Private Sector Development

Trainees in Ethiopia who learned kaizen (continuous improvement) activities

JICA's private-sector development initiatives have so far centered on Southeast Asia and East Asia. Today, both of these regions are experiencing tremendous economic growth. In light of this fact, there is increasing demand from Africa to learn from the experiences of Asian countries.

The volume of trade and investment in the world economy has risen substantially in accordance with globalization. Not only Asian countries that have grown into emerging economies on the world stage but also many developing countries in Africa and other regions are encouraged to participate in international frameworks such as the World Trade Organization (WTO) and Economic Partnership Agreement (EPA) and expected to take necessary actions.

Economic globalization has increased the likelihood that one country's economic crisis will spread widely in a short space of time and significantly damage the economy of vulnerable countries and regions, as witnessed in the global financial and economic crises that struck in autumn 2008. JICA provides support that aims to empower developing countries to build industrial bases, advance industry, increase job opportunities and create a society that can reap the rewards of economic development through their own efforts.

By promoting trade and investment, developing countries can create new markets, introduce expert knowledge such as finance and management know-how and technology, create jobs and strengthen international competitiveness. JICA provides assistance in three core areas: development of industrial bases, organizational/institutional reinforcement and capacity development.

The development of industrial bases includes creating legislation and institutions to promote trade and investment and building other infrastructure for industrial advancement. On top of this, JICA supports organizational/institutional reinforcement of the institutions which play key roles in trade and investment promotion, and individual companies in each country, as well as capacity development for policy makers and human resources of private enterprises. By doing so, JICA can provide comprehensive support from industrial policy to promotion of export and investment.

Recent successful projects include the Study on the Institutional Strengthening of Investment Promotion in Cambodia, Egyptian Export Promotion Center, Reinforcing the Capabilities of the Zambia Development Agency and Project for Reinforcement of the Human Resource Development Center on Export and Investment in the Dominican Republic.

In Cambodia, JICA has supported the establishment of the special economic zone (SEZ) on around 70ha of land near Sihanoukville Port, the country's only international port. The SEZ is expected to attract foreign direct investment for the development of Cambodia's export-related industries which can generate employment opportunities particularly for youths. JICA conducted a development study from February 2009 aimed at strengthening functions for attracting investment and transferred the required knowledge and know-how to the Council for the Development of Cambodia (CDC). Throughout this cooperation, CDC's capacity, such as information gathering and investment promotion, can be strengthened.

Products created from the "One Village, One Product" program in Malawi

In developing countries, delayed development of policies and institutions to support small and medium-sized enterprises coupled with inadequate technology and management know-how have stifled growth in this sector. To boost competitiveness in the global economy, it is also necessary to develop supporting industries that provide parts and materials to assemblers including foreign companies.

In response to these challenges, JICA provides cooperation for strengthening implementation capacity of the government institutions in charge of promoting small and medium-sized enterprises, human resource development and improving the quality and productivity of enterprises. Since it is difficult for such enterprises to get funding, JICA aims to provide effective support through complementary use of ODA Loans and Technical Cooperation.

In recent projects, JICA helped Viet Nam promote small and medium-sized enterprises and supporting industries. JICA formulated a program that included the Two-Step Loans for SMEs (ODA Loans), Technical Cooperation for strengthening collaboration among administrative institutions and strengthening human resource development capacity at educational institutions, and dispatch of senior foreign volunteers with abundant field experience at Japanese firms. In Cambodia, Tunisia, Egypt, Ethiopia, Paraguay and Latin American countries, including Costa Rica, JICA also works to support strengthening of public institutions that provide companies with services for quality/productivity improvement by utilizing Japanese business improvement techniques such as "5S" activities. In particular, the kaizen program in Ethiopia was initiated at the request of Prime Minister Meles Zenawi, who was extremely impressed by JICA's support in Tunisia in this field. JICA is advancing this on-the-ground kaizen initiative concurrently with policy support and industrial policy dialogue based on experience in Japan and Asia that is conducted jointly with the National Graduate Institute for Policy Studies.

For vitalizing local industry and economies, JICA supports the development of local industry under the program called "One Village, One Product" and encourages the use of local resources in an attempt to create employment and advance regional economies. This program is being broadly implemented in 12 countries in Africa. In addition to Malawi, where activities have already taken root, JICA has started studies and Technical Cooperation projects in Kenya, Uganda, Nigeria, Senegal, Mozambique and Rwanda. In Asia, JICA assists with a similar program in Viet Nam and Laos, placing emphasis on utilizing local resources and vitalizing local economies.

Third country training in Mexico for the "Project for Capacity Development of the Tourism Self-Management Committees" in Guatemala

Previously, the tourism industry in developing countries was led by foreign-capital entities such as tourism developers, travel companies and hotel chains. This is regarded as heteronomous tourism. Although not necessarily adverse, it does not allow local people to fully reap the benefits of this sector.

JICA initiatives aim to promote autonomous tourism development, in which the local people develop the industry under their own steam and sustainably by utilizing their own resources.

JICA provides support in the following areas: (1) promotion of Public-Private Partnerships in which public institutions such as the Ministry of Tourism and local tourist bureaus, private enterprises such as travel companies and guide associations, and local people can work together; (2) nurturing of human resources to convey the necessary know-how to advance tourism; (3) development of tourism products using tourism resources such as places of historical importance or extraordinary scenic beauty in addition to locally produced items such as handicrafts and folk art unique to a region; and (4) strengthening tourism promotion and marketing capacity and the implementation system. Through such support, JICA aims to ensure sustainable tourism that helps realize regional advancement contributing to poverty reduction. This is attainable by increasing the income of local people, creating jobs and strengthening the impetus for social harmony.

Recent cases of support include a project called Sustainable Tourism Based on Public-Private Participation in the Dominican Republic, which aims to create foundations for tourism development that provide benefits to the local community in a sustainable manner. This is achieved by supporting the use of local resources to develop tourism products and their promotion. The Ajanta & Ellora Conservation and Tourism Development Project in India aims to promote tourism and vitalize the local economy by conserving this historic site, increasing awareness through publicity and building infrastructure for tourism.

In addition, tourism promotion advisors have been sent to the Balkan states of Serbia, Albania and Macedonia simultaneously in response to increasing calls for the transfer of technology aimed at attracting foreign tourists, mainly Japanese. Efforts focus on boosting promotional and marketing competencies to attract tourists, and in the future, the three countries aim to work together to promote the region as a single tourist destination.

In this way, JICA assesses the needs of each country and the condition of local communities and supports tourism development that is necessary and suitable for each country or region.