49248 MAY 2009 Injecting International Good Practices into ABOUT THE AUTHOR Policy Reforms: The importance of Study Tours YEHIA K. ELDOZDAR works as an operations analyst for the Business In policy reform Advisory Services (AS) projects the concept of "good Enabling Environment (BEE) practices" often floats around, not knowing when or where to land on a program in IFC Advisory Services in the Middle East "project runway." So the question here is how and when do you inject good and North Africa (AS MENA). practices into regulatory reforms so they yield maximum impact? He was responsible for organizing the study tour to Canada. He has been with IFC Whenever terms like "international expert" and/or "study tours" are since December 2006. Prior to joining IFC, Yehia worked for mentioned, projects become vulnerable to criticism of wasted money and 7 years as a small and medium enterprise advisor to the shopping sprees. The experience from IFC Advisory Services in the Middle Minister of Economy, Foreign East and North Africa's (AS MENA) "Alexandria Business Start-up Trade and Finance in Egypt. Simplification" project in Egypt stands out as a good example of a project APPROVING MANAGER that used international good practices both at the right time and in the right Frank Sader, Senior Opera- tions Manager for BEE, and way. chief strategist, AS MENA. Identifying the Problem while, at the same time, protecting public health, welfare, and safety. In October 2006, the government of Egypt asked IFC for assistance in streamlining the 2) Assessing good-practice countries and issuance process for building permits. The experts should start as early as the project construction industry in Egypt was saddled approval stage.1 with the burden of a process that took on average 195 days and 43 separate procedures. After three months of real effort on the part As a preliminary step in the streamlining of the Ministry of Housing's Agency for process, and to gather data for the Technical Inspections on Buildings and the corresponding Doing Business (DB) indicator, Governorate of Alexandria's Housing the project mapped the process of issuing Department, the number of days to obtain a building permits inside a pilot district in the permit was reduced to 156 and the number of Governorate of Alexandria, Egypt. Here are procedures to 35. Our clients were not satisfied some lessons we learned: with these results. Very early on in the project cycle, we had made them aware of the top- 1) Choosing the right time to insert ranked countries in building permit issuance internationalgoodpracticesinanASproject according to the Doing Business reports. So is extremely essential. now they said, "There must be something unique about those countries that are way The mapping exercise was a real eye opener ahead of us that is worth exploring." for the various government bodies involved (process owners). It not only showed them Anticipating such an inquiry, the project team how lengthy and complicated the process was, had done its homework ahead of time. We but also highlighted the wide gap between immediately provided process owners with Egypt and top reformer countries. The result information on the reform experiences of was a consensus that every effort had to be Canada and New Zealand. We also presented made to narrow this gap. The project team them with options for experiential learning, responded immediately. Using working groups based on our discussions with the expert and workshops, we began exposing the practitioners that designed and participated in government bodies to different ways of the reform process in those countries. The approaching the issuance of building permits. 1 The process of identifying and assessing international good prac- Our goal was to assist in building their capacity tices for use in the project started as early as the project approval to develop a process that was investor friendly stage. Canada and New Zealand were mentioned as potential good-practice countries with which the project team would estab- lish contact in order to benefit from their success stories. IFC SMARTLESSONS -- MAY 2009 1 team was careful to focus its attention on identifying and meetings with both central and local authorities so securing the assistance of public servant experts because participants were exposed to the various aspects of how an our thinking was that, despite being from different efficient permit system functions. We also gave thought to countries, public servants speak the same language. choosing the right system in Canada for in-depth study. Experiential learning between these experts and their Because the project pilot in Egypt was in Alexandria and Egyptian counterparts would therefore be easier and potentially more beneficial. Introducing the Experts: Welcome to Egypt 3) Familiarizing the expert with the local context prior to a potential study tour is a must. Some might think that benefiting from international good practices is as easy as copying and pasting successful legal and operational models. However, as we all know, the one- size-fits-all approach is a one-way ticket to failure. We wanted to avoid this pitfall. So in November 2006 IFC invited the expert practitioners from Canada and New Zealand on a four-day study tour to Egypt.2 Our objective was twofold: First, we wanted our clients, Egyptian public officials, to get exposed to ways of thinking that made the difference for countries such as Canada and New Zealand. Secondly, in Our visit to the city of Kitchener construction department. order for the expert practitioners to propose good-practice reform solutions, they had to familiarize themselves with the local context and understand how the system in Egypt not Cairo, everyone agreed that the focus should be on a functioned. city-level system. As a result, we chose the cities of Kitchener and Toronto. As a result, the experts spent a good amount of time observing operations and processes, meeting with the But Who Should Be On Board? That Is the process owners, private players in the construction industry, Question and other stakeholders. Their study tour was concluded with the presentation of a report to the government of 5)Choosingtherightcombinationofpeopletoparticipate Egypt.Itdidnottrytoprescribeonemodelofgoodpractices in the tour is key. Aim for a mix of high-level policy/ for streamlining the building permit issuance process. decision makers and management who can ensure Instead the report offered various options with implementation on the ground. recommendations, tailored to the specific factors and considerations pertaining in Egypt. Once the agenda and date (July 2007) were set for the trip, the question of who should get on board came up. Despite Seeing Is Believing understanding the key role that study tours can play in facilitating successful reforms, public servants often are 4) Setting the right agenda for the tour should be a joint inclined to use them to reward or incentivize employees. effort between IFC, the clients, and the consultants. The team made clear to the client that it was critical to To ensure that the client was willing and committed to go choose the right people for the tour. We advised a mix of the extra mile, our next step was to organize a reverse study senior decision-making representatives and implementers tour for Egyptian public officials to go to Toronto, Canada. from both the central (Ministry of Housing) and local (city of Alexandria) authorities. Maintaining the balance The main aim of the trip was for process owners in Egypt to between central (three senior policy makers) and local understand policy and gain practical experience of how a (three mid-management implementers) delegation streamlined building permit process functions. The hope members was essential. For effective reform in a highly was that the resulting broadening of perspective and decentralized process such as the issuance of building increase in knowledge would be put to use by participants permits, the need for political will and vision is equally as when developing the right model for Egypt. It usually takes important as practical knowledge of the processes on the more than tailored recommendations to undergo bold ground. reforms. It takes will, dedication, and commitment on the part of everyone. We did not ask the client to make a contribution to the cost of this tour. With hindsight, we probably should have asked The tour's agenda was carefully thought out. A great deal them to bear some of the cost because we believe that of attention was given to striking a balance between client contribution is a must, no matter how justifiable your study tour spending is. 2 Because the two experts (one from New Zealand and one from Canada) were public servants, this made things much easier because public servants at the end of the day do speak the same regulatory and procedural language, so they interacted smoothly with their Egyptian counterparts. 2 IFC SMARTLESSONS -- MAY 2009 Wrap-Up... The Last Day of the Tour Below are the main outcomes of the trip reflecting good practices from the Canadian 6) Don't leave the discussion of next steps system that were tailored and adapted to the until participants return home. Egyptian context: · A new set of construction issuance "Let's discuss the results and agree on our procedures has been introduced and will next steps when we get back to the home be enforced by law for all districts country" is the traditional approach in nationwide. The new system resulted in a planning study tours. In our case, however, IFC reduction of the time and procedures moderated a one-day workshop in Kitchener necessary to obtain a permit to 141 days with the support of the experts in Canada. and 31 procedures, accordingly. The outcome of the workshop was the outline of an action plan for the government of · Thenewconstructionlawwasalsomodified Egypt, developed by delegation members. to include streamlined building permits for The plan also consolidated the best practices low- risk, low-rise buildings in alignment that the delegation witnessed on the ground. with a new fast-track system. This was a direct application of a system operating in The workshop could have been even more the city of Toronto, where an applicant can effective if we had convened daily wrap-up get a permit in a shorter time frame if the sessions to facilitate reflection. This would construction activity falls under certain risk have generated more ideas for discussion and height criteria. during the workshop. · The concept of private-sector engineering So Did the Trip Really Pay Off? firms reviewing and approving designs was also introduced both in the law and its It's been nearly 18 months since we went on executive articles. this study tour and, if you're wondering why it took me so long to write this smart lesson, my · Members of the delegation developed response is simple: Most of the best-practice strong and continuing relationships with recommendations are legal in nature, and we their Canadian counterparts. Egyptian all know that legal reforms usually require officialsconsultdirectlywiththeirCanadian more time to be implemented. colleagues as issues arise. This bodes well for the sustainability of the reform efforts after the project ends. DISCLAIMER IFC SmartLessons is an awards program to share lessons learned in development-oriented advisory A visit to a construction site in Kitchener. services and investment operations. The findings, interpretations, and conclusions expressed in this paper are those of the author(s) and do not necessarily reflect the views of IFC or its partner organizations, the Executive Directors of The World Bank or the governments they represent. IFC does not assume any responsibility for the completeness or accuracy of the information contained in this document. Please see the terms and conditions at www.ifc.org/ smartlessons or contact the program at smartlessons@ifc.org. IFC SMARTLESSONS -- MAY 2009 3