66635 Using Knowledge Exchange for Capacity Development: What Works in Global Practice? Three case studies in assessment of knowledge exchange programs using a results-focused methodology Joint Study by the Korea Development Institute and World Bank Institute 1 About the Korea Development Institute The Korea Development Institute is Korea’s leading think tank in economic and social sciences. Its mission is twofold: contribute to Korea’s development by setting long-term national agendas and providing policy recommendations based on rigorous analysis and share Korea’s development experiences to support the institutional and capacity building of partner countries, primarily through the Knowledge Sharing Program. For more information, visit www.kdi.re.kr. About the World Bank Institute The World Bank Institute’s mission is to be a global facilitator of capacity development for poverty reduction, helping leaders, institutions, and coalitions address their capacity constraints to achieving development results. It spearheads coordination of South-South knowledge exchange for the entire World Bank, cutting across regions and sectors. For more information, visit www.worldbank.org/wbi. 2 Using Knowledge Exchange for Capacity Development: What Works in Global Practice? Three case studies in assessment of knowledge exchange programs using a results-focused methodology Joint Study by the Korea Development Institute and World Bank Institute 3 Copyright © November 2011 The World Bank 1818 H Street, N.W. Washington, D.C. 20433, USA All rights reserved Overall Guidance Wonhyuk Lim, Korea Development Institute Aki Nishio, World Bank Institute Samuel Otoo, World Bank Institute Report Preparation Korea Development Institute Team: JiHwan Kim Saebyul Chun World Bank Institute Team: Cristina Ling Dawn Roberts Contributors Ja-Kyung Hong, Korea Development Institute Jang Saeng Kim, Korea Development Institute Sharon Fisher, World Bank Institute Sara Okada, World Bank Institute Design Sharon Fisher, World Bank Institute Photos from the World Bank collection: Cover, Curt Carnemark; p15 and p52, Dave Lawrence; p30, Dominic Sansoni; p72, Jonathan Ernst; p88, Arne Hoel. 4 Contents Acronyms .............................................................................................................................. 7 Summary ............................................................................................................................... 9 Lessons Learned ............................................................................................................... 11 Background The Role of Knowledge in Development ........................................................................... 16 Introduction to Korea’s Knowledge Sharing Program and the World Bank’s South-South Knowledge Exchange ............................................................................ 19 Capacity Development and Results Framework ................................................................ 24 Applied Methodology for the Study ................................................................................... 28 Case Studies Korea Development Institute Knowledge Sharing Program with the Dominican Republic Introduction .................................................................................................................... 31 Program Description ..................................................................................................... 32 Outcomes and Analysis................................................................................................. 36 Lessons and Implications .............................................................................................. 47 Korea Development Institute Knowledge Sharing Program with Mongolia Introduction .................................................................................................................... 53 Program Description ..................................................................................................... 54 Outcomes and Analysis................................................................................................. 57 Lessons and Implications .............................................................................................. 69 NESAP-ICT South-South Experience Exchange with India: Results in Ghana and Nigeria Introduction .................................................................................................................... 73 Program Description ..................................................................................................... 74 Outcomes for Ghana ..................................................................................................... 76 Outcomes for Nigeria ................................................................................................... 81 Lessons and Implications .............................................................................................. 85 Recommendations ........................................................................................................... 89 Appendix 1—Sample Interview Questions ........................................................................................... 91 2—List of Participants and Organizations .......................................................................... 94 3—References ....................................................................................................................... 96 5 6 Acronyms ADOZONA Dominican Association of Free Zones BNVP Bank of Housing and Production BPO Business Process Outsourcing CDRF Capacity Development and Results Framework CDEEE Dominican Corporation of State Electrical Companies CEI-RD Export and Investment Center of the Dominican Republic DEXIM Dominican Export-Import Bank DR-ETC Dominican Republic Export Trading Company EDCF Economic Development Cooperation Fund FRC Financial Regulatory Commission GASSCOM Ghana Association of IT Software and Service Companies GDP Gross Domestic Product ICO Intermediate Capacity Outcome ICT Information and Communications Technology ITES Information Technology Enabled Services KDI Korea Development Institute KDIC Korea Deposit Insurance Corporation KEPCO Korea Electric Power Corporation KEXIM Korea Export-Import Bank KSP Knowledge Sharing Program MDIC Mongolian Deposit Insurance Corporation NASSCOM National Association of Software and Service Companies NESAP New Economy Skills for Africa Program NDIC National Development and Innovation Commission ODIN Outsourcing Development Initiative of Nigeria OECD Organisation for Economic Co-operation and Development PFS Preliminary Feasibility Study PIMAC Public and Private Infrastructure Investment Management Center PPP Public-Private Partnership SCU Savings and Credit Union SME Small and Medium Enterprises SPC State Property Committee SSKE South-South Knowledge Exchange WBI World Bank Institute 7 8 Summary Knowledge exchange—the sharing of infor- logic for understanding how institutions mation and experiences for customized change, as well as sets of institutional and learning—helps to lessen the knowledge intermediate indicators that can be flexibly divide, build consensus and coalitions for applied to measure and analyze capacity reform, and promote the concept of Open development outcomes across sectors and Development. In other words, knowledge countries. exchange meets immediate, operational The study examines three programs: knowledge gaps by fostering the sharing of (1) KDI’s Knowledge Sharing Program (KSP) countries’ experiences. for advancing export development in the The results of South-South knowledge exchange Dominican Republic; (2) KDI’s KSP for pro- encourages cross-country partnerships moting public-private partnerships and pre- knowledge that can help strengthen local ownership feasibility studies in Mongolia, along with exchange and leadership of development issues by providing support for deposit insurance providing just-in-time support on “how-to.� reform; and (3) the World Bank’s South- programs Lessons drawn from the practical experi- South Experience Exchange Facility for ence of others can improve stakeholder the New Economy Skills for Africa Program have not been buy-in and subsequently create an enabling (NESAP) in India for sharing knowledge on rigorously environment for designing and implement- information and communications technol- ing difficult development initiatives and ogy with African countries, including Ghana explored in reforms. As a result, a country’s ability to and Nigeria. a systematic identify, design, implement, and evaluate The study’s findings reveal concrete development solutions becomes more evidence of institutional outcomes from manner. How efficient and effective, leading to an overall knowledge exchange and how these results improvement in performance. were achieved through intermediate capac- then do we However, the results of knowledge ity outcomes. The results highlight lessons know how exchange programs have not been rigor- for the design and management of knowl- ously explored in a systematic manner. How edge exchange programs for future replica- effective they then do we know how effective they are in tion or improvement, including ways to: meeting countries’ needs? And how do we • Respond to the demands of the partner are in meeting know what works and does not work so we country, to better target the knowledge countries’ can replicate successes or avoid potential exchange for a more efficient and pitfalls? effective program. needs? In this joint study, the Korea Devel- • Ensure local ownership and commitment opment Institute (KDI) and World Bank to the reform process, to establish Institute (WBI) assess three of their South- conditions on the ground to promote South knowledge exchange programs to change. analyze their effectiveness as well as gather • Strategically select participants on lessons that can inform global practice. both the demand and supply sides of WBI’s Capacity Development and Results the knowledge exchange, to ensure Framework (CDRF) provides the conceptual participants have relevant experience to foundation and methodology for facilitating share and are in key positions to effect the assessment. The framework supplies change. 9 • Promote and sustain cross-country and within-country peer-to-peer interactions, to facilitate the exchange of tacit knowledge and contribute to local institution-building. The assessment also identifies good practices in managing knowledge exchange for results, by demonstrating the value of a results focus, clear change logic, and indicators to monitor and measure progress. The merits of South-South exchanges have become increasingly evident for capacity development, and the role of knowledge in the development agenda will only continue to grow. Thus, it is necessary for those involved in designing and imple- menting knowledge exchange programs to focus on improving their effectiveness and results. Development practitioners and local partners can apply the lessons learned from this study to help improve future knowledge exchange programs. 10 Lessons Learned This study reveals important lessons for ply side, knowledge exchange programs effectively conducting knowledge exchange should involve policymakers and practi- programs that are applicable across sectors tioners who have firsthand experience in and countries. Its findings indicate support the reform process and understand the for innovative, results-focused capacity inherent capacity and political economy development approaches that emphasize constraints of the process. In the case of the roles of state and non-state actors and Mongolia, KDI carefully selected the Korean promote collective action. The programs in participants based on their expertise and this study used a variety of traditional and personal experience in facilitating the innovative instruments to foster collabora- changes in the areas and policies in Korea tive behavior between diverse stakeholders for which the Mongolians were requesting that facilitated institutional change. support: public-private partnership (PPP), The study’s findings elaborate on the pre-feasibility study (PFS), and transition factors that contribute to successful knowl- to limited deposit insurance. The targeted edge exchange programs, and how using a change agents who were anticipated to systematic framework helped to reveal how implement reform in Mongolia were essen- these programs achieved results. tially matched up with Korean experts who had already gone through the process in Customize for Local Context Korea. To develop an efficient knowledge On the demand side in the knowledge exchange, knowledge seekers must be seeking country, programs must target and able to identify their needs and describe engage the appropriate change agents— their demands. In this respect, non-govern- the individuals or groups best positioned mental stakeholders, such as academia and to initiate and manage needed changes. the private sector, play an important role. In the case of the Dominican Republic, A key challenge in the knowledge the minister-level executive director of the exchange process is the matching of Export and Investment Center selected demand and supply of knowledge. In the participants from an array of relevant stake- case of the Dominican Republic, the gov- holder groups to encourage interaction ernment expressed strong demand for the among the Dominican participants. KSP on export development and articulated It is also critical to identify participants its demands based on a needs assessment who are committed to leading the change conducted in the local context together with processes and in a position to catalyze Korean consultants. KDI conducted inter- change in terms of timing and resources. views with local stakeholders to understand Efforts to apply the lessons of experience the local context in order to design the (no matter how relevant) will encounter knowledge sharing intervention to meet the challenges in the country context. How- needs of Dominican stakeholders. ever, even if commitment and intentions are strong, the timing for the knowledge Identify Key Change Agents exchange should align with decision mak- Participant selection is critical to both sides ers’ priorities and their abilities to focus on of the knowledge exchange. On the sup- and implement targeted changes. In other 11 words, knowledge exchange programs Another approach for sustaining should be sequenced to the policymaking momentum is for the knowledge exchange process. It is also important to make sure to conduct ongoing programming or even relevant resources—funding, staffing, and establish twinning arrangements to con- institutions—are available locally to support tinually provide motivation and support an ongoing change process as envisioned. to the partner country. In the case of the In the case of Mongolia, the key KSP, each engagement is for one year, but components of participant commitment it is often followed up with another KSP existed for the knowledge sharing at the request of the partner country. For intervention on transforming the deposit example, there were two KSPs held in Mon- insurance system from blanket deposit golia and four in the Dominican Republic. guarantee to limited deposit insurance. In the Dominican Republic, the 2009 KSP The Mongolians were committed to the on infrastructure development for exports transition and KDI provided knowledge was designed in follow-up to the 2008 and support to catalyze preparation for the KSP where policies were recommended transition, which needed to be underway for export development. The 2010 KSP but had not yet begun. The Mongolians focused on export financing, with experts were able to mobilize the necessary from the Korea Export-Import Bank sup- resources to embark on the steps toward porting the Dominican effort to establish its transition. own export-import bank. Maintaining peer-to-peer interaction is Build Sustainable Momentum for the most effective way to exchange tacit Change knowledge and sustain horizontal partner- Successful knowledge exchange activities ships. Also, an important aspect of learning are characterized by continued engage- is knowledge exchange within a country— ment, regular consultations, and evidence- central, regional, and local governments— based recommendations. Acquiring, an area that has been overlooked. This can adapting, and applying knowledge is a be critical in facilitating the building and medium-term process. This is why recur- formalization of relationships among local rent interaction is necessary in both vertical stakeholders, e.g., businesses, entrepre- (within-country) and horizontal (cross-coun- neurs, consumers. try) relationships. In the case of NESAP, coalitions among One way to encourage repeated interac- public and private actors were strength- tion in both horizontal and vertical ways is ened in Ghana through the knowledge to assure the knowledge exchange pro- exchange by opening a formal connection gram is situated within a series of other rel- between the Ghana Association of Software evant capacity development interventions. and IT Services Companies and the govern- In the case of NESAP, multiple videoconfer- ment. The delegation members needed to ences, in addition to study tours and field work closely with each other to build action visits, encouraged repeated interactions plans and country strategies for ICT devel- between participants in various settings to opment. After the knowledge exchange, promote collaborative action. In Ghana, the Ministry of Communications facilitated follow-up activities sponsored by related “matchmaking events� so that potential World Bank projects facilitated additional business process outsourcing investors had interactions and knowledge exchange the opportunity to meet and network with among key stakeholders. For example. Ghanaian companies. the Ghana Association of Software and IT In terms of building sustainable motiva- Services Companies hosted an interna- tion, site visits are an effective inspirational tional conference in 2009, “Outsourcing to tool. Site visits not only allow participants Ghana, Africa’s Golden Gateway.� to observe how things work on the ground and experience firsthand how success was 12 Summary of Lessons Learned for Conducting Knowledge Exchange Programs • Customize for the local context by matching the demand and supply of knowledge and making sure the knowledge exchange program responds to the articulated needs of the partner country. • Identify key change agents on both sides of the knowledge exchange to ensure those who have firsthand experience of the reform process are providing knowledge and support to those who are able to mobilize resources and drive targeted changes toward reform. • Build sustainable momentum for change by encouraging and managing recurrent horizontal (cross-country) and vertical (within-country) interactions, as well as by using knowledge exchange instruments that motivate or inspire, such as twinning arrangements or site visits. • Understand what is meant by results by focusing on changes in capacity—at the level of institutional capacity and the level of intermediate outcomes—for a more systematic documentation and analysis of results. • Trace the change logic to illuminate the results story of how knowledge exchange leads to intermediate outcomes that contribute to institutional changes that affect the development goal. • Assign indicators to monitor and measure change that will help practitioners to track progress, document practical lessons in implementation, and make timely adjustments to the program when necessitated. achieved, it encourages them to imagine improving effectiveness of organizational what can happen in their own countries if arrangements. Second is at the level of recommended actions are implemented. intermediate outcomes, which includes This was true in all three case studies. In improvements in the ability or disposition reflecting on his visit to Korea, the minister of stakeholders to take action in the form of the Export and Investment Center of the of raised awareness, enhanced knowl- Dominican Republic described his experi- edge and skills, improved consensus and ence as “going to heaven and coming teamwork, stronger coalitions, enhanced back� in being able to observe firsthand networks, and increased implementation what the Dominican Republic could achieve know-how. in the future. These institutional and intermediate level results provide a systematic way to Understand What is Meant by Results document, compare, and analyze informa- Often, a result is thought of in terms of tion. Systematic analysis of results using outputs (e.g., number of people trained), this approach can help the development deliverables (e.g., policy recommendations community to learn what works and does delivered), or milestones (e.g., learning not work in knowledge exchange. module completed). These serve an impor- tant monitoring function, along with results Trace the Change Logic information, for assessing whether a project The case studies demonstrate the impor- is being implemented as planned and tance of having a clear change logic: pictur- adjustments are needed to achieve results. ing the flow of how knowledge services and But these are not counted as results—they activities affect agents and their capacities do not demonstrate evidence of increased (i.e., intermediate capacity outcomes), capacity. then how they affect change in institutional The results approach applied in the case capacities (i.e., stakeholder ownership, studies requires monitoring results at two policy instruments, and organizational levels. First is at the higher level of insti- arrangements), which finally affect develop- tutional capacity in the areas of strength- ment goals. ening stakeholder ownership, enhancing In the case of the KSP in the Dominican efficiencies in policy instruments, and Republic, tracing the knowledge exchange 13 activities illuminated how the knowledge change process and participants’ moti- exchange interventions led to intermediate vation for example, would have alerted outcomes that contributed to institutional program leaders to the decrease in par- changes. For example, the program led to ticipants’ motivation after the knowledge the creation of networks for international exchange ended, and allowed them to trade and exports, such as the Domini- intervene to increase participants’ resolve can Republic Export Trading Company; to facilitate change. strengthened coalitions between public Overall, developing indicators for and private sectors for export develop- monitoring knowledge exchange practices ment, such as private sector input into the will help to facilitate adaptive management National Development Strategy; and led to and assessments of outcomes. Further, the the formulation of new policies and laws, tracking of intermediate and institutional such as the amendment of General Electric- level outcomes will contribute to the grow- ity Law to criminalize power theft. ing body of knowledge on what works in In the case of the KSP in Mongolia, knowledge exchange programs. Dissemi- articulating the results chain and identify- nating practical lessons learned is critical ing the intermediate outcomes showed for future knowledge exchange program- the progress made toward achieving ming by the development community. institutional outcomes. For instance, the KSP was successful in raising the awareness of high-level government officials on the importance of PPP. It improved teamwork and working relations between key stake- holders across ministries and departments to enhance efficiency in implementation of PPP. The knowledge shared during the KSP was applied by the Mongolian government in its formulation of PPP guidelines. Assign indicators to monitor and measure change The absence of high-quality, precise results measures and failure to effectively track them limit the possibility to make needed, timely adjustments to knowledge exchange programs. The case studies illustrate the importance of embedding indicators and results monitoring in the design and implementation of knowledge exchange programs. In the case of the Bank’s knowledge exchange in Nigeria, one of the partici- pants noted that the trip provided valuable and relevant lessons for Nigeria, and that “there was some energy� when the delega- tion returned home. But without any follow- up actions or funding to continue facilitat- ing the change process, “people return each to their harried programs, engage in survivalist activity, and the energy fades.� A results monitoring system tracking the 14 15 The Role of Knowledge in Development The end of the Cold War, acceleration of It is now commonly understood that globalization, and resurgence of emerging sustainable development happens when countries have dramatically transformed the results and performance are locally owned international development landscape. The and can be replicated and scaled up by emergence of new sources of growth and local actors, including non-state actors aggregate demand in the world economy, such as civil society, private sector, service combined with better domestic economic users and providers, academia and citizens. management, has also led to increased fis- Hence, it is necessary to employ instru- cal and policy space for developing coun- ments to advance development that bring It is now tries. This in turn has opened up opportu- together diverse actors to promote collab- commonly nities for experimentation on the design orative change and leadership. of development strategies and policies, In other words, development practitio- understood thereby expanding demand for relevant ners must go beyond traditional invest- knowledge. ments in training, knowledge products and that sustainable The emphasis on knowledge as a key technology and draw on capacity develop- development instrument for catalyzing change is evident ment instruments that facilitate practitioner by the development community’s cur- knowledge exchange and experiential happens when rent focus on Open Development. Recent learning. This provides countries access results and reports, notably, “The State of World Bank to unique tacit knowledge that is only Knowledge Services: Knowledge for Devel- revealed through peer-to-peer knowl- performance are opment 2011,� indicate that countries rate edge exchanges. Capacity development the acquisition of knowledge as more valu- also needs to incorporate the concept locally owned able than financial lending, such as project of change management and include the and can be loans offered by the World Bank or export- enabling environment and coalition build- import banks. The demand for practitioner ing as key factors for success. replicated and knowledge and customized transforma- Indeed, recent attention to South-South tional learning is now at the forefront of the knowledge exchange reflects the grow- scaled up by development agenda. ing demand for practical knowledge as local actors. After decades of frequently unsuccess- opposed to theoretical knowledge. Coun- ful efforts, the development community tries are seeking to share their knowledge has come to understand that standard, and development experiences, while one-size-fits-all approaches to development developing countries are seeking to find do not work. Past development practice development partners that can share expe- focused on applying technical solutions to riences that provide insights and practical development challenges rather than on cus- knowledge to guide them in how to imple- tomized approaches based on locally driven ment their own reforms. diagnoses of issues within country contexts. Reflecting this trend, the G20 Seoul Current approaches to capacity develop- Development Consensus for Shared ment respond to development challenges Growth selected knowledge exchange as by emphasizing result-oriented approaches the ninth and final pillar, which supports, that use transformational learning. through mainstreaming, the other pillars that are essential to enhancing growth 16 potentials and managing risks. This frame- • Knowledge exchange network: This is a work was well received among the G20 network of government officials, experts, members and international community and practitioners with an intimate knowl- (Winters 2010). edge of development challenges. What would be an effective way to • Knowledge exchange forum: This is a promote knowledge exchange for develop- regularly held policy dialogue to share ment? Imagine a two-tiered structure for knowledge on policy challenges. Figure knowledge exchange consisting of “Wiki- 1 illustrates the general infrastructure of pedia� and “Facebook,� where (1) Wikipe- knowledge exchange. dia represents the general infrastructure to share knowledge, and (2) Facebook pro- (2) Customized consultation for knowl- vides customized consultation for knowl- edge exchange: edge exchange between participants (Lim • This aims to contribute to capacity 2011a). development and institution building by addressing specific policy challenges. (1) General infrastructure for knowledge Activities include interviews and meet- exchange requires: ings, joint research and dialogue, study • Knowledge exchange platform: This is a tours, and seminars, with a view toward search-and-match platform that provides building cross-country and within- practical information on development country partnerships. The emphasis is solutions and case studies. It could be on horizontal or peer-to-peer interaction organized by sector with international since it not only facilitates tacit knowl- organizations playing a supportive edge exchange but also creates empa- role, e.g., World Bank on infrastructure, thy and inspiration. This helps to build United Nations on food security, and cross-country partnerships. For effec- the Organisation for Economic Co- tive implementation, coalition building operation and Development (OECD) among government officials, experts, on growth with resilience (Lim 2011a). and practitioners is also important. This A common quality standard should is the vertical or within-country reform be applied to make the knowledge partnership aspect. Figure 2 depicts exchange platform(s) readily accessible customized consultation for knowledge for suppliers and demanders. exchange. Figure 1. Knowledge Sharing in Action Stage 1: General Infrastructure Knowledge sharing Bilateral Regional Multilateral forum Knowledge sharing Experts Government officials Practitioners network Knowledge Infrastructure Food security Growth with Other pillars sharing (World Bank) (United Nations) resilience (OECD) platform Supply of practical Quality standards Demand for knowledge and Brokering/Dissemination development case studies solutions Funding 17 Figure 2. Knowledge Sharing in Action Stage 2: Customized Consultation Ultimate Development goal outcome Intermediate Capacity development and institution building outcome Output Consultation report Activities Interviews Joint Study Seminars and meetings research tours Knowledge conversion Coalition building Experts Peer-to-peer Experts Government officials Tacit knowledge exchange Government officials Practitioners Empathy/Inspiration Practitioners Country ownership, cross-country and within-country interaction and pragmatic recommendations 18 Introduction to Korea’s Knowledge Sharing Program and the World Bank’s South-South Knowledge Exchange Korea’s Knowledge consulting with international organizations Sharing Program in a triangular format. Since inception of its KSP in 2004, Overview Korea has provided policy consultations Korea’s development cooperation effort to 22 countries on topics ranging took off when the government of Korea from development planning to crisis launched the International Development management (list available at http://www. Exchange Program at KDI in 1982. Sub- ksp.go.kr/ksp/01/bilateral.jsp). In 2011, sequently, the Economic Development Korea is working with 26 countries on a Cooperation Fund (EDCF) and the Korea budget of KRW 10 billion (USD 9 million) for International Cooperation Agency were KSP’s bilateral consultation program. established to manage the provision of At the start of each year’s KSP, the Korea’s concessionary loans and grants, Korean government sends out demand sur- respectively. However, Korea’s piecemeal veys to potential partner countries through and microscopic policy approach to aid its embassies and crafts its consultation and development lacked coordination and projects tailored to the needs of these did not fully take into consideration the countries. Former high-ranking govern- socioeconomic environments and policy ment officials are directly involved in these demands of its partner countries (Lim policy consultations to share their intimate 2011b). In response to these challenges, knowledge of development challenges. KDI launched the KSP in 2004 with support They describe in detail the decision-making from the Korean Ministry of Strategy and process, provide interesting anecdotes, Finance (formerly known as the Ministry of empathize with government officials in Finance and Economy). developing countries, and complement The KSP is a knowledge-intensive devel- the analytical work of policy experts and opment cooperation program in which specialists who have extensive experience Korea shares its development experiences of their own in their fields. to support the institutional and capac- These government officials and prac- ity building of partner countries through titioners effectively pair up with their a series of collaborative research works, counterparts in development partner policy consultations, and technical assis- countries to work jointly on pressing policy tance, on policy issues identified by the challenges and share development knowl- partner countries. The KSP is comprised edge in the process. Instead of offering a of three parts: (1) the systemization and one-size-fits-all or template approach, this modularization of Korea’s development knowledge-sharing exercise is customized experiences into case studies; (2) bilateral to the needs of the country. Furthermore, in policy consultation through knowledge a number of cases, policy consultations led sharing with partner countries; and (3) joint to substantive follow-up projects, linked to 19 concessional loan and technical assistance discussion is likely to become a one-time programs, to produce tangible outcomes. event and have limited results. In other words, these methods are often limited in Main Features the results that can be achieved, particularly Many multilateral organizations and gov- when the initiatives are supply-driven or of ernments have developed knowledge a one-shot nature. exchange initiatives. Most of these knowl- The KSP’s goals are institution building edge-intensive development cooperation and capacity building. The KSP selects its projects can be categorized into three participants by matching experts and policy groups: technical assistance/cooperation, practitioners of a partner country with their study tours, and policy dialogues. In many respective Korean counterparts. This facili- cases of technical assistance, experts are tates close collaboration through active dia- sent to a partner country and conduct stud- logues and research work conducted both ies in the field, after which recommenda- in Korea and its partner countries, where tions are drawn to complete the project. the final policy recommendations are co- The set of policy recommendations is then authored by the collaborators of both coun- submitted to the government of the part- tries. Therefore, the process is geared to ner country. However, this mode of craft- enhance the likelihood that recommenda- ing and delivering recommendations has tions are implemented because the actual drawbacks in that it is limited in fostering policymakers and their experts are highly ownership within the partner government involved in making the recommendations. as well as in building capacity to convert This is particularly relevant when the KSP is these recommendations into actionable in a partner country that is supported with policies. Once foreign experts leave, often financial assistance from Korea’s EDCF or all that is left behind is a consultation report grants to assist in implementing develop- (Lim 2011b). ment strategies that were recommended. In the case of study tours, policy practi- In addition, the KSP plans study tours tioners and experts of developing countries and on-site visits taking into consideration get to see industrial sites and relevant insti- the capacity development needs of part- tutions, which may help give participants ner countries. The focus is on establishing different perspectives from what they are mid- and long-term working relationships accustomed to at home. However, unless between the participants of partner coun- the participants take specific actions to tries and of the organizations that they visit change after returning home, study tours to produce practical outcomes in institution have little chance of contributing to institu- building. For example, site tours would tion building. Even if the participants take be conducted at the Small and Medium specific actions based on newly acquired Business Corporation and the Small and knowledge from the study tours, such as Medium Enterprises (SME) Clusters if amendment of a law, it usually takes a SME development was a KSP policy topic. long time for the law to be implemented. Likewise, a team of policymakers would visit This wait is often due to a lack of common the Korea Institute of Science and Technol- understanding among the relevant stake- ogy and the Daeduk Innopolis, a cluster of holders, or in other words, a lack of vertical technology-oriented, research and devel- interaction among key stakeholders. opment centers, and venture companies, Bilateral and multilateral dialogues allow to demonstrate the importance of institu- policymakers to have in-depth discus- tion and capacity building. These kinds of sions and to build networks, but the actual activities are possible and relatively man- outcome of these changes is still left as ageable to carry out under the KSP since mid- and long-term tasks. Also, if key participants are current policy practitioners policymakers do not guarantee continued and experts from Korea and its partner interest and participation, such an in-depth countries. 20 Key Activities of Korea’s Knowledge Sharing Program • For Policy Research, the KSP teams identify, analyze and conduct research on current policy issues of a partner country, where case studies are reviewed and workshops organized to discuss the preliminary results and get feedback from policy practitioners and experts. • For Policy Consultation, the KSP teams discuss the current development issues and policy alternatives with top policymakers and heads of relevant organizations from a partner country. This is to ascertain the needs of partner countries; to share Korea’s development experience; and to enhance the applicability of the research outcomes as actual development policies. • For Capacity Building, the KSP teams invite policy practitioners and experts from a partner country to Korea to discuss the research outcome, take part in a series of seminars on Korea’s development experience, and visit relevant Korean institutions to build institutional and personal networks. • For Dissemination, a workshop is held both in the partner country and Korea in which policy outcomes and the experiences of the KSP are disseminated to policy practitioners, experts, academia, the private sector, and the general public. The KSP has five distinctive character- implementing result-driven policies, backed istics. First, it is a policy-based develop- by a series of institutional and financial com- ment cooperation program, which applies mitments made through other development Korea’s own experience in offering practical cooperation programs. Lastly, it is a flexible development policy alternatives to partner program in which projects can be devel- countries. To this end, former high-level oped into multi-year cooperation programs, policymakers that executed these policies if needed. The KSP also seeks to establish and experts that helped to make the poli- strategic development relationships with cies, as well as current practitioners from non-official development assistance coun- the public and private sectors, participate tries to broaden participation as a way to in the KSP. Second, it is a demand-driven meet the needs of the international com- program in which the development con- munity. cerns and needs of high-level policymakers and current policy practitioners of partner Key Players and Activities countries are taken into consideration. The Ministry of Strategy of Finance of the Third, it is a capacity building program, Republic of Korea is the supervisory ministry aimed at enhancing the policymaking and for the KSP. The Ministry sets out the yearly implementing capabilities of the partici- plan and budget of the KSP and periodi- pants through sectoral research, consulta- cally monitors its progress. KDI is the main tion, and training. In particular, the KSP implementation organization of the KSP. It strives to maximize the effectiveness of is Korea’s leading think tank and has played learning and strengthen development a critical role in policy analysis and prescrip- partnerships by inviting policymakers and tion since the 1970s. experts of a partner country to Korea to KDI selects appropriate Korean special- discuss policy recommendations and show ists according to the needs of individual KSP firsthand how policy is implemented by projects. KDI assigns a project manager and touring relevant institutions. Fourth, it is a 3–5 researchers to each project depending comprehensive program that seeks to help on the number of consultation issues. One a partner country achieve its development person on the consultation team is usually goals. It is a departure from existing aid an in-house expert from KDI, which assures programs that merely offer a blueprint for the implementing role of KDI. A program development or directional policy advice. officer is also designated to each project Instead, it tries to assist in developing and from the KDI Center for International 21 Development to coordinate and implement the Bank’s Brazil country team, works to the project (http://cid.kdi.re.kr). integrate knowledge exchange of Brazil’s Apart from the experts, former high-level experience into new loans. In Africa, South- government officials also take part in the South knowledge exchange has been project by providing advice based on their successfully incorporated into a technical firsthand experiences. Local consultants are assistance loan. also important resources for the KSP since The Bank staff behind these efforts are they provide local information and data learning about opportunities and chal- and often participate in the writing of the lenges for replicating and deepening Bank consultation report. support for peer-to-peer learning, includ- The KSP project consists of four key ing issues around incentives for knowledge activities: policy research, policy consulta- partners to turn their experiences into tion, capacity building, and dissemination. knowledge products. They are conducted over a span of 12 months and consist of various stages for Role of WBI each activity. The sidebar on page 21 pro- In March 2010, the Bank’s Executive Direc- vides more detail about each activity. tors asked the Bank to mainstream South- South knowledge exchange in Bank prod- ucts and services, and WBI was mandated The World Bank’s South-South to lead the agenda in collaboration with the Knowledge Exchange rest of the organization. WBI spearheaded coordination of South-South knowledge Overview exchange for the entire Bank, cutting As a global development institution, the across regions and sectors. WBI is working World Bank offers financing, knowledge, on systematically identifying and helping and connecting services to provide support to address challenges, capturing lessons for South-South knowledge exchange in a learned, and providing a one-stop-shop “global connector� role. Having a country for tools, information, guidance, and good office presence in 120 countries positions practices. This work will foster even more the Bank well to assist in identifying oppor- effective regional and sectoral initiatives tunities for effective peer-to-peer practitio- for developing the Bank as a facilitator of ner learning. The Bank can assist in match- knowledge exchange among practitioners. ing those who have relevant experience to Figure 3 illustrates the lifecycle of the those who are in need of practical learning, South-South knowledge exchange process, in addition to financing. including the brokering role. WBI estab- In response to client demand, the lished a South-South Knowledge Exchange Bank has begun to scale-up support for (SSKE) hub to support this lifecycle: South-South knowledge exchange in more • Brokering to help countries offer their systematic ways, including new types of successes to other countries and help analytical services, such as Bank-facilitated them identify their learning needs. practitioner networks and support for • Financing to develop financing knowledge exchange built into Bank- mechanisms for SSKE such as the South- financed projects. For example, the Social South Experience Exchange Facility. Protection Unit in the Latin American and • Design to offer know-how on how Caribbean Region supports a platform knowledge exchanges can be designed to connect Conditional Cash Transfer for lasting results. practitioners across countries in the region • Implementation to advise and support to learn from one another’s experiences countries in developing their capacity in handling implementation issues and to implement SSKE, using the Global challenges. On the lending side, the Development Learning Network. government of Brazil, in partnership with 22 Figure 3. Lifecycle for South-South Knowledge Exchange Process Supply Design Results Matching Implementation Demand Financing Brokering The State of World Bank Knowledge Services: Knowledge for Development 2011 • Results to document the results through ners act as knowledge providers in facility- this online knowledge platform. funded grants and bring together their The SSKE hub serves as a central reposi- significant experience in development. Cur- tory for information on supporting South- rent partners are China, Colombia, Denmark, South knowledge exchange, including best India, Mexico, the Netherlands, Russian practices and a library of results stories. The Federation, Spain, and the United Kingdom. SSKE seeks to help match countries that The South-South Facility aims to meet want to share knowledge with countries immediate operational knowledge gaps that need knowledge through a brokering by catalyzing the sharing of country experi- mechanism that was piloted with 10–15 ences between practitioners; documenting countries in 2011. This mechanism has the and disseminating lessons learned through potential to address issues of incentives, an online results stories library; and main- transaction costs, and Bank value added streaming demand-driven South-South in a more systematic and coordinated way, knowledge exchange into Bank-financed building on ongoing initiatives. operations. To date, grants are associated with nearly South-South Experience US $2 billion in Bank project financing. Part Exchange Facility of this financing was funded through the Created in 2008, WBI’s South-South Experi- South-South knowledge exchange competi- ence Exchange Facility is a demand-driven, tion, which supported 25 new knowledge multi-donor trust fund that provides just- exchange activities in the context of other in-time small grants (up to US $150,000) for products and services in 2010. Exchanges Bank teams to support country requests cover a wide range of topics, such as agricul- for South-South knowledge exchange. ture, education, finance, industry and trade, The grant application integrates a results- public administration, and law and justice. focused approach for program design and The South-South Facility also supports M&E arrangements. Grant requests are the design of effective knowledge exchanges country-driven but administered by the and documents their results. Lessons learned Bank to facilitate rapid implementation. are disseminated through a library of results Nine partners, including five middle- stories (http://wbi.worldbank.org/sske) that income countries, support the South-South strive to pinpoint outcomes in capacity Facility. In addition to funding, these part- building linked to the CDRF. 23 Capacity Development and Results Framework WBI’s CDRF is a strategic and country-led of South-South knowledge exchange, from approach to capacity development that understanding the initial capacity con- emphasizes the empowerment of local straints and needed change process(es) to agents through learning, knowledge, and identifying the indicators and measures to innovation. The CDRF serves as a valuable assess outcomes: tool for evaluators by articulating the results • A structured framework to guide and chain of capacity development activities— define a theory of change for capacity the progression from needs assessments development. and interventions to outcomes and impact • A change process logic to facilitate the toward development goals. Figure 4 pres- assignment of measurable results indica- ents an overview of the capacity develop- tors. ment process as defined by the CDRF. • Categories of intermediate and insti- Knowledge exchange practitioners can tutional outcomes that can be flexibly use the CDRF to facilitate an assessment of applied across sectors and countries. results in existing or completed knowledge When identifying the results of knowl- exchange programs. The following features edge exchange programs, questions to of the CDRF support a guided assessment keep in mind include: Figure 4. CDRF Capacity Development Process Development Goal Development Actions s Sup tion ply Ins titueholder • In cre Inst k pol ase ef itutio and en st a emrengthhip • Im icy in ficie st nc ns D t s p org rove e rumen y of •S ner aniz f t Resources ow atio fective s nal n arra ess of • Financial nge men • Human ts • Technology • Infrastructure Agents of Change • Raised awareness Intermediate Capacity Outcomes • Enhanced skills • Improved consensus and teamwork • Strengthened coalitions • Enhanced networks • Increased implementation Knowledge Services know-how 24 Table 1. Institutional Capacity Areas and their Contributing Characteristics DEMAND INSTITUTIONS SUPPLY INSTITUTIONS Contributing to the Strength Contributing to the Efficiency Contributing to the Effectiveness of Stakeholder Ownership of Policy Instruments of Organizational Arrangements • Commitment of political and • Clarity in defining rights and • Clarity of mission social leaders responsibilities of stakeholders • Achievement of outcomes • Compatibility of social norms • Consistency • Operational efficiency and values • Legitimacy • Financial viability and probity • Stakeholder participation in • Incentives for compliance • Communications and stakeholder setting priorities • Ease of administration relations • Demand for accountability • Risk for negative externalities • Adaptability in anticipating and • Transparency of information to • Flexibility in addressing varying responding to change stakeholders situations • Resistance to corruption • What capacity challenges was the pro- society, and the private sector give to gram designed to address? a development goal. Shifts in this area • Was change observed at the institutional are reflected by widespread changes in level, that is, in terms of making the attitudes or behaviors that cut across sociopolitical environment more favor- society. able (i.e., strengthening stakeholder ownership), improving the efficiency of Efficiency of policy instruments—com- policy instruments, and enhancing the prising the administrative rules, laws, effectiveness of organizational arrange- regulations, standards, and other formal ments? incentives that a society uses to guide • What evidence is there of intermediate stakeholder actions to achieve devel- capacity outcomes, that is, changes in opment goals. Policy-related capacity local agents’ behaviors, relationships, changes extend beyond the design or processes, and actions, that lead to implementation of a new policy, rule, institutional changes? or procedure to focus on the effects on stakeholder actions that have occurred Institutional Capacity Areas and as a result. Outcomes The CDRF specifies three institutional Effectiveness of organizational arrange- capacity areas that can be enhanced ments—comprising the systems, rules of through capacity development interven- action, processes, personnel, and other tions. Any assessment of knowledge resources that state or non-state stake- exchange results is contingent on under- holders bring together within a specific standing these three areas in the program organization to achieve a development context. Capacity development objectives goal. These capacity changes extend are defined in terms of improvements in beyond the development of individu- stakeholder ownership, policy efficiency, als’ knowledge and skills to focus on the and organizational effectiveness: results that occur due to shifts in organi- zational behavior. Strength of stakeholder ownership— comprising the formal and informal For each of these institutional capacity political and social forces that determine areas, the CDRF specifies contributing char- the priority that government, civil acteristics that may be enhanced through 25 knowledge exchange programs (Table through acquisition or application of new 1). These capacity characteristics provide knowledge or skills. a comprehensive approach to measure (3) Improved consensus and teamwork, capacity development results. which is a strengthened disposition According to the conceptual frame- or ability to act through improved work provided by the CDRF, knowledge collaboration within a group of people exchange projects are either explicitly or tied by a common task. This improved implicitly designed to address one or more collaboration may involve, for example, of three types of capacity constraints or a stronger agreement among team challenges, directly aligned to the CDRF’s members, improved communication, areas of institutional capacity: coordination, or cohesion among team • Low priority attached to the develop- members, or improved contributions by ment goal by key stakeholders (strength team members to the group’s common of stakeholder ownership). task. • Deficiencies in the policy framework (4) Strengthened coalitions, which guiding pursuit of the development goal is a strengthened disposition or ability by different stakeholders (efficiency of to act through improved collaboration policy instruments). between individuals or groups with diverse • Weak performance of the organization(s) objectives to advance a common agenda. charged with achievement of the goal This improved collaboration may involve, (effectiveness of organizational arrange- for example, a stronger agreement among ments). coalition members on a common agenda for action, increased commitment to Identifying and understanding the act, improved trust among members, or capacity challenges that a project has been improved ability of the coalition members designed to address is critical for assessing to leverage their diverse strengths. the knowledge exchange program’s (5) Enhanced networks, which is a effectiveness in contributing to the capacity strengthened disposition or ability to act development objective(s). through improved collaboration between individuals or groups with a common Intermediate Capacity Outcomes interest but not a formal common agenda The CDRF provides a typology of interme- for action. This improved collaboration may diate capacity outcomes (ICOs) that change involve, for example, improved processes agents can achieve to contribute to institu- for collaboration, stronger incentives for tional level changes (Table 2). An ICO is an participation in the network, or increased improvement in the ability or disposition traffic or communication among network of agents to take actions. This improve- members. ment is considered intermediate because (6) New implementation know-how, the expectation is that stakeholders or which is a strengthened disposition or agents—due to their changed ability or ability to act arising from the formulation disposition— will be empowered to bring or implementation of policies, strategies, about a process of change that strengthens or plans. This involves discovery and institutional capacities toward the develop- innovation associated with “learning by ment goal. doing.� The CDRF specifies six types of ICOs. ICOs reflect the initial change results (1) Raised awareness, which is an of capacity development interventions increased disposition to act, through, and are determined by the needs of local for example, improved understanding, change agents to advance the institutional attitude, confidence, or motivation. change process. ICOs therefore serve two (2) Enhanced knowledge or skills, critical purposes in the overall assessment which is an increased ability to act of capacity development results: scoping 26 Table 2. Intermediate Capacity Outcomes and their Operational Attributes Intermediate Capacity Outcome Operational Attribute Raised awareness Understanding, attitude, confidence, motivation Enhanced knowledge and skills Acquisition or application of new knowledge and skills Improved consensus and teamwork Communication, coordination, cohesion, contributions Strengthened coalitions Common agenda for action, commitment to act, trust, leverage diverse strengths Enhanced networks Common interest, process for collaboration, incentives for participation, generating traffic Increased implementation Formulation or implementation of polices, strategies, know-how or plans out and defining each agent’s role in the envisioned change; and setting milestones against which knowledge partners can monitor progress toward achieving capacity development objectives. Once the targeted ICOs are identified, it is necessary to trace the change process intended to strengthen the identified institutional capacity characteristics. The program change process logic can be explored by asking the following questions: • Who were the change agents who initiated or managed the desired change process(es)? • What ICOs achieved by selected agents empowered the process of change, and led to the measurable improvements in institutional capacity characteristics? • What capacity development interventions contributed to the targeted ICOs? Thus, to identify the results of knowl- edge exchange programs, the primary step is to trace the program logic and associated measures to explore the cause- and-effect relationships between knowl- edge exchange program activities and outcomes. Once this basic understanding is established, it is necessary to explore how the program was implemented and what discrepancies exist between expected and actual outcomes. 27 Applied Methodology for the Study A retrospective assessment of the results • Targeted capacity constraints. Which of knowledge exchange requires going institutional capacity areas that are cur- beyond the review of project documents rently impeding the achievement of to interview knowledge partners and other the development goal are targeted key stakeholders. The case studies in this for enhancement through program report illustrate the results stories for three activities? What kind of evidence might knowledge exchange programs in varying be available to measure the needed sectors and country contexts. changes for specific institutional capac- The assessment process for the studies ity characteristics? (Table 1) is based on the following steps. • ICOs. What raised awareness, enhanced Assemble program documents and knowledge or skills, improved consen- materials sus and teamwork, strengthened coali- Collect any project reports available from tions, enhanced networks, or increased the entire program cycle. This includes not implementation know-how is needed only final outputs and evaluation reports at to achieve the desired changes in the the end of the cycle, but also needs assess- targeted institutional capacity character- ment documents and demand surveys istics? What evidence might be available conducted at the beginning of the program to identify these outcomes? (Table 2) and interim monitoring reports. In addition, obtain materials developed by participants • Change agents. Which individual during the knowledge exchange program stakeholders, groups, or organizations such as presentations, action plans, or should initiate or manage the needed other artifacts. changes? Review the program background, Interview the program officer(s) or objectives, and activities other lead stakeholder(s) Conduct a desk review of program docu- Fill information gaps and continue to ments and related materials to understand develop an understanding of the capac- the country context and development ity development change process(es) by goal(s) toward which the program is ori- interviewing one or more knowledgeable ented. Depending on the quality of infor- individuals about the program. Explore the mation available, the reviewer should be validity of current assumptions and identify able to construct preliminary hypotheses data sources or data collection opportuni- about the key components of the capacity ties for gaining evidence of intermediate development change story(ies): and/or institutional outcomes. Sample interview questions can be • Development goal. Who will be better found in the Appendix. The interview guide off and how over the longer term, as a does not need to be followed in sequence; result of the knowledge exchange pro- instead, a collaborative, conversational gram and related activities? approach could dictate the order in which topics are addressed. 28 Steps in the Assessment Process Assemble Review Collect data Analyze data Follow up Understand the documents the program through by tracing on data knowledge exchange and materials background, interviews of results story collection as program’s results from the entire objectives, and stakeholders using CDRF needed to by identifying program cycle activities and key methodology refine the results intermediate and informants stories institutional level outcomes Conduct additional interviews of key informants As possible, collect qualitative data from other program designers, knowledge pro- viders, participants, and other stakeholders well positioned to provide useful contex- tual information or evidence of outcomes. This step could include field visits and in- person interviews (Dominican Republic and Mongolia examples) or could be limited to email exchanges and telephone interviews (NESAP example). Follow up as needed to collect evidence from key informants Continue to develop and refine the results stories through an iterative process, con- structing a more detailed description of the relevant change process(es) and requesting additional clarification and evidence when possible. Simple, consistent qualitative data collection techniques work effectively for revealing and compiling the evidence of results from knowledge exchange pro- grams. Applying the CDRF to identify and analyze intermediate and institutional outcomes through these steps provides a detailed understanding of how knowledge exchange facilitated by KDI and knowledge exchanges coordinated by WBI have con- tributed to capacity development results. 29 30 KDI Knowledge Sharing Program with the Dominican Republic Introduction KnOWLEDGE ShARInG PROGRAM InFORMATIOn Overview of Program Context Title: Export Development of the KDI launched the KSP with the Dominican Dominican Republic (2008), Improving the Republic in 2008. The objectives included Export Infrastructure and Electric Power conducting policy research, consultation, System of the Dominican Republic (2009) and training programs to advance export Knowledge Partners: Government development of the Dominican Republic. officials and private exporters of the The 2008 KSP focused on finding policy Dominican Republic, Korean consultants priorities and challenges of developing Program Period: March 2008–April 2010 exports and providing pragmatic and viable policy recommendations tailored to meet local conditions. It was followed by another KSP in 2009 that focused on infrastruc- government ministries, public and private ture development for export promotion agencies, and exporters and export associ- in conjunction with Korea’s EDCF and on ations. Study tours in Korea were designed improvement in the electric power system to address the needs of the Dominican in the Dominican Republic. Republic in both the public and private sec- The KSP aimed to improve vertical tor through sharing Korea’s knowledge and (within-country) interactions. That is, the experience from several perspectives. program strived to promote coalition build- The KSP’s mix of vertical and horizontal ing among relevant stakeholders, includ- interactions facilitated final policy recom- ing policymakers, practitioners, scholars, mendations customized for the local con- private sector leaders, and exporters within text. This section reports the outcomes of the Dominican Republic. The KSP also tried the knowledge exchange based on findings to encourage horizontal (cross-country) from a qualitative analysis of interviews with interactions—peer-to-peer learning— program implementers and beneficiaries between Korean and Dominican par- and relevant program documents (2008 and ticipants to assist capacity building of the 2009 KSP final reports). Data were analyzed Dominicans through exchange of knowl- using the CDRF, which offers a blueprint edge and experience with their Korean for tracing results stories. The CDRF shows counterparts. how the knowledge exchange armed At the request of the Dominican Repub- change agents to achieve needed ICOs for lic, participants were selected from a variety supporting the longer-term development of of areas, including policymakers, practi- institutional capacity. tioners, scholars, exporters, and export associations from Korea and the Dominican Development Goal and Capacity Republic. Participants from the Korean side Development Objectives included the main KSP consultant team of During his visit to KDI in July 2006, Presi- 3–4 experts as well as representatives from dent Leonel Fernandez Reyna of the 31 Dominican Republic participated in a ers through knowledge and experience seminar and engaged in lively discussions exchange with Korean counterparts. on Korea’s development experience. By • Learn from the benchmarking of Korea’s comparing Korea’s development experi- export-oriented strategies and apply the ence with that of the Dominican Republic, results strategies to become acquainted he found out that the Dominican Republic with key factors that caused export had a higher per capita income than Korea development in Korea to soar. until 1974. Despite similar geopolitical and economic conditions, Korea had pursued To achieve these objectives, the 2008 strong export-driven policies throughout KSP focused on the development of poli- the 1960s and 1970s, which impressed cies and systems for export promotion, President Fernandez. He was motivated to export financing, and human resource instruct Minister Eddy Martinez Manzueta capacity building. As a follow-up to the of the Export and Investment Center of the first-year’s policy recommendations, the Dominican Republic (Centro de Export- Dominican government requested related ación e Inversión de la República Domini- technical and financial assistance on export cana, or CEI-RD) to seek cooperation with infrastructure, electric power, and establish- KDI to learn from Korea’s export develop- ing an export-import bank in 2009. ment experience. Based on an analysis of a series of inter- Despite the country’s small domestic views with Dominican policymakers, practi- market of about 10 million people, export tioners, private sector leaders, and Korean was not traditionally strong and not viewed participants, along with in-depth reviews of as important in the Dominican Republic. the final KSP reports, the capacity develop- The volume of export was anticipated to ment objectives of the two KSPs were to: decline, from 35 percent of the country’s • Increase the strength of stakeholder GDP in the 1990s to 27 percent in 2003 to ownership by building the commitment 15 percent in 2007. The Dominican Repub- of political and social leaders of the lic had an average export growth rate of Dominican Republic to promote export approximately six percent from 2005 to development. 2007, among the lowest in the Caribbean • Improve the efficiency of policy instru- region, including the member countries ments for encouraging export develop- of DR-CAFTA, the free trade agreement ment. between the U.S. and Central American • Enhance the effectiveness of organiza- countries and the Dominican Republic (Lim tional arrangements by improving the et al. 2009:43). Multiple factors explain operational efficiency of state electrical reasons for the stagnation in the country’s companies to better generate and dis- exports: complicated customs procedure; tribute electrical power. insufficient financial support, including the absence of export financing tailored to the Program Description needs of exporters and companies; col- lateral-based loans; and lack of systematic Stages of the Program support. The KSP with the Dominican Republic was A key development goal in the Domini- implemented through a series of program can Republic is to promote export develop- stages set within the KSP framework. The ment. With this goal in mind, the Domini- participants from Korea and the Dominican can government wished to achieve certain Republic visited each other’s respective objectives through the KSP with Korea: countries to conduct the following activities • Learn and apply best practices that in the 2008 KSP: worked in Korea’s development process. • High-level Demand Survey: Identifica- • Build capacities of policymakers, practi- tion of policy priority areas regarding tioners at the working level, and export- export development through interviews 32 between policymakers and export lead- play a significant role by working with the ers of Korea and the Dominican Repub- private sector on a regular basis to monitor lic. progress and devise solutions to emerging • Pilot Study: Interviews with policy prac- problems (Lim et al. 2009:8). titioners, export agencies, and exporters The 2009 KSP was implemented based to concretize policy research and con- on the same framework, with the exception sultation topics and to collect data for of the High-level Demand Survey and Local in-depth research and studies, including Reporting Workshop. The policy priorities respective presentations on the export and detailed topics were decided at the experiences of Korea and the Domini- last stage of the 2008 program through the can Republic. Senior Policy Dialogue. The Policy Confer- • Local Reporting Workshop and Addi- ence for EDCF Country Strategy, which was tional Study: Presentation of preliminary held during the Pilot Study, replaced the findings and discussion with local partic- Local Reporting Workshop. ipants to tailor policy recommendations. The exchange of visits and interviews • Interim Reporting and Policy Practitio- with diverse stakeholders, including policy- ners’ Workshop: Presentation of interim makers, practitioners, and the private sec- findings and discussions, seminars, and tor, provided the Korean consultants with study tours to Korea’s export agencies, the opportunity to learn varying perspec- ministries, and private export companies tives from all sectors. Through the KSP, the to experience first-hand Korea’s export Dominican delegation—composed of a mix development. of policymakers, practitioners and the pri- • Senior Policy Dialogue and Final vate sector—were encouraged to ponder Reporting Workshop: Presentation and and discuss challenges to export develop- dissemination of findings to local policy- ment and possible policy solutions. In addi- makers, social leaders, and local stake- tion, by seeing and experiencing Korea’s holders, including government officials, export development experience firsthand, export agencies, specialists, media, and the Dominican delegation observed in local exporters, etc. practice the methods and techniques on how to develop their export that they had The Korean expert group felt the read about in the literature. highlight of the 2008 program was a meet- ing with President Fernandez held at the Participants from Korea National Palace in June 2008; the meeting For the 2008 program, “Export Develop- helped to ensure local ownership and sup- ment of the Dominican Republic,� the port for the KSP. For Korea, export devel- government and KDI selected four topics opment—for which the nation has continu- through a series of discussions with the ously had to measure itself against global Dominican counterparts. In line with the benchmarks—has been the engine of number of topics, four Korean consultants, growth and the organizing principle under based on their expertise and knowledge on which industrial upgrading, infrastructure each of the topics, participated in the pro- development, and human resource devel- gram (Table 3). opment could be pursued. To President The Korean ministries, export agencies, Fernandez, the Korean expert group sug- and private exporters contributed to the gested that the Dominican Republic simi- content during the Dominican delega- larly use exports to change the Dominican tion’s study tour to Korea. During the Policy people’s mindset and overcome the limits Practitioners’ Workshop, the Dominican of its small domestic market. Dr. Wonhyuk delegation met with high-ranking officials Lim, project manager and director of the at the Blue House and Ministry of Strategy Office of Development Cooperation at KDI, and Finance and visited export-related emphasized that the government could agencies and organizations as well as firms 33 Table 3. Korean Consultants for 2008 KSP with the Dominican Republic Topics for 2008 KSP: Export Development of the Dominican Republic 1. Strategic Re-positioning for the Dominican Republic • Dr. Wonhyuk Lim (Project Manager), Director, Office of Development Cooperation, KDI 2. Industrial Upgrading and Export Diversification • Dr. Jongil Kim, Professor, Dongguk University 3. Human Resource Development • Dr. Byoung-Hoon Lee, Professor, Chung-Ang University 4. Export Financing in the Dominican Republic and Its Medium- to Long-term Promotion Plan • Mr. Sung-Kyu Choi, Senior Manager, Korea Export-Import Bank Table 4. Korean Consultants for 2009 KSP with the Dominican Republic Topics for 2009 KSP: Improving the Export Infrastructure and Electric Power System of the Dominican Republic 1. EDCF Country Strategy for the Development of Export Infrastructure of the Dominican Republic • Mr. Sung-Kyu Choi, Senior Manager, Korea Export-Import Bank 2. Improving the Electric Power System of the Dominican Republic • Dr. Wonhyuk Lim (Project Manager), Director, Office of Development Cooperation, KDI • Mr. Kab-Joon Yoo, Representative, Suez Energy • Dr. Jung-Shin Park, Professor, Uiduk University in the public and private sector including: Trade Zone, Kumho P&B Chemical, and the Dongdaemun Fashion Center, Korea Daewoo International Trading Company Electric Power Corporation (KEPCO), Sam- provided valuable information on Korea’s sung Electronics, Hanyang University Ansan development experience in export and Campus, SK Group Headquarters, and electric power development. Korea Export-Import Bank (KEXIM). The same logic was applied to the Participants from the Dominican 2009 KSP, which focused on improving the Republic export infrastructure and electric power sys- Another main characteristic or feature of tem. Four Korean consultants participated, the KSP, apart from selecting detailed top- based on their expertise and knowledge on ics and consultants, is its selection of a each of the topics (Table 4). counterpart organization within the partner Experts from KEPCO contributed heavily country that will coordinate all of the neces- to the content, focused on improving the sary arrangements among different local electric power system in the Dominican stakeholders. The Dominican government Republic. KEPCO participated in the pilot designated CEI-RD to cooperate with KDI study and presented Korea’s development since it was the main organization in charge experience in the electric sector. In addi- of promoting Dominican Republic exports. tion, during the Policy Practitioners’ Work- The participants of the Dominican shop when 13 Dominican delegates—com- Republic can be divided into two catego- posed of government officials and experts ries: members of the Dominican delega- on export and electricity—visited Korea for tion who participated in the study tour in the study tour, KEPCO, Korea Institute of Korea, and attendees of the local reporting Energy Research, Korea Advanced Institute workshops, such as the Launching Semi- of Science and Technology, Incheon Free nars, Policy Conference on EDCF Country 34 Strategy, and Final Reporting Workshop. ers from additional relevant organizations A number of Dominican officials and participated, to provide comments and experts made presentations and comments feedback on findings and recommenda- at these events. In addition, a couple of tions prepared by the Korean counterparts Dominican experts subsequently contrib- as well as to make their own presentations uted consultant papers on human resource on policy challenges for the Dominican development issues. Republic. Organizations included ministries, The Dominican delegates who visited banks, public agencies, the private sec- Korea for the Interim Reporting and Policy tor, and universities. (The complete list of Practitioners’ Workshop were selected at participants and organizations is found in the discretion of the Dominican counter- the Appendix.) part, CEI-RD, building on guidelines pro- The KSP process occurs at multiple vided by the Korean counterpart, KDI: levels, with assistance to government • Delegation must be led by a senior ministries, public and private organizations, government official (e.g., vice minister) and businesses. Since the KSP is a com- responsible for policymaking in export prehensive program consisting of policy development, economic planning, elec- research and recommendations that aim tric sector development, or any area to assist the socioeconomic development relevant to the KSP topics. of the counterpart country, it is essential to • Delegation must include a mix of consider the perspectives of all stakehold- policymakers, practitioners, and private ers in preparing the final policy recom- exporters. mendations. The KSP also provides oppor- • Delegates must have expertise and tunities to strengthen vertical interactions knowledge of the relevant areas within the Dominican Republic by bringing studied. various stakeholders together at seminars CEI-RD suggested that the delega- and workshops to discuss issues related to tion include multiple high-level officials the topic. across ministries and agencies so that they could not only see Korea’s development Policy Recommendations experience firsthand, but also engage in After working through each of the stages in intensive discussions on Dominican policy the KSP framework, the KSP produced final challenges over the course of the trip and policy recommendations for each year’s work together to implement reform after project topic: Export Development of the returning home. KDI agreed, believing Dominican Republic (2008) and Improving that additional resources committed to the the Export Infrastructure and Electric Power study tour as a result would be justified if it System of the Dominican Republic (2009). led to substantive reform. In the 2008 program, the Korean Based on these criteria, 15 Domini- consultants and Dominican officials and can delegates were selected for the 2008 experts agreed that a resolute pursuit of program on export development: three coordinated export development was minister-level policymakers and 12 policy necessary to achieve macroeconomic practitioner-level experts from varied stability and long-term economic growth in organizations. For the 2009 program on the Dominican Republic. In addition, export improvements in the export infrastructure development strategies had to become the and electric power system, 13 Dominican organizing principle under which industrial delegates were selected using the same upgrading, infrastructure development, criteria. (The list of participants and organi- and human resource development would zations is found in the Appendix.) be pursued. Moreover, the Dominican For the seminars and workshops held in government was advised to recognize the Dominican Republic for the 2008 and that competitive exports based on 2009 KSPs, a wider range of stakehold- domestic industrial capabilities could 35 provide a solid basis for maintaining macro- • Reduce technical and non-technical economic stability. losses by changing outdated electric- Based on the main findings, policy rec- ity distribution lines and equipment, ommendations included: legislating a law to prevent power theft, • Establish regular public-private consulta- improving meter-reading work, etc. tion meetings on export headed by the president to set up various information- Outcomes and Analysis sharing mechanisms to monitor progress on export development and devise solu- Summary of the Capacity tions to emerging problems. Development Change Logic • Develop international trade networks The KSPs sought to address five main insti- and strengthen international information tutional constraints to export development. collection efforts to share information on First, the government was not committed foreign markets, identify foreign buyers, to export development. Second, the pri- etc. vate sector did not have the policy incen- • Establish an export promotion fund and tives in place to promote exports. Third, the expand it to an export-import bank to financial resources and support for com- provide export financing, insurance, and panies to start exporting were not avail- credit services to exporters. able. Fourth, the infrastructure for exports • Set out a clear vision in a multi-year was weak—particularly in terms of export plan to coordinate mid- to long-term financing and assistance—due to absence development policies and ensure policy of a government authority in charge and in consistency. the energy sector because of operational inefficiencies. Fifth, a lack of multi-year For the 2009 program, the primary strategic planning led to inconsistencies in objective was to formulate an EDCF Coun- policies slowing export development. try Assistance Strategy for the Dominican In order for the government to estab- Republic within the framework of a com- lish their commitment to export develop- prehensive export infrastructure develop- ment, government officials and business ment plan, by identifying an extensive list leaders needed to be able to understand of projects that would allow 3–4 years of the importance of developing exports to stable and continuous EDCF assistance to create a sociopolitical environment con- the country. The main objective for improv- ducive to export development. The KSP ing the electrical power system was to seek allowed the key stakeholders to envision effective solutions to chronic problems in how export development would help the the Dominican electric power sector. country to transform its economy and Based on the findings of the electricity improve the lives of its people. The knowl- sector and identification of the necessary edge exchange from the KSP and seeing infrastructure for export development, firsthand the successes of Korea had the policy recommendations included: catalytic effect of inspiring key govern- • Proceed with the EDCF project on the mental decision makers (the president and establishment of the CIBAO Trade Cen- ministry heads) and business leaders to ter to better assist export development commit to export promotion in the Domini- with basic infrastructure. can Republic. • Establish a control tower in the energy It is not until higher-level political offi- sector in charge of policy implementa- cials and private sector leaders established tion as well as its formulation. their commitment to export development • Reform pricing and subsidy policies to that progress toward influencing policy reduce massive debt of power distribu- changes and organizational efficiencies tion companies and thereby secure busi- could begin. The political leadership’s com- ness certainty. mitment to the development of exports led 36 Figure 5. Overview of the Change Logic for the KSP with the Dominican Republic Improve the socioeconomic development of the Dominican Republic by contributing to its export development Strength of stakeholder Efficiency of policy Effectiveness of organizational ownership instruments arrangements Commitment of Clarity in defining Incentives for Consistency Operational leaders roles and compliance of policy efficiency High level govern- responsibilities The policy envi- instruments Dominican Cor- ment officials need Private sector ronment could A consistent poration of State to envision the enterprises could provide better set of policies Electrical Compa- transformation of engage more in incentives and is needed for nies (CDEEE) the economy that export activities fewer barriers strategic plan- could improve op- could result from if the appropriate to encourage ning to reach erational efficiency export develop- lending and insur- private sector country goals. by improving orga- ment to promote ance instruments engagement in nizational arrange- the needed were available. export activities. ments to reduce changes. electricity loss. Intermediate Intermediate Intermediate Intermediate Intermediate capacity capacity capacity capacity capacity outcome outcome outcomes outcome outcomes Raised awareness: Applied knowledge Raised Applied Enhanced Key high-level and skills: After awareness: knowledge and knowledge: government learning about the Private sector skills: High- CDEEE officials become Korean model for stakeholders level officials management aware of the export financing, understand at the Ministry understands potential benefits Dominican the benefits of of Planning, reasonable of export leaders take the policies that Economy and energy loss rates development steps to create promote export Development and methods for that could be an export-import development. learn how to reducing losses. achieved through bank—including implement Strengthened Increased reducing electricity a presidential a national public and implementation losses, fostering decree and the strategic private sector know-how: A public-private formulation of a law planning coalitions: Gov- law criminalizing collaboration, to clarify roles and process ernment officials energy theft is and creating responsibilities. that ensures establish formal implemented. international trade consistency arrangements networks. among for gaining private sector government policies. input. Consecutive KSP projects Export Development for the Dominican Republic Improving the Export Infrastructure and electric power system Establishment of the Dominican Export-Import Bank 37 to a high prioritization of export develop- development and were motivated to ment in the national strategy, the upgrad- take action. They enhanced and applied ing of the current infrastructure to improve knowledge acquired from the KSP in their operational efficiencies in the energy respective areas. They also strengthened sector, and the facilitation of financing and coalitions between the public and private lending operations for exports. sectors. The KSP imparted knowledge on how to improve energy sector efficiencies and how Strength of Stakeholder Ownership: to establish financing and insurance for Changes in the Mindset and exports through practitioner-to-practitioner Commitment of the Government exchanges. Observing how these models toward Export Development worked in practice and discussing the chal- lenges with the experts who implemented Targeted Institutional Outcomes them in Korea motivated and informed Before the KSP, high-level government local stakeholders, not only on what officials had limited knowledge and willing- needed to be done, but also in how to take ness on the need to take necessary steps action from a practical level. The KSP con- to promote changes in current policies, nected the Dominican Republic delegation infrastructure, and financing needed for members to their Korean counterparts who export development. To strengthen their had grappled with the same issues in the commitment, these leaders needed to first past (i.e., KEPCO and KEXIM). This led to envision the transformation of the economy formal twinning arrangements whereby the that could be achieved through export Korean institutions will provide assistance, development. training, and the technical guidance neces- By sharing Korea’s development experi- sary to implement the new policies. ence with a strong emphasis on the role Likewise, the officials from the Ministry of exports in sustainable growth, the KSP of Economy, Planning and Development helped to shift the mindset of policymakers, learned from the KSP how to engage in practitioners, and private exporters toward strategic long-term planning to achieve one that embraced exports. The knowl- national goals. This empowered the Minis- edge gained through the KSP informed key try to integrate multi-year planning into the stakeholders and raised their awareness of development of their national strategies. the importance of the Dominican Republic The importance of planning to successful developing its export, which strengthened development was emphasized by Minister their commitment to implement needed of Planning Juan Montas’s preface to the change (Figure 6). The Face of Hope: The Miracle of South Korea Seen by a Dominican Diplomat, writ- Intermediate Capacity Outcomes ten by Ambassador Hector Galvan, which In results-focused capacity development, he wrote after the KSP (Montas 2008). the achievement of raised awareness dem- Figure 5 presents an overview of the onstrates an ICO. In this KSP, participants’ change logic for the KSP with the Domini- raised awareness reflected a change in the can Republic. The individual results stories ability and disposition of stakeholders (or in the following sections describe how change agents) to take action. After the the KSP influenced key change agents to KSP, Dominican participants were highly achieve ICOs that lead to greater insti- motivated to take action to achieve the tutional outcomes. The ICOs are critical development goal. points in the change process that encom- Minister Martinez of the CEI-RD said pass outcomes achieved by participants in his awareness had been raised dramati- the intermediate term. In the Dominican cally from his participation in the KSP. Republic, participants achieved raised During his interview, he said, “There have awareness of the importance of export been numerous country reports that we 38 Figure 6. Change Logic for Strength of Government Commitment Improve the socioeconomic development of the Dominican Republic by contributing to its export development Strength of stakeholder ownership Commitment of leaders High level government officials need to envision the trans- formation of the economy that could result from export development to promote the needed changes. Change process and agents of change Government officials understand the potential economic growth fostered by export development and the changes necessary to achieve this growth. Intermediate capacity outcome Raised awareness: Key high-level government officials become aware of the potential benefits of export development that could be achieved through reducing electricity losses, fostering public- private collaboration, and creating international trade networks. Consecutive KSP projects Export Development for the Dominican Republic Improving the Export Infrastructure and Electric Power System Establishment of the Dominican Export-Import Bank have read in the literature on the need tation at FUNGLODE, the Dominican foun- to develop the export but they never felt dation for democracy and development real. However, after we visited Korea and that he had founded, President Fernandez engaged in discussions with those who said: “We try to build the future knowing actually participated in the process of that is uncertain… Nothing can be done in developing Korea’s exports, it made us this world in transition if we do not visual- believe that the Dominican Republic could ize the future. And we want the Dominican also do it. Seeing was totally different Republic to be the Korea of the Caribbean� from just reading about it in the literature. (Fernandez 2011). We could now clearly see the future of Likewise, Minister of Planning Montas the Dominican Republic. The Dominican demonstrated his awareness had been Republic can be the Korea of the Carib- raised in the preface he wrote for The Face bean.� of Hope. Montas’s preface was based on This sentiment was echoed at the his reaction to the stark realization that the highest government level when President Dominican Republic had a higher GDP per Fernandez used the same expression in capita than Korea until 1974 (Montas 2008). his remarks in March 2011 at a seminar on The preface begins by stating, “In 1950, future challenges for humanity. After spe- South Korea was poorer than the Domini- cialists in future studies made their presen- can Republic. The GDP per capita of the 39 Asian nation represented 83 percent of the ment officials, and private sector repre- Dominican Republic’s GDP. In 1965, the sentatives. Another result is a proposal to Dominican Republic’s GDP per capita still establish the Dominican Republic Export exceeded South Korea’s; however, in 2006, Trading Company (DR-ETC), prepared the GDP per capita of South Korea was jointly by public and private actors based almost four times superior to the Domini- on the Korean model of general trading can Republic...� Montas also said the title companies promoting local export. The of the book, The Face of Hope, captured CEI-RD collaborated with other ministries “what South Korea is for all those countries and export associations to develop busi- who want to radically transform the social ness plans to establish the DR-ETC, which and economic conditions of their people are currently under review. Once estab- in the course of a single generation.� This lished, the DR-ETC will be dedicated to statement illustrates the KSP’s inspirational the commercialization of Dominican goods and motivational influence on Minister and services in international markets. The Montas. DR-ETC is expected to function exclusively as a trader, i.e., serving as a matchmaker for Institutional Outcomes intermediary sales, without taking posses- The KSP enhanced the commitment of sion of goods and services. high-level government officials and busi- ness leaders, which represented improved International trade networks were stakeholder ownership at the institutional enhanced, which led to stronger informa- level. Several examples demonstrate the tion collection efforts. public sector’s increased commitment to CEI-RD and the Dominican Ministry of promote exports. Foreign Relations signed a memorandum of understanding to collaborate on strength- A presidential decree was issued to hold ening the international trade networks. private-public consultation meetings. The first achievement of the collaboration According to the 2008 KSP final report was inviting Dominican representatives and interviews conducted in April 2011, from the public and private sectors living presidential decrees had been issued to abroad to Santo Domingo for training. The hold private-public consultation meetings. training encompassed exports, foreign This action was a direct result of the KSP direct investment, and approaches to foster recommendation that was based on Korea’s international trade networks, based on experience of the President convening Korea’s experience with the Korea Trade- “Monthly Export Promotion Meetings� Investment Promotion Agency and general from the 1960s to 1980s. In the Dominican trading companies. case, the meetings have been held every In addition, the Dominican Republic 3–4 months upon the request of the private hosted the first international Food Show sector when there was a need for public (exhibition) and invited foreign buyers to and private actors to come together and participate. The CEI-RD and Ministry of solve problems relevant to exports. Mem- Foreign Relations arranged more than 600 bers of the meetings include the president, business-to-business meetings between relevant ministers, leaders of export agen- foreign buyers and domestic exporters. cies, and private sector leaders, such as the president of the Dominican Association of The president established support for Exporters. The president demonstrates his mechanisms to facilitate access to funding. strong support for exports by convening Specifically, the president of the Domini- these meetings. can Republic mandated the conversion of Direct results from the meetings include the Bank of Housing and Production (BNVP) the One-Stop Shop for Investment estab- into the Dominican Export-Import Bank lished by the president, high-level govern- (DEXIM) and has taken concrete steps to 40 facilitate the process. During interviews encourage export development by the pri- with BNVP managers and staff, it was vate sector have not been fully established, noted that President Fernandez directly valuable ICOs have been achieved toward instructed the conversion of BNVP into a that end. The KSP influenced the private development bank. President Fernandez sector’s mindset to become significantly assigned the presidency of BNVP to a pro- more pro-export and strengthened coali- export candidate, Mr. Federico Antun, and tions between the public and private sec- ordered him to oversee the conversion of tors (Figure 7). BNVP to DEXIM. This was corroborated by the 2010 KSP country report, which Intermediate Capacity Outcomes cited President Fernandez’s strong support The KSP raised awareness of policymakers for DEXIM and requested regular brief- and private sector leaders on the impor- ings about its progress. Minister Martinez tance of developing exports. Strong evi- of CEI-RD reported that the Minister of dence, based on interviews conducted in Economy, Planning and Development and April 2011 with policymakers and private Finance, Governor of the Central Bank, sector leaders, indicates the mindset of the and other officials of related institutions are private sector has become pro-export. also supportive of the project. In addition, In the past, the private sector was not the law to implement the conversion of the supportive of export development and BNVP to assist Dominican exporters with unaware of the importance of exports to export credit and insurance is strongly sup- the country and potential profits. Through- ported by the three largest political parties out the 1980s, agricultural and industrial in Congress. associations favored isolationist policies to Currently, CEI-RD, BNVP and the Central protect local markets. An interview with the Bank are collaborating to convert the executive vice president of the Dominican main functions of BNVP to conduct export Association of Free Zones (ADOZONA) financing and insurance services as DEXIM. revealed that in the past, exporters and To make a smooth transition, high-level export associations used their “leftover� management meetings are being held production as exports. Today, exporters between CEI-RD, BNVP, and the Central and associations are producing products Bank. Together these actions indicate with the primary goal of exporting them. concrete commitment from the leadership Since the first KSP in 2008, the private level toward the establishment of DEXIM sector has become the biggest advocates and ultimately toward export development for pro-export policies in the country. The of the Dominican Republic. private sector actively engages in related decision-making processes and frequently Efficiency of Policy Instruments for requests better incentives and systems to Encouraging Export Development by improve their export competitiveness and the Private Sector skills. Newspapers feature frequent reports about the private sector promoting the Targeted Institutional Outcomes need to establish policies and incentives The Dominican Republic lacks incentives for exports. This was unheard of previ- in the policy environment to encourage ously because businesses clung to policies private sector engagement in export activi- protecting domestic markets. Today, these ties. The KSP helped government officials associations defend international treaties, and private sector leaders to learn how free trade agreements, and policies to export development could transform the keep the borders open. Export associa- Dominican economy as it did for Korea. tions demand policies to promote export The KSP helped them to identify policy development. changes needed to promote this transfor- The KSP also led to private and public mation. Although new policy incentives to actors strengthening coalitions to facilitate 41 Figure 7. Change Logic for Policy Incentives from the Private Sector Improve the socioeconomic development of the Dominican Republic by contributing to its export development Efficiency of policy instruments for encouraging export development by the private sector Incentives for compliance The policy environment could provide better incentives and fewer barriers to encourage private sector engagement in export activities. Change process and agents of change Government officials and private sector leaders learn how export development could transform the Dominican economy and what policy changes are needed to promote this transformation. Intermediate capacity outcomes • Raised awareness: Dominican businesses, agricultural associations, and industrial associations understand better the benefits of policies that promote export development and are motivated to take action. • Strengthened public and private sector coalitions: Government officials request input from the private sector for strategic planning and the public and private sectors establish formal arrangements for promoting foreign direct investment and export trading. Consecutive KSP projects Export Development for the Dominican Republic Improving the Export Infrastructure and Electric Power System Establishment of the Dominican Export-Import Bank export development. Participation in the participation in the national development KSP brought together public and private strategy. The Ministry of Economy, Planning actors. It encouraged them to collaborate and Development requested input from the in formulating strategies and policies and private sector on formulating the national solve challenges to economic develop- development strategy and incorporated ment by applying models from Korea’s revisions from ADOZONA. experience through local adaptation and The collaboration to develop the DR- innovation. For instance, private sector ETC is further evidence of strengthened representatives participate in presiden- coalitions. The private sector is expected tial meetings and ministerial meetings on to participate as a shareholder of export development. Another important the DR-ETC once it is established. The example of strengthened public and pri- company will be structured as a limited vate sector coalitions is the private sector’s liability company with CEI-RD serving as a 42 Figure 8. Change Logic for Clarity in Providing the Needed Export Financing Improve the socioeconomic development of the Dominican Republic by contributing to its export development Efficiency of policy instruments or establishing the financing needed for export development Clarity in defining roles and responsibilities Private sector enterprises could engage more in export activities if the appropriate lending and insurance instruments were available. Change process and agents of change Government officials and financial sector leaders learn how to create an export-import bank for the Dominican Republic by adding this function to the National Bank of Housing and Production (BNVP). Intermediate capacity outcome Applied knowledge and skills: After learning about the Korean model for export financing, Dominican Republic leaders are taking the steps to create an export-import bank. These steps include a presidential decree to support the transition of BNVP, and the formulation of a law to clarify the roles and responsibilities of BNVP. Establishment of the Dominican Export-Import Bank Twinning arrangement with Korean Export-Import Bank majority shareholder (approximately 50%), form of trade finance to exporters through and the remaining shares divided among a state-owned development bank and a the private sector, mostly through power- few commercial banks. This issue has been ful private sector associations, including a bottleneck to the promotion of exports in the Dominican Association of Exporters, the private sector. The KSP addressed the Dominican Industrial Association, and lack of policies mandating export financ- ADOZONA. ing by bringing government officials and representatives from the Dominican BNVP Efficiency of Policy Instruments for together with KEXIM to learn about the Providing Export Financing Korean bank’s experiences and technical advice for export financing. As a result of Targeted Institutional Outcomes the KSP, the Dominican government is in Exporters in the Dominican Republic cur- the process of converting BNVP into DEXIM rently have little or no access to long-term (Figure 8). financing and insurance needed for their businesses. In particular, the Dominican Intermediate Capacity Outcomes Republic does not yet have an export BNVP staff applied knowledge and skills credit agency and therefore is only able to acquired from the KSP to transform BNVP provide minimal financial assistance in the into DEXIM. BNVP staff applied the Korean 43 model for export financing by propos- Targeted Institutional Outcomes ing a reform bill to change its mandate The electrical power system in the Domini- to establish DEXIM. The preparation and can Republic currently suffers from tremen- submission of this reform bill represents the dous inefficiencies due to losses caused application of knowledge and skills gained by obsolete machinery and energy theft. through the KSP. The reform bill for BNVP’s The targeted institutional outcome is to conversion to DEXIM is under revision at improve the electric power system and the Monetary Board of the Central Bank. export infrastructure through increased According to interviews with the BNVP operational efficiency in the Dominican president and his staff, the bill is expected Corporation of State Electrical Companies to pass the revision process at the Central (CDEEE). Learning about how the Korean Bank and the national Parliament. Electrical Power Corporation (KEPCO) The KSP also led to a partnership overcame challenges with energy efficiency between BNVP and KEXIM that was formal- revealed to the Dominicans not only how ized through an agreed memorandum of low their efficiency rates fared in com- understanding. The institutions have estab- parison, but also how quickly they could lished twinning arrangements whereby improve if they applied the right policies. KEXIM will provide guidance and technical This knowledge inspired Minister support to DEXIM. This will lead to ICOs in Marranzini, the head of CDEEE, and his the near future through its planned activi- staff by motivating the adoption of new ties, including training, secondee arrange- policies and the design of projects to ments, and technical assistance. implement new machinery to improve operational efficiencies and increase Progress Toward Institutional access. Progress toward improvements Outcomes in organizational efficiencies at CDEEE Agreement among the change agents— is evidenced by the achievement of the CEI-RD, BNVP, and the Central Bank—on following ICOs (Figure 9). the reform bill to convert BNVP’s role demonstrates strong progress toward an Intermediate Capacity Outcomes institutional outcome. The policy will clarify CDEEE applied knowledge gained through and define BNVP’s role and responsibil- the KSP in a variety of ways. The most ity as DEXIM. According to the 2010 KSP important knowledge acquired through the final reports, intense debate occurred over KSP by members of CDEEE and National whether to establish a new DEXIM or to Energy Commission (CNE) was the realiza- add the role of exporting financing and tion of, as Minister Marranzini of CDEEE insurance services to an existing agency. puts it, “how far behind the Dominican There were also differing views as to which Republic was compared to Korea.� CDEEE agency should take the responsibility and adopted and implemented the following roles of export financing and insurance measures based on the 2009 KSP recom- services. The agreement reached between mendations: the stakeholders to convert BNVP into DEXIM strongly suggests that the law will The General Electricity Law No. 125-1 be passed, representing an improvement in was reformed to criminalize power theft. the efficiency of policy instruments in terms Reducing non-technical losses in distri- of clarity in defining rights and responsibili- bution systems such as electricity theft ties. was the most important factor in improv- ing the poor status of the power sys- Effectiveness of Organizational tem in the Dominican Republic. Seven Arrangements to Provide the thousand cases of power theft have needed Export Infrastructure been brought to justice since 2009 when the law was passed, and as a result, 44 Figure 9. Change Logic for Operational Efficiency of Electrical Companies Improve the socioeconomic development of the Dominican Republic by contributing to its export development Effectiveness of organizational arrangements to provide the needed export infrastructure Operational efficiency The Dominican Corporation of State Electrical Companies (CDEEE) could improve operational efficiency through more effective organizational arrangements to reduce electricity loss. Change process and agents of change Government officials and energy sector leaders learn how policy changes, infrastructure upgrades, and price increases could reduce electricity loss and a performance measurement system could boost employee productivity. Intermediate capacity outcomes • Enhanced knowledge: CDEEE management gained an understanding of reasonable energy loss rates and methods for reducing technical and non-technical losses. • Applied knowledge: CDEEE proposed a law criminalizing energy theft that was implemented in 2009. Improving the Export Infrastructure and Electric Power System Practitioner exchange between CDEEE and KEPCO according to Minister Marranzini, “the Old power distribution lines will be traditional culture where electricity theft upgraded to reduce technical losses. was not considered as a wrongdoing or The CDEEE signed a USD 46.5 million illegal is now changing.� contract with KEPCO to upgrade the old electricity distribution lines of more than The CDEEE reformed electricity prices. 400 km in three major cities. With this One of the reasons for the power upgrade, CDEEE expects better distribu- distribution companies’ losses was low tion of electricity in the three cities with electricity prices. Therefore, the CDEEE fewer technical losses. increased the electricity prices by five percent in May 2011 and is planning on An additional intermediate outcome was increasing it an additional 11 percent in a memorandum of understanding to estab- November. With the criminalization of lish a kind of twinning arrangement between power theft and increase in electricity CDEEE and KEPCO. The partnership with prices, CDEEE expects to improve the KEPCO is likely to lead to ICOs in the near business conditions of its power genera- future from the technical assistance and tion companies. training offered by KEPCO to CDEEE. 45 Figure 10. Change Logic for Consistency of Policy Instruments Improve the socioeconomic development of the Dominican Republic by contributing to its export development Efficiency of policy instruments for supporting export development Consistency of policy instruments A consistent set of policies is needed for strategic planning to reach country goals. Change process and agents of change Government officials learn how to integrate multi- year planning into the national development strategy to establish a consistent approach for promoting export development. Intermediate capacity outcome Applied knowledge and skills: High-level officials at the Ministry of Planning, Economy and Development learn how to implement a national strategic planning process that ensures consistency among government policies. Consecutive KSP projects Export Development for the Dominican Republic Improving the Export Infrastructure and Electric Power System Establishment of the Dominican Export-Import Bank Efficiency of Policy Instruments for planning with program priorities consis- Supporting Export Development tent with the national strategy through an amendment to the Constitution. The Targeted Institutional Outcomes change process took place by achievement Historically, the Dominican government of the following ICOs (Figure 10). suffers from a lack of results-focused, long- term planning in its policy instruments, Intermediate Capacity Outcomes including its national development strat- The Ministry of Economy, Planning, and egy. This led to inconsistencies and a lack Development applied the knowledge of alignment across policies and budgets. and skills they obtained through the KSP The targeted institutional outcome is con- to modify the Constitution and national sistency of policy instruments for strategic development strategies. According to an planning to reach the country’s goals. interview with Director Magdalena Lizardo From working with the Koreans through of the Ministry of Economy, Planning and the KSP, the Dominican government Development, the KSP made clear the learned how to develop strategic plans to importance of economic planning in partic- obtain long-term country goals over several ular, and setting multi-year plans to assure years. This led them to implement policy the consistency of policies. As a result, the changes to mandate multi-year strategic following measures are in process: 46 The Ministry of Economy, Planning and by inviting them as speakers at local or Development incorporated the KSP international seminars. However, it is diffi- recommendations into the national cult to maintain their continued interest and development strategy. According to participation throughout the entire pro- interviews at the Ministry, the Korean gram, especially with programs that have a consultants’ recommendation of long-lasting cycle, such as the KSP. There- establishing a competitive and stable fore, it is important to design knowledge real exchange rate to promote export exchange services that provide incentives development is reflected in the national for high-level public and private actors to development strategy of the Dominican pay continued interest and sustain willing- Republic, which is under review at the ness to participate. For that purpose, the national Parliament. KSP provides one-to-one matching of gov- ernment officials at the policymaker level The government modified the Constitu- between Korea and the partner country. tion and national development strategy First, the KSP starts with a High-level according to KSP recommendations Demand Survey mission, where Korea’s of establishing a clear vision for the former or present high-level government nation in a multi-year plan. The modified official meets with high-level government Constitution now mandates the national officials of the counterpart country to iden- development strategy to include multi- tify main policy priorities. Then, high-level year development plans. For example, government officials of the counterpart five-year development plans and the country visit Korea, where they meet again multi-year development plans must with Korea’s high-level officials and discuss reflect the national policy priorities of the ongoing program, this time with the the Dominican Republic. The Ministry of emphasis on Korea’s development experi- Economy, Planning and Development is ence. At the final stage of the program, the confident that such changes will assure same Korean high-level public figure meets consistency of policies and facilitate with his or her counterpart to disseminate execution of the Dominican Republic’s final findings and policy recommendations. development goals, such as export For the KSP with the Dominican Repub- development. lic, this standard format was modified. During his official visit to Korea in July 2006, Overall, the KSP with the Dominican President Fernandez of the Dominican Republic was effective in providing knowl- Republic met with the president of KDI and edge to local stakeholders so that they subsequently instructed Minister Martinez may achieve ICOs that would contribute to of CEI-RD to commence the KSP between institutional changes. Major changes and the two countries. President Fernandez also reforms are still in progress, and institu- met with the Korean consultants during tional level outcomes are expected in the their visit to Santo Domingo in June 2008 near future, for example, when DEXIM to receive key policy recommendations and is finally established, and measurable lend his support for the program. operational efficiencies are observed within In the Written Demand Survey Form, the CDEEE. KSP mandates the partner government to designate a high-level government offi- Lessons and Implications cial who will be in charge of the program. For the KSP with the Dominican Republic, Continued Interest and Participation Minister Martinez of CEI-RD was placed in from high-level Public and Private charge of the KSP from the Dominican side Actors for two consecutive years. Minister Martinez It is relatively easy to attract the attention of coordinated local activities, recommended high-level public and private actors once, the Dominican delegation to Korea, 47 delivered key remarks during seminars and strategies for them to be effectively imple- workshops, and reported the findings to mented. Vertical (within-country) interaction the president and other ministers. among the relevant stakeholders—public Minister Martinez also played the bridg- and private—is therefore essential for new ing role between the public and private policy drives to have positive spillover sector, inviting presidents of relevant effects in the relevant sector development. associations and exporters and informing A common understanding has to be estab- them of the government’s policy to drive lished on the government’s new strategies export development. Minister Montas before they are implemented. of Economy, Planning and Development The KSP with the Dominican Republic visited Korea as the head of the Dominican aimed to create such a common under- delegation in the 2008 program and met standing by encompassing all relevant with the president of KDI, vice-minister of actors, from high-level leaders to working- Strategy and Planning, chairman of the level officials to private exporters. First, National Competitiveness Council, and policymakers, practitioners, and private other leading figures of Korea. He partici- exporters were invited to local workshops pated in the Interim Reporting Workshop or seminars. These gatherings provided a and provided comments to the interim find- forum where relevant stakeholders dis- ings presented by the Korean consultants. cussed and shared the KSP’s policy recom- Minister Marranzini of CDEEE and Minister mendations. Participants had a chance to Ramirez of CNE visited Korea as the head listen to varying perspectives from govern- of the delegation in the 2009 program and ment officials and private exporters and met with the president of KDI, president think of practical solutions to overcome the of KEPCO, and the Ministry of Strategy challenges with the policy recommenda- and Finance, and also participated in the tions provided by the Korean consultants. Interim Reporting Workshop. Second, the Dominican delegation to Korea Therefore, it is important to design was composed of public and private actors, knowledge exchange programs that contin- from ministers and presidents to working- uously induce high-level public and private level officials and private exporters. They figures to participate in the program stages together saw how Korea had developed and detailed content-building processes. its policies and discussed with their Korean Through continued involvement, the pro- counterparts how to envision their future. gram should draw out sustained interest Knowledge exchange services plays an and monitor the change in their disposi- important role in providing opportunities tion that influences them to formulate and for building coalitions among participants implement new policies and strategies themselves. Programs must not aim to toward achieving the development goal. involve only high-ranking or working-level In CDRF terms, it is essential to assist and officials because new knowledge or skills guide the change agents through follow- learned may not be properly shared or up knowledge services so that they do transferred. Knowledge exchange services not stop at the intermediate capacity level must provide a communication chan- changes, but implement concrete actions nel where vertical interactions can be or behaviors that can affect institutional enhanced. outcomes. Demand-oriented Program Design Coalition Building among the and Strengthening of Ownership Participants For knowledge exchange programs to have Policymakers and working-level practitio- a sustained effect, it is important for the ners, along with relevant private actors, beneficiaries, in this case, the Dominican must understand the objectives, content, participants, to have a spirit of ownership. and expected outcomes of new policies or In order to strengthen the ownership of the 48 participants, knowledge exchange pro- right times due to capacity constraints in grams need to emerge out of country-led formulating necessary policies and iden- processes, from program initiation to tifying exactly when the policy should be producing outcomes. In addition, the con- implemented. Even though good policies tent and results of knowledge exchange are developed, if they are not implemented programs need to be tailored to meet the at the appropriate moment, their effective- demands of the partner country. ness is minimal. Moreover, the country can The KSPs start with a written demand become even worse off if unpractical poli- survey where the partner government sub- cies are implemented at needed times. mits its priority policy areas after coordinat- For the Dominican Republic, it was a The Dominican ing the different needs of other ministries. struggle to find a new growth engine to Then among the policy areas, topics for boost its economic growth. The collabora- Republic was the KSP are selected after discussions with tion through the KSP provided the neces- the Korean counterparts. Throughout the sary knowledge to identify a breakthrough able to envision program, government officials and local strategy. The Dominican counterparts real- its future by experts participate in local workshops, ized that the Dominican Republic resem- practitioner workshops, and final reporting bled Korea’s economic situation in the looking through workshops, and their comments are incor- 1960s and 1970s. The Dominican Republic the window of porated in preparing final policy recom- was able to envision its future by looking mendations. Local experts and consultants through the window of Korea’s history at Korea’s history also participate in analyzing their local its economic development. Korea could conditions and identifying their strengths become the benchmark for the Domini- at its economic and weaknesses, which then motivates can Republic and the Dominican Republic development. them to look for alternative policy solutions could be the “Korea of the Caribbean,� through Korea’s development experience as Minister Martinez put it. However, this Korea could in the relevant area. Such a system of active vision could never be realized if it were not participation from the Dominican experts for the sharing of practical knowledge and become the helped them to develop the spirit of own- experience between the two partners. benchmark for ership to the program. This implies first that the development Therefore, knowledge exchange pro- experiences of knowledge partners, in this the Dominican grams need to be demand-oriented from case, Korea and the Dominican Republic, Republic and design to implementation. At the initial should be relevant to each other. In this stage of the program, it is vital to identify way, participants know what kind of knowl- the Dominican the needs of the partner country together edge or skills are necessary in similar situa- with the participants. The contents of the tions and the participants can expect what Republic program must not focus on one-sided will happen with the acquired knowledge could be the views and intentions but on the demand and skills. Second, the sharing of knowl- from local stakeholders. Programs must edge must be based on the demand and “Korea of the also have diverse participatory mechanisms active participation of the knowledge ben- so that participants can contribute to pro- eficiaries. Knowledge can be successfully Caribbean.� ducing the final outcome. Once the par- shared only when participants are able to ticipants’ spirit of ownership is well devel- digest the new knowledge through active oped, then the program results are likely involvement in the process. to continuously affect the partner country because the country will take its own initia- Monitoring and Continued Assistance tive to follow up on the results. in Application of Program Results The experience thus far with the KSP is that Sharing of Practical and Timely most partner countries request second-year Knowledge Content programs after the first KSP is complete For developing countries, it is not easy to to obtain detailed technical assistance in implement needed policies at precisely the applying their newly acquired knowledge 49 and skills in their countries. This request occurs because most knowledge seeking countries lack capacity in the actual pro- cess of implementing new strategies. For example, in the Dominican Republic, the first KSP’s recommendation to establish an export-import bank was accepted by the Dominican government; however, the Dominican stakeholders lacked the know- how and experience to readily implement it. Thus, a follow-up KSP was requested and implemented on how to manage and oper- ate export financing and insurance services for an export-import bank. Knowledge exchange programs, therefore, must not stop at providing knowledge content but also have a follow-up mechanism to monitor and assist how knowledge exchange outcomes are applied in the partner country. In addition, knowledge exchange programs should be linked to other technical assistance programs or loan programs needed by the partner country to implement recommend projects. For the Dominican Republic, the KSP played a bridging role, linking Korea’s EDCF to financing export infrastructure development projects such as the estab- lishment of the CIBAO Trade Center. KEXIM and BNVP have further developed its partnership in the third (2010) and fourth (2011) KSPs, which are currently building the capacity of BNVP staff in export financ- ing and insurance services. In addition, through KSP, CDEEE and KEPCO were able to sign a memorandum of understanding to change old power distribution lines of 400 km in three cities. KEPCO is also providing training programs and staff exchanges with CDEEE to build the capacity of the Domini- can participants to improve efficiency in the electric power sector. In results-focused capacity develop- ment, knowledge exchange programs must be structured to continue to affect institutional outcomes. Programs should not stop at the ICO level but continue to have follow-up programs or links to other technical assistance programs that can help achieve targeted institutional outcomes. 50 51 52 KDI Knowledge Sharing Program with Mongolia Introduction KnOWLEDGE ShARInG PROGRAM InFORMATIOn Overview of Program Context Title: Public-Private Infrastructure In 2010, KDI launched the KSP with Mongo- Investment and Deposit Insurance in lia to provide policy research, consultation, Mongolia (2010) and training programs to tackle two devel- Knowledge Partners: Government opment challenges confronting the Mon- officials of Mongolia, Korean Consultants golian government: management of fiscal expenditure and increased alternatives for Program Period: June 2010–February 2011 infrastructure investment; and establish- ment of guidelines for a new deposit pro- tection scheme. One key aspect of the KSP is that it is More than 120 policymakers and prac- initiated by the partner country’s request. titioners from Mongolia participated in the This is part of an effort to ensure strong program. The KSP consultant team, gov- commitment and ownership of the partner ernment ministries, and public and private country to the program. The Mongolian agencies contributed to the program to government requested consultation in top- share Korea’s know-how in infrastructure ics where Korean experience could be of management and deposit insurance. value. The government, along with the KDI This chapter describes the program, team, finalized the topics for the 2010 KSP articulates the change processes, and after evaluation of the requested topics identifies the results chains and related and intense discussions between Mongo- outcomes. The first section explains the lian officials and Korean counterparts based development goal toward which the capac- on an in-depth assessment of the current ity development intervention was designed socioeconomic situation in Mongolia. to contribute. The program activities are The KSP is designed to foster both verti- then described, highlighting potential cal (within-country) and horizontal (cross- variables that led to the conditions under country) interaction. This interaction is one which capacity outcomes were observed. of the core factors leading to the imple- The analysis comprised a review of program mentation of policy recommendations in documents, 2010 KSP final reports, and Mongolia. In terms of vertical interaction, interviews with Mongolian KSP participants. the program enhanced cooperation of government officials representing various Development Goal and Capacity agencies within Mongolia. Meanwhile, Development Objectives peer-to-peer cooperation between the The KSP was designed to contribute to two Mongolian practitioners and Korean development goals for Mongolia: counterparts through exchange of knowl- • Promote economic growth through edge and experience promoted horizontal increased infrastructure, in transporta- interaction. tion and energy sectors. 53 • Improve the government’s financial To develop its capacity to achieve the stability by introducing a limited deposit institutional changes necessary for advanc- insurance system. ing the two development goals, the Mon- golian government identified the following Promote Economic Growth through objectives for the KSP (as indicated in the Investment in Infrastructure KSP demand survey submitted by the Mon- Currently, Mongolia has a great shortage golian government in April 2010): of public infrastructure. This shortage is • Learn and adopt Korea’s legal frame- of major concern, taking into account the work, procedural guidelines, and regula- growing urbanization around Ulaanbaatar tions on deposit insurance. and increasing demand from the devel- • Enhance the abilities and skills of poli- oping mining industry. The Mongolian cymakers and practitioners at the work- government recognizes that the contin- ing level to implement the guidelines, ued under-investment in infrastructure is through the exchange of knowledge and negatively impacting economic growth, liv- experience with Korean counterparts. ing standards, and the transaction costs of businesses (Kim et al. 2011:79). At the same The capacity development objectives of time, the country suffers from limited bud- the KSP with Mongolia were to enhance the get resources to build and manage large- efficiency of policy instruments by: scale projects. • Improving clarity in defining the rights The government adopted the Prelimi- and responsibilities and ensuring legiti- nary Feasibility Study (PFS) to assess project macy in providing policy instruments to potential and prioritize implementation in boost infrastructure development. order to make the best use of the country’s • Addressing the risk of negative external- limited resources. In addition, the govern- ities associated with the transition from ment has turned to the private sector as blanket deposit to limited deposit insur- a partner in the provision of infrastructure ance to ensure financial stability. services to reduce investment gaps by broadening financing options for infra- Program Description structure investments. However, Mongolia is challenged by a lack of experience and Stages of the Program knowledge in implementing PFS and PPP, The KSP with Mongolia was composed of areas in which Korea has substantial experi- a series of activities executed during vari- ence. ous stages of the KSP framework. Korean consultants and Mongolian participants Improve Financial Stability through exchanged visits throughout the program. Deposit Insurance • High-level Demand Survey and Pilot In November 2008, the Mongolian gov- Study I: Identification of policy priorities ernment introduced a four-year law, “The and topics based on an analysis of the Blanket Guarantee for Bank Deposit,� to Mongolian economy with policymak- save the country from being severely hit by ers of Mongolia; interviews with policy the global financial crisis. The law stipulates practitioners to set the scope of policy that the government protects deposit and research; information and data collected account holders of every bank in Mongolia for in-depth studies; and a brief presen- without any ceilings on their possessions in tation of Korea’s development experi- banks. The deadline of the law is drawing ence to Mongolian policy practitioners near, and it is now crucial for the Mongolian to enhance their general understanding government to prepare an exit strategy that in the fields of PFS, PPP and deposit will neither cause moral hazard nor place a insurance, so that they become aware of heavy burden on the budget. the current status of Mongolia in com- parison and have a blueprint in mind. 54 Table 5. Main Knowledge Partners for 2010 KSP with Mongolia Topics for 2010 KSP: Public-Private Infrastructure Investment and Deposit Insurance in Mongolia 1. Improvement in Legal and Procedural PPP System in Mongolia • Dr. Kang-Soo Kim (Project Manager), Director, Private Infrastructure Investment Management Center, KDI • Mr. Batjargal Zayabal, Head, Public Private Partnership and Concession Department, State Property Committee 2. Improvement on the PFS System in Mongolia • Dr. Hyungtai Kim, Research Fellow, Private Infrastructure Investment Management Center, KDI • Ms. Sosor Tsend-Ayush, Senior Specialist, Fiscal Policy and Coordination Department, Ministry of Finance • Dr. Davaadorj Baljinnym, Officer, Sectors Development and Investment Policy Department, National Development and Innovation Commission 3. A Study on the Foundation for Introducing Limited Deposit Protection Scheme in Mongolia • Dr. Jae-Youn Lee, Research Fellow, Korea Institute of Finance • Dr. Seungkon Oh, Research Fellow, Korea Deposit Insurance Corporation • Mr. Bayarkhuu Tsookhuu, Officer, Financial and Economic Policy Department, Ministry of Finance • Mr. Battulga Ulziibat, Senior Supervisor, Supervision Department, Bank of Mongolia • Policy Seminar and Policy Practitioners’ Participants from Korea Workshop I: Presentation of policies in Korea was an ideal knowledge partner for Mongolia and Korea; discussion on pre- Mongolia because it had addressed similar liminary findings with local participants challenges to properly exercise PFS and to tailor policy recommendations; par- PPP and sought an alternative to replace its ticipation in study tours to topic-related blanket deposit insurance system. agencies; and field visits relevant to In Korea’s case, the government officially Mongolia’s economic development. introduced the PFS system in 1999 after • Pilot Study II: Discussion on research the Asian financial crisis to better use its findings with local participants; collec- limited fiscal resources. The system stands tion of additional data and information; on a sound legal framework with published interviews with relevant policymakers guidelines, including the National Finance and policy practitioners in Mongolia. Act and its Enforcement Decree, opera- • Interim Reporting and Policy Practi- tional guidelines, and analytical guidelines. tioners’ Workshop II: Presentation of The government selected KDI to act as an interim findings and discussions; par- objective evaluator and to be in charge of ticipation in lectures and study tours to conducting PFS. topic-related agencies; and field visits The Korean PPP system is also based relevant to Mongolia’s economic devel- on a strong legal framework, with the Act opment. on Public-Private Partnerships in Infrastruc- • Senior Policy Dialogue and Final ture and its Enforcement Decree at the Reporting Workshop: Presentation of core, together with annually updated Basic final findings to local policymakers and Plans for PPP and detailed implementation social leaders; and dissemination of final guidelines. Korea has a PPP-specialized findings to local stakeholders, including agency called Public and Private Infra- government officials, specialists, media, structure Investment Management Center etc. (PIMAC) at KDI. 55 With regard to deposit insurance, Korea Participants from Mongolia has experience carrying out the transition Effective vertical and horizontal interaction from a full coverage scheme to a limited requires that KDI work with a counterpart coverage scheme. In November 1997, in organization within the partner country. the immediate wake of the Asian financial KSP selects a counterpart organization as a crisis, the Korean government temporar- focal contact point to promise cooperation ily adopted a blanket guarantee system. between the two countries. The organiza- The government managed to transition tion assumes the responsibility of coor- to a limited coverage system in 2001. The dinating necessary arrangements among government established the Korea Deposit different local stakeholders. For the KSP Insurance Corporation (KDIC) to provide with Mongolia, the Mongolia government protection for bank depositors even before designated the Ministry of Finance to coop- the Asian financial crisis. erate with KDI. KSP designates expert consultants The participants of the KSP with Mon- in Korea in accordance with the policy golia can be divided into two groups. The research topics selected by the partner first group was involved in PFS and PPP, country. These Korean consultants, in turn, and the other group was involved with choose their knowledge partners in Mon- deposit insurance. All of the delegates golia as local consultants. Table 5 presents were approved to participate by their affili- knowledge partners from Korea and Mon- ation and the Ministry of Finance. The two golia according to their areas of expertise groups jointly participated in the program. and KSP topics. Thirty-seven Mongolian delegates During the Policy Practitioners’ Work- visited Korea for a Policy Seminar and shop II, PIMAC and KDIC heavily con- Policy Practitioners’ Workshop I and Interim tributed to the content by organizing a Reporting and Policy Practitioners’ Work- three-day training session for PPP/PFS and shop II. The delegates were selected at the deposit insurance scheme, respectively. The discretion of the Ministry of Finance, on the workshop was attended by 30 Mongolian following rationale provided by the Korean policy practitioners from the line ministries, counterpart, KDI: central bank of Mongolia, and government • The delegation must be led by a senior institutions, plus officers from the World government official responsible for poli- Bank. cymaking in an area relevant to the KSP The Korean ministries, institutions, and topics. lecturers from public and private sectors • At least one policy practitioner must be also contributed to the content of the work- included to represent the organizations shops. During the two Policy Practitioners’ involved with the KSP topics. Workshops, the Mongolian delegation • Possible local consultant candidates for visited the Ministry of Strategy and Finance, KSP topics must be included. Korea Federation of Banks & Credit Union, • Delegates must have expertise and Korean Financial Services Commission knowledge of the relevant areas studied. and Korean Financial Supervisory Service, Incheon Bridge, and Busan Port. As means The Final Reporting Workshop took of transportation, the delegation took place in Mongolia. Stakeholders from the Korea Train eXpress (KTX) to get firsthand aforementioned organizations participated experience of infrastructure development. in the program to provide comments and The workshop also included visits to Gori feedback on the findings and recommen- Nuclear Power Plant and SK Energy to dations presented by the Korean counter- reflect Mongolia’s interest in the field of parts. The workshop received great interest industrial development and mining and from the Mongolian media. Policy recom- energy. mendations were broadcast on television news and covered in newspapers. 56 The KSP is a comprehensive program • Clarify the rights and duties of involved that triggered the interaction of stake- parties to ensure effective practice of holders within Mongolia to use a holistic PFS. approach in preparing policy recommenda- tions. In addition, the program promotes (3) Deposit Insurance bilateral cooperation between participating • Facilitate the full cooperation of countries. Since the program is designed to stakeholder organizations for a swift meet the demands of the partner coun- transition from blanket guarantee try, the resulting policy recommendations system to limited guarantee system. are timely and practical and can be well • Introduce a deposit protection scheme received by the Mongolian government. for the Savings and Credit Union (SCU) after a thorough restructuring phase. Policy Recommendations The KSP covered two critical development Outcomes and Analysis problems the Mongolian government faced related to managing fiscal expenditures, Efficiency of Policy Instruments: creating a greater source of investment for Improving Clarity in Defining Rights infrastructure, and changing the deposit and Responsibilities of Stakeholders insurance scheme. Based on Korea’s in PPP prior experience in PPP, PFS, and deposit insurance, the Korean experts conducted Targeted Institutional Outcomes in-depth research with help from the Mon- The targeted institutional constraint is the golian local consultants. The policy recom- limitation in the legal framework to pro- mendations for each topic are: mote and exercise infrastructure develop- ment via PPP. The KSP enabled key stake- (1) PPP holders to progress toward the targeted • Strengthen the existing legal framework institutional outcome of improving clarity in (Law on Concessions, 2010) by adopting defining rights and responsibilities of stake- enforceable guidelines that are coherent holders in PPP. with line ministries. First, the program motivated the key • Build a transparent and competitive stakeholders to act through raising their procurement process via preparation of awareness on the nature of PPP. It informed standard documents to ensure competi- them of the potential successes that could tiveness within the PPP market. be achieved through PPP by showing them • Adopt incentives and risk-sharing mea- examples during the workshops, which sures to attract more private partner included visits to Incheon Bridge in Korea. investments. Second, the program not only enhanced • Educate policy practitioners through their knowledge about PPP but also pro- training and capacity building, especially moted application of the knowledge. For those from the State Property. Commit- instance, through the provision of sample tee (SPC), which is the main implemen- concession contracts used in Korea, the tation entity, so that PPP projects can be SPC developed customized documents carried out under proper supervision. for Mongolia. Third, the KSP enhanced the working relations among the key stake- (2) PFS holders to implement PPP: SPC, Ministry • Adopt intermediate evaluation systems of Finance, line ministries, Cabinet, and to establish an efficient and sustainable National Development and Innovation evaluation system. Commission (NDIC). • Establish and elaborate on operational These intermediate outcomes contrib- and analytical guidelines so that legal uted to the development of PPP guidelines foundation is firm and practical. for implementing PPP in 2011 based on the 57 Figure 11. Change Logic for Improving Clarity in Rights and Responsibilities of Stakeholders in Public-Private Partnership Promote economic growth through increased infrastructure investment through public-private partnership (PPP) Efficiency of policy instruments for strengthening PPP for effective investment Clarity in defining rights and responsibilities of stakeholders in PPP Line ministries and authorities in charge could agree on their roles and responsibilities with regard to implementing PPP projects. Change process and agents of change Government officials from different line ministries learn how to select projects appropriate for PPP, and experts within the State Property Committee learn to review the submitted projects according to criteria described in the guidelines. Intermediate capacity outcomes • Raised awareness: Government authorities and line ministries understand and agree on the importance and role of PPP in economic development, especially, on the need to establish a firm legal framework for PPP, and were motivated to take action. • Improved consensus and teamwork: Working-level officials from different ministries communicate better with each other, saving unnecessary delay in implementing projects. Relationship between the State Property Committee and Ministry of Finance has improved • Applied knowledge: The Mongolian government has developed its PPP guidelines, including bidding documents, request for quotations, request for proposals, and evaluation guidelines. Improving the legal framework of PPP in Mongolia Studies on the need for private participation in infrastructure develop- ment in Mongolia and assessment of Mongolian concession and policy recommendations. 58 Concession Law passed in January 2010. as PPPs being misused to bypass spending The interviews indicate that the guidelines controls. have initially been successful in defining the Mr. Batjargal Zayabal, head of the PPP rights and responsibilities of stakeholders department, SPC, who participated in the in implementing PPP. For example, minis- the KSP as the local PPP consultant, stated tries know their roles and responsibilities during the discussion session in the Interim with respect to implementing PPP and are Reporting workshop that the presentations now able to identify and submit appropri- impressed upon him the urgency of setting ate PPP projects. The Ministry of Finance up a proper working system to exercise is more informed about the budgetary PPP. In addition, Mr. Zayabal stated that implications for funding PPP projects and KSP acted not only as a channel by which to therefore more likely to be supportive of learn about Korea’s PPP system but it also the projects. As a result, SPC is more effec- motivated Mongolian officials to develop tive and efficient as an entity in charge of their own system based on the Korean implementing PPP because the stakehold- materials. Ten officials for PPP had visited ers understand their roles and are better Korea to attend the Policy Practitioners’ equipped to carry out the projects. Based Workshop II, which focused on highlighting on the improvement, the organization is the importance of a sound PPP legal system currently in the initial stage of pursuing by sharing Korea’s PPP structure and legal the recently approved PPP projects in the system. energy and roads sectors (Figure 11). In addition, Mr. Batkhuu Idesh, officer of the PPP department, SPC, remarked during Intermediate Capacity Outcomes an interview in April 2011, “Before, people One of the most important and fundamen- had talked about different things about tal changes at the intermediate level for PPP. But after KSP, people had clear knowl- PPP is the enhancement in understanding edge of what PPP was, and how essential and change in attitude with regard to the it was for development, and what its role importance and role of PPP, and in particu- was.� He stated that prior to the KSP the lar, the need to set up a firm legal frame- line ministries would propose any projects work for PPP. as PPP for which they lacked funding. This Over the course of the program, the resulted in a long list of PPP project candi- knowledge participants constantly pin- dates lying on the shelf. However, after the pointed the lack of a legal framework as the KSP, the line ministries now understand bet- main barrier to properly exercising PPP in ter the criteria for identifying potential PPP Mongolia. The two workshops mentioned projects and are able to propose projects deficiencies in the various stages of a PPP that are more appropriate and precise. project cycle in Mongolia. These deficien- Increased understanding and awareness cies included missing guidelines, lack of on PPP also facilitated better collabora- clear criteria describing the right conditions tion among the stakeholders. Ms. Ninjin for a project, unclear procedures for the Nansanjargal, officer of the PPP depart- approval of a project, and lack of transpar- ment, SPC, commented, “Before the KSP ent and competitive bidding procedures it was difficult to work with line ministries with a clearly identified entity that has because they did not understand PPP… the right to enter into negotiations when Now, they can give quick responses and selecting the projects. useful feedback and information and they Dr. Kang-Soo Kim, the Korean expert do so more willingly.� She explained that on PPP, warned the Mongolian participants in the past, the line ministries gave only at the workshops that the current institu- technical details, but now they are aware of tional set-up was incomplete because it the economic implications of PPP and able lacked guidelines to handle and oversee to provide input on the projects from an PPP, which could lead to many risks such economic perspective. 59 It was also observable from the line min- workshops. In the Mongolia case, the work- istry participants that KSP contributed to shops were exceptionally well attended; raising their awareness of the importance of a large number participated due to the PPP. Ms. Gunsendari Sharavsambuu, officer overwhelming demand created by the large of the Ministry of Road, Transportation, base of stakeholders across line ministries. Construction, and Urban Development According to Mr. Batkhuuat of the SPC, stated that with the knowledge from the the relationship between the agencies KSP, there is now a better understanding of improved as a result of their interactions PPP in her ministry and there seems to be a with the KSP. They were able to get to know more uniform understanding of PPP among each other better and develop better work- the line ministries. ing relations based on a shared knowledge Another line ministry officer from the of PPP. For instance, they are now not only Ministry of Finance, Mr. Tserendash Sed- better at communicating with each other in vanchig, stated that decision makers’ views a more informed way, they are also faster at had changed regarding the burden of responding because they are motivated to budget with respect to PPP. He claimed do so from the KSP. Batkhuuat said, “When that before the KSP, there were widespread we contact line ministries, we are now able misconceptions about PPP, which would to call our friends from the KSP and hear cause budget pressures in the long term. back from them within one hour versus a After the KSP, however, it became clear that one-week turnaround.� In addition, the the implementation of PPP, if executed cor- interviews revealed stakeholders were bet- rectly, would not cause such difficulties. As ter able to inform their decision makers of a result, Ministry of Finance working-level the value of the PPP projects and obtain officials are now able to propose PPP proj- cabinet approval quicker, partially because ects for funding without facing pushback of cabinet members’ involvement in the from high-level decision makers based on KSP. their misconceptions about long term bud- Two concrete examples of how the KSP getary strains resulting from PPP projects. fostered better relations between the line In other words, high-level decision makers ministries were reflected in two projects— are now open to approving PPP projects for one in the energy sector and the other in funding. an ongoing road project. As was the case with the Dominican The KSP contributed to fostering con- Republic, site visits, and seeing firsthand sensus and teamwork because the Korean the case stories of a similar experience participants had recommended that the contributed strongly to raising the aware- PPP Unit (within the SPC) work closely with ness of the importance of PPP. Ms. Oyun- the Ministry of Finance to avoid the rise of delger Bavuudorj, officer at NDIC, who fiscal risks. In addition, the KSP ensured participated in one of the KSP workshops, continued interaction between the two reported that the KSP site visits raised her bodies by involving officials from both the awareness of the potential value of PPP by SPC and Ministry of Finance during the PPP seeing the completed Incheon Bridge proj- meetings. ect. Observing the project up-close inspired For example, Mr. Zayabal mentioned her to embrace the concept of PPP and that the KSP strengthened ties between the consider the potential value for Mongolia. SPC and the Ministry of Finance by ensur- ing continued interaction through KSP- Raised awareness motivated the change related activities and by emphasizing the agents of Mongolia to improve their con- importance of cooperation. Mr. Batkhuu sensus and teamwork toward establishing a also reported an improvement in teamwork firm legal system for PPP. between the SPC and Ministry of Finance The KSP invited members from vari- through weekly meetings, where the SPC ous ministries to seminars and practitioner presented their progress on the guidelines 60 and the Ministry of Finance provided com- were helpful particularly because they did ments based on their experience in manag- not have any other sample concession ing traditional government procurements contracts from other foreign advisors. They and in controlling budget expenditures. could adopt and modify the Korean sample documents to create Mongolia state con- By sharing Korea’s knowledge and skills tracts. These state contracts will be distrib- on PPP, the Mongolian participants were uted to the provinces as reference materials able to apply the acquired knowledge and to develop provincial contracts. establish a firm ground for its PPP system in Mongolia. Institutional Outcome As mentioned, the KSP shared knowl- The KSP raised awareness among the PPP edge about Korea’s PPPs and how it could stakeholders, which motivated them to be applied to Mongolia through various work together and build consensus on PPP knowledge sharing activities such as meet- as well as to improve teamwork in devel- ings, seminars, workshops, and study tours. oping PPP guidelines, handbook, bidding Mongolian participants from related min- documents, etc. The PPP guidelines, which istries were exposed to both general and were developed in collaboration with all the in-depth knowledge regarding PPP based relevant stakeholders, clarified the respon- on Korea’s experience in PPP project initia- sibilities and roles of various actors in pro- tion, bidding, contract management, and posing, bidding and implementing PPP construction of the Incheon Bridge. projects in Mongolia. The KSP introduced Korea’s case as an As noted in the interviews, PPP was a example and provided sample documents new concept in Mongolia and stakeholders to support Mongolia in developing its had misconceptions about PPP, i.e., each own PPP guidelines. The KSP provided a ministry did not know which projects were comprehensive review of Korea’s PPP legal appropriate for PPP nor did they know who framework including PPP procurement should be in charge of compiling the final and evaluation processes. The KSP also list of PPP projects from diverse ministries. shared Korea’s comprehensive PPP system In addition, stakeholders were not clear for implementation, including all of the about who should review and select the necessary guidelines, from how to initiate final PPP projects from the candidate list, projects to controlling projects. submit it to the cabinet, and carry out Applying the knowledge acquired from the bidding procedure. However, due to the KSP, the SPC developed the PPP hand- development of the PPP guidelines based book and distributed a draft among rele- on the knowledge acquired from the KSP, it vant stakeholders The SPC committee also has now become clear to all relevant actors completed bidding documents, including who should be responsible for what and request for quotations and request for pro- the role each actor should play. Addition- posals documents and evaluation guide- ally, the guidelines describe the necessary lines to be used for the bidding. Further, in documents to be used throughout the PPP February 2011, knowledge sharing partners procedure (e.g., project proposal, bidding, from the SPC applied what they learned by evaluation, etc.). organizing seminars and training for their Consequently, each ministry submits its colleagues to foster understanding in PPP desired PPP list based on the PPP hand- among local, provincial, and ministry level book and guidelines. Unlike in the past, the staff as well as representatives from the pri- proposed lists of projects are precise and vate sector. In addition, they disseminated short because now there is a clear under- materials on PPP from the KSP among the standing of the nature of PPP projects and line ministries. the categories that explain which projects Mr. Batkhuu from the SPC explained in are appropriate for PPP. The PPP unit at his interview that the Korean documents SPC then reviews the list of candidate PPP 61 projects submitted by each ministry and tated their application of new knowledge provides feedback. and skills. Once the independent admin- Following this review, the ministries and istrative body for PFS is established, it is SPC meet to coordinate their views on expected that the institutional outcome which projects should be included in the list will be that the government of Mongolia is and sent for cabinet approval. The inter- better able to achieve successful PPP proj- views indicate that the private sector also ects through the implementation of PFS in participates during this phase, since private selecting PPP projects (Figure 12). sector involvement is essential in imple- menting successful PPP projects. Once the Intermediate Capacity Outcomes coordination is complete, the SPC submits The KSP raised awareness of the Mongolian the list to the Cabinet for approval and government officials on the importance of then opens the project to the public for PFS. competitive bidding. Like PPP, PFS was also a new concept in The PPP guidelines define the coordina- Mongolia and therefore, it was first essen- tion of responsibilities and differentiating tial to highlight the significant economic roles in PPP procedures. This resulted in benefits PFS could bring to the economic one PPP project in the energy sector and development in Mongolia. two PPP projects in ongoing road sector Mr. Baterdene, head of the Fiscal Policy projects in Mongolia. Among the two road and Coordination Department, Ministry of projects, one has completed its bidding Finance, stated in his interview that there process. The draft agreement is to be was a lack of knowledge about the value of signed and the other project is waiting for PFS in general before the KSP. The deci- cabinet approval. sion-making process for selecting invest- ment projects was not transparent and at Effectiveness of Organizational times vulnerable to the influence of political Arrangements: Achievement of Out- interests. Thus, there have been growing comes via Adopting a PFS-Special- concerns within Mongolia as to how to deal ized Agency with this problem. He said the KSP contrib- uted to raised awareness of the importance Targeted Institutional Outcomes of implementing PFS for all projects in The targeted institutional constraints are Mongolia and how this could help solve the limitations in the legal framework and current problems. organizational arrangements to properly Ms. Tsend-Ayush Sosor, senior special- exercise PFS for infrastructure development ist of the Fiscal Policy and Coordination projects, including PPP projects. For PPP Department, Ministry of Finance, also projects to be successfully implemented, stated that the KSP helped officials at the the selection procedure for investment working level to better understand PFS. projects needs to include transparent pro- Further, the Ministry of Finance organized cesses that are less vulnerable to political a seminar on PFS to present what the interference. Therefore, a firm legal frame- Mongolian participants learned from the work and organizational arrangements for KSP and the materials used during the proper PFS need to be established by local workshops to relevant line ministries. She agents. Since Mongolia lacked both a legal said this contributed to the understand- and organizational framework, the KSP ing of PFS among stakeholders. In addi- aimed to raise awareness of the importance tion, Mongolian officials became aware of of a sound PFS legal system and the need the need to establish detailed guidelines for establishing an independent entity to with numeric values as was the case in carry out the PFS. In addition to raising Korea. Ms. Soyolmaa Dorjnamjaa, officer awareness, the KSP enhanced knowledge of the Fiscal Policy Department, Ministry of among Mongolian participants and facili- Finance, added that she and her colleagues 62 Figure 12. Change Logic for Organizational Arrangements of Establishing a Preliminary Feasibility Study -Specialized Agency Promote economic growth through improved review of infrastructure investment projects through preliminary feasibility studies (PFS) Efficiency of organizational arrangements to provide needed, effective PFS Achievement of outcomes Stakeholders and the Institute of Urban Construction and Planning will be able to achieve better outcomes through more effective PFS of sub- mitted PPP projects, leading to successfully implemented PPP projects. Change process and agents of change Stakeholders and line ministry officials learn to review infra- structure investment projects objectively and transparently and with numeric values that will lead the government to efficiently use its limited resources for better investment. Intermediate capacity outcomes • Raised awareness: Relevant stakeholders and line ministries understand and agree on the importance and role of PFS in selecting infrastructure projects, especially the foundation of legal framework and an independent government authority to conduct objective and transparent evaluation of projects. • Applied knowledge: The Mongolian government has developed PFS general guidelines, which include numeric values and the Urban Development Index acquired from the KSP. Eleven ministries have come together to establish the Institute for Urban Construction and Planning, which will be in effect from 2012 to implement PFS. Improving the legal framework and organizational arrangements of PFS in Mongolia Studies on the necessary legal framework and establishment of an independent body to implement PFS more efficiently. realized that the existing vague guidelines completing the PFS general guidelines. in Mongolia need to be replaced with less The KSP provided guidance on content for generic terms if they are to be used in the developing the guidelines. In addition, the practice of PFS. NDIC presented Korea’s PFS system as a model system, making direct references to The KSP enhanced participants’ knowl- the Korean documents shared in the two edge and skills about PFS so that they were KSP workshops as examples for Mongolia able to apply what they learned. to follow. The application of knowledge and Stakeholders learned from Korea’s expe- skills is evidenced by the NDIC effort on rience that PFS guidelines include specific 63 benchmarks and therefore adopted the During the interviews, Ms. Tsend-Ayush Urban Development Index as a factor to be from the Ministry of Finance and Mr. Baljin- considered in PFS implementation. Another nyam from NDIC stated that the Korean example of applying the knowledge from experience motivated Mongolian officials the KSP is the addition of quantitative to push for the creation of an administra- values to the PFS conducted for the Road tive body to be in charge of conducting PPP project. PFS. They also added that the Mongolian Raised awareness of the importance of participants visited PIMAC and attended PFS further motivated the Mongolian par- the workshops on how PFS was conducted ticipants to establish an independent PFS in Korea along with technical sessions on organization. From the beginning stage of implementation. the KSP, the knowledge sharing partners Following this, 11 ministries agreed to from Korea referred to the absence of an establish an independent organization institution in Mongolia to establish stra- in charge of conducting PFS. The decree tegic priorities and to effectively appraise establishing the independent organiza- project proposals submitted from the line tion was passed on December 19, 2010. ministries as one of the major weaknesses. The decree states that the organization, The Investment Division of the Ministry of the Institute for Urban Construction and Finance was given the task but lacked the Planning will be housed in the Ministry of necessary staff with skills to conduct PFS. Road, Transportation, Construction and Despite the establishment of the NDIC as Urban Development and be effective in an organization responsible for strategic early 2012. planning and for the independent appraisal of public investment projects, the system Prospective Institutional Outcome still lacked an effective process for coor- The KSP raised awareness of PFS in gen- dination with the Ministry of Finance. This eral, the need to set up specific PFS guide- worried both Korean experts and Mongo- lines, and the importance of establishing an lian government officials, since it may lead independent administrative body for PFS. It to the danger of fragmentation between also enhanced the knowledge and skills of the capital and recurrent budget and of Mongolian participants on how PFS should projects being approved without consider- be properly implemented and managed ing the resources available. by sharing Korea’s experience. These ICOs led to development of new PFS guide- During the workshops, the Mongolian lines and the creation of an independent knowledge sharing partners were advised entity to effectively and efficiently practice that it may be more appropriate for Mon- PFS, providing objective results for proj- golia to set up an independent agency ect implementation. Once the Institute capable of conducting an objective and for Urban Construction and Planning is transparent evaluation to ensure that established and put into practice, the selective projects are implemented instead government of Mongolia will be better of dividing the responsibilities between able to implement successful PPP projects the line ministries, NDIC, and Ministry of through the use of PFS in selecting PPP Finance. projects and better using the country’s lim- Interviewees for PFS reported they had ited resources to invest in infrastructure. been aware of the need for an independent organization but that the KSP provided Efficiency of Policy Instruments: them with the impetus to take action. They Address Risk of negative applied the knowledge learned through Externalities Associated with the the KSP, in particular, from their interactions Transition from Blanket Deposit to with PIMAC, the Korean PFS agency. Limited Deposit Insurance 64 Targeted Institutional Outcomes to take place when in fact, the preparation The targeted institutional constraint is the and planning should have already been possible negative consequence of the tran- under way. The KSP provided a platform sition from the blanket guarantee system to for knowledge sharing partners from both the limited deposit insurance scheme (for countries to discuss the current state of example, to avoid a run on the banks). The Mongolia. Mongolian government was already aware Interviews with Tsookhuu Bayarkhuu, of the need to transition its system and the an officer for the Financial and Economic potential negative side effects that could Policy Department, Ministry of Finance, and arise during the process before the KSP, but the local consultant for the KSP, indicated it was reluctant to take necessary measures. that similarities between Mongolia and The KSP helped to impress the urgency of Korea inspired and motivated participants the need to prepare for the transition and to realize the urgent need to prepare to demonstrate how to successfully carry for deposit insurance in Mongolia. He it out, based on the Korean experience explained, “The Korean success helped a through achieving three ICOs. lot because before that, everyone had dif- First, the KSP helped raise awareness ferent ideas and opinions on deposit insur- of the importance of setting up a proper ance… After the KSP, everyone knew about deposit insurance scheme. Second, the KSP deposit insurance and the main principles enhanced Mongolian government officials’ of successful deposit insurance around the knowledge on deposit insurance by provid- world.� ing relevant example documents and case During the KSP stages, the Korean studies and by improving their general experts met with officials from the Ministry understanding of the concept of deposit of Finance, Bank of Mongolia, and Finan- insurance. Lastly, the KSP helped improve cial Regulatory Commission (FRC). The working relations among the related minis- participants discussed the existing deposit tries. The knowledge sharing partners from insurance system in Mongolia, as well as Mongolia became motivated to cooperate Korea’s experience in preparing for a transi- and work together. They set up a working tion from full deposit protection to a partial group that drafted the deposit insurance deposit protection system. In Korea, the law, including establishing the Mongolian KDIC spent almost two years preparing for Deposit Insurance Corporation (MDIC). a smooth transition. Through these measures, it is expected that Mr. Battulga expressed that Mongolia unintended negative impacts from transi- would benefit from learning about KDIC’s tion would be minimized, and the Mon- experience in guiding Mongolia’s transi- golian government would reduce its trial tion strategy in this short time frame. In and error, thereby minimizing the cost or ill addition, Ms. Zambaga, an official from the effects (Figure 13). Ministry of Finance, reported that the KSP’s focus on the issue led to raised awareness Intermediate Capacity Outcomes and a strong willingness to act among The KSP raised awareness among stake- some Mongolian officials from related holders about the urgent need to prepare agencies after witnessing the formation of for a new insurance system. the working group. Prior to the KSP, some Ministry of Finance officials had increasing concerns The KSP also highlighted the impor- about the current deposit insurance system tance of improving the soundness and because the blanket guarantee system supervisory ability of Savings and Credit would end in 2012. However, there was also Unions (SCUs) among Mongolian govern- hesitation to act because the government ment officials. was under the illusion that it had ample The SCUs are categorized under non- time before the change in system was due bank financial institutions and thus were 65 Figure 13. Change Logic for Reducing Negative Externalities Arising from Transition from Blanket Deposit to Limited Deposit Insurance Improve financial stability by reforming and adopting a new deposit insurance scheme Efficiency of policy instruments for reducing negative externalities associated with the transition to a new deposit insurance scheme Address risk of negative externalities The Mongolian government was able to reduce the likelihood of bank runs by transitioning to the limited deposit insurance system in time to develop the new deposit insurance law and the deposit insurance corporation. Change process and agents of change Stakeholders and line ministry officials learn to include non-banks for deposit insurance in the law. They structure Mongolia’s new deposit insurance corporation through interactions within the working group and coordinate different perspectives. Intermediate capacity outcomes • Raised awareness: Relevant stakeholders understand the urgent need to prepare in advance the transition from blanket deposit to limited deposit insurance scheme. Also, stakeholders realize the need to have deposit insurance for nonbanks (savings and credit unions) in addition to banks. • Strengthened consensus and teamwork: Ministry of Finance, Bank of Mongolia, Financial Regulatory Commission, and Ministry of Justice have formed an official working group on deposit insurance. Further, participants have improved working relations at a personal level. • Applied knowledge: The working group included savings and credit unions in its revised new deposit insurance law, which also includes the establishment of the Mongolian Deposit Insurance Corporation. Also, participants have applied new knowledge in proposing appropriate deposit insurance scheme within Mongolia. Improving the legal framework and organizational arrangements of deposit insurance in Mongolia Studies on the necessary legal framework and establishment of an independent body to change the deposit insurance system of Mongolia. 66 not of major concern. However, the KSP informative than any other program in which emphasized that non-bank financial institu- he had participated thus far. He expressed tions should also be considered when set- appreciation for the KSP’s emphasis on ting up a new deposit insurance system. the participation of the Mongolian officials During the additional pilot study, Mr. in making policy recommendations. The Sharavsambuu, member of the FRC board, program included five visits in total, allowing thanked the Korean knowledge shar- enough time to absorb what was learned ing partners for raising the FRC’s general and to build on the newly acquired knowl- awareness of SCUs and promoting under- edge by asking follow-up questions through standing of the need to have deposit continued interaction with the Korean insurance not only for banks but also for experts. SCUs among the officers in the FRC. Both Ms. Tserendejid Purevjav, head of the of the KSP workshops emphasized the Insurance Policy and Planning Division, FRC, importance of protecting small depositors reported in a September 2011 interview that and the need for governmental guarantees the KSP greatly enhanced the FRC’s knowl- to protect funds for SCUs to shield small edge of deposit insurance. She said she depositors and ensure competitiveness. learned about three types of deposit insur- In addition, the advantages and disad- ance scheme: (1) blanket guarantee system, vantages of separate and consolidated pro- (2) paybox with extended power and (3) risk tection schemes were discussed in-depth. minimizer. The second strategy adds some The Korean consultants advised Mongolian proactive features to exercise regulatory officials that adoption of a consolidated powers to the blanket system that is reactive scheme is desirable in the long run given and focused on paying out to the protected the economies of scale in management depositors. The third strategy requires costs and the difficulties of merging sepa- minimizing exposure to loss and thus the rate systems later on. The Mongolian offi- institution has to be proactive in terms of cials came to understand the need to have on-going risk identification, assessment and deposit insurance for banks but also for the management. She then applied the knowl- SCUs to ensure balanced development of edge gained and pushed for the second the deposit insurance sector. strategy within the working group. As a result of the KSP’s final policy Although the second strategy did not recommendations that deposit insurance get adopted because the third strategy was be implemented gradually after the super- chosen based on the majority vote, Purev- visory role function is implemented for jav said she understood the three types banks, representatives from the Ministry of of deposit insurance systems as a result of Finance and Bank of Mongolia reported KSP. She also learned the advantages and during the final workshop that Mongolia disadvantages of deposit insurance and the will implement deposit insurance for non- technical aspects of deposit insurance. She Bank financial institutions. said she now has a clear understanding on what products should be included as part The KSP enhanced the knowledge of of the deposit insurance. In addition, she Mongolian officials on deposit insurance reported that she was able to apply what through knowledge sharing in visits, she learned from the KSP in the arguments presentations, and discussions. she made to the working group both ver- This knowledge was then applied in bally and in her written proposals. Based on writing joint policy recommendations. the KSP, she wrote two proposals on finan- Participants were presented with case cial stability; one to put more emphasis on studies from Korea and Japan to learn the the SCUs in achieving financial stability; the stages of transition from blanket guarantee other to pose her idea on the establishment to limited guarantee system in detail. Mr. of stability fund and the scope of coverage. Bayarkhuu stated that the KSP was more 67 The KSP presented Mongolia with initial which promoted better ministerial work- research on deposit insurance, which led ing relations. To quote Mr. Bayarkhuu, them to do additional research through “We [Participants to the workshops] went the working group on how other coun- [to Korea] as one group and that made us tries implemented deposit insurance. The quite closer in terms of communication… interviews revealed that the working group Being closer friends made us work together drafted the deposit insurance law based more easily in all fields, not just deposit on many country examples such as Ger- insurance—including budgeting and anti- many, Bulgaria, and Hungary. However, corruption.� He claimed that improved the interviewees claimed that Korea’s case working relations at a personal level also was particularly helpful because of the site contributed to the success of the work- visits that provided practitioner knowledge ing group. The working group met more exchange and a three-day workshop at frequently than is typical of other working KDIC. groups as a result of the KSP. To reflect this, guidelines drafted by the working group included the same structure Prospective Institutional Outcome as those purported by KDIC. For instance, The working group drafted and submitted the general structure of the MDIC is based the Law on Deposit Insurance to Parlia- on the KDIC. MDIC is to be set up once the ment. The draft law reflects opinions of law is enacted. In addition, guidelines on all the stakeholders in the working group, information sharing among stakeholders which were influenced by the KSP. The law and penalty sections are few of the exam- seeks to address the potential negative ples that indicate the Mongolian partici- consequences of implementing the new pants learned from KDIC through the KSP deposit insurance system, such as a run and used the knowledge gained. on the banks. For instance, the law does not limit beneficiaries solely to banks. The The KSP strengthened the consen- KSP advised that SCUs only be subject to sus and teamwork among the Ministry of the limited deposit law once they reach Finance, Bank of Mongolia, FRC, and the the level of banks in terms of management Ministry of Justice in their task to draft and transparency. This would help to mini- legislation on deposit insurance on both mize difficulties in having a consolidated official and personal levels. protection scheme in the future. This idea The Korean consultants emphasized was strongly supported by FRC. The law the need to have unity among the affected also includes a section on establishing the agencies for a successful transition. The MDIC. Ministry of Finance, Bank of Mongolia, FRC, During the KSP, the Mongolian partici- and Ministry of Justice issued an official pants visited KDIC and learned about the decree in September 2010 to establish organization in detail. The three-day work- a working group to collaboratively draft shop conducted by the KDIC influenced the Law on Deposit Insurance. Signing the officials by firmly establishing in partici- a consolidated decree such as this is an pants’ minds the need for Mongolia to cre- exceptional case in Mongolia, thereby sig- ate an entity that will carry out the activities nifying the importance of the stakeholders’ of KDIC in Mongolia. During his interview, collaboration. Mr. Bayarkhuu stated the visit to KDIC was one of the most influential factors that led The KSP also helped improve working the Mongolian government officials to push relations among line ministries at a for MDIC. KDIC is likely to provide further personal level. assistance to Mongolia once it embarks on For instance, joining the KSP with formally establishing MDIC. colleagues from the Ministry of Justice In June 2011, KDIC signed a memo- improved relations on a personal level, randum of understanding with the Min- 68 istry of Finance and Bank of Mongolia to Understanding both countries’ current work together in creating MDIC. Once the situation also played an important role in law is implemented, it will represent an selecting topics. Mr. Hyoung Kwon Ko, improvement in the effectiveness of policy a World Bank advisor to the minister of instruments in addressing the negative finance of Mongolia, acted as an interme- externalities associated with transition from diary during the procedure. He was not blanket deposit to limited deposit insur- only well aware of Korea’s experience, but ance. In August 2011, the cabinet rejected understood the local situation in Mongolia. the deposit insurance law and the working He shared his opinion as the Korean team group had to clarify 27 issues. The work- tried to narrow down the submitted list of ing group answered all of the questions topics. This involvement was of great help and resubmitted the proposal for approval. when prioritizing the topics, since Korea Cabinet meetings are in progress to review was in a position to know issues that are the revised proposal. timely and can be of help to the Mongolian government based on Korea’s experience. Lessons and Implications Ko engaged in discussions with the Korean team on the current status of Mongolia. He Matching Countries with Similar stated that PPP was new to Mongolia upon Experiences the passing of the Concession law and the It is crucial to select topics that are establishment of the PPP Division within the requested by the country to secure willing- SPC. The nearing deadline for the blanket ness of the knowledge recipient. The coun- guarantee system was highly emphasized. try that is sharing its knowledge should also Based on these local conditions, Ko said have the necessary experience and know- PPP, PFS, and deposit insurance should be how to meet the request to provide rel- considered as the key topics. evant information. In this vein, the KSP with During the stage of the Demand Survey Mongolia was successful because the topics and Pilot Study I, then vice minister of requested by the Mongolian government finance, Mr. T.Ochirkhuu, welcomed the were well matched with Korean know-how. Korean delegation. The Korean team posed In the beginning stage of the program, three areas of research selected based on the Mongolian government submitted a three factors: demand of the Mongolian Demand Survey form listing eight topics government; available expertise in Korea; as candidates for the KSP. Based on the and understanding of the Mongolian request of the Mongolian government, KDI economic situation. Mr. Ochirkhuu showed tried to select and provide consultation in enthusiasm for the topics, requested the areas where Korea has the necessary knowledge sharing from the Korean know-how and is ready to share its experi- experts, and promised full cooperation. ence. In the case of the PPP and PFS, Korea Thus, the program yielded results had more than 10 years of experience with because it was composed of topics of inter- sound legal background and guidelines. est to Mongolian government officials and In addition, Korea has a PPP-specialized areas of expertise for Korea. In addition, agency, which ensures the Mongolian offi- the topics were well suited to local condi- cials are exposed to a pool of knowledge tions. Overall, the topics met the necessary sharing partners with real experiences to criteria to be well received by the Mongo- share. For deposit insurance, Korea also had lian government officials, leading them to to transit from a blanket guarantee system guarantee their participation in the KSP. to a limited coverage system starting in the late 1990s and is thus able to provide con- Strengthening of Program Ownership sultation based on prior experience. Korea with Participation from Stakeholders also has KDIC, a corporation in charge of To ensure transparency and minimize con- deposit insurance scheme. flict of interest, policymakers and working- 69 level practitioners from the relevant min- The KSP with Mongolia not only pro- istries must communicate and share their vided informative sessions to share Korea’s opinions when working toward a common experience and knowledge, but also gave goal. The vertical (within-country) interac- firsthand experience to the Mongolian tion among the relevant stakeholders from participants. As mentioned, the program various line ministries is therefore crucial. included study tours to organizations The KSP brought about participation related to the topics. For PPP and PFS, from various related line ministries to work the Mongolian delegation visited PIMAC, together toward a common goal of manag- Incheon Bridge and Busan Port. For deposit It is said that ing fiscal expenditure, increasing alterna- insurance the delegation attended a tives of the investment for infrastructure and seminar hosted by KDIC as part of KSP, and “seeing is establishing guidelines for a new deposit met with officials from Korea Federation believing.� It protection scheme. of Banks & Credit Union, Korean Financial PPP, PFS and deposit insurance had Services Commission and Korean Financial is crucial the various line ministries involved, respectively. Supervisory Service to learn from experts Policymakers and practitioners from 14 with field experience. knowledge organizations and ministries related to the The interview results show these visits participants KSP topics attended the workshops and motivated the Mongolian government seminars. Throughout the workshops, offi- officials to work toward improving its cur- learn in cials from different ministries involved in the rent system. As illustrated in the PFS, the same topic communicated frequently and officials who participated in the KSP stated seminars and shared opinions. The meetings provided a that the program—especially the visit to workshops forum for stakeholders to realize the impor- PIMAC—motivated them to take action, tance of cooperation. The formation of the based on what they were already aware but are also working group as the result of the KSP in of, in pushing for an independent agency exposed to the case of the deposit insurance system in charge of PFS. The case is similar for illustrates this cooperation. deposit insurance. The visit to KDIC trig- real-world Improved communication among stake- gered the participants to push for the cre- holders from various ministries also led to ation of MDIC in its new deposit insurance examples. The building good working relations. In the law, which takes on its basic foundation cases play a deposit insurance section, interviewees said from KDIC. joining the KSP with colleagues from various visionary role ministries improved relations on a personal Strategic Targeting of Participant level, which promoted better ministerial Selection through Identifying Change to motivate working relations. In the PPP section, inter- Agents participants viewees also stated that improved working One of the factors that contributed to relations helped them to work in a more achieving the ICOs is the selection of KSP working toward efficient manner, because officials from dif- participants who were anticipated to have a goal. ferent ministries could communicate more the power to act toward bringing about often instead of having to wait for a longer desired outcomes. A program itself can- time period in exchanging viewpoints. not automatically lead to intermediate outcomes unless the program participants Designing the Program to Provide are in the position to understand, learn and Firsthand Experience practice based on knowledge gained from It is said that “seeing is believing.� It is the program. crucial the knowledge participants learn For instance, government officials who in seminars and workshops but are also have interest in the program topics are to exposed to real-world examples. The cases participate in the program, so that they are play a visionary role to motivate participants enthusiastic and are more willing to take working toward a goal. part compared to officials who have no relation to the issues. This includes officials 70 who work in related fields and are in the right position to use the knowledge gained from the program when doing their job. In the case of Mongolia, the KSP partici- pants were appropriate for the three topics covered. Understanding the local environ- ment, including the organization in charge and the organizational structure, helps to ensure that participants are relevant. In the case of PPP, the SPC was the main body in charge, so the majority of participants for PPP were from SPC, specifically under the PPP division. For PFS, NDIC and the Ministry of Finance were the key agencies involved. Under the Ministry of Finance, the fiscal policy department mostly dealt with the PFS, so the program coordinator and local consultant for the PFS were selected from that department to ensure relevancy. Regarding deposit insurance, working-level officials from the Bank of Mongolia, Min- istry of Finance, and FRC were invited to participate because they were all equally concerned with the issue and highly likely to benefit from the KSP. Another important factor is to not only have the participants who are at the work- ing level report to the higher ranks and voice their opinions based on the knowl- edge gained, but also those who have the authority to make the final decisions. This was one of the main reasons why the local consultant for the PPP was the head of the PPP division who had the power within the division in selecting PPP projects. If only the working-level officers participated in the program, they may have had difficulty in exercising PPP as learned from the KSP. The KSP thus selected participants to ensure efficiency and boost cooperation within the same department. For PPP, a member of the cabinet also participated in the KSP because PPP project selection procedure involved getting approval from the cabinet. The interviewees reported that including the cabinet member in the KSP enhanced cabinet members’ understanding on PPP so that PPP projects could be carried out in a more efficient manner. 71 72 nESAP-ICT South-South Experience Exchange with India: Results in Ghana and nigeria Introduction KnOWLEDGE EXChAnGE PROGRAM InFORMATIOn Overview of Program Context Title: New Economy Skills for Africa In 2008, the World Bank launched New Program-Information and Communication Economy Skills for Africa Program-Infor- Technology South-South Experience mation and Communication Technol- Exchange ogy (NESAP-ICT) to support countries in Knowledge Recipient Countries: Ghana, Sub-Sahara Africa in building skills for the Kenya, Madagascar, Mozambique, Nigeria, knowledge economy. The initial focus was Rwanda, Senegal, and Tanzania to develop benchmarked, employable Knowledge Provider Countries: India, skills for the IT-ITES industry. South-South Philippines, and Korea knowledge exchange initiatives were Program Period: January 2009–July 2010 integrated into the broader NESAP-ICT program to share lessons of experience among peer countries, and to use these lessons in implementing country-level interventions. process. While the eight recipient coun- The first experience exchange was a tries participated in the same knowledge two-week South-South learning visit to exchange program, the mix of participants India designed to expose participants to in their delegations, their country contexts, the Indian IT-ITES industry. This visit cov- and the balance of other contributing ered the IT hubs of Mumbai, Hyderabad, interventions varied widely. These diverse and Bangalore. Fifty-four people par- circumstances provide a rich opportunity ticipated in this South-South experience to qualitatively examine what characteris- exchange, including senior policymakers, tics and conditions help to foster capac- entrepreneurs, and educators from eight ity development results for knowledge African countries—Ghana, Kenya, Mada- exchange initiatives. gascar, Mozambique, Nigeria, Rwanda, The CDRF offers a blueprint for tracing Senegal, and Tanzania—along with their the results stories to show how, or whether, World Bank counterparts. These countries participants acted as change agents to have ongoing or pipeline World Bank- achieve needed ICOs to support longer- financed operations with a focus on edu- term development of institutional capacity. cation, and thus the Bank invited them to This chapter relies on review of program participate in the visit. documents and interviews with program The South-South experience exchange implementers and participants to explore with India was implemented in concert with two country results stories from this South- other ongoing development activities to South initiative and identify potential suc- catalyze a capacity development change cess factors. 73 Development Goal and Capacity The South-South experience exchange Development Objectives grant funding request for NESAP ICT also Although the eight African delegations noted that the learning visit could serve a came from different country contexts, the key role in supporting ICT skills develop- main development goal was similar: to ment as a means to competitiveness in develop the IT-ITES industry and requisite IT-ITES. The knowledge exchange was skills in order to stimulate economic growth designed to address the need for “market- and employment. The capacity develop- responsive training programs� and would ment objectives targeted by the experience seek to “introduce innovative skills devel- exchange were designed to contribute to opment models deemed necessary for the this higher purpose. country’s present and future needs� (World At the opening ceremony for the South- Bank Grant Funding Request, p5-8). South Learning Visit in India, Jee-Peng Tan, In CDRF terms, the knowledge exchange an education advisor for the Africa Region component was designed to contribute at the World Bank, described the general to the longer-term objective of increas- objectives of the broader NESAP-ICT initia- ing the effectiveness of organizational tive of which the South-South knowledge arrangements at learning institutions to exchange was one component. These over- better produce graduates prepared for the arching objectives of NESAP-ICT are to: IT-ITES industry. This capacity development • Equip the workforce with more and bet- objective was important but secondary ter ICT skills benchmarked to global (longer-term) for this knowledge exchange, standards. which first required increasing commitment • Support the specific ICT educational among the leaders noted above. That is, to and skills needs of targeted African participate in the program, the participants countries. had to demonstrate sufficient promise to • Build capacity to better design and promote ICT. The purpose of the knowl- implement ICT projects and compo- edge exchange was to increase their com- nents. mitment to a level that would lead to action. • Pilot a new way of working collabora- tively across sectors to address a com- Program Description mon need. Design of the Knowledge Exchange Interviews with knowledge providers Initiative at the World Bank and a review of South- The centerpiece of this South-South experi- South experience exchange program docu- ence exchange was a two-week learning ments clarified the capacity development visit to India, hosted by the National Asso- objectives for this knowledge exchange. ciation of Software and Service Companies The primary focus was to increase the (NASSCOM). The main elements of this visit strength of stakeholder ownership for included: developing the IT-ITES industry by build- • Presentations from Indian and interna- ing commitment among industry leaders tional experts. and policymakers. Anubha Verma, World • Networking and learning at the Bank Operations Officer, said, “All coun- NASSCOM Annual Leadership Forum. tries wanted to learn about the IT industry • Site visits to IT firms and skills develop- and its impact on the economy. However, ment institutions. they were not able to envision the trans- • Sessions to share country experiences formation of the economy and the urban among the eight participating African development as a result of the IT industry countries and prepare country action development… An attitudinal shift and dif- plans. ferent mindset was necessary to nurture this Though the primary focus was on skills industry.� development, other areas critical for the 74 IT-ITES industry’s growth were also included Hyderabad and Bangalore. IT companies, in the learning activities: infrastructure, poli- consulting firms, higher education institu- cies and institution, and business environ- tions, and senior policymakers provided ment. content. Prior to the visit, three videoconference Presenters from the Philippines and sessions were held to prepare the coun- Korea brought a global perspective to try delegations and inform the planning IT-ITES. A representative from the Business of the overall agenda, and after the visit, Processing Association-Philippines shared one videoconference session was held experiences on how the Philippines rose to discuss the lessons learned. To follow from a newcomer in ITES to the status of up on country progress, a workshop and a dominant global player, using private- panel discussion was incorporated into the public sector alliances to achieve growth. A 2010 eLearning Africa conference held in a representative from POSTECH shared an Zambia, with videoconference connections overview of Korea’s IT experience and how to explore lessons learned and progress to build world-class educational institutions achieved by the knowledge-receiving coun- for ICT excellence. tries (http://nesap-ict.pbwiki.com). The learning visit provided the oppor- Participants in the Knowledge tunity for peer countries to share their Exchange experiences related to the IT-ITES indus- The members of each country delega- try. The Africa delegations from Ghana, tion were strategically selected based Kenya, Madagascar, Mozambique, Nigeria, on their positioning to initiate or man- Rwanda, Senegal, and Tanzania met with age new action based on lessons, and to their India counterparts and also learned attain a comprehensive representation about experiences in the Philippines and from relevant stakeholder groups. One Korea. participant in each country group was designated a “champion.� A program Knowledge Providers designer explained the selection rationale: India was selected to be the key knowledge “We looked for champions in each coun- provider and to serve as the site of the try before the project. We made sure we learning visit because it is a global leader included not just the leaders but also the in IT engineering and IT-enabled services. implementers.� Program materials noted that in 2007–2008, In keeping with this rationale, the mix of the industry contributed an estimated 5.5 participants was structured to represent the percent of India’s GDP, compared with 3.6 following stakeholder groups (Tan, 2009): percent in 2003–2004 and 1.2 percent in • Senior government officials from 1997–98. This rapid growth occurred within the ministries responsible for ICT the context of still widespread poverty and development. low literacy rates, thus offering relevant les- • ICT regulatory bodies. sons for the knowledge receiving countries • Education and training institutions in Africa. The IT-ITES industry is of particu- involved in ICT skills development. lar interest to these countries because the • Entrepreneurs from the private sector global market potential is substantial and and industry association members. because of the demonstrated potential of IT-ITES to create jobs, particularly for young The composition of each country’s del- people. egation varied to some degree. For Ghana, The main content providers in India the participants included high-level repre- included industry association representa- sentatives from the public sector, private tives and skill development experts. The sector, and skills development institutions learning visit was hosted by NASSCOM (complete list in Appendix). For Nigeria, and covered the India IT hubs of Mumbai, the country delegation also represented 75 the public and private sectors and a skills the increased commitment of leaders development institution (complete list in described above. Appendix). The individual components for each of these two results stories are described in Summary of the Capacity detail in the following sections, with specific Development Change Logic evidence and lessons learned provided The CDRF provides guidance to identify related to the emerging outcomes in each how capacity development interventions country. Figure 14 provides an overview of can catalyze and facilitate transformational this change logic. change processes that enhance institutional capacity. This capacity development results Outcomes for Ghana chain logic is directly applicable for assess- ing South-South knowledge exchange pro- Country Context grams. The capacity changes can be traced Ghana is a low-income, agriculture-driven by establishing which institutional capacity country that is striving to become middle areas are constraining the achievement of income through knowledge-based and a particular development goal, which local technology-driven economic growth. In its stakeholders or change agents are well opening presentation, the Ghana country situated to manage or initiate the needed delegation highlighted various steps that change(s), and which ICOs are being have been implemented for supporting this achieved to advance progress toward the transformation, including the following: higher-level institutional capacity results. • Formulation of the ICT for Accelerated Following this logic, two capacity Development Policy, with ongoing work development change stories are emerg- to refine the policy pillars and sectoral ing in Ghana and Nigeria following the strategies. South-South visit to India. First, to promote • Establishment of the Ghana Multimedia needed action steps, policymakers, industry Incubator Centre in 2005 to train people leaders, and other decision makers must be for the Business Process Outsourcing able to envision the transformation of the (BPO) industry and to develop incuba- economy that could result from developing tors. the IT-ITES industry. By helping government • Establishment of the ITES Division of the officials, industry executives, and represen- Ministry of Communications in 2007 to tatives from skills building institutions bet- facilitate the development of the private ter understand this growth potential and sector. the relative advantage of their country— • Establishment of the Ghana Investment and by helping to empower each group of Fund for Telecommunications to enable participants to articulate these benefits to Telecom Operators to extend their ser- other leaders back home—the South-South vices to rural communities. experience exchange is helping to foster • Completion of the first phase of the the needed stakeholder ownership. National Communications Backbone These same participants should be Project to provide open access broad- well positioned to implement changes for band connectivity to most major towns increasing the effectiveness of skills build- and cities. ing institutions in preparing graduates for IT-ITES employment. The learning visit According to the Ghana Association of provided the country delegations with the Software and IT Services Companies opportunity to learn from experiences in (GASSCOM), the growing global need for India about how to prepare graduates in BPO services was estimated to have reached line with internationally recognized stan- $180 billion by 2009, with Ghana identified dards. Implementing the needed changes as a favored destination. The country del- in this case will take more time and require egation attending the learning visit in India 76 Figure 14. Change Logic for the NESAP-ICT South-South Experience Exchange with India Develop the IT-ITES industry to stimulate economic growth and employment Strength of stakeholder Effectiveness of organizational ownership arrangements Commitment of leaders Achievement of outcomes Industry leaders and policymakers Skills building institutions need the need to be able to envision the curricula and prepared teachers transformation of the economy necessary to produce graduates that could result from IT industry with the appropriate knowledge and development in order to promote skills to be competitive in the IT-ITES the needed changes. industry. Change process and Change process and agents of change agents of change Government officials, industry Government officials, industry executives, and representatives from executives, and representatives from skill building institutions develop a skill building institutions learn from better understanding of the potential experiences in India about how to growth offered by the IT-ITES prepare graduates for the IT-ITES industry and the relative advantages industry in line with internationally of their country. recognized standards. Intermediate capacity outcome Intermediate capacity outcomes Strengthened coalition: Meetings Increased implementation know- with NASSCOM help delegates how: The country delegations to understand how the members developed an action plan outlining of an industry association can short-term, medium-term, and long- leverage their strengths to advance a term steps for producing a skilled common agenda. workforce. Improved consensus and teamwork: Enhanced knowledge or skills: Industry leaders and policymakers Participants apply lessons learned in focused on a common task and India to contribute to new develop- built agreement around action ments in the assessment, training, steps for developing the IT-ITES and/or certification of graduates of industry. skill building institutions. Main components of the knowledge exchange initiative Networking and Learning at NASSCOM Annual Leadership Forum Presentations from Indian and international experts Site visits to IT firms and skills development institutions Sessions to prepare action plans 77 outlined several advantages that could training curricula. As the task team leader allow Ghana to capture a growing share of of the South-South experience exchange this market. Important strengths included noted, the participant selection process the presence of a large talent pool, a loca- was designed to target “high-level influ- tion near to Europe, and a foundation of ential champions to be leaders, and not government support with financial incen- necessarily technological leaders, but those tives to position IT-ITES as focus areas for who could influence policy and establish a economic growth. vision for promoting ICT in their countries.� However, the Global Competitiveness An important outcome therefore was Report for 2008-2009 indicated that Ghana the increased ability of this diverse set of was relatively weak in the areas of tech- stakeholders to collaborate effectively on nological readiness, innovation, and labor the common task of establishing this vision. market efficiency (World Economic Forum, This cohesion is reflected in the following: 2011). Limited skills and productivity pres- • The delegation worked collaboratively ent challenges for Ghana, along with the to produce a country presentation and problem of “perception� as described by an action plan outlining short-term, the country delegation: local stakehold- medium-term, and long-term steps. ers, including leaders, are not yet grasping • Stakeholders have continued to carry Ghana’s potential as a BPO destination out their designated roles as set forth in (Ghana country delegation presentation, the action plan. As reported by a partici- May 2009). Reshaping these perceptions pant from the Ministry of Communica- to strengthen stakeholder ownership will tion, a leadership committee was estab- be an important early step in overcoming lished following the visit composed of barriers. the Minister of Communication, Deputy Minister of Finance, Deputy Minister of Changing Attitudes Among Industry Education, and representatives from the Leaders and Policymakers Ministry of Trade. This committee has By design, capacity development interven- met approximately four times to track tions should aim to affect the ability or progress in achieving the action steps disposition of stakeholders who are well and “keep the skills agenda on course.� situated to initiate or manage the changes needed to achieve capacity develop- Coalitions among public and private ment results. As defined by the CDRF, this actors strengthened. changed ability or disposition reflects an The experience exchange also strength- intermediate step toward higher-level insti- ened the relations between the public tutional capacity results. sector and GASSCOM. A participant from A review of program documents and the Ministry of Communication reflected interviews with key stakeholders identified that the learning visit “opened a formal evidence indicating that the South-South connection� between GASSCOM and experience exchange contributed to two the government because the delegation ICOs. These ICOs are critical for strength- needed to work closely with GASSCOM to ening stakeholder ownership in promoting prepare the concept paper and the country the IT-ITES industry in Ghana. presentation. As the participants learned how NASSCOM pushed the BPO agenda in Consensus and teamwork improved India, they better understood how impor- among influential ICT champions. tant it is that “industry and government and The delegation from Ghana included academia should get together so that the a strategic mix of high-level representa- skills that are produced would be industry tives from the public and private sectors, and demand-driven.� including stakeholders well positioned to Following the learning visit, GASSCOM influence policy, resource allocation, and established a stronger disposition for 78 influencing the BPO agenda, reflected by leaders in Ghana to the development goal. the following: The multi-year NESAP-ICT program targets • With World Bank support, GASSCOM eight countries that satisfy certain eligibil- hosted its first international conference ity criteria, one of which is strong govern- in July of 2009: “Outsourcing to Ghana, ment commitment at the leadership and Africa’s Golden Gateway.� operational level to the project’s agenda. • The government of Ghana’s e-Ghana At the launch of NESAP-ICT in 2008, Ghana project supported GASSCOM with insti- demonstrated sufficient stakeholder owner- tutional capacity building and expansion ship to meet this requirement. However, of membership. interviews with stakeholders and a review of • The Ministry of Communication now program documents highlighted the need holds at least a quarterly meeting with to strengthen and broaden commitment the CEO of GASSCOM and invites GAS- among stakeholders in instrumental leader- SCOM representatives in regularly to ship and decision-making positions. Real discuss skills development issues. As commitment is reflected by action steps one participant noted, “They have a say implemented and/or supported by leaders: in prioritizing the agenda for govern- leaders needed to demonstrate increased ment. At the end of the day, they are philosophical buy-in to promote IT-ITES going to use the skills of the people industry growth, as well as increased moti- whom we train.� vation to act and knowledge about what • The ITES Secretariat of the Ministry of activities were needed. In other words, real Communications facilitates “matchmak- commitment is reflected by action steps ing events� so that potential BPO inves- implemented and/or supported by leaders. tors visiting Ghana have the opportunity As described in the discussion of ICOs to meet and network with GASSCOM (improved consensus and teamwork), a members. GASSCOM is now viewed leadership committee was established fol- as playing an instrumental role in the lowing the participants’ return from India to promotion of Ghana as a destination for Ghana to promote, implement, and moni- BPO/ITES industry investment. tor various steps in the action plan. This high-level committee included the Minister The South-South learning visit to India of Communications, Deputy Minister of was conceived primarily for African par- Finance, Deputy Minister of Education, and ticipants to gain exposure to the Indian representatives from the Ministry of Trade. IT-ITES industry and to distill lessons for The committee participated in a follow- possible application in Africa. The experi- up South-South exchange to Singapore, ence exchange was therefore strategically designed exclusively for higher-level deci- positioned to help advance diverse capac- sion makers. Evidence of increased com- ity development objectives and interven- mitment to developing the IT-ITES industry tions, including World Bank work in Ghana by these leaders following the South-South addressing ICT issues and the ongoing, experience exchange includes: multi-year NESAP-ICT initiative. While the • The committee requested the World learning visit alone would not be expected Bank’s support in critical areas of to achieve these development objectives, economic growth, including ICTs, oil evidence of improvements in targeted and gas and agriculture. Following this institutional capacity indicates how change discussion, Ghana launched the Ghana processes facilitated by the knowledge Skills and Technology Development exchange contributed to capacity develop- Project with support by the World Bank. ment. This project was launched after the In terms of strengthening stakeholder Singapore learning visit. Participants ownership, a clear focus of this initiative emphasized that the lessons from India was to further increase the commitment of solidified leadership for this project 79 and clarified what steps needed to Indian BPO-ITES industry on an ongoing be supported to achieve results for basis, and a BPO-ITES Training Roadmap Ghana. The leadership committee was had recently been completed before the designated as the Project Steering learning visit as part of the World Bank’s Committee for the Ghana Skills and eGhana project. Technology Development Project, and The experience exchange strategically the project is due to become effective aimed to educate the delegation about between July and September of 2011. what reforms and action steps were needed • The project targets ICT industry as a for effective skills development to prepare priority area. The Ghanaian participants graduates for IT-ITES employment. Imple- used the lessons learned from the mentation of these action steps, described India visit to select high-impact areas below, demonstrate how participants to be targeted by the competitive fund applied newly acquired knowledge and instrument, the main vehicle of financing skills in following the BPO-ITES training in the Ghana Skills and Technology roadmap. Development Project. These areas are modular, industry-based training, New implementation know-how. just-in-time training for workforce Participants from Ghana not only for- needed by ICT investors, employability mulated an action plan but also followed training among graduates through through to implement action steps. As bridging method and capacity building alluded to previously, developing the action in industry association GASSCOM for plan provided practical insights on how to large-scale impact. improve IT-ITES skills development, which led to the following progress. Strengthening Skills Building Institutions • Immediate Program documents and interviews with o Completion of BPO skills standards/ key stakeholders also indicated that the curriculum guidelines. South-South experience exchange helped o Validation of standards/curriculum catalyze a capacity development change guidelines. process related to increasing the effective- o Hiring of training consultant (content ness of the organizational arrangements of development/training of trainers ). skills development institutions so that they o Planned launch of training grants pro- could produce graduates better prepared gram in June, 2011, following the con- for IT-related jobs. Two intermediate out- sultant’s completion of training con- comes in particular appeared to serve as tent (currently nearing completion). stepping stones to this higher-level capac- o Launch of the skills development fund ity development objective. as part of the Ghana Skills and Tech- nology Development Project. IT champions increased their knowledge • Medium-term and skills to reform the skills-development o Planned accreditation of training of cycle. trainers following the completion of Participants developed an increased the training content. ability to act related to IT-ITES skill devel- o Planned training of learners and opment. The participant from the ITES agents program will happen within Secretariat observed that “the knowledge two months. After 50 trainers and 500 exchange was very helpful in getting us learners are trained, the full learners to craft the curriculum: there are global or course will be reviewed and revised international skills sets that are important as needed. Following that, approxi- for the IT-BPO industry.� Key stakeholders mately 7,000 learners are expected to have been studying the evolution of the complete the training. 80 • Long-term commitment from a broad group of stake- o Ongoing rapid deployment of mod- holders, which continues to strengthen as ern IT/BPO infrastructure. Increasing described above. submarine cable capacity to three Evidence of improvements in workforce eliminated the monopoly and drasti- skills is not yet available, but near-term cally reduced the cost of bandwidth. measurable improvements in the effective- One participant emphasized that ness of skills development institutions are “when we went to India, we realized indicated by the following (described previ- that our bandwidth capacity was SO ously in the overview of the delegation’s low,� and this realization motivated action plan): rapid cable deployment. • Completion and validation of BPO skills o Ongoing promotion of Ghana as a curriculum guidelines, in line with inter- destination for BPO/ITES industry nationally recognized standards. investment, with participants organiz- • Development of training content that ing inbound events to promote the complies with the new curriculum guide- advantages of locating in Ghana. A lines. team from Ghana also visited the • Training of trainers to deliver the training United States to learn about invest- content. ment promotion in BPO- ITES, and as • Training of learners to test the effective- a result, the American BPO Teletech ness of the content and planned visited Ghana and took over the delivery. Vodafone call center in Ghana, result- • Administration of skills development ing in 500 new jobs. funding to support the delivery of tested o Ongoing development of technol- approach and content at skills develop- ogy parks, with the design stage now ment institutions. complete. The strategy is to build The results framework for the Ghana an office complex and BPO hall that Skills and Technology Development Proj- will then entice private sector firms ect includes monitoring and assessment to locate there. The government of changes in human capacity over time identified some warehouses, which through measuring things like employer are to be rehabilitated into BPO satisfaction with the skills of trainees enter- shacks with plug-and-play access ing the labor market, employers’ ratings of for use in the next three months. workers’ competencies, and the propor- These warehouses were public works tion of those trained who become certi- department buildings that were fied. These data will confirm whether the abandoned. capacity of skills development institutions has improved to produce graduates better Overall, the NESAP-ICT South-South prepared for IT-ITES jobs. Experience Exchange with India worked in concert with other key development Outcomes for nigeria interventions in Ghana to improve the effectiveness of institutions promoting the Country Context IT-ITES industry. An important factor for Nigeria has taken important steps to pro- developing the IT-ITES industry in Ghana is mote the growth of the IT-ITES and BPO increased human capacity, which includes sectors over the past decade. Notable improved preparation and competitiveness milestones include creation and approval among graduates from skills development of the National IT Policy, establishment of institutions. These organizations need to the National Information Technology Devel- produce a more skilled workforce. Invest- opment Agency in 2001, development of ment in training, curriculum development, a framework for IT education by the Fed- and infrastructure requires demonstrated eral Government of Nigeria in 2008, and a 81 steady increase in information and commu- relevant lessons for Nigeria, and that “there nication technology expenditures (Nigeria was some energy� when the delegation country delegation presentation, February returned home. But without any follow-up 2009). The IT-ITES industry represents a actions or funding to continue facilitating substantial opportunity for non-oil eco- the change process, “people return each to nomic growth in Nigeria: the Outsourcing their harried programs, engage in survival- Development Initiative of Nigeria (ODIN) ist activity, and the energy fades.� estimated in 2009 that the global off-shor- Interviews and program documents for ing market grew from approximately USD Nigeria suggested that the experience 32 billion in 2001 to USD 85 billion in 2008. exchange contributed effectively to the fol- In many ways, Nigeria is well situated lowing emerging ICOs, but further interven- to capitalize on the growing BPO market, tions will likely be needed before these will and to attract foreign direct investment to lead to an increase in commitment among further accelerate industrial and economic leaders to promote the IT-ITES industry. growth. Advantages cited by the Nigeria country delegation during this South-South Consensus and teamwork among experience exchange include the large influential ICT champions improved. English-speaking population, relatively low As with Ghana, the team from Nigeria labor costs, strong contract enforcement represented a diverse set of stakeholders. laws, and a highly educated workforce (with These included delegates representing the more than 10,000 tertiary institution gradu- office of the Presidency, Ministry of Science ates annually). and Technology, Digital Bridge Institute, But significant challenges remain. The and iNterra Networks, Inc., a global pro- Nigeria country delegation highlighted vider of IT solutions and services. Partici- the poor infrastructural base, lack of an pants were strategically selected based on adequate legal and regulatory framework their potential to serve as “champions� for to support BPO, and shortage of skilled the IT-ITES industry given their ability to labor among the barriers that need to be manage or initiate needed changes. The addressed. A World Bank-supported study, learning visit to India therefore improved The IT-ITES Industry in Africa, helped iden- cohesion of and collaboration within this tify existing challenges, but also identified group, as evidenced by the drafting of a Nigeria as one country where significant country action plan for Nigeria outlining progress had been achieved in establishing what steps are needed to promote the IT- an environment conducive to growth in the ITES industry. IT-ITES industry. The study concluded, “All This could potentially be an important that is required is high level government ICO because effective teamwork within commitment to taking the necessary steps� this group is critical for continued advance- (World Bank, Tapping the global IT-BPO ment of the capacity development objec- potential). tive upon their return to Nigeria. However, unlike in Ghana, it is unclear whether this Changing Attitudes Among Industry new collaboration can continue without Leaders and Policymakers further interventions. Like in Ghana, the Nigeria country delega- tion was strategically selected based on Public and private actors strengthened their positioning to strengthen stakeholder their coalitions. ownership to promote the IT-ITES industry ODIN was legally registered prior to in Nigeria. The potential capacity develop- the South-South experience exchange, ment change processes for Nigeria follow but it had not been promulgated as an the logic of those in Ghana, but the results institution, and the learning visit to India are less clear at this time. Participants was instrumental in educating delegates noted that the trip provided valuable and about what an industry association can do. 82 The meetings with NASSCOM helped the that “the time has come to create jobs country team to understand how ODIN and lay a new foundation for Nigeria’s can facilitate needed changes related to economic growth.� A National Job human capacity, the legal framework, the Creation Strategy will be developed enabling environment, the infrastructural with business process outsourcing as base, network connectivity, and other fac- one of the priority sectors for boosting tors. One participant explained, “We had growth and jobs. a lot of discussion about the need to have However, it is important to note that an industry association that could drive the more focused attention on the commit- agenda in Nigeria where the public sector ment of leaders could be warranted to is very strong and sets the agenda. So let’s build on the momentum of the knowledge just have the right association that would exchange and ensure the continued imple- bring both worlds together to decide the mentation of the action plan. In the words future of this industry.� of one participant, “Building commitment Following the visit to the NASSCOM among Nigeria leaders is an issue. Wash- Annual Leadership Forum, ODIN held its ington could have understood this issue first National Outsourcing Conference in and set up strategies and mechanisms to June 2009, supported by the World Bank. address it and keep addressing it. It is naïve The conference aimed to create aware- to think that one can just go on a trip to ness and sensitize the public and private solve their problems.� sectors on the need to develop the ICT, BPO, and ITES sectors in Nigeria (http:// Strengthening Skills Building www.odinconference.com/). Although the Institutions conference “met with a lot of support and The South-South experience exchange a very high level of participation from the also started the process of changing the ministerial side,� the energy and activity organizational arrangements for skills has decreased since then. development in Nigeria. Like Ghana, this The South-South experience exchange process is only in its beginning stages, but has potentially contributed to an increase two ICOs are emerging: in commitment among leaders to devel- oping the IT-ITES industry. Some actions IT champions enhanced their reflecting this increased commitment knowledge. include the following: Members of the Nigeria country delega- • ICT Skills Technical Assistance was tion were exposed to innovative ICT skills launched in 2010. ACCESS (Assessment development strategies and programs of Core Competence for Services during their learning visit to India, and they Sector) Nigeria has broadened support developed a common understanding of among stakeholders positioned to the priorities for ICT skills development. promote and support growth in the IT, This enhanced knowledge was evidenced ITES, and BPO sectors. The program’s in part when the Nigeria delegates helped pilot is now entering its second to design and implement a pilot initia- phase, and it is envisioned that ODIN tive to assess core competencies for the will anchor the initiative in the long- IT-ITES and BPO sectors after the visit. The term with the Digital Bridge Institute ACCESS Nigeria initiative, launched in under the National Communications January 2010, is linked with the knowledge Commission designated as the exchange in the following ways: governmental counterpart. • The project is based on an adapted • The President’s Job Creation Initiative version of the National Assessment of was included as part of the 2011 budget. Competencies for IT and BPO sector, President Jonathan, in his speech which has so far only been implemented introducing the 2011 budget, asserted at a public scale in India and Egypt. 83 • The initial needs assessment in Nigeria increased ability to act to advance their was conducted by an IT-BPO industry capacity development objective. The action skills development expert from India, plan set overarching goals, identified the who made a presentation to African del- conditions and steps necessary for achiev- egates during the learning visit in India. ing those goals, and identified the resource • ODIN is expected to anchor the ongo- requirements, potential funding sources, ing World Bank-supported technical and partnerships needed to implement the assistance (ACCESS Nigeria) as the delegation’s strategic agenda for Nigeria. effort expands. The formulation of this plan is poten- The first phase of the ACCESS Nigeria tially an important intermediate step pilot was completed in January 2011 with toward increasing the effectiveness of the assessment tool tested on 300 stu- skill development institutions to produce dents in Lagos. The test was then rolled graduates prepared for IT-ITES employ- out in five cities to 3,000 students, with ment. However, participants indicated that the results expected later in 2011. Parallel the plan relied too heavily on uncommitted components to the piloting of the assess- resources. In particular, support for specific ment tool have included the development action steps was expected to come via the of a training program, design of a skills Nigeria Growth and Employment in States set dictionary and curriculum framework, a project and the Science and Technology at training matching grant model, and pre- the Post-Basic level (STEP-B) project. liminary identification of training providers. As in Ghana, increased human capacity Phase II of ACCESS Nigeria will continue is needed in Nigeria. Skills development to establish a full, globally benchmarked institutions need to produce graduates cycle of Assessment-Training-Certification with appropriate skills sets for IT-ITES jobs. accompanied by candidate job placement. As described above, ongoing commitment To help industry endorsement of ACCESS will be required by key stakeholders to Nigeria, ODIN is holding industry round- implement steps to produce a more skilled tables in Abuja, Lagos, and Port Harcourt in workforce. But the following develop- September and October 2011. ments, if implemented, could contribute to the targeted institutional capacity New implementation know-how. result of increasing the effectiveness of The action plan developed by the organizational arrangements to produce Nigeria country delegation outlined short-, graduates with more relevant skills and medium-, and long-term steps for pro- competencies: ducing a skilled workforce and achieving • ACCESS Nigeria, by developing and IT-ITES industry growth. Immediate steps implementing an assessment and focused on developing human capacity benchmarking tool, is producing a base- through changes to organizational arrange- line measurement and skills gap analysis ments, starting with the skills assessment for students in five cities. study conducted via ACCESS Nigeria. The • Activities and resources are under devel- review and enhancement of curricula used opment to address identified skills gaps, by skills development institutions was also including a training program, a skills set identified as an immediate priority, with a dictionary and curriculum framework, a medium-term step established for develop- training matching grant model, and a ing the Centre for Skills Development in database of training providers. IT-ITES. • A roll-out sample (1,500 trainees) will be The Nigeria country action plan devel- trained and given access to the various oped during the learning visit resulted in resources and their performance in the improved ability to strategically plan IT job market will be tracked. development tasks within resource con- • As ACCESS Nigeria is scaled up, ODIN straints. It also reflected the delegation’s will develop a certification framework 84 and seek recognition of the certification • A firsthand look at company operations. from service sector players. Site visits included more than just meet- • Over the longer term, assessment cen- ings with a few key informants. Instead, ters will be established across the coun- delegations had the opportunity to try and accredited trainers will provide observe day-to-day operations and training. engage with management in discus- When these steps are completed, data sions about actions pursued on a large could become available to track changes scale and how to build such capacity. in the skills and preparedness of Nigeria’s One participant observed that this on- workforce for IT-ITES employment. the-ground experience not only helped The rationale guide strategic planning but also pro- for selecting Lessons and Implications vided simple, practical, and useful les- sons for implementation. For example, participants Success Factors at the Reliant Telecom call center, little Ghana and Nigeria were chosen as the mirrors were provided for staff so that focused on focus for this case study because these they could see themselves and monitor identifying two knowledge recipient countries were their own demeanor as they talked to reported by program implementers to have customers. The participant, a CEO of individuals who the richest sets of emerging outcomes a private telecommunications services associated with the NESAP-ICT South- firm, is now applying this use of mirrors. could help to South Experience Exchange. Program initiate and documents and interview data helped to Strategic participant selection. illuminate which characteristics of the expe- As described earlier, the rationale for manage needed riences for these two countries appeared to selecting participants focused on identify- changes. facilitate these successes. This review iden- ing individuals who could help to initiate tified four factors that are necessary for an and manage needed changes. More than More than effective knowledge exchange. one program implementer underscored the importance of finding champions: “not just one program The right mix of learning components the leaders but also the implementers.� implementer in the program’s content. How this approach played out in reality The participants benefited from their learn- varied by recipient country. For Ghana and underscored ing visit to India because the program Nigeria, the country delegations repre- was designed to provide an in-depth view sented a mix of organizations from the the importance of what is needed to develop the IT-ITES public and private sectors to reflect various of finding industry, and what benefits a country can roles related to oversight, policy, academia, reap as a result of such efforts. Participants and industry, among others. This was not champions: “not highlighted two characteristics as being always the case. For example, a program especially helpful for building this under- implementer said that the mix of people in just the leaders standing: Kenya’s delegation “was not ideal because but also the • Exposure to varied contexts of site visits. they were mainly from Education.� Thus, The IT hubs of Mumbai, Hyderabad, and while some notable outcomes were still implementers.� Bangalore provided three very different achieved in the other participating coun- settings in India. This diversity increased tries, the groups were less effective in the chances that at least one of these solidifying the needed ICOs by building contexts would resonate with each relationships and collaborating across orga- participating country delegation. One nizations and sectors. participant described this phenomenon in detail and noted, “Hyderabad was Relevance of the knowledge provider’s somewhat like Nigeria, and it was good experience. to share experiences on building from Participants provided useful reflections scratch.� about the circumstances in which a 85 knowledge exchange is likely to be effec- development results and provide guidance tive. A learning visit is intended to have a on how to harness the catalytic effects of catalytic effect by inspiring participants. knowledge exchanges going forward. The experience must therefore have the The case studies for show how the right timing and content to capitalize knowledge exchange helped to contribute on current opportunities for change in to capacity development objectives. Par- a recipient country. The extent to which ticipant testimony about program effective- the context and experience provided by ness and recommendations for improve- India related to each country receiving ments shed light on potential successes knowledge varied. For example, the Indian but also highlight ways that the program Diaspora has played an important role in fell short of expectations. Together, these fostering India’s IT-BPO industry, and both findings can help strengthen future South- Nigeria and Ghana were poised to draw South knowledge exchange programs. on these lessons for tapping into their own Diaspora contacts and networks for invest- Maximize the success factors. ment and leadership. The experiences shared by participants provide clear guidance: Sustained interaction through follow- • Obtain a thorough understanding of up activities. recipient countries’ learning expecta- The South-South experience exchange visit tions. was short, but education and inspiration • Provide concrete, firsthand exposure to of participants were expected to continue activities in the relevant content area so after the program ended. In Ghana, the that participants can see up close how momentum of the learning visit was pro- things are done in the knowledge pro- pelled by establishment of a leadership vider country. committee to monitor the implementation • Choose settings and contexts for site of the action plan, as well as through par- visits relevant to the current situations in ticipation in another knowledge exchange the knowledge receiving countries. activity in Singapore. The leadership com- • Select participants strategically to mittee became the steering committee for enable the knowledge exchange to the Ghana Skills and Technology Develop- catalyze a capacity development change ment Project, and lessons from the knowl- process. edge exchange continue to inform the • Consider how realistic it will be for par- design and implementation of this project. ticipants to apply their lessons of experi- In Nigeria, the follow up has been less ence in their home countries and make clear. The planned action steps have not the program as relevant as possible for been systematically implemented over their country context(s). time, and follow-up financial resources and • Expose participants early on to objec- technical support have not emerged. tives and activities, and bring them together using videoconferencing to Lessons help them get to know each other and The NESAP-ICT South-South Experience start a conversation. Exchange offered a typical knowledge • Build in a timeline of follow-up activities exchange format, with one or more knowl- to help participants maintain momen- edge provider countries collaborating to tum once they return home. host multiple knowledge recipient coun- tries on an intensive learning visit. The Integrate the knowledge exchange in a findings derived from examining the expe- broad, ongoing set of related capacity riences of participants from Ghana and development initiatives. Nigeria help to illustrate the potential role Follow-up activities for the knowledge of these programs in achieving capacity exchange alone might not be sufficient for 86 participants to implement real changes that overcome identified capacity constraints. Instead, a knowledge exchange should ide- ally be embedded in, or linked to, a larger related capacity development intervention or an integrated set of ongoing activities. The experience of Ghana was particularly instructive for this lesson, with the Ghana Skills and Technology Development Project providing one vehicle through which par- ticipants could promote the changes they wanted to see happen. • Set realistic goals. South-South knowl- edge exchanges are of limited duration and should not be expected to alone affect changes in the targeted devel- opment goal. Instead, these initiatives provide the opportunity to achieve or work toward ICOs as part of a longer capacity development change process. One participant from Nigeria articulated this lesson clearly by pointing out that the success of the learning visit to India was inappropriately assessed by the degree to which all of the steps of the delegation’s action plan were imple- mented. Given that these steps involved a longer-term process and the ongoing infusion of additional resources, this assessment did not provide an accurate or fair measure. • Facilitate action planning and ensure that needed resources are available. Directly related to the previous point, any action planning that occurs during a South-South experience exchange with similar format and duration should be guided and monitored so that par- ticipants establish realistic objectives and timelines that rely on available resources. Inspiration established within a delegation after a learning visit could otherwise quickly dwindle by repeated attempts to locate additional funding or other necessary support. 87 88 Recommendations This study provides concrete evidence related to knowledge exchange across a that impact at the institutional level can be wider spectrum of topics and countries. achieved through knowledge exchange. In addition, a deeper exploration of Moreover, the case studies demonstrate the instruments and platforms used in the how institutional change was achieved knowledge exchange process is in order through intermediate outcomes. In other to discover the conditions under which words, the study provides examples of the certain types of tools work and do not work. “how-to� of capacity development through By examining the knowledge exchange knowledge exchange by explicitly showing instruments and how they connect to how interventions empowered key agents to intermediate outcomes, practitioners will achieve specific outcomes. The study points have more information for replicability and to two overarching recommendations on the scaling-up. For instance, the World Bank’s successful design and implementation of South-South Experience Exchange Facility knowledge exchange and the importance of has amassed a library of results stories on results-focused capacity development. knowledge exchange programs that is searchable by sector, theme, knowledge Build on current evidence and lessons exchange instrument, and ICO (http://wbi. learned through more knowledge worldbank.org/sske). work Knowledge exchange offers new instru- Practice results-focused knowledge ments that allow practitioners to consider exchange an increasingly diverse range of develop- The study’s findings indicate the need to ment experiences and to tap into the tacit implement a results-focused approach knowledge that is often key to understand- throughout the knowledge exchange pro- ing the “how to� of development solutions. gram life cycle. Knowledge exchange activi- However, it is important to use knowledge ties can benefit from consideration of the exchange instruments more strategically. change process during the design phase. Development practitioners need to under- Mapping out intermediate and institutional stand how and when different instruments capacity outcomes to be achieved would can be used effectively in supporting local strengthen the design of future activities. actors to achieve change toward their coun- For example, the World Bank’s South-South try goals. Experience Exchange Facility Trust Fund The study’s findings point to the need requires a results-focused planning process for building on the lessons from the current to be conducted as part of the application case studies by testing their applicability for its trust fund. Finally, implementing knowl- and generalizability in a larger and more edge exchange programs with measurable diverse sample of cases. In other words, a indicators would facilitate monitoring and broader investigation is necessary, using adaptive program management as well as the results-focused methodology to obtain post-program assessments. Such practices more evidence of results, and perhaps even should enhance the likelihood of achieving more importantly, to better understand the results as well as provide information and change process and the cause and effects guidance for future programs. 89 90 APPENDIX 1 Sample Interview Questions Instructions The interviews are most effective when conducted with two people on the interview team. One person leads the discussion asking questions from the respondent, and the other person focuses on taking notes, while also potentially jumping in to ask follow-up or clarification questions. It is helpful to record the session to document the results. Videos could provide interesting testimonial evidence as well. However, the quotes could also be transcribed and reported as a narrative. Protocol The interviewer greets the respondent and gives a brief background to explain that the purpose is to explore outcomes from the knowledge exchange. The interviewer may segue into the questions with a statement such as, “Since the knowledge exchange ended, we would like to follow up on what happened with the activities that were planned based on the policy recommendations.� notes to the Interviewer • The interview guide does not need to be followed in sequence; instead, a collaborative, conversational approach could dictate the order in which topics are addressed. • Probes and instructions are provided in italics to assist the interviewer in eliciting more details as needed. • The interviewer should use this guide to qualitatively explore the capacity development change process(es) supported by the knowledge exchange program. Existing challenges and reported outcomes should be translated into the CDRF terms for the corresponding institutional capacity constraints and types of ICOs (listed at the end of this guide). Program Overview Participants 1. Could you briefly describe your role in the 4. Who was targeted or selected in each design and implementation of this project? recipient country to participate in this knowledge exchange program? What were 2. What were the challenges or problems these individuals’ roles and organizations? that this program was designed to address? Probes as needed to ascertain partici- Specifically, what barriers did the recipient pants from private, civil society and govern- country face? ment sectors. Probe as needed to define each chal- lenge in terms of an institutional capacity 5. What was the rationale for selecting constraint. these participants? Probe as needed to understand how the 3. Did this knowledge exchange occur participants were positioned to help over- within a larger ongoing initiative? If yes, come the institutional capacity challenges could you briefly describe the major that the program was designed to address. components or activities supported for the Interviewer should focus on the specific knowledge exchange? challenges mentioned in Question 2. 91 6. How were the knowledge providers Additional Information selected to participate? 10. Are there any additional materials or Probe as needed to understand the existing resources that you suggest we rationale for selecting these individuals. review to learn more about this knowledge exchange program’s design, implementa- Outcomes tion, and outcomes? In particular, we are 7. The project report described some interested in: results and follow-up activities from this • Any results available from evaluations. knowledge exchange that we would • Any tangible evidence that would characterize as intermediate capacity help us better understand outcomes. outcomes. We would like to briefly review Examples might include copies of some of these outcomes with you to clarify countries’ action plans, documentation our understanding. related to the formation of associations, Probe should focus on the following etc. questions, with ICOs as a reference point: • Do you believe the knowledge 11. Who are other key informants whom exchange activities directly contributed we should contact to learn more about the to [INSERT]? Why or why not? program’s design, implementation, and • What evidence could support the claim outcomes? that the knowledge exchange directly contributed? 12. Are there any final comments or sug- gestions that you would like to share 8. We also examined the report for evi- regarding this knowledge exchange pro- dence that the program helped to address gram and its capacity development results? the identified institutional capacity chal- lenge [name challenge listed in Question 2]? What indicators were or could be used to assess a change for the [name institu- tional capacity characteristic]? Probe should focus on the following questions, with the institutional capacity challenges as a reference point: • Do you believe the knowledge exchange activities directly contributed to [INSERT]? Why or why not? • What evidence could support the claim that the knowledge exchange directly contributed? Probe for possible indicators for each identified institutional capacity challenge separately. Probe for attribution and evi- dence as appropriate. 9. Are there other notable outcomes of this knowledge exchange that we have not discussed yet? If so, please describe. Probe as needed to understand whether outcome is at intermediate or institutional level and what measure and evidence is available. 92 Institutional Capacity Areas and Intermediate Capacity Outcomes and Their Contributing Characteristics Their Operational Attributes Strength of Stakeholder Ownership Raised Awareness � Commitment of social and political � Attitude leaders � Confidence � Compatibility of social norms and values � Intention to act � Stakeholder participation in setting � Motivation priorities � Transparency of information to Enhanced Knowledge and Skills stakeholders � Acquisition of new knowledge � Stakeholders demand for accountability � Application of new knowledge � Improvement in understanding Efficiency of Policy Instruments � Clarity in defining rights and Improved Consensus and Teamwork responsibilities of stakeholders � Communication � Consistency � Coordination � Legitimacy � Contributions � Incentives for compliance � Cohesion � Ease of administration � Risk for negative externalities Strengthened Coalitions � Suitable flexibility � Common agenda for action � Resistance to corruption � Commitment to act � Trust Effectiveness of Organizational � Leveraging diversities Arrangements � Clarity of mission Enhanced Networks � Achievement of outcomes � Common interest � Operational efficiency � Processes for collaboration � Financial management (financial viability � Incentives for participation and probity) � Generating traffic � Communications and stakeholder relations Increased Implementation Know-How � Adaptability � Formulated policies and strategies � Implemented strategies and plans 93 APPENDIX 2 List of Participants and Organizations KDI’s KSP with the Dominican Republic 2008 KSP Dominican participants • Ministry of Economy Planning and Development – Minister, Director, and Advisor in Economic and Social Analysis • Ministry of Higher Education, Science and Technology – Under Secretary • Ministry of Finance – Economic Studies Analyst • Export and Investment Center – Minister, Manager in Promotion of Exports, Manager in Communications, Coordinator, Research Assistant • National Competitiveness Council – Minister • Reserves Bank – General Manager in International Business • Export Association – Member • Free Zone Association – Vice President • National Council of Free Trade Zones – Executive Sub-director • Bank of Housing and Production – Investment Projects and Working Capital Official 2009 KSP Dominican participants • Dominican Corporation of State Electrical Companies – Minister, Advisor • Export and Investment Center – Minister, Coordinator • National Energy Commission – Minister • Industry Association – President • EGE Haina – President, General Manager • Free Zone Council – Executive Director • Presidential Office for the Information and Communication Technologies – Director General • Bank of Housing and Production – General Comptroller 2008 and 2009 KSP participants for seminar and workshops held in the Dominican Republic • Ministries – Ministry of Labor, Ministry of Agriculture, Ministry of Education, Ministry of Industry and Commerce, Ministry of Public Administration, Ministry of Foreign Affairs • Banks – Central Bank, Banco Leon, Banco Popular Dominicano, Scotiabank • Public Agencies – National Institute for Professional Technical Training, National Customs Agency, Center of Development and Industrial Competitiveness, National Energy Commission, Electricity Coordinator Entity, Superintendency of Electricity, Rural and Suburban Electrification Unit, Dominican Confederation of Small and Medium Business • Private Sector – Dominican Agro-Business Association, Global Foundation for Democracy Development, Dominican Association of Foreign Investment Companies, Microtek Dominicana, National Association of Young Businessmen • Universities – Las Americas Institute of Technology, Santo Domingo Institute of Technology 94 KDI’s KSP with Mongolia KSP Mongolian delegates • Cabinet Office • Financial Regulatory Commission of Mongolia • Ministry of Education, Culture and Science • Ministry of Finance, Expenditure Division • Ministry of Finance, Financial and Economic Policy Department • Ministry of Finance, Fiscal Policy and Coordination Department • Ministry of Justice and Home Affairs • Ministry of Mineral Resources and Energy of Mongolia, Finance and Investment Department • Ministry of Roads, Transportation, Construction and Urban Development • National Development and Innovation Committee, Sectors Development and Investment Policy Department • Office of the President • State Property Committee, Public Private Partnership and Concession Department • Bank of Mongolia, Supervision Department World Bank’s nESAP-ICT for Ghana and nigeria NESAP-ICT Ghana country delegation • Ministry of Communications – Director of Policy, Planning, and Evaluation • Ministry of Communications – Deputy Director for Human Resources in ITES • Ministry of Education – Executive Director of Council for Technical and Vocational Education and Training • Ghana Outsourcing Association representative and founder of multiple technology firms in the private sector • Intercom Programming and Manufacturing Company – Chief Executive Officer of Ghana’s leading IT company • Intercom Programming and Manufacturing Company College of Technology – Head of Training NESAP-ICT Nigeria country delegation • Cabinet Secretariat in the Office of the Presidency – Permanent Secretary • Federal Ministry of Science and Technology – Honourable Minister and Director of Planning and Policy • Digital Bridge Institute, an international center for communications studies affiliated with the National Communications Commission – President and Chairman of the Governing Board • iNterra Networks Inc., a business process outsourcing firm backed mainly by Nigeria Diaspora investors – President and CEO (who was also steering an initiative to establish an outsourcing industry association) 95 APPENDIX 3 References 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The global competitiveness report 2011-2012. http://www.weforum.org/reports/global- competitiveness-report-2011-2012. 97 98 99 The demand for practitioner knowledge and customized learning is now at the forefront of the development agenda, leading to a proliferation of South-South knowledge exchange programs. In this joint study, the Korea Development Institute and World Bank Institute assess the impact of three knowledge exchange programs on capacity development. Using a results-focused methodology, the study reveals concrete evidence of institutional and intermediate outcomes from knowledge exchange. The study also shows the importance of country ownership and sustained cross-country and within-country interactions in facilitating tacit knowledge exchange and building momentum for change. Development practitioners can apply the lessons learned from the study’s findings to improve the design and implementation of knowledge exchange programs and more effectively meet the needs of partner countries. 100