A Manual for LRED Facilitators


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

A Manual for LRED Facilitators

  1. 1. Rolf Speit Economic Development Consultant Hamburg/GermanyA Manual for LRED FacilitatorsKick-starting Processes of Local and Re-gional Economic Development (LRED)Updated versionJune 2009 -1-
  2. 2. Rolf SpeitTABLE OF CONTENTS1   Introduction 1  2   The LRED – approach 2   2.1   Key features of the LRED approach 2   2.2   The sustainable development paradigm as normative framework for LRED 4   2.3   The concept of systemic competitiveness as strategic guide of the LRED approach 5   2.4   Strategic options for integrating natural resource management into LRED 8  3   The LRED cycle 10   3.1   Step 1 – Organizing the local stakeholders 11   3.2   Step 2 – Assessing the economic situation 13   3.2.1   Objectives and principles of rapid economic appraisals 13   3.2.2   Preparing a Rapid Economic Appraisal 14   3.2.3   The schedule of a Rapid Economic Appraisal 15   3.2.4   Fields of analysis, sources of information and the assessment matrix 16   3.2.5   Tools for information gathering and triangulation 20   3.2.6   Sampling 22   3.2.7   Conducting the interviews 24   3.2.8   The use of the REA workbook 25   3.2.9   Elaborating the analysis 26   3.2.10   Identification of proposals for intervention 28   3.3   Step 3 – Validation of the appraisal results 31   3.4   Step 4 – Action planning 32   -i-
  3. 3. Rolf Speit 3.5   Step 5 – Implementation 33   3.6   Step 6 – Replanning 35  4   Ethics of LRED facilitators 37  5   List of annexes 38   - ii -
  4. 4. Rolf SpeitAcronymsBSC Balanced ScorecardCDP Comprehensive Development PlanCIDA Canadian International Development AgencyCLUP Comprehensive Land Use PlanDAR Department of Agricultural ReformDENR Department of Environment and Natural ResourcesDILG Department of the Interior and Local GovernmentDTI Department of Trade and IndustryELA Executive and Legislative AgendaEnRD Environmental and Rural Development ProgramGDP Gross Domestic ProductGTZ Deutsche Gesellschaft für Technische ZusammenarbeitIGF Internally Generated FundsLCE Local Chief ExecutiveLGSP Philippines-Canada Local Government Support ProgramLGU Local Government UnitLoI Letter of IntentLRED Local and Regional Economic DevelopmentM&E Monitoring and EvaluationMAO Municipal Agricultural OfficerMDG Millennium Development GoalsMENRO Municipal Enviornment and Natural Resources OfficerMPDC Municipal Planning and Development CoordinatorMSME Micro, Small and Medium EnterprisesNGA National Government AgencyNGO Non-Governmental OrganisationPSP/SMEDSEP Private Sector Promotion/Small and Medium Enterprise Development for Sustainable Employment ProgramRODG Regional Operations Development Group (DTI) - iii -
  5. 5. Rolf SpeitSDC Swiss Development CooperationSME Small and Medium Enterprise(s)ToF Training of FacilitatorsUN United NationsUSAID United States Agency for International Development - iv -
  6. 6. Rolf Speit1 IntroductionThe Republic of the Philippines is one of the signatories of the UN Millennium Declara-tion adopted in September 2000 at the UN Millennium Summit. The Declaration em-bodies specific goals, targets and milestones in eliminating extreme poverty worldwide.Probably the best known target is to halve the proportion of people whose income is lessthan one dollar a day by the year 2015. Other targets refer to the reduction of the shareof people suffering from hunger, the achievement of universal primary education, thepromotion of gender equality, improvements in health as well as environmental sustain-ability and the creation of a global partnership for development.The Medium-Term Development Plan of the Philippines for the period 2004 – 2010 isaddressing the Millennium Development Goals (MDG). According to a midterm pro-gress review conducted in 2007 on the MDGs, the country will most likely achieve asignificant part of the indicators formulated to measure the achievement of the goals. Atthe same time, the Philippines are facing several challenges in this respect. The MDG –Monitor1 is specifically emphasizing the fact that progress among regions is uneven andexhibiting wide disparities in spite of high economic growth rates over the past years.Apart from diminishing regional imbalances, performance improvements in agriculture,capacity building of Local Government Units (LGU) for the delivery of basic servicesand the management of programs and projects have been identified, among others, aspriority actions for ensuring good progress in the attainment of the MDGs.The participatory approach of Local and Regional Economic Development (LRED)serves as a methodology for addressing some of the challenges mentioned above. Thismanual reflects the experiences gathered by the Department of Trade and Industry(DTI), the German Agency for Technical Cooperation (GTZ) and their local partners inthe introduction and dissemination of the LRED approach in the Philippines. Startingfrom November 2004, four LGUs in the Province of Leyte spearheaded the practicalapplication of the approach. In the year 2006, geographical coverage was expanded tothe Province of Southern Leyte. The success of these initial experiences triggered repli-cation within other LGUs of Regions 6, 7 and 8 in the years 2007 and 2008. In April2008, DTI’s Regional Operations Development Group (RODG) expressed interest indisseminating the approach nationwide (upscaling).1 The MDG Monitor is a one-stop-shop for the monitoring of the progress on the MDGs. It was created by the UN Development Programme in partnership with other UN organiza- tions. For further reference please check www.mdgmonitor.org -1-
  7. 7. Rolf SpeitIt is understood by all partners that the availability of facilitators well versed with theLRED – approach is one of the cornerstones of the upscaling strategy. Taking into ac-count the widened outreach of LRED envisaged through upscaling, the moment wasdeemed right to present an updated version of the manual. It is primarily directed at fa-cilitators supporting LGUs in kicking-off and sustaining LRED – processes, guidingthem through their different stages. It is also geared towards providing decision-makersat local level, representatives of NGAs and private sector bodies with a glimpse of howLRED is done in practice.The manual starts by providing an overview of essential characteristics of the approach(section 2.1) and placing it into the context of the sustainable development paradigm(chapter 2.2) as well as the concept of systemic competitiveness (section 2.3). Chapter2.4 explores strategic options for incorporating natural resource management intoLRED, in line with the sustainable development paradigm. Chapter 3, titled LRED cy-cle, presents a detailed description of all steps that are necessary for getting an LRED –process into full swing. Although the focus of the manual is on getting the ball rollingor kick starting the process (sections 3.1 to 3.4), reference is also made to the imple-mentation and replanning of the process (sections 3.5 and 3.6). Section 4 highlights keyaspects regarding the role of facilitators in LRED processes. The annexes listed in chap-ter 5 provide additional reference material of practical use for LRED – facilitators.2 The LRED – approach2.1 Key features of the LRED approachLocal and Regional Economic Development (LRED) has become an increasingly popu-lar approach among governments in developing countries, bilateral donors and interna-tional organizations. The World Bank, USAID, ILO, UN-HABITAT, the Canadian In-ternational Development Agency (CIDA), the Swiss Development Cooperation (SDC)and GTZ have all embarked on programmes in this field. GTZ defines the approach asfollows: “LRED is a process to mobilise stakeholders from the public and private sec-tors as well as from the civil society, to become partners in a joint effort to improve theeconomy of a defined subnational territory and thus increase its competitiveness”.Although the above mentioned agencies use different definitions, the underpinningprinciples of the approach are basically the same:• Focus on a subnational territory: Decentralization processes in many parts of the developing world have led to the creation of autonomous local entities entrusted with the task of shaping the local economic environment. LRED provides local -2-
  8. 8. Rolf Speit stakeholders with a set of tools addressing local economic potentials and constraints in a systematic way, spurring local economic growth as well as job creation and, thus, sustaining decentralization efforts. In the Philippines, the decentralization pro- cess started in 1991.• Involvement of relevant stakeholders: It is imperative to get all relevant stakehold- ers (local administrators and legislators, business associations, community organiza- tions and NGOs) at one table in order to achieve long lasting successes in local eco- nomic development. If LRED becomes a joint effort, it is easier to act in a holistic way, mobilize resources and access information more widely. The involvement of different actors is also important for trust building as a prerequisite for public- private dialogue.• Holistic approach: Any regional economy is shaped by a variety of different as- pects which all impinge on the potential for local employment generation. If these aspects are addressed in an isolated, stand alone manner, one may not be able to remove all growth barriers and unleash the economy’s full potential. For example, the introduction of effective pest control mechanisms alone may not result in higher abaca production, if the grading system, considered unfair by many farmers, is not tackled at the same time.• Committed local leaders and local government backing actively the LRED effort: LRED is basically about mobilizing people and making them work collectively in order to effect change. These need not necessarily come from the local government itself, as the term leader is not confined to those holding a formal leadership man- date. However, without the active backing of the mayor of an LGU, it would be dif- ficult to unleash sustainable LRED processes.• Action and strategic orientation: In the beginning, LRED intervention target at quick wins in order to create momentum and build trust with the local stakeholders. However, quick wins do not mean short termism. For instance, training activities for developing the business management skills of micro scale business people should start fast (quick win), but should be embedded in a longer term strategy for entre- preneurial capacity building, which includes linking up with micro finance provid- ers and the development of business membership organizations.One feature relates specifically to GTZ. While most organizations use the term LocalEconomic Development and the acronym LED, GTZ has added R for Regional. Thereason is that, initially, LED focused on urban development. One of the drivers of theapproach was the World Bank’s Urban Development Unit, which still uses the termLED under the Urban Development headline. In another connotation, the term Local inLED might be interpreted as Community Development which is a different approach.The term LRED is based on the notion that a local area and the surrounding region areintertwined and have therefore to be viewed as integral parts of one regional economy.This refers especially to developing countries where smaller towns are not economicallyviable without their hinterland. Further, the experiences show that after some time of -3-
  9. 9. Rolf Speitmore localized development interventions LRED turns to joint activities that go beyondone LGU and becomes more Regional.2.2 The sustainable development paradigm as normative framework for LREDSustainable development is the overarching paradigm setting the framework for devel-opment worldwide. It is a normative paradigm that has, among other approaches, alsoshaped the broad lines of LRED. Its origins can be traced to the nineteen eighties, whena study called Global 2000 hinted at the limits of the Earth to bear unrestrained eco-nomic growth. The term gained worldwide recognition through the Brundtland-Reportin 19872. The report defined it as follows: “Sustainable development is developmentthat meets the needs of the present without compromising the ability of future genera-tions to meet their own needs. It contains within it two key concepts: • The concept of needs, in particular the essential needs of the world’s poor, to which overriding priority should be given; and • The idea of limitations imposed by the state of technology and social organiza- tion on the environment’s ability to meet present and future needs.”The UN Conference on Environment and Development, held in Rio de Janeiro in 1992adopted sustainable development as a normative principle guiding economic, social,environmental and political affairs worldwide. While the Rio Summit managed to makesustainable development a top policy issue, the ensuing World Summit on SustainableDevelopment, held in Johannesburg in the year 2002. placed more emphasis on design-ing strategies for turning goals into reality. Before the Johannesburg Summit, the Mil-lennium Declaration had already marked a milestone in terms of getting more action-oriented.As a result of intensive discussions within academic circles, development organizationsand the civil society, sustainable development started to be seen in four dimensions:Economic, social and environmental sustainability as well as good governance. Sus-tainability is set as a goal within each of the dimensions, but also refers to the relationsamong them. The present worldwide economic crisis serves as a perfect example ofunsustainable practices in the sphere of the economy, that have a bearing on all the other2 In the year 1987, the World Commission on Environment and Development (WCED), chaired by former Norwegian Prime Minister Gro Harlem Brundtland, published the report Our Common Future. The task of the Commission had been to develop a concept for worldwide development respecting ecosystems. -4-
  10. 10. Rolf Speitdimensions: Social problems are aggravating due to rising unemployment, the overex-ploitation of natural resources might, to a certain extent, be lessened due to sluggishdemand for most traded goods and governance models promoting individual freedomfind themselves in the defensive. As the example demonstrated, it is not easy to op-timize all dimensions at the same time. In this case, the crisis has a somehow positiveeffect on the environment. Still, it is important to view development from each of thedimensions angles.For LRED, the paradigm has the following implications • LRED is geared towards economic development. The construction of health posts and the training of mid-wives would never feature under LRED. Still, it places the economy into the spectre of the other dimensions. It strives for eco- nomic development that is socially balanced, preserves the ecosystem and fos- ters good governance. Annex 1 provides examples of interventions for economic development at local level through the conscious preservation, rehabilitation as well as sustainable use of natural resources. • Good governance is a cross cutting issue within LRED processes. It promotes participation of various stakeholders in various stages and encourages transpar- ency through monitoring mechanisms built in the process.2.3 The concept of systemic competitiveness as strategic guide of the LRED approachThe concept of systemic competitiveness was elaborated by scholars from the GermanDevelopment Institute (GDI) in the early 90s as a response to the neoliberal model ofeconomic development3. While the neoliberals emphasized the need for market-orientedinterventions at macro level, the proponents of the systemic competitiveness conceptstressed the need for more specific interventions (meso level) apart from creating a con-ducive environment at macro level. They also considered the sphere of societal frame-work conditions (like the social status of entrepreneurs, value systems), the meta level,as an area shaping a society’s competitiveness. In a nutshell, the proponents of the con-cept view competitiveness as a result of interrelated, market-oriented efforts, includingstate interventions to address market failures, at micro, meso, macro and meta levels.3 Esser, Klaus, Wolfgang Hillebrand, Dirk Messner, Jörg Meyer-Stamer: Systemic Competi- tiveness. New Governance Patterns for Industrial Development. London, 1996 -5-
  11. 11. Rolf Speit Note that the terminology of the concept is easily confused with spatial developmentterminology where micro means local, meso is related to regional and macro tonational levels. In this context, the terms do not have a spatial but rather functionalconnotation with micro relating to the sphere of firms, meso to specialized organizationsand policies (such as industrial policy) and macro to generic framework conditions.Seen from this angle, the concept of systemic competitiveness can be applied to localareas (see table 1 for examples of the four levels of systemic competitiveness in the con-text of the local level). Table 1: The concept of systemic competitiveness at local level (examples): Level Examples Meta level – Constructive dialogue between local administration and local private sector – Local Chief Executive (LCE) is development-oriented – Acceptance of change by local business people Macro level – Business Permit and Licensing System is streamlined – Regulations favouring sustainable use of natural resources Meso level – Local universities supporting R&D for local sub-sectors – Effectiveness of local chambers and associations – Local programs targeting specific sub-sectors Micro level – Local businesses engaged in raising productivity -6-
  12. 12. Rolf Speit Table 1: The concept of systemic competitiveness at local level (examples): Level Examples – Local businesses access market information – Networking along the value chain – Buyers preferences providing an incentive for quality productsThe question arises how the sustainable development paradigm, the concept of systemiccompetitiveness and the LRED approach are related to one another. Sustainable devel-opment can be considered as the overarching goal that many governments and interna-tional development agencies are striving at. Systemic competitiveness is geared towardsorganizing society in a way conducive for economic development. It tells us, in broadterms, how to achieve one of the cornerstones of the paradigm, namely economic devel-opment. Though the focus is on economy, it can firmly accommodate the other dimen-sions, because, in the long run, it is difficult to envisage competitiveness without sen-sible environmental policies, good governance and social peace. For example, if inad-equate environmental policies (macro level) lead to an over exploitation of natural re-sources, this would inevitably undermine the competitiveness and even survival of thosebusinesses making a living of them. And the inability of employers and employees toengage into constructive dialogue might spur social tension and impact negatively uponworker productivity (micro level).In more practical terms, how is the conceptual framework of systemic competitivenesstranslated into the tools and the process of LRED? The following lines seek to providean answer:− REA and the concept of systemic competitiveness: The fields of analysis in the Rapid Economic Appraisal encompass all the four levels mentioned above. While the legal and administrative environment refers to, broadly speaking, the macro level, the field businesses relates to the micro, support institutions to the meso, human resources to the micro and infrastructure to the meso level. The meta level is touched upon under legal and administrative environment and businesses. Natural resources, another as- pect being dealt with in the REA, are cutting across all four levels like society’s affec- tion for nature (meta), generic environmental policies (macro), ecological aspects within specific policies and programs (meso) and the way entrepreneurs are dealing with natural resources (micro).− LRED interventions and the concept of systemic competitiveness: Practice has demon- strated that interventions identified as a result of LRED processes cut across three out of the four levels. For instance, you can find interventions targeting the simplification of business permit and licensing processes (macro level), support to business associa- tions (meso level) as well as initiatives to enhance technical innovation and improved marketing for specific subsectors (micro level). -7-
  13. 13. Rolf Speit− The LRED process and the concept of systemic competitiveness: As will be outlined later on, dialogue among the various stakeholders within and outside the confines of a local territory play as crucial a role as transparent and democratic decision making. Hence, the LRED process promotes a societal framework (meta level) more condu- cive for sustainable economic development.2.4 Strategic options for integrating natural resource management into LREDThe crucial implication for LRED is that it should at least help maintaining the resourcebase for economic development instead of contributing to its further degradation, bettereven if it could identify and support the sustainable use of the natural resources. Indoing so, it might generate new income opportunities for the poor echelons of society,provide a long-term perspective for rural areas and, ultimately, stem the tide of ruralmigrants flocking into the cities. There are three strategic options for achieving thisgoal:− Rehabilitation of natural resources: This refers to the rehabilitation of already de- graded or destroyed natural habitats by prohibiting their commercial use until they are completely or partially restored. This can directly create job and income opportunities for the rural poor, for instance in the case of reafforestation programs. Such efforts re- quire the political will and resources to effectively ban destructive economic activi- ties.− Promote economic activities not related to natural resources: These relate to eco- nomic ventures which are neutral to natural resources, because their raw materials are people’s brains rather than physical materials. They would reduce the pressure on natural resources through promoting alternative sources of income and employment. Backoffices handling administrative jobs, call centres and software companies are ex- amples for this kind of businesses. However, these would rarely find locational advan- tages in rural areas, thus making this option an less likely one.− Promote the sustainable and effective use of natural resources: This option acknow- ledges the need for rural dwellers to use the natural resources available in their vi- cinity but change their management practices in a way that promotes their sustaina- bility. In practice, this is the most common way of marrying economy and ecology at local level. The advantage is that it mainstreams environmental concerns into eco- nomic activities and makes local stakeholders aware on the possibility of earning in- come while, at the same time, doing something good for the environment. Annex 1 presents three case studies of LRED interventions, where local stakeholders opted for taking this route.The LRED approach presented in this manual is trying to mainstream sustainable natu-ral resource management in the tools it provides: -8-
  14. 14. Rolf Speit− the questionnaires used for the REA contain several questions exploring the situation with regard to the management of natural resources;− the Environmental Compliance Check presented in annex 17 is equipping facilitators with a tool to scan the compliance of interventions for economic development with the goals for natural resource management;− several interventions in ongoing LRED processes seek either to restore or preserve natural resources in order to maintain the livelihoods of a significant part of local citi- zens.Experience, though, has demonstrated that practitioners face a considerable amount ofchallenges when addressing the issues outlined in this chapter. Crucial insights are− Short term versus long term interests: Sometimes it is difficult to match economy and ecology because of vested short term economic interests lobbying for unrestrictive use of natural resources. If these short-term interests reside outside the confines of the LGU (such as in the case of influential export companies), it might be an option to build political alliances and seek the dialogue with these groups. If feasible, the dia- logue should emphasize that, in the medium to long term, industries can only be served by an intelligent management of natural resources. Hinting at the fact that good practices of corporate social responsibility are gaining ever more recognition in key buyer markets could also help in this respect.− The struggle for daily survival of the rural poor makes natural resources management with a long term perspective equally difficult to enforce. Any intervention towards protecting the environment should be accompanied by a strategy towards developing alternative sources of income as demonstrated in the case of the Tabuk Marine Park in Palompon (see annex 1).− Committed leadership: Successful initiatives demonstrated that matching the two ar- eas requires the commitment and passion of local leaders (LGU), the coordination with other stakeholders at local level, their control over the factors causing the deple- tion of the natural resources and the development of alternative livelihoods for the poor. In the case of local stakeholders not exerting exclusive control over the re- sources being depleted, the buy in of stakeholders at a higher level becomes inevi- table.− Sustainability of interventions: Interventions within LRED processes will find it more difficult to succeed if they create an entirely new project in the local area rather than supporting existing initiatives for the sustainable use of natural resources. Experiences in the field also revealed that financial assistance needs to be carefully staged and linked with capacity building in order to stand on firm ground. If carefully staged, it might take some time to produce the desired results. -9-
  15. 15. Rolf Speit− Multiplicity of laws, policies and mandates: A resource book published by the Philip- pines-Canada Local Government Support Program4 concludes “…the country has an aggregate of laws, executive and administrative orders dealing with various resources and activities in the coastal zone: fisheries, aquaculture, mining and quarrying, tour- ism, forestry, human settlements, reclamation, ports and harbour development and in- dustrial development. Unlike the basic ecological principle that recognizes the inter- connectedness of ecosystems, existing laws regard the coastal zone in a disaggregated manner.” The situation inevitably leads to a multiplicity of institutional mandates, which are often overlapping. The said document cites 17 institutions involved in coastal resource management alone5. It is not uncommon that initiatives for protecting coastal habitats come to a halt because of “turf wars” of some of the concerned agen- cies. However, experience has shown that these can be overcome by promoting dia- logue and consultation among these bodies, an intrinsic principle of the LRED ap- proach.3 The LRED cycleLocal and Regional Development is not a singular, one-time intervention. In principle, itis a continuous process and does not end at a certain date. Graphic 1 demonstrates thestages of such a process: While, in the beginning, local stakeholders need to be orga-nized in the sense that they agree to build their local economy jointly and accept theneed for change, the second step consists of conducting a Rapid Economic Appraisal(REA) for assessing a local area’s economic potentials and constraints. This brief analy-sis is done by outsiders such as external facilitators. In order to obtain a common under-standing of strengths and weaknesses of the local economy and verify the appraisal re-sults, the analysis is being validated by local stakeholders in step 3. Based on this, linesof intervention are identified (stage 4). The interventions seek to overcome constraintsor utilize economic potentials of a local economy with a view to generating employmentand income. Then, implementation starts, the most essential part of any LRED process(step 5). An intrinsic element of implementation is monitoring. Without monitoringmechanisms, it is likely that the momentum aroused at the start will not sustain and theprocess fizzles out. After some time of having got the ball rolling, local stakeholderswill need to decide whether to continue with the process and, if yes, where to set thepriorities (step 6).4 De Guzman, Aileen and Jorge Reyes: Policy and operational issues that impact on effec- tive coastal resource management. Manila, 2003, p. 8 ff.5 ibid, p. 15-16 - 10 -
  16. 16. Rolf SpeitThe following chapters will describe the steps in more detail and provide practical tipsfor facilitators.3.1 Step 1 – Organizing the local stakeholdersThis step marks the beginning of any LRED process. At this stage, organizing meansintroducing the LRED approach to key local decision makers, identifying a felt need forlocal decision makers to venture more vigorously into the promotion of the local econ-omy apply bottom up methodologies for doing so and mapping the most important insti-tutions directly or indirectly involved in local economic affairs, be they public or privatesector representatives. Another objective is to plan for the ensuing steps. The followingtable lists the necessary steps. Table 2: Stages in organizing local stakeholders Stages Description and hints − Get appointment with LCE The LCE should always be the entry point. His or her active support and conduct orientationmeet- is crucial for the success of the LRED process. The orientation ing with him or her. meeting should be hands-on. Success stories from LGUs using the LRED approach would help secure the interest of the Mayor. − Conduct orientation meeting This group should include key respresentatives from the local ad- with larger group. ministration, the local legislature and the private sector. The objec- tive is to gain wider support for kick starting the LRED process. - 11 -
  17. 17. Rolf Speit Table 2: Stages in organizing local stakeholders Stages Description and hints Topics are the following: − Objectives of the LRED approach and the LRED cycle − Success stories from other LGUs − The roles of the LRED Coordinator for the LGU and the LRED Focal Persons for Specific Interventions − Costs involved in LRED processes − Select LRED Coordinator for The LGU should be asked to designate an LRED Coordinator6. This the respective local area person would serve as a kind of liaison officer for the team of exter- nal facilitators before, during and after the appraisal. He or she would also act as coordinator for the implementation of interven- tions defined as a result of the appraisal. This means basically being responsible for informing and mobilizing the stakeholders, preparing logistics, providing additional information (mostly written material) and convening people involved in the implementation of interven- tions later on. − Stakeholder mapping This serves to identify key stakeholders as interviewees for the re- source person interviews as well as potential advocates for the LRED process. Can be done either during the orientation meeting with a larger group or in a separate event. − Agree upon letter of intent The letter of intent (LoI) serves to secure commitment from the from the LGU LGU for venturing into the LRED approach. Ideally, the LoI should include a plan for the ensuing steps.If a lifetime motive for caring about LRED can be identified and if local stakeholdersappear to being able to work together, the two most essential criteria for engaging intosuch a process are being met. In some cases this initial assessment takes a single day, inother cases, several visits are required to find convincing responses to the key questions.Notwithstanding the support provided by DTI for replication and upgrading of LRED, itshould be made very clear that the LGU needs to budget for the expenditures incurred inkick starting and sustaining the LRED process. Such expenditures include fees, trans-port and accommodation for the facilitators, the workshop costs as well as the fundingof interventions resulting from the process. Hence, local stakeholders should be sensiti-zed as to the need for mainstreaming LRED into its short, medium and long term plans.Broad stakeholder mobilization is another crucial factor from the early beginning on-wards. Taking into account the sometimes highly politicized local arena, this serves toensure a fair representation of local groups and a balance of interests.6 Note that the designation LRED Coordinator always entails the naming the local area he or she is responsible for, for instance LRED Coordinator Calbiga or LRED Coordinator Ormoc. - 12 -
  18. 18. Rolf Speit3.2 Step 2 – Assessing the economic situation3.2.1 Objectives and principles of rapid economic appraisalsThe objective of Rapid Economic Appraisals (REA) is to identify potentials and con-straints to accelerated economic development of a particular territorial unit. It serves asa starting point for short, medium and long term interventions in order to overcomegrowth barriers and let the local population, including poorer sections of society, par-ticipate more widely in economic gains. The appraisals are also a means for initiatingpublic-private dialogue.In terms of poorer sections of society, it should be noted here that a REA is normallynot addressing the poorest of the poor, in this context referring to those parts of the localpopulation that are disposing of little to none assets such as land, education and basicworking equipment. The reasons are twofold. First, it would take a long time to buildbasic assets which would not cope well with an approach that, at least in the beginningof LRED processes, intends to generate “quick wins”. Second, people living in highlyvulnerable conditions are often risk aversive. For instance, they might be very hesitantto venture from subsistence to more specialized forms of farming, because of the risk ofnatural calamities or unstable markets. Hence, any efforts towards developing rural sup-ply markets within LRED might encounter only lukewarm response if the potential risksfaced by rural producers are considered too high. For these reasons, the target groupswithin the universe of the poor are limited to those who those who (i) dispose of someassets that can be used for becoming active players in markets and (ii) are at least par-tially already producing for markets.Rapid Economic Appraisals follow a clear format and are based on the principles rapid,participatory and holistic. What this means in practice is outlined next:− Rapid appraisal: The rationale behind a rapid appraisal is to save scarce financial resources and time as compared to traditional and very detailed studies, and still come up with results that are fairly right. Normally, rapid means two to four days field work and an additional full day for sorting the analysis of the information gathered. It is not the intention of a REA to go into all details and provide ready so- lutions, but rather identify the crucial issues and offer ways for the local constitu- ency to find appropriate responses.− Participation: Participation comes in already at this stage. The results of the analysis are partly shaped by hard data, but to a significant extent also by the perceptions of the local respondents. Apart from this, interviewees are invited to the validation and action planning workshop (see steps 3 and 4). Thus, they have an opportunity of - 13 -
  19. 19. Rolf Speit correcting, adding to and confirming the findings of the external facilitators, who steered the appraisal.− Holistic approach: A rapid appraisal aspires to examine all relevant aspects that impinge on the development of a local economy. Six fields of analysis are com- monly considered: General trends; the legal and administrative environment; the structure and evolution of the local micro, small, medium and large companies (in rural areas this includes the farming sector as well); the support institutions; the en- dowment with human and natural resources; and infrastructure. In practice, local administrations in the Philippines tend to focus on physical infrastructure. Hence, this methodology often provides them with additional insights into potentials and constraints of a particular local economy.3.2.2 Preparing a Rapid Economic AppraisalThe preparation of the field work is an important intermediary step between the organi-zation of the local stakeholders (stage 1) and the actual REA (stage 2). It may requireadditional meetings in loci with local stakeholders. The purpose is to establish a solidworking relationship with the LGU, to prepare the field work and to ensure a successfulassessment. These are the key issues:− Establishing sample size and structure: A description on sampling procedures, size and composition are provided in chapter 3.2.6.− Provide written information on the LGU to the LRED - facilitators: The external facilitators will need written information depicting broadly the economic situation of the district, municipality or metropolitan area. Information on number and struc- ture of local businesses, including agriculture, are part of it. Other important sources of information are described in section 4.2.5.− Demarcate field work areas: The economic assessment is often done by a team of four to eight facilitators. In order to use the time efficiently, it is advisable to split the area into different zones (mostly three), so that the appraisal team can work in parallel. The criteria for this separation could either be purely geographical (like north, east, west), according to economic characteristics (for example light- industrial zone, commercial zone, farming zone) or a mix of both, depending on the features of the LGU.− Designate contact persons for each zone: The LGU also needs to identify persons, who serve as guides during the field work. Their task is to identify and in- form/mobilize interview partners in their respective zones and guide the team to their respective locations.− Logistics: Since the appraisal team does not have much time, logistics need to be prepared well in advance. Key questions are: How is the transport organized? How many vehicles do we need? Who provides them? Who covers fuel costs? Where will - 14 -
  20. 20. Rolf Speit the facilitators be lodging? Will we provide snacks to the participants of the kick off and the validation/action planning workshops? What will be the venue for the work- shops? − Team composition: It is recommended to let one or two local stakeholders be part of the appraisal team. This can help promote the exchange of experiences and informa- tion within the team from different perspectives. While external facilitators can bring in unbiased and uncompromised views, the local facilitators can bring in their local knowledge. 3.2.3 The schedule of a Rapid Economic Appraisal After the preparations, the actual appraisal mission follows. The next table provides a typical schedule of a rapid economic appraisal. It is broken down into four parts: − Kick off workshop: The mission begins with a kick off workshop with local stake- holders from the public and private sectors. This event officially launches the exer- cise. After the team has explained purposes and methodology of the appraisal in simple terms, sometimes even in the local language, the audience is given the oppor- tunity to comment and ask questions. Quite commonly, these questions are related to funding concerns. The expectation is often that a donor agency would provide money in order to help the district. At this point, it is of utmost importance for the success of exercise to scale down these expectations, by mentioning that LRED is not about spending money. It is rather a process through which local people mo- bilize their own resources in order to do what they can for improving the economic situation. One could also refer to the situation of the business people by saying that there are so many factors impinging on the situation of a small company that just a loan would not solve the lot of the entrepreneurs. The event is being closed by ask- ing the audience to provide the information needed by the appraisal team and invit- ing the attendees to the validation and action planning workshop at the end of the field exercise. Table 3: Proposed schedule of a rapid economic appraisal Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day Day 8 Sun. Mon. Tues. Wed. Thurs. Fri. 7 Sun Sat.Morn- Kick-off Interviews Interviews Interviews Analysis Validation/ Resting workshop and mini- and mini- and mini- action workshops workshops workshops planning workshopsAfter- Arrival of Interviews Interviews Interviews Interviews Analysis Validation/ Documen-noon the team. and mini- and mini- and mini- and mini- action tation, Technical workshops workshops workshops workshops planning cleaning- prepara- workshops up travel tions. back home Meeting with local - 15 -
  21. 21. Rolf Speit LRED Coordina- tor.Eve- Team Team Team Prepara-ning meeting: meeting: meeting: tion of Biggest Biggest Biggest presenta- surprises surprises surprises tion and and docu- and docu- and docu- workshop mentation mentation mentation − Conducting interviews and field work: With the logistical support of the LGU, the LRED Coordinator and the contact persons of each of the zones, the field work be- gins right after the kick off workshop. It is useful to spare some time at late after- noon or early evening to allow group members to exchange some of the day’s ex- periences. One tool could be asking for the biggest surprises and visualize them on flipchart paper. Normally, a whole lot of exciting and detailed observations are el- icited. During the rest of the evening, it is advisable to commence with encoding the results of the interviews (see also section 4.2.8). Doing this early means saving some time later for a proper reflection on all the information that facilitators are flooded with. − Analysing the information: The analysis follows the information gathering. It takes approximately one working day. The objective is to come up with a draft of the as- sessment matrix (see chapter 4.2.4). It is recommended to follow the logic of the matrix and brainstorm on each of the fields of analysis sequentially. A look back at the biggest surprises can also be helpful. − Preparing the presentation: As a final step, the presentation needs to be prepared. There are two options. If you expect a large group (more than 30 attendees), it is recommended to design a power point presentation, but if you expect a smaller group, a presentation on metaplan cards and softboards might be preferable. The ad- vantage of the latter is that you may easily change cards according to how the dis- cussion goes, which makes it a quite participatory tool. It also allows for the visuali- zation of a complete matrix, while in PowerPoint you can only see parts of it at once. On the other hand, meta plan cards are not visible enough if you are handling many people, which gives PowerPoint an advantage. Which way to go for depends on the specific circumstances and might entail a combination of both forms of pres- entation. 3.2.4 Fields of analysis, sources of information and the assessment matrix The following table provides a synopsis of the key questions that need to be inquired for each field of analysis. Please note that support institutions relate to those organizations that provide services, directly or indirectly, to the business community. These include the financial sector (commercial and rural banks as well as non-banking financial inter- - 16 -
  22. 22. Rolf Speitmediaries), the education and training sector (for human resource development), techni-cal support institutions (e.g. laboratories), NGOs (human resources and technologiesdevelopment) as well as trade associations and chambers of commerce and industry. Table 4: Fields of analysis and their key questionsField of analy- Key questions Sources of informa- sis tionGeneral trends • What are local or regional Gross Domestic Product • Municipal Devel- (GDP) figures over the last five years? What is the trend opment Plans and what are key determinants for either dynamic or • Resources person sluggish growth? interviews • Population: What is the general growth rate and what are trends in in- and outmigration? How broad based is pov- erty and who is most affected? • What are trends in unemployment and underemploy- ment? • What are general location factors (like proximity to big cities and markets)Legal and • Taxes: What local taxes do exist? Do local stakeholders • City/municipaladministrative consider them high or fair? How efficient and profes- profilesenvironment sional is the local tax administration (for example collec- • Resources person tion)? interviews • Red tape: In what areas is there red tape? Is corruption a problem? How does red tape affect the business com- • Individual inter- munity? views with busi- ness owners • How can local government’s attitude towards economic development be assessed? • How did the local government’s budget over the last years develop? What are key sources of revenue? Is there pressure towards raising the share of internally generated revenues? How does it affect the local business climate? • How can the capacity of local government to carry out LRED programs and interact well with private stakehold- ers be assessed? Is there enough dialogue between private and public sectors? • Are there existing programs and strategies towards im- proving economic development? Is government interfer- ing directly and heavily in the local economy, thereby creating market distortions? Or are programs geared to- wards creating an enabling environment? • Is the local business community involved in decision- making on economic affairs? How do public and private sector representatives think about the effectiveness of these dialogue mechanisms? • Are there local policies, programs and related activities addressing natural rsources management? Are these ef- fectively being enforced? What has been the impact of these policies, programs etc. ?Businesses • How many businesses are there broken down into catego- • Individual inter-(including views with busi- - 17 -
  23. 23. Rolf Speit Table 4: Fields of analysis and their key questionsField of analy- Key questions Sources of informa- sis tionmicro busines- ries (micro, small, medium and large)? ness ownersses) • What are major subsectors and how did these develop over the last years? Which subsector is the most promi- nent source of employment? • What are the major problems of the business com- munity/subsectors (for example threat of new entrants, threat of substitution, competition within subsectors, problems with suppliers)? • How confident are local business people with regard to the business climate (can be measured by investment plans of companies)? • How are local businesses integrated into supplier and consumer markets (local, regional, national, interna- tional)? • Are environmental problems jeopardizing economic live- lihoods? Are there economic activities having a negative effect upon the environment? Which are these? Any ways to mitigate the negative effect?Support insti- Financial system: • Resources persontutions interviews • How many banks and non banking financial intermedi- aries are operating in the local area and what types of ser- • Individual inter- vices do they offer? views with busi- • Do their services and service conditions correspond to the ness owners needs of the local market? Education (vocational and technical education): • What kind of vocational and technical education institu- tions are operating in the local area? • Do their services correspond with the business com- munity’s needs? Training: • What kind of vocational, skills and technical training in- stitutions are operating in the local area? • Do their services correspond with the business com- munity’s needs? Providers of Business Development Services: • Are there any private BDS providers located in the area? In which fields? Are they operating well? • Are there any private BDS providers from outside operat- ing in the area? In which fields? Are they operating well? NGOs and Cooperatives (limited to those dealing with eco- nomic/business issues): • Are there any NGOs involved in economic affairs active in the local area? In which fields? Are they operating well? - 18 -
  24. 24. Rolf Speit Table 4: Fields of analysis and their key questionsField of analy- Key questions Sources of informa- sis tion Chambers and trade associations: • What are chambers and associations active in the local area and what is their specific mandate? • How many members do they have? Did membership over the last years increase or decrease? • What is the financial situation of the cham- ber/association? Are they also providing business-related services or focusing on social issues? Natural Resource Management: • What are the existing private and public organizations and companies which are promoting sustainable use of natural resources? • Could they serve as a relay for furthering the promotion of sustainable practices of natural resource management?Human and Employment: • Municipal Devel-natural re- opment Plans • Are unskilled labourers available? How do business peo-sources ple compare their costs with the quality of work they • Resource person provide? interviews • Are there skilled human resources available? In which • Individual inter- fields there are and in which fields are their skills gaps views with busi- from a business point of view? ness owners • Are skilled human resources expenses, from a business point of view? If so, why? Natural resources: • Are there natural resources (such as land, minerals, tour- ist attractions) in the local area? • Are there environmental problems related to the use of these natural resources (like soil degradation)? • Can the natural resources be accessed by businesses? Are there problems in the land tenure system? If there are problems in the use of natural resources from the point of view of business, do thesetheir indicate inappropriate management ?Infrastructure • How can the situation of the road transport (km of gravel • Socio economic and cemented roads, quality of bridges) be considered? profiles • How can the situation of maritime transport (ports, ferry • Resource person companies existing, ferry lines) be considered? interviews • How is the quality and cost of power supply be assessed? • Individual inter- views with busi- • Is developed real estate available for business purposes? ness owners Can its costs be considered high or fair? • How is the quality and cost of the telecommunication network considered? • How is the cost and quality of water supply for business - 19 -
  25. 25. Rolf Speit Table 4: Fields of analysis and their key questionsField of analy- Key questions Sources of informa- sis tion operations considered? • How do respondents perceive cost and quality of liquid and solid waste removal?3.2.5 Tools for information gathering and triangulationWithin a REA several methods for gathering information are combined in order to comeup with an image of the economic situation of a territory like a municipality or city. Theuse of different methods (triangulation) is intended to enhance the validity of the analy-sis, considering the rapidness of the appraisal. These methods include the use of writtenmaterials, individual interviews with business owners, resource person interviews, fieldobservations and a validation workshop with local stakeholders.− Written materials refer to existing statistics, studies on socio-economic developments, budget plans, the Executive and Legislative Agenda (ELA), the Comprehensive De- velopment Plan (CDP), the Comprehensive Land Use Plan (CLUP) and sectoral de- velopment plans (for example tourism development plans). Although these documents provide valuable information and statistics on certain aspects of the local economy, they rarely depict the overall economic situation, hence making it necessary to com- plement the information through other sources.− Conducting interviews with business owners constitute another source of information. The Business Questionnaire is directed at the businesses operating in a particular mu- nicipality. It covers all sectors of a local economy, from agriculture, manufacturing and services to commerce. It is also targeting all sizes of businesses, from micro, small and medium to large companies, be they formal or informal. It seeks to obtain information as to the companies’ particular development and on the local business en- vironment from the point of view of the businesses interviewed. Preferably, the ques- tions should be directed at the owners. Exceptionally, the respondents can also be managers (such as in the case of medium and large businesses) if they are knowledge- able about the company and the local economy. A model questionnaire for business interviews is presented in annex 2. A guide to the questionnaire is available in annex 3.− In the context of LRED, we understand resource persons as persons who have some general knowledge about the local economy. Their information, perceptions and ana- lyses can give us the broad picture about what is going on economically in a given local area. Likewise, they can provide information on the activities of the institutions represented by them. The Resource Person Questionnaire is directed at representa- tives of the local administration, the local legislature (Sangguniang Bayan), business - 20 -
  26. 26. Rolf Speit membership organizations (associations and chambers of commerce and industry), NGOs dealing with economic issues, banks and other financial intermediaries, the academe, cooperatives, people’s organizations, BDS, training providers in a local area and representatives of organizations who are working on sustainable use of natural re- sources. It also targets National Government Agencies (NGA) present at municipal and city level such as the Department of the Interior and Local Government (DILG), the Department of Agricultural Reform (DAR) and the Department of Environment and Natural Resources (DENR). The key selection criterion is an organization’s or person’s ability to deliver insights into the development of the overall local economy. The second criterion is someone’s capability of providing insights into the specific field the entity or individual person is working in (for example natural resource man- agement, finance). Other criteria are their influence and power to change things for the improvement of the local economy and their interest in getting involved in an LRED process. Annex 4 provides a model questionnaire and annex 5 a guide to its ra- tionale and the understanding of each of the items to be inquired during the interview.− Mini-workshops are conducted with businesses from the same subsector. The tool is especially used in the case of businesses with little differentiation among one another or little specialization such as smallholder farmers, fishermen operating in coastal wa- ters or market vendors. The tool allows gathering a larger number of economic actors at one place. An abridged and simplified form of the business questionnaire is used as a guideline for conducting the meeting (see annex 6).− Inputs from local REA team members: Although local REA team members usually not happen to be formally treated as resource persons and therefore are not interviewed, they provide valuable information and insights. This relates specifically to team dis- cussions on REA results. They can put findings into the local context and provide ad- ditional support to the interpretation of certain insights, specifically those related to the local political situation and touchy issues.− Observations made during the interviews constitute another form of gathering infor- mation. This requires facilitators to conduct interviews at the work places of the re- spondents. Observations enable interviewers to obtain additional information and validate the responses instantly. For example, the author of this manual once had the opportunity to meet a mat and basket weaver successfully marketing her products and providing employment to a large number of micro scaled suppliers. Meeting her at her workshop instantly revealed why she would not be able to receive buyers from larger companies: Her workshop was just too run down to convince buyers of her profes- sionalism. Observations also include obvious environment related concerns such as solid waste management practices, cleanliness of shorelines or coastal areas.− The validation workshop conducted as the following stage of the LRED cycle is an- other element in the triangulation process. Here, the emphasis is not on obtaining ad- ditional information but rather on obtaining feedback from local stakeholders as to the correctness of the analysis. Chapter 3.3 provides more insights into this method.Experience has demonstrated that the combination of these sources of information en-ables facilitators to arrive at a fairly comprehensive picture of the local economy. It - 21 -
  27. 27. Rolf Speitshould be noted, however, that in practice the study of the written documents availableis often neglected. It should be borne in mind that these provide information that cannotbe elicited through interviews and can serve as a valuable source for validating percep-tions of local stakeholders, which, sometimes, turn out to be myths.3.2.6 SamplingMany LRED facilitators are concerned about the size of the samples. “If we do the ap-praisal rapidly”, they say, “can we come up with statistically representative data?” Theresponse is that within a REA it is not expected to do scientific research that has to meetthe requirements of statistical accuracy. This is mainly due to practical reasons. In thereal world, engaging into such rigorous research would simply be too costly and tootime consuming for LGUs. Instead, a REA is based on methods of qualitative research.One of these methods is purposive sampling7. Within purposive sampling, you alreadyhave specific predefined groups in society in mind that you base your assessment on. Inthe case of a REA, these are business people within a geographical setting, including thefarming community, as well as resource persons to provide their expert opinion andperceptions on the evolution of the economy in a given territory. Taking into accountthe universe of business entities and the maximum number of interviews you would beable to conduct, you construct a sample that, at least somehow, reflects the proportionsof each of the economic sectors. For example, if agriculture accounts for, say, 60% oflocal GDP, you would consider a significant share of all respondents for individualbusiness interviews to represent agriculture.In practical terms, it is proposed to follow these procedures for constructing the sample:Table 5: Broad steps to follow in the construction of a sample for the REA Individual Businesses Resource Persons1. Key information: Obtain information on the 1. Mapping: Conduct a stakeholder mapping withnumber of businesses active in each sector (agri- local stakeholders (see chapter 3.1).culture, mining, manufacturing, commerce, ser-vices). If available, obtain information on the con-tribution of each sector to local GDP.2. Sample size. Determine the sample size. In a 2. Sample size. Determine the sample size. In amunicipality between 50.000 and 200.000 inhabit- municipality between 50.000 and 200.000 inhabit-ants, the floor should be 30 and the maximum 100 ants, the floor should be 10 and the maximum 20interviews. interviews.3. Proportions in the sample: On the basis of the 3. Selection of respondents: Compulsory respond-7 See the Web Centre for Social Research Methods for a quick overview of purposive am- pling under www.socialresearchmethods.net/kb/sampnon.php - 22 -
  28. 28. Rolf SpeitTable 5: Broad steps to follow in the construction of a sample for the REA Individual Businesses Resource Personsavailable number of businesses per sector, deter- ents should be the LCE and his deputy, DILG, themine the number of businesses per sector to be Municipal Planning and Development Coordinatorincluded in the sample. The proportionate repre- (MPDC), the Municipal Agricultural Officersentation in the sample should somehow meet the (MAO), the Municipal Environment and Naturalproportions in the universe. Resources Officer (MENRO) and the Speaker of the SB. All other respondents’ are based on the IIP principle: interested, influential and powerful.4. Prepare list of respondents: Obtain a list of 4. Prepare list of respondents: Forward respond-local business people with names of businesses ents’ list to LRED Coordinator for the local area,and their addresses. Purposively select respondents agree upon a date for the field work and ask theaccording to your numerical targets. Likewise, coordinator to inform them about the interviewprepare a list of replacements. Forward respond- date.ents’ list to local stakeholders, agree upon a datefor the field work and ask the LRED Coordinatorfor the local area to inform them about the inter-view date.In preparing the sample, please take note of the following hints.− Larger enterprises: Sometimes, you will find one or a limited number of larger enter- prises in an LGU. If this is the case, include them in your sample, even if they have not been considered in your random selection. These companies are important players in the local area, often have forward or backward linkages with other business entities in the municipality and, if involved, might provide valuable resources for the LRED process.− Informal sector: Often, the informal sector plays an important role in a local economy. Make sure to consider it, when you prepare the respondents’ list. Since informal busi- nesses are not registered, there might be no written files to locate them. If this is the case, reserve slots for interviews within those sector where informal businesses can be found and ask the support of local stakeholders to locate them.− Size of the local economy: The procedure is based on the assumption that the size of the local area does not exceed a population of 250.000 inhabitants. If the size is well above, a redesign of the sample construction might be necessary. Options available are (i) the number of interviews is increased, (ii) the REA focuses on a specific terri- tory within the confines of the LGU or (iii) the appraisal is directed at a specific sector (for example manufacturing) or several subsectors within a specific sector (like gar- ment, wood and electronic industries). The first option would definitely need a re- adjustment in terms of resources devoted to the exercise (for example time, inter- viewer, finance).Following the above mentioned hints in a flexible manner will most probably pave theway for achieving the objective of the REA, conducting a snapshot of key potentialsand constraints of a local economy and identifying interventions for the kick off of alonger lasting LRED process. However, it should be remembered that a qualitative as- - 23 -
  29. 29. Rolf Speitsessment like this will not come up with the ultimate truth and is not hard science, butrather an instrument for getting local stakeholders into a structured, systematic and prac-tical dialogue with the ultimate purpose of improving their economic situation. It is notmore than that, but also not less ……3.2.7 Conducting the interviewsWhen conducting the interviews, it is important for facilitators to bear in mind that aRapid Economic Appraisal is also a means for mobilizing stakeholders for change. Thiscan only be achieved if they are convinced that they are empowered to play an activerole in the LRED – process and that, ultimately, its results are going to benefit them.The interviews are part of this mobilization process, which has a few implications forthe interview setting.One relates to the opening of the interview. After the interviewer presented himself orherself (name, institution the interviewer comes from, role during the REA), a properexplanation of the objectives of LRED, the cycle and the purpose of the analysis willhelp to put the respondents in the picture. It is important to inform them that there willbe a validation workshop and to invite them for this event. Then, the facilitator shouldask permission to commence the interview by using a questionnaire. The interview isconducted in a conversational manner. The idea is not just to know, whether the re-spondents considers the access to financial institutions as good or not so good, but ra-ther to elicit the story around it (in this case, for instance, the person’s own experienceswith banks, why loan conditions are considered inadequate and so on), as this providesfar more insights into the dynamics of the local economy. Hence, instead of just work-ing the questions off, it is recommended to create an atmosphere that allows respond-ents to say a few words around the particular issue, giving examples and explaining hisor her assessments. Still, it is not uncommon to respondents unfamiliar with interviewsituations, that their responses are a little laconical or are not sufficiently substantiated.If this is the case, the facilitator may use probing in order to understand the responsesbetter. However, in doing so it should be avoided to fall into an interrogative interviewstyle, as this may deter respondents from opening up.In the following, we are presenting a few more hints for interviews.− Language barriers: Language barriers can occur in two ways, (i) respondents not be- ing familiar with the technical terms used in the questionnaire and (ii) interviewees not being well versed with the English language. With regard to the first case and in line with the conversational approach applied, it is recommended to put the technical terms into common language or paraphrase them. Concerning the second case, the fa- cilitator would have to hold the interview in the local language and translate the ques- - 24 -
  30. 30. Rolf Speit tions instantly. In the preparation of the REA, it would help to inquire about the local language situation and, ideally, have the questionnaires translated prior to consucting the appraisal.− Sensitive issues: If rapport is being built with the respondent, it is not uncommon that you dig into politically sensitive issues. An example could be an LCE involved in en- vironmentally hazardous sand mining activities. It is crucial to handle these issues carefully. First, the person providing the information should be assured of his or her anonymity. Second, the interviewer should discuss the topic with the team members. Have the others obtained similar information? How severe is the case in the context of LRED? Third, if the team is of the opinion that the case is severe and relevant, it should reach a common understanding of how to deal with it. One option could be to skillfully present the case to the accused person and a second option could be to ap- proach the issue diplomatically and indirectly during the validation workshop.− Handling confidentiality: Sometimes, respondents have reservations towards their names being taken note of on the questionnaire. If this happens, interviewers may simply leave the respective line blank. Having the names documented is not important for the analysis.− Inadequate exposure to the information being asked: Likewise, if the respondent is not able to answer one or several questions, the respective items are left blank. If a pattern develops in the sense that certain groups of the local society are not familiar with a certain topic, this non information maybe an information in itself.− Giving a bring home: At the end of the interview, some respondents might present a small gift such as a home-made product to the facilitator. In almost all cases, this is a gesture of gratitude towards the attention given to the interviewee. Hence, respect for the local people’s feelings demand the facilitators to accept it. However, in two in- stances, facilitators should opt for a more careful attitude: (i) if the value of the gift would imply a financial burden for the giver, and (ii) the presenter intends to com- promise the neutrality of the interviewer. In these cases, facilitators need to find a dip- lomatic way of avoiding being presented the gift.3.2.8 The use of the REA workbookThe REA workbook is a file based on the Excel software that helps REA teams to col-late all the information gathered in the interviews. It is divided into two parts, one relat-ing to individual business interviews and another one to resource person interviews. Itprovides space for summarizing the ratings of the respondents of each of the itemsasked but also the comments. The workbook automatically generates graphs that arevisualizing the outcome of ratings as a summary of each group.The workbook contains four worksheets: REA Business and REA Resource Persons(annexes 7 and 8) for the tabulation of each individual interview. Summary REA Busi- - 25 -
  31. 31. Rolf Speitness and Summary REA Resource Persons are used for collating the summaries con-ducted by each encoder, produce the overall summary and generate the graphs (annexes9 and 10). In practice, it means the following: Assuming the REA team consists of fivemembers and that each one of them would take part in the tabulation. The team dividesthe questionnaires to be summarized by each member and they are simultaneously com-piling the information by using the REA Business and REA Resource Persons files. Inthe end, the file of each of the tabulators produces a summary column. As a next step,the five summaries are consolidated into a single one. This is done through the Sum-mary REA Business and Summary, REA Resource Persons files. One team member de-signated as collator collects all the individual files and inputs all the summaries in therespective columns. After this is done, the software automatically generated the overallsummary and the graphs. For more details on tabulation and collation itself please seethe instructions drafted by DTI in Bohol in annexes 11 and 123.2.9 Elaborating the analysisThe analysis of the local economy is summarized in the form of a simple matrix, wherepotentials and constraints are related to each field of analysis.Table 6: The format of the assessment matrix Potentials ConstraintsGeneral trendsLegal and administrative envi-ronmentBusinesses (including microbusinesses and farmers)Support institutionsHuman and natural resourcesInfrastructureThe REA team should reserve a full working day for the analysis. It is assumed herethat the data resulting from the interviews have already been inputted into the excelworkbook. However, some time should be provided for finalizing this work, After that,it is recommended that the team follows these procedures:− Checking written documents: The first step would be to have another look at the written documents (assuming that they have been read during the preceding days). The key question would be “What are key findings here?” - 26 -
  32. 32. Rolf Speit− Checking interview summaries: Then, each team member would have to browse again through the compilation of interview results as documented in the excel work- book. Key questions are “What are key comments?” and “What are the results re- vealed by the quantative analysis?”− Brainstorming: As a next step, the team conducts a brainstorming. Each team mem- ber is taking note of potentials and constraints according to each field of analysis on a metaplan card. The cards are pinned on a softboard and clustered according to the matrix.− Group consensus: The findings are discussed and a consensus on the appropriate statements is arrived at. The final matrix is elaborated. The discussion needs to be facilitated by one of the team members.− Documentation: The matrix is summarized in the form of a powerpoint or another form of presentation, that can be presented during the validation and action planning workshop.− Program for the validation workshop: As a final step, the team designs a program for the upcoming workshop and tasks are divided.Annexes 13 and 14 provide a template of the matrix and an example from a rapid eco-nomic appraisal carried out in the LGU of Baybay. A few hints should be taken intoconsideration when elaborating the matrix:− Present an analysis and not just data: The matrix is an analysis of the REA – team based on the information gathered during the preseding days. This means that it does not simply quote the results as compiled in the Excel-workbook. For example, instead of stating “20 percent of the respondents consider the road network as nega- tive, 30 percent as not so good ….” and so on, the team needs to present a sum- marized statement such as “The feeder road network is inadequate which increases marketing costs of agricultural produce” and/or “Good road connections to the re- gional capital”. The information compiled in the Excel-workbook can then be used to back this finding up.− Relevance and specificity: The findings need to point at something relevant and spe- cific for the local area. For example, the sheer existence of a local administration is not something that provides either an advantage or disadvantage from the local ec- onomy’s point of view. However, saying that the local administration is actively en- gaged in a dialogue with the local community would match both criteria, because it is an essential ingredient in economic development processes and, as a tool, not of- ten practiced.− Dealing with conflicting statements: In case the perceptions of key stakeholders conflict with the analysis of the team, the latter can opt to present the former as a perception of the respondents. An example would be “Local entrepreneurs perceive loan conditions offered by local banks as inadequate”. The team might balance this statement by formulating a finding depicting the situation from the point of view of - 27 -
  33. 33. Rolf Speit the local providers of financial services: “According to local banks, risks in lending for micro-businesses and farmers are relatively high.” These are two sides of the same coin which might be discussed during the validation workshop and sensitize the two groups for the respective concerns of each party.− Comparing results from business with resource person interviews: It can be quite revealing to compare the results from business with resource person interviews. In case there are consistent diversions on certain topics between the two groups, for example in the way the business community assesses local policies relating to eco- nomic development as compared to resource persons (many of them representing the local administration), these might be presented as opposed standpoints at the workshop. This might trigger interesting discussions.− Practicality: The matrix should not be overloaded with too many findings, because this might tempt facilitators and local stakeholders to not see the forest for the trees and lose focus. A good analysis can be done with four to seven findings in each of the quadrants, more than 10 should be avoided.− Coherence: Facilitators should check the coherence of the matrix, in the sense that the findings are placed in the right quadrant. This is not just a technical matter but requires being clear about essence and direction of the statement. Take the example of overfishing in municipal waters. The team should be clear whether the issue is, for instance, lack of municipal policies and their enforcement or a lack of alternat- eve livelihoods for the local fisherfolk or even both of them. If it is a policy matter, the finding would be placed under Legal and administrative environment, if it re- lates to practices of the fisherfolk and the lack of other means of income generation, the statement would be placed under the Businesses quadrant. If both are true, two statements are placed within the respective categories.− Use graphics carefully: Some of the findings might be illustrated by graphics auto- matically generated in the Excel – workbook. However, the presentation in the vali- dation workshop should not be turned into a show of graphics as this might divert at- tention from the content. Using two or three of them illustrating unexpected or out- standing results should be enough.3.2.10 Identification of proposals for interventionThe analysis of the appraisal and the interventions resulting from it need to be owned bythe local stakeholders. Ideally, proposals for intervention would therefore be identifiedin a dialogue with them during the validation and action planning workshop. However,for practical reasons, such as time constraints during the workshop, it is advisable thatfacilitators prepare some proposals for intervention. Still, these proposals would bebased on the information gathered from the local people and the initial ideas of the fa-cilitators. It is recommended to use the evaluation grid (annex 15) for the selection.Core criteria for their identification are presented and interpretated as follows: - 28 -
  34. 34. Rolf Speit1. Based on the Rapid Economic Appraisal (REA): Any intervention needs to bebacked up by an assessment on the potentials and constraints of the economy of alocal area because otherwise it would be difficult to establish a raison d’ etre for aparticular project. The REA is a tool that seeks the assessment of the economic situa-tion of a local area in all crucial aspects. Thus, it helps to prioritize interventions andto avoid wish lists with little focus on what the real issues are. If a proposal for anintervention is obviously and directly related to such an assessment, it should obtain arating of 2. If it cannot be backed up by a systematic analysis, the rating would be 0.A score of 1 is given, if it can be indirectly deducted from the analysis.2. Implementable within 6 to 12 months: In the past, all over the world, local eco-nomic development initiatives have suffered from a too academic approach: Thickplans were elaborated coming up with huge activity lists. They often did not manageto achieve their objectives because their aspirations did not match implementation ca-pacity of a local area. This resulted in frustration and, in the end, very little changed.In order to build trust with local communities it is therefore of utmost importance toachieve quick-wins through the implementation of projects that achieve their objec-tives in a short time, like 6 to 12 months. This is not to promote short termism. A do-able intervention should be placed in the context of a longer term vision. For example,the development of sea based and pro poor tourism in its various facets would surelyneed more time than just half a year. However, for the commencement of an LREDprocess, you single out those activities that can really deliver tangible results within afew months, and then, later on, tackle those requiring more time. If those that rate theproposals are sure, the intervention can be done within 6 to 12 months, 2 points aregiven. If doability within this timeframe is somehow likely but not too sure, the ratingwould be 1, and if it is unlikely no point is awarded.3. Implementable with local resources: Implementable with local resources meansthat local stakeholders are in a position to carry out the intervention without needingto rely on outsiders to do the job. This is to foster local ownership, a crucial ingredientfor sustainability. This does not rule out local groups approaching outsiders, such astrainers or experts, to support them on specific aspects of their interventions. How-ever, they should be in the drivers seat and manage them without dependency on oth-ers. If they can run the project fully on their own, the rating would be 2. If coordina-tion and management would necessitate some external support, the rating would be 1.In the case o heavy dependence on outsiders to run it 0 points would be attributed.4. Relevant for the local economy: In this context, relevance is related to the outreachof an intervention within a local economy. If an intervention takes place in a sector orsubsector producing a large share of the local GDP or harbouring a significant propor-tion of local SMEs, it would be considered as relevant (rating of 2). If a project is de-signed for a tiny sector, it would be considered as less relevant (rating of 0 or 1).5. Positive impact for a sub-sector and/or the general public (and not just a singlebusiness): This criterion is closely related to the previous one and, yet, a little differ-ent. It means that impact and outcomes resulting from an LRED intervention shouldnot benefit just a single business, even if this is operating in a relevant subsector of thelocal economy and even a lot of additional employment and income would be gener- - 29 -