Mr. Tatsuya Yanagi presentation on OVOP - Yogyakarta Workshop 2014

Sharing experiences of OVOP projects
Tatsuya YANAGI
1

Note
 The following are my personal opinions, not
representing public statement of JICA on “OVOP”.
2

０．Purposes of my presentation
１．What is OVOP ?... just in case
２．How is OVOP projects ?
- introducing a project in Malawi
- contents, achievements and challenges
３．Way forward
3
Outline

0. Purposes of my presentation
- JICA supports implementing OVOP projects in 20
countries referring to OVOP initiative for promoting and
developing regional economic development.
- I saw several OVOP projects on sites.
- The achievements and challenges which I saw could be
beneficial for us all to consider the way forward.
4

 OVOP in JAPAN
- Local communities and people in Oyama village, Yufuin
village etc. located at Oita prefecture
1. What is OVOP ?… just in case
5

 OVOP in JAPAN
- Local communities and people in Oyama village, Yufuin village
etc. located at Oita prefecture
・Oyama village：low income farmers at mountainous areas
⇒self-help effort by local community
“by planting plum and chestnut tree, let us go to Hawaii islands in
U.S.A.”
increase of income, livelihood culturally wealthy, establish identity
6

7
 OVOP in JAPAN
・Yufuin village： little tourists, without large hotels and
other entertaining facilities
⇒self-help effort by local and tourism related people for
promoting existing resources and exchanging
culture, village development through utilizing scenery with
paddy rice field, differentiations of quality of products.
- There are positive comments on OVOP as a movement.
And at the same time, there are views that OVOP as a
theory for economic development has not been confirmed
and evaluated.

 OVOP initiative is a long-term movement. Based on
3 principles, local communities and related players
keep engaging.
Local, yet global
Ensuring utilization of local resources and adding
values, products could be accepted nationally and
globally as results. Products include tourism
resources which contain cultural and traditional art.
8

keep engaging.
Self reliance and creativity (value addition)
It is local people who choose and select things as
OVOP products. It is important for local people to
think how to add values. Outsiders such as
administrative bodies and others can support them
based on the needs shown by local people such as
providing technical and marketing advices and
opportunities.
9

keep engaging.
Human resource development
However there is a product with great amount of
sales now, the trend could be changed and there will
be competitors. It is important not only focusing on
developing products, but trying to raise rural leaders
who has views on how to activate rural economy,
how to contribute to the societies, through those
developing processes.
10

 OVOP in International Cooperation
- 1980’s: Local diplomacy by Oita prefecture
- 2000’s: interests increased by foreign countries
- 2005: OVOP support was mentioned at WTO Hong
Kong meeting as “Development Initiative”, then
JICA, JETRO started supporting
※JETRO: OVOP markets at International airports,
JETRO demonstration program for trade development
etc.
- 2008: GOJ appealed supports for OVOP at TICAD IV
- Yokohama plan for action mentions that the activities in
12 countries on OVOP to be implemented.
11

2. How is OVOP projects ?
- introducing a project in Malawi
One Village One Product Movement in Africa Towards
Self Reliance and Economic Development of African
Rural Communities
https://jica-net-library.jica.go.jp/jica-
net/user/lib/makeHisRec.php?login=1&id=226&nm
=112072544943133087099450822849360325410.
asx&hd=jn226
12

2. How is OVOP projects ?
Standard Contents of OVOP projects
Project purposes and objectives
 At disadvantageous areas, micro and small businesses
utilizing local resources and local human resources are
carried out.
⇒ Economic Development
 “Through implementation of project, rules/ regulation/
system/ ability for rural MSMEs promotion by
administrative bodies could be developed and upgraded.”
⇒ Capacity Development
13

2. How is OVOP projects ? ... introduction
3 steps
① Consideration on how to promote OVOP
② System review and capacity building through
implementing pilot projects to business groups.
③Comprehending results, achievements, lessons
learned through pilot projects and sharing those
with others to promote OVOP
14

① Consideration on how to promote OVOP
- Establishing supporting system
- Strengthening supporting ability, networking BDS
providers
etc. (both Technical/Financial)
- Developing operational guideline on OVOP support
15

- Acquiring understandings through explanations
to the BDS receivers
- Supporting developing business plans and selection of
companies/groups to support
16

- Providing support to the selected
companies/groups and monitoring
> Training and Guidance for Book keeping, Accounting,
Marketing, Production, Q/C etc.
> Supporting Marketing such as providing opportunities
for joining exhibitions, developing antenna shops etc.
> Providing information of Financial support, loans,
subsidies
17

③Comprehending results, achievements, lessons
learned through pilot projects and sharing those
with others to promote OVOP
> Organizing seminars and promoting OVOP initiative to
other areas
18

Ex. System and Mechanism（OVOP cycle）
19
Central Level:
OVOP
Secretariat
Regional Level:
Local Government
(Province/State/Cit
y/District/Village
etc.)
Community Level:
Local
MSMEs/Producers
/Cooperatives etc.
2nd
screening
+ follow up to the
not-selected groups
1st
screening
+ follow up to the
not-selected groups
Services provided
1. Technical support
2. Business Management support
3. Financial support
4. Others
① ②
③
④
⑤
⑥
⑦ ⑧
⑨Monitoring
Evaluation
Improvement
① Workshop on OVOP and service introduction from Central Level to Regional Level
② Workshop on OVOP and service introduction from Regional Level to Community Level
③ Submission of application for joining in OVOP from Community Level to Regional Level
④ First Screening of applications
⑤ Transferring of screened applications from Regional Level to Central Level
⑥ Second Screening of applications
⑦ Coordination with BDS/Financial support providers
⑧ Service and Support provided by BDS/Financial support providers
⑨ Monitor/Evaluate/Improve the system and mechanism

Counterpart ministries/agencies
 Since the objectives are to promote businesses in rural
areas and villages, counterpart ministries/agencies are
ministries of Industry, Agriculture, Rural Development
etc. depending upon the countries.
 In some cases, counterpart ministries/agencies are
changed during the course of the project implementation.
20

Targeted areas
Rural, mainly disadvantageous areas.
Step by step (Piloting at a few states/provinces, then
extending nationwide)
21

Targeted groups
 Legally registered groups such as cooperatives, groups
and some informal groups.
 Many of them have little or no experiences dealing with
business.
22

Main product and market
 Using local resource, produce products and sell those
locally.
 Products contain tourism products (services).
 Mainly agriculture/animal husbandry/forestry/fishery
products.
 Though mainly the targeted market is local or domestic
cities, some are challenging to penetrate into the foreign
market.
23

Targeted countries and ways of cooperation
 There are many projects in Africa, affected by TICAD
initiative.
 Similar number of projects took place in Latin America
and Asia, while less projects implemented in the Middle
East and Europe.
24

Significance of OVOP projects
25
Where? By Whom? Who? What?
MSMEs Urban
Admin. in charge of
Industry
Enterprises(MSMEs) Production/Services
OVOP Rural(Disadvantageous)
Admin. in charge of
Industry/Agriculture/R
ural Development
Entrepreneurs such as
Farmers
Agriculture/Animal
Husbandry/Forestry/Fis
hery, Handicraft,
Tourism

2. How is OVOP projects ? ...
-achievements and
challenges-
Current situation of supported businesses: economic
impact
Products developed through OVOP projects exported to
Japan
Kyrgyz
http://www.muji.net/lab/found/kyrgyz/
https://www.facebook.com/GalleryCafeRosily?ref=stream&hc_location=stream&filter=3#!/photo.php?fbid=49657578702
1688&set=a.496575727021694.118375.215790985100171&type=1&theater
https://www.facebook.com/GalleryCafeRosily#!/photo.php?fbid=504643162881617&set=a.504643122881621.120347.2
15790985100171&type=1&theater
Kenya
http://www.muji.net/lab/found/kenya/
Malawi
http://www.malawi.jp/
http://www.cocorocosme.com
http://www.hukka-cosmetics.com/
Senegal
http://www.fancl.co.jp/Items/Detail?category=02&item_code=4050-03
26

 Example of business ： Kyrgyz OVOP（felt products）
The products [felt cases of mobile phones] under the packaging in
Kyrgyz. In 2012 it was done in Japan, then changed in Kyrgyz in
2013.
27
-achievements and
challenges-

28
-achievements and
challenges-
Main Product : Phone case, Business card holder etc.
Procurement :
OVOP union purchases wools for all the groups
utilizing profit carried over for the smooth
continuation of production.
Production :
Product is developed by OVOP group members with
their hand-made. Experts gave guidance for
improvement of production. Local designer is found
and contracted.
Market :
Utilizing antenna shop at the capital city for
selling their products to foreign tourists. Since
2011, they started exporting their products to
Japan.
Sales/Profit/Sold products :
[to Domestic market]
30,000USD / 3,000USD / no figure
[to Foreign market]
70,000USD / 20,000USD / 10,000pieces
Groups :
There are 30 groups dealing with developing felt
products, with 250 members. 90% of members are
women, no experiences of business.

-achievements and
challenges-
Current situation of supported businesses: economic
impact
Some OVOP groups started enhancing their markets
through joining in the opportunities such as bazaar for
tourist, local and international exhibitions etc.
Local market ⇒ City market ⇒ Capital market ⇒ Intl. market
☆Providing opportunities could be one of the key functions.29

Current situation of supported businesses: economic impact
Sizes of businesses (Sales amount)
- In some cases, OVOP groups have other main jobs, such
as farmers. OVOP activities contribute as additional
income generation.
- If OVOP groups are consisted with MSMEs who have
been engaging their businesses more than years, there
may be potentials to enhance their capacities and sales
as a result.
- If you consider further regional economic impact,
considerations toward networking and clustering through
encouraging those MSMEs in the certain areas to develop
their unions can be an option.
30
-achievements and
challenges-

Current situation of supported businesses: economic impact
Profit
- Growing OVOP groups generate their profit amounting 1-3
hundred USD/year/person.
* Proper book keeping by OVOP groups and close
monitoring by project implementer can provide precise
figures and situation.
31
-achievements and
challenges-

Business situation: Social Impact
 Upgrading Quality of Life
- Profit leads increase of disposable income, then it is
utilized for upgrading the quality of life.
 Upgrading Self Reliance and Social Position
- Some members consider that they feel self reliance
and it changed their social position.
32
-achievements and
challenges-

Ex.
Upgrading quality of life
Renewing roof and walls of their houses
Purchasing room heater
Paying educational fees for their children
Purchasing mobile phones
Purchasing livestock
Self reliance and Upgrading social position
Uniting group in the community and working together
gives self reliance.
Success of business improves the position of women in
the household and community.
For further success of business, their husbands start
helping housework.
33
-achievements and
challenges-

 Upgrading Self Reliance and Social Position
- Some members consider that they feel self reliance and
it changed their social position.
Ex.
Upgrading quality of life
Renewing roof and walls of their houses
Purchasing room heater
Paying educational fees for their children
Purchasing mobile phones
Purchasing livestock
Self reliance and Upgrading social position
Uniting group in the community and working together gives self
reliance.
Success of business improves the position of women in the household
and community.
For further success of business, their husbands start helping
housework.34
-achievements and
challenges-

Challenges of businesses
- Through projects, there are successful groups or
products, yet many are still facing problems on
management / production etc.
1. Business Management
Book keeping and Accounting : It can help better planned
procurement, production, sales. Also it is needed for better
monitoring and advices.
Marketing : Many producers have no experience to come to
the capital city/abroad. Opportunities facing with customers
can help producers to know the needs at the market.
35
-achievements and
challenges-

 Challenges of businesses
- Through projects, there are successful groups or
products, yet many are still facing problems of
management/production etc.
2. Production :
Quality : To get proper licensing and inspection of
Foods/Beverages, Medicines, Cosmetics etc. can help
MSMEs to penetrate into other market.
Complying with the rules and regulation by MSMEs, and
appropriate enforcement of those by authorities are
needed.
Quantity : Dealing with market in capital city or foreign
market, it is sometimes requested to have a certain bulk
of products or regular dealings throughout a year.
Supporting developing union can be a solution in such a36
-achievements and
challenges-

 Sustainability of Policy/System/Mechanism
 Status of OVOP under the policy level
- It can help the sustainability of OVOP activities if OVOP is
mentioned in their national development policy or the like.
- Some countries shows strong commitments by the
president and/or ministers through showing their strong
leadership and domestic appealing.
- Yet, policies can not guarantee the sustainability of
activities and profit generation on the ground. When power
shift occurred, policies can be changed, and sustainability
can not be sustained, organization dealing with OVOP can
be changed. Depending upon your necessity, further
consideration would be needed.
37
２．Current situation of OVOP projects
-achievements and
challenges-

- In some countries, there are sometimes confusion on
prioritizing (1) Economic Development, (2)Poverty
Reduction, (3)Social Development.
⇒ This could be a cause of changing ministries in charge.
- Setting up clear policy objective can help you achieving
goals through implementing OVOP.
- It is recommendable to confirm the policy to be achieved
through implementing OVOP, and align OVOP activities
with it properly. Otherwise, the activities on the ground
may not achieve the policy objectives, then not stabilized
and sustained.
38
-achievements and
challenges-

 Sustainability and Development of the Systems, Rules
and Regulations
①Sustaining and Developing the number of targeted
MSMEs and/or OVOP groups and activities
- Through implementing projects, the movement of OVOP
seems becoming popular.
- Activities to support MSMEs and/or OVOP groups are
needed to be well maintained.
- To make it happen, close monitoring and evaluation are
required.
- Decreasing the level of political commitment, budgeting,
manpower, abilities could be the threat.
39
-achievements and
challenges-

②Sustainability of system and mechanism
If providing technical and financial support are not originally
the mandate of the project implementation body, it makes
difficult to keep sustainability of supporting activities. It is
recommendable to develop the system appropriate for the
actor and situation.
40
-achievements and
challenges-

３．The Way Forward
 The Way forward
 While many of developing countries achieve high
development, the gap of wealth among the players could be
widened and the government would be required to fill the
gap. The needs are high to support rural industries.
 Rural (micro) business promotion should be implemented
aligned with the policy to be achieved and the system and
mechanism which are available.
41

 The Way forward
 Targeting, scoping the recipient of business development
services can be considered with the following criteria.
 Business development of local citizen, production group
(local entrepreneurship)
 Promotion of Local MSMEs（support for enhancing local
business）
 Promotion of Regional Industrialization（local business into
regional integration and clustering）
42

Type 1:Business development of local production group and
community (local entrepreneurship)
 Supporting basic business activities in rural areas where
governmental services are not reached, and the maturity of
businesses is low, and encouraging utilization of local
resources.
 Referring OVOP movement, provide basic knowledge and
experiences necessary for producers to run their businesses
especially at the entry point, such as book keeping, standard
sanitary requirement etc. And develop a system and
mechanism to support promoting local products.
43

Type 1:Business development of local production group and
community (local entrepreneurship)
 There could be 2 types under this criteria. (1)aiming
activation of local business activities which contribute to
income generation of individuals. (2)aiming promotion of
regional industrialization in the future.
44

Type2: Promotion of Local MSMEs（support for enhancing
local business）
 Making use of locality and resources, government (and
others) provide resources to support and develop local
MSMEs.
 Not only providing basic business knowledge and
management techniques, developing the system and
mechanism to support the local production, providing support
on Q/C, productivity improvement, marketing etc. are needed
so that MSMEs can add values and become competitive to
some extent.
45

Type 3: Promotion of Regional Industrialization
（local business into regional integration and clustering）
 To strengthen and develop regional industries, providing
certain financial and technical input such as governmental
loans and comprehensive BDS, the regional industry can be
well supported and increase the possibility to be developed.
 There is a possibility that the result or achievement achieved
and obtained through the project being shared with other
regions. Focusing not on individuals but rather regional
compilation of industries, supply chain, clustering, etc.
46

47
Note
Not every OVOP group nor MSMEs can survive.
In Japan, the sustainability of SME businesses
more than 3 years could be around 30%.
Arranging social safety net could be considered
as one of other supporting tools, though it could
be handled by other ministries.

 Points to keep in mind to implement the project
 Clear objectives and approaches aligned with
policies
- Selection of approaches that fit to the policies, targeted
business entities, governmental ability
48

 Balancing (1)developing products and (2)developing
OVOP system and mechanism
 To check the achievement, (1) is important, while to
evaluate the sustainability, (2) should be established
and keep working.
- Well balanced support and progress of activities are
needed to make it effective and sustainable. The
System and mechanism are selected while surveying
roles and practical ability at rural areas.
49

 Strengthening the capabilities to cope with both
supply and demand sides
- It is recommendable focusing on not only “developing
what you can develop locally” but also “developing
what are demanded at the market (customer)”.
50

 Strengthening the capabilities to cope with both
supply and demand sides
- The services for companies/OVOP groups are to be
developed and provided within the available
resources(budget/human resource etc.) under your
authorities in a sustainable manner.
- Developing the capacities of companies/OVOP groups
on book keeping and accounting have great
importance for proper monitoring of the progresses
and results.
51

 Grasping and Measuring the Result
- To make proper Monitoring and Evaluation of the
result and impact of the project and
policy, implementing baseline/endline surveys and
compiling data are essential.
52

 Penetrating Developed Market
- There are potentials at developed market on the
products produced at developing countries to cope with
the demand at their market where requesting
diversification and the varieties of products, social
products etc.
- Through contacting and dealing with companies in
developed market, there are opportunities for the
producers to learn how to improve the quality and
quantities of their services/products.
53

Thank you !
Hoping your success !
54

Mr. Tatsuya Yanagi presentation on OVOP - Yogyakarta Workshop 2014

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Mr. Tatsuya Yanagi presentation on OVOP - Yogyakarta Workshop 2014