sustinable economic development & value chains.ppt

7/27/2019 Sustinable Economic Development & Value Chains.ppt

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Training/Workshop

Value Chain Development and Inclusive Business9-12 January, 2012

Birendranagar, Surkhet

SUSTAINABLE ECONOMIC DEVELOPMENT &

VALUE CHAINS

Implementing Partners:


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Sustainable Development

Ecological

Economic

Social

Some Major Issues

Unfair distribution

Social inclusion andgender

Power balance

Gap between rich and

poor

Some Major Issues

Over exploitation of

natural resources

Forest degradation

Climate Change

Some Major Issues

Free market economy (private sectordevelopment)

Competitiveness

Growth (especially rural economy)

Source UN, Burdtland Report

Bearable

EquitableViable

Development that meets the needs of the present without compromising

the ability of future generations to meet their own needs


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VCD and Sustainable Development

Ecological

Economic

Social

In MSME

promotion

programs entry and

focus is from here

In ecological programs,

entry and focus is from

here

In social

programs/rural

development entry

and focus is from here

VCD is an effective approachto promote SustainableEconomic Development


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Can we comprehensively solve all thecomponent of SD successfully with one

project/programme?

If the focus of the programme is sustainable

economic development than there is need tobalance issues concerning environment, socialjustice, health, security or equitable distributionof benefits

VC and Sustainable Economic Development


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Free Market Economy (Competitive private sector):

Supporting the private sector and strengthening itscompetitiveness

A strong private sector leads to:

Additional jobs, income thus contributing toGDP and poverty reduction

It is perceived as the engine for future growth

VCD can be a key instrument to foster freemarket economy

Three Essential Component ofSustainable Economic Development


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Rural economy and its growth:

Providing opportunities in rural areas is essential

Why ?

- to enhance the growth of the rural areas

- By creating jobs and income opportunities forthe rural population

to reduces the gaps between growing urban areasand rural areas that are left behind

- provide answers to growing urban migration

Hence, VCD is a good approach to strengthenrural economic sectors

Sustainable Economic Development contd..


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Sustainablenaturalresource management:

People tend to manage resource better when theycan have direct benefit from it.

Companies and VC chain actors and consumers cancontribute to sustainable management of naturalresources by

improving the way they purchase, process,trade, consume and dispose the products

The important point is that the VC approach canpositively contribute to sustainable NRM

Sustainable Economic Development contd..


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A genericdefinition:

Growth is pro-poor, when the income of the poorest

(e.g. of the lowest quintile) increases more than the

average income

PPG stresses the need to make the poor participate

directly in the economic growth, and does not rely on

'trickle down processes or social transfers

Going beyond TRICKLE- DOWN concept


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pro-pooreconomic growth

Pro-poor growth= greater employment and income of poorpeople

Economicgrowth= greater volumesold, higher value

products(the cake grows)

Povertyalleviation= the poor benefit fromthe income generated

(the poor get theirshare of the cake)

Source GTZ, ValueLink


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Pro-poorgrowth and MSMEsMSMEs provide highest employment in most

economies (self +formal/informal employment)

Hence, MSMEs development is essentially linked with pro-poor growth and hence,

Majority of businesses engages MSMEs as:

Unique advantages in performing certain functions ofthe chain Non-repetitive production processes Seasonal activities

Low entry costs Relative labor intensiveness Small production volumes Critical to achieving competitiveness


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Trends: Development Ass istance in the 20thCentury

Development partners support one/few providers

NGOs provide free/highly subsidised services

Small number of small enterprises/small farmers gain

access to services designed by donor/NGO

Services stop when funding stops

Donor ServiceProvider

MSMEs

GIVE A MAN A FISH


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TRENDS: DONOR A ID IN THE 21st CENTURY

ServiceProvider

ServiceProvider

MSME

MSME

MSME

MSME

MSME

MSME

MSME

MSME

MSME

Development Agenda Commercial Orientation

TEACH A MAN TO FISH

Facilitator

Donor Service

Provider

Source USAID Micro Links


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Can small firms and MSMEs compete?

Yes. By improving their capacity and efficiency

Yes By improving quality and taking advantage ofproduct differentiation

Yes By taking advantage of increases and changes indemand

One way to support small firms and producers becomecompetitive is by applying the Value Chain DevelopmentApproach in economic development programme.

sustinable economic development & value chains.ppt

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