PublicPrivate Dialogue Mechanisms The Role of the Private

Public-Private Dialogue Mechanisms The Role of the Private Sector in Improving the Business Environment Mary Agboli & Maria Miller Private Sector Day, July 11 2007

Overview Provide Lessons of Experience and Examples in Public-Private Dialogue from Africa and elsewhere Characteristics and Benefits: What PPD can do, and why it’s worth the effort to engage both sectors in dialogue Considerations in Establishing a PPD Structure: Key issues to address and examples of experience Different PPD Structures and Experiences: Structures respond to different institutional and strategic needs Moving Forward in Liberia: How best to address stakeholder needs and concerns 2

Defining Public-Private Dialogue Mechanisms A Forum/Meeting/Arrangement for structured dialogue between government and the private sector on public policy issues Objectives: Typically to define or accelerate reforms which address constraints to investment and business operation, may also encompass growth strategy, competitiveness Scope and Focus: Usually national, but may also operate at state or local level Relation to institutions: PPD not an institution, but key institutions participate Outputs: Range from “hard” policy proposals for adoption to “soft” accomplishments in building trust, setting priorities and shared vision Formality: May be legally chartered, or informal meetings of individuals, or anything in between 3

Diverse Range of Experience in PPD Mechanisms No one model works everywhere Vietnam, Cambodia, South Africa, Mexico, Bosnia, Ghana, Nigeria, Uganda, Malaysia, Botswana, Japan, Bolivia, Indonesia, Senegal, Tanzania, Bulgaria, Turkey, Cameroon, Cook Islands, Germany, Hungary, Ireland, Kosovo, Malta, Mozambique, Thailand, Mauritius, Etc. 4 Economic Council, Social Council, Gender Coalition, National Competitiveness Committee, Annual Forum, Private Sector Forum, Regional Forum, Deliberation Council, Business Forum, Competitiveness Review Group, High Level Consultative Council, Better Business Initiative, Bulldozer Committee, Investors Advisory Council, Etc.

Pre-Conditions for Effective Dialogue Stagnation New Government Motivating Factors for Change Government willingness to listen and include private sector Post-Conflict Private Sector willingness to stay engaged Ignition 5 Crisis

Benefits from Effective Dialogue Government • Structured inputs into policy processes • Identification of priorities and binding constraints • Technical inputs to reform design • Buy-in and acceptance of reforms • Greater reform credibility • Increased investment response 6 Private Sector • Access at political levels for strategy and priorities • Access at technical levels for detailed inputs • Mechanism for monitoring implementation • Greater impact beyond narrow lobbying efforts • Legitimacy with government in policy process

Benefits from Effective Dialogue • Facilitates investment climate through: – Accelerating reform processes – Promoting better diagnosis and design of policy reforms – Easing implementation of new reforms – Promoting transparency and good governance through broad constituency building; and – Building an atmosphere of trust and cooperation between sectors 7

Effective Dialogue in the Reform Process Dialogue is important at all stages of the economic reform process Assessment 8 Solution Design Implementation M&E • Engagement • Consensus building • Ongoing support • Watchdog • Definition • Filtering • Technical Inputs • Prioritization • Credibility • Acceptance by private sector • Feedback loop

Key Considerations: Structure National forums Government-sponsored 9 Series of working groups Regional/local initiatives Time-bound agreements Investors councils

Key Considerations: Structure Where is Focus? Steering Committee/Council Who? Where? How Big? Secretariat 10 Working Group 1: Working Group 2: Working Group 3: Working Group 4: Technical Committee Technical Inputs

Key Considerations: Participation at various levels needs to be defined and accepted in advance 11 • Private Sector: Broad based will work best – include large domestic, foreign, SMEs, even informal sector • Individuals or institutions: Individuals can bring strong contribution; institutional interests should be represented • Champions: Both public and private sector Champions can drive the process and mobilize effective participation • Civil Society: Consider key academics, others (labor, SOE’s, etc. ) for particular issues • Review: Review participation and replace members periodically

Key Considerations: Agenda Setting Initial Agenda needs to fit mandate, and adapt in the future 12 • Use Diagnostic Analyses: Investment Climate Assessments, Doing Business Rankings, Sources of Growth analyses will suggest initial focus • Set Initial Agenda: Build consensus on initial agenda, validate at first meeting if needed • Issues and/or Sectors: Priorities typically include business environment constraints, or key sectors, or both – sector focus leads to common issues • Mechanism for Additions: Allow new issues to be added by agreed process, including outside sources; review current agenda periodically • Focus: Highlight on “easy” reforms or dynamic sectors at outset and manage expectations

Key Considerations: Communications Dialogue Fora can be credible communications platforms to broaden impact, speed implementation and help ensure response Bosnia Bulldozer initiative, “ 50 reforms in 150 days” Transparency of Process Branding Reform and Dialogue Initiatives Nigeria PPD Building Public Awareness and Support Philippines procurement reform 13

Key Considerations: Secretariat with resources needed to ensure proper functioning • Where to house? Can be either linked to public or private sector structure, or standalone. Neutral intermediary key aspect. • • • 14 Private Sector: Umbrella Organization or Federation Government: Investment Promotion Agency Independent: Part of PPD structure • Resources: Core requirements minimal if other programs/sources/ institutions exist and are funded; if not Secretariat can fill gaps. • Functions: Organize meetings, support working groups, access technical resources, manage communications and information • Funding: Contributions from both public and private sectors; role for donor funding also key directly or indirectly

Experience from the Continent: Presidential Investor Advisory Councils in Africa: Initiated with World Bank/IMF Support to invigorate dialogue 15 • Countries: Ghana, Senegal, and Tanzania in original group, supplemented by Mali and Uganda • Presidential Advisory Council Structure: Presidential role key in setting and keeping high level orientation • Participation: 2/3 foreign, including non-invested firms. 1/3 CEO’s of large domestic firms. Little representation of SMEs • Orientation: Prioritizing among pending reforms, focusing on implementation. Investment promotion function. • Focus: Initial importance of actual council meetings and participation

African Investor Councils Experience Performance key function of structure and commitment 16 • Secretariat key: Ghana floundered initially due to lack of secretariat, Senegal highly effective due to strong APIX role. • Working Groups oversight role: Effective where based on existing structures or mapped into government structures, mostly monitoring role • Communications: Use of public action plans key for effective monitoring and communication with government, private participants • Reform Implementation: Main successes in “low hanging fruit” of removing logjams to implementation of reforms already well advanced • Foreign company experience mixed: Non-invested companies lost interest; lack of buy-in from domestic private sector in some cases

African Investor Councils Results are generally positive, Councils continue and evolve 17 • Senegal: Over 70% of economic legislation passed since council established directly attributed to Council generating political backing • Tanzania: IRT helped push through land Act amendments, Labor Act, Companies Act, forced rethinking of Tax reforms. • Ghana: Customs clearance time reduced, financing initiatives launched or accelerated, some role in major legislation • Corruption and Capacity: Recurring theme from all 3 countries from private sector is impact of corruption and lack of capacity to effectively implement reforms • Investment response? Actual investment response to date disappointing

Other African Examples Issues-driven focus works also with decentralized private sector • Nigeria Better Business Initiative: Loose structure arose out of national competitiveness forum • • • Focus on research to define issues, solutions, and generate consensus Donor support individually to different groups Limited results without cohesive structure Sierra Leone Business Forum: Forum convened to generate private sector input into reform process initiated with government. • • • 18 Issues “adopted” by key private sector groups, accommodating fragmented private sector groups Working groups focused on specific reform issues: land, tax, business registration, investment promotion Forum now being created to formalize and provide structure to working groups Private participation critical to drive reform implementation

Non-African Examples: The Vietnam Experience From Origins as unstructured response to Asian Crisis 19 • Origins: Response to Asian Crisis in 1997, and lack of investment following initial liberalizations in 1990’s • Evolution: From loosely structure high level dialogue, to focus on issues working groups and semi-annual Forum. • Foreign Role: Foreign firms dominated initially, with difficulties bringing in national private sector and tensions between Western and Asian firms. • Donors: Donors involved at the outset, supporting emerging reforms and secretariat; reinforces CG meetings. • Openness. Open meetings with donors, observers present.

Vietnam Private Sector Forum Structure Semi Annual Quarterly Continuous (Every 2 -4 weeks) • Prime Minister • Donors/Private Sector • Government, Private Sector, Donors • Private Sector • Issues from Working Groups • Specific Issues • Donors • Agenda • Government Linked to CG Meetings Secretariat Coordination/Support 20 • Vetting of legislation, regulations Linked to Ministries

Advancing Public-Private Dialogue in Liberia Where we are: consultations to establish common ground 21 • Mandate: Established scope of dialogue by engaging both the government and the private sector • Agenda: From these discussions, clear definition of priority sectors and selected issues. • • Structure: Technical support yet to be defined • Secretariat: IFC proposed to host the secretariat. Participation: Currently focussed on private sector organizations and key voices (women, informal sector, diaspora); broader engagement to come.

Advancing Public-Private Dialogue in Liberia Identification of Five Thematic Priority Areas 22 • Legal and Regulatory Constraints: limitations arising from laws and/or • Infrastructure Constraints: limitations arising from physical and social • Administrative Barriers: limitations arising from the administration and/or • Institutional Constraints: limitations arising from systemic capacity concerns (e. g. , • Trade & Export Promotion: enhancement of trade and export opportunities (e. g. , regulations (e. g. , tax code, investment code, etc. ) infrastructure (e. g. , road networks, ICT, development of informal sector, etc. ) implementation of laws, regulation or procedures (e. g. , business registration, inspections, etc. ) access to finance, media training, public and private sector capacity building, etc. ) development of non-traditional exports, harmonization of regulatory processes and regulations, etc.

IFC’s Investment Climate Team’s Overall Program Approach and Design of Phase 2 Ø Policy, regulatory and legal reform: including legal reform, regulatory simplification of business registration, taxation and demonstration projects Ø Institutional reform and capacity building: for the NIC, the govt with the mandate for design and implementation of a national investment strategy Ø Foundation elements to support: comprehensive communications strategy, public-private dialogue, engagement with the Liberian Diaspora, and leadership training and a gender dimension 23

Conclusion Dialogue will improve policy-making and implementation processes Ø Engagement of broad constituency in policy and reform initiatives, including women, Diaspora, youth and informal sector Ø Collective prioritization of private sector constraints Ø Development of sound reform recommendations and agreed implementation plans Ø Shared ownership and commitment to reform agenda Ø Ultimately leading to growth of domestic businesses and increased foreign investment 24

Thank you 25