ADDRESSING THE RURAL DEVELOPMENT PROBLEM IN UGANDA

Transcription

1 ADDRESSING THE RURAL DEVELOPMENT PROBLEM IN UGANDA John Kiyaga-Nsubuga 1 A Paper submitted for presentation at the 10 th Global development Network (GDN) Conference Kuwait City, Kuwait, February 1-5, Formerly Director General of Uganda Management Institute

2 ABSTRACT A major problem facing developing countries is how to develop local areas to them attractive and, in the process, stem the rural-urban migration. The economic decline of rural areas due to the declining value of traditional agriculture forces many young people to migrate to urban areas in search of better opportunities, incomes and standards of living, but this causes further decline to the rural areas and contributes to urban congestion and all its attendant problems. Uganda has been grappling with this problem for a long time and has tried many measures including introducing better yielding crops and promoting agricultural diversification, but all this has not achieved much success in terms of increasing rural incomes and regenerating rural areas. Of late, however, government has embarked on extensive promotion of value addition to rural agricultural produce to increase farmers incomes. The main instrument being used is establishment of micro-finance institution to avail credit to rural households and communities, because they lack the collateral that banks and other market oriented lending institutions insist on. Government is also in the process of adopting the Japanese One Village One Product rural development model to transform rural areas into economically vibrant entities. This paper discusses this policy shift and its potential for solving this age long problem. INTRODUCTION 2 This paper discusses the potential for adaptation of the Japanese One Village One Product (OVOP paper) concept to Uganda s poverty reduction and local development efforts. The Uganda government strongly believes that local development, especially in rural areas, is key to poverty reduction. In the last twenty years or so Uganda has been pursuing a broad and sustained poverty reduction strategy to transform the livelihoods of Ugandans for the better, most of whom live the countryside. The focus on poverty reduction as the country s primary development goal springs from the leadership s conviction that very little development and progress can take place when the majority of the population lives in abject poverty. To that end the Uganda government has undertaken a broad range of poverty reduction interventions under the overarching Poverty Eradication Action Plan (PEAP) which has been implemented in three year phases ( , , ), with the main focus being placed on economic growth, macro-economic management, security, public service reform, decentralisation and service delivery. The PEAP is currently being recast as the National Development Plan. 3 Although considerable progress has been made on all those fronts, and delivery of services has improved substantially, poverty levels still remain unacceptably high. The percentage of Ugandans living below the poverty line (defined in terms of one US dollar a day) reduced from 56% in 1992 to 36% in 2007, which is no mean achievement, but there is widespread dissatisfaction within government, development circles and the general population with the country s inability to reduce poverty further, let alone eradicate it completely. Consequently, the recent past has witnessed renewed efforts by government to tackle poverty by broadening the interventions at the local level. All along most of the emphasis has been placed on improving service delivery through decentralisation of powers to popularly elected governments and boosting of agricultural production through the Programme for Modernisation of Agriculture (PMA) and the National Agricultural 2 This paper is based on my earlier one titled The Japanese One Village One Product (OVOP) Concept and Its Application to Uganda. 3 Flora L Kessy and Arne Tostensen (eds.), Out of Poverty: Comparative Poverty Reduction Strategies in Eastern and Southern Africa (Dar es Salaam, Mkuki na Nyota Publ;ishers). 1

3 Advisory Delivery Services (NAADS) programme. However, while enhancing service delivery and boosting agricultural production still constitute the core of government s approach to reducing poverty in the countryside, government is now emphasizing local economic development 4 and value addition to agricultural output as potential avenues for increasing local community and household incomes. This new thrust marries well with the Japanese One Village One Product (OVOP) concept. OVOP is a unique approach to local development by which hitherto declining areas are transformed into economically vibrant entities through release of latent local potential and creation of unique and appealing local products and environments. The OVOP concept was the brain child of the Japanese former Governor of Oita prefecture, Hiramatsu, who used his previous experience and exposure in the Japanese Ministry of Economy, Trade and Industry (METI) to try to find a solution to Oita s serious rural economic decline. This approach has been very successful in the Japanese prefecture of Oita and has attracted and continues to attract wide international appeal, particularly in developing countries, because of its potential to reverse local decay and decline. The countries that have embraced OVOP include Thailand, Vietnam, Korea, China, Cambodia, Philippines, Laos, and Indonesia in South East Asia, 5 and Malawi, Ghana, Tunisia and Nigeria in Africa. The Japanese government adopted OVOP as part of its policy for African development that was announced by the then Prime Minister Junichiro Koizumi during the G8 summit in July Uganda through the Ministry of Tourism, Trade and Industry, has also indicated strong interest in the OVOP approach because of its close fit, conceptually at least, with the governments Prosperity For All programme. The essence of OVOP lies in value addition to local products to generate higher incomes for local communities, as well as in transforming local environments to make them attractive to local residents and tourists. In that regard it runs in line with the new thrust towards local economic development and the value addition being promoted through Programme. This paper is divided into five sections, starting with this introduction. Section two discusses the OVOP concept and provides three distinct examples of how it can be implemented: the classic Oita (Japanese) model, the Thai model and the Malawi model. Section three looks at the conditions that may favour the introduction of OVOP in Uganda, while section four highlights the issues that have to be taken into account if OVOP is to be successfully implemented in Uganda. Section five concludes the discussion. OVOP: THE CONCEPT AND THE PRACTICE OVOP is a distinctive approach to rural community development in which latent local community creativity and potential is triggered, through effective local leadership and human resources development, and directed at community revitalisation through development of unique products that have strong market appeal. Its overall aim is to develop and consolidate local self-organising capability for sustainable local development and poverty reduction. It is built on three principles, namely (i) self-reliance and creativity (ii) human resources development, and (iii) thinking locally but acting globally. Local people take the lead, independent of external prompting and largely on their own creativity and self-reliance, to make unique products from local resources for their own good and to capture markets external to their locality. In the process they develop their expertise through production of competitive products, their livelihoods improve due to enhanced incomes, and their communities develop closer bonds at the same time. 5 Oita International Exchange Promotion Committee (August 2006), One Village, One Product Spreading Throughout the World. 6 Ministry of Foreign Affairs (Japan), Japan s ODA White Paper

4 The OVOP rural community development concept has been implemented in different ways where it has been introduced, depending on the overall objective and the unique circumstances of each country. Three examples are outlined below to provide some contrasts that should be of interest in determining how Uganda should approach the subject. These are (i) the classic Oita (Japanese) Model (ii) Thailand s One Tambon One Product model and (iii) the Malawi One Village One Product model. These are not pure types as such; they are only distinguished here for conceptual and analytical convenience. (i) The Classic Oita (Japanese) Model The Oita OVOP model is termed classic here because it is the model that has been emulated in other countries with variation of course. The Oita OVOP model developed from locally-led movements which aimed at gradual, long-term and intrinsic community revitalisation, to be pursued through the formulation of local leaders. 7 The impetus for this was the preceding rapid post-war economic growth and transformation in Japan which, while generating tremendous benefits for the country as a whole, concentrated most of these benefits in urban areas leaving rural areas desolate and quite unattractive, particularly for the young. The resultant disillusionment with too rapid industrialisation 8 led to a shift in national policy from concentration on economic growth to balanced socio-economic development, which provided the framework for interest in rural and community development. In the case of Oita local movements sprung up, specifically in Oyama and Yufuin, in which local communities (though strong local leadership) took various steps to rejuvenate their areas. These actions, which included community dialogues and networking, local leadership formation through after work school, promotion of culture and sport, and enhancing tourism, were given support by the Oita prefecture. OVOP was not intended to be the main or only socio-economic development strategy for the Oita prefecture, nor was it considered a substitute to attracting industries to Oita. Rather, it was meant to be a complementary strategy to other interventions, but with special focus on promoting economic and social wellbeing of rural communities through leadership action. Emphasis was placed on economical use of resources and environmental conservation, owing to scarcity of natural resources in Japan generally. To deal with the problem of market circulation and sharpening competition, value addition focused on promoting product originality, uniqueness and diversity. Human resource development targeted leaders or those with potential to become leaders, taking the priorities of OVOP into account. The classic OVOP concept is built on three principles, namely: (i) Think Globally, act Locally through creation of unique products that can be marketed nationally and internationally (ii) Independence and Creativity the decision on what to produce is made entirely by the communities while local government only provides technical support, infrastructure and marketing information, and (iii) Fostering Human Resources by developing community capacity to respond creatively to challenges through dynamic and visionary leadership. 9 In terms of administrative structure, OVOP in Oita is not overseen by any national body. Initially it was coordinated by a section in the Oita prefectural government called the OVOP Promotion Council 7 Rika Fujioka, (2006) Learning from OVOP in Japan and OTOP in Thailand for the Application to CLMV Countries (paper presented at the workshop on Integrated Community Development for the Mekong Region: One Village One Product Movement in CLMV Countries by Asian Productivity Organizations: December 2006), p.1. 8 Rapid industrialization led to extensive urban congestion and pollution, on the one hand, and, on the other hand, it drew people away from their land and community and left them hanging in unfriendly urban centres. 9 The Oita Prefecture One Village One Product 21 Promotion Council, One Village One Product 21: Bringing the Spirit of the Country to the City, p.2 3

5 but this responsibility was transferred to the Oita International Exchange Promotion Committee. OVOP activities are financed by donations from the private sector (.e.g. Tokiwa Department Store) rather than from the prefecture government. OVOP in Oita depends a great deal on partnership between government, the community and the private sector. Individuals and groups within the community undertake entrepreneurial activities on their own initiative; government provides technical support, infrastructure and marketing information; and the private sector, with government s assistance, contributes to community development (and also benefits in the process). OVOP in Oita targets local, national and external markets. At the local level Hometown and roadside stations sell OVOP products within Oita prefecture. Beyond the local level, antenna shops and product fairs have been set up outside Oita prefecture and Tokiwa Department Store has a specific OVOP corner. All this is intended to enhance Gross National Satisfaction (GNS), and not just to expand Japan s Gross National Product (GNP). Emphasis has been placed on using resources within the community for the community benefit, so that there is a direct link between product development and community development. 10 At international level, OVOP products have been marketed through careful analysis of international markets and emphasising in superior quality and effective distribution. (ii) The Thai One Tambon One Product Model The Tambon is an administrative unit in Thailand roughly equivalent to a district in Uganda. One Tambon One Product (OTOP) is Thailand s version of OVOP. The brain behind it was ex-prime minister Thanksin Thai Rak, a telecommunication business tycoon, who was a strong advocate of balanced socio-economic development. He and his senior officials visited Oita on several occasions to get first hand understanding of the revolutionary changes brought about by OVOP, and these visits led to coordinated government adoption and adaption of OVOP to the specific circumstances of Thailand. The legacy of centralised administration in Thailand arising out centuries of absolute monarchism made a centralized approach to OVOP the natural choice. Although OTOP (like OVOP) has adopted a bottom-up implementation modality that hinges on government-community-private sector partnership, and is based on the same three principles (i.e. Think Globally, Act Locally; Independence and Creativity; and Fostering Human Resources), it is formulated and implemented by the Thai central government, with strict guidelines for product development and marketing. OTOP (like OVOP) is not promoted as the only or even main development strategy for Thailand; rather it is part of the Thailand s dual track development policy of fostering the nation s competitiveness, while stimulating domestic consumption and empowerment of grassroots communities. 11 The administrative structure for OTOP is much more defined than that of OVOP. OTOP is directed and coordinated from the top by the National OTOP Administrative Committee (NOAC), with subcommittees comprising officials from line ministries at national, provincial and district levels. Interestingly, staff from local government, such as the Tambon Administrative Organisation (TAO), which are responsible for promoting community development, are not part of this administrative structure. OTOP activities are based on an annual project master plan, which is funded directly from the national budget. The budget for OTOP is managed by NOAC and is used to fund activities in the OTOP annual project master plan, but not to provide financial support to producer groups. These groups are encouraged to seek funding from the regular budgets of government ministries and agencies, banks and the private sector. 10 ( Ibid p.5) 11 Rika Fuika, Ibid, p.2 4

6 Unlike OVOP which is based on a gradual, long-term development strategy, OTOP aims at rapid development of community entrepreneurship. Among the measures promoted to achieve this is periodic designation of certain individuals or groups as OTOP Village Champion and assigning number one or five star status to certain products based on government-set selection criteria for value addition. In its origin and intent OTOP products are aimed at national and external markets rather than local community consumption or use, which is an important distinction from Oita s OVOP. OTOP focuses primarily on producing outstanding products that can compete successfully in urban and external markets. Community participation in the production of OTOP products is not that much important, unlike in the case of OVOP. Of more significance to OTOP are those individuals and groups that can produce such products. Thus, community self-reliance and creativity which is so central to OVOP is of secondary importance to OTOP. It is value addition that really matters. In short, the essential difference between OTOP and OVOP is that OTOP is primarily economic in outlook and intent, fundamentally targets urban and external markets, and is less concerned with development of the local community as such. (iii) The Malawi OVOP Model The origin of the Malawi OVOP programme can be traced to earlier visits to the Oita prefecture in Japan by high ranking Malawi government officials to see how the OVOP approach to local development had transformed local communities there. The minister of agriculture visited first in December 1997, followed by the former president of Malawi, Dr Bakili Muluzi, in October Both visits made such an impression on the Malawi government that a strategic decision was made to adopt OVOP as a fully fledged national development programme. The overall goal of the programme is an empowered community generating equitable incomes and wealth, while its mission is To generate incomes and wealth for the Malawians society by community mobilisation to produce value added goods and services that are marketable in order to reduce wealth disparities (p.3). Underlying the programme is zoning of production, processing and marketing of goods and services, the idea being that communities should direct their efforts towards the production of goods and services which they have a comparative advantage over other communities (p.1) The Malawi OVOP programme is managed through an elaborate institutional arrangement that starts from the central government and cascades down to the district and community levels. At the central level the OVOP programme is overseen by the National OVOP Board chaired by the President, and is managed by the Ministry of Local Government and Rural Development (MLGRD) through its Rural Development Services Department (RDSD). Operational control of the programme is in the hands of the OVOP Secretariat under the RDSD which is headed by the Deputy Director of Rural Development. Initially the Secretariat was located in the Ministry of Agriculture but it was later moved to MLGRD because the latter was considered more immediate. A Joint Coordination Committee harmonises the implementation of the OVOP project and meets every six months The Joint Coordination Committee comprises Principal Secretary, Ministry of Agriculture; Principal Secretary, Ministry of Economic Planning and Development; Principal Secretary, Ministry of Industry, Trade and Private Sector Development; Principal Secretary, Ministry of Finance; Principal Secretary, Ministry of Labour and Social Development; Principal Secretary, Ministry of Lands and Natural Resources; Principal Secretary, Ministry of Tourism and Culture; Principal Secretary, Ministry of Information and Civic Education; Bunda College of Agriculture; Malawi Rural Development Fund (MARDEF); Malawi Industrial Research and Technology Development Centre (MIRTDC); Development of Malawian Enterprises Trust (DEMAT); Malawi Export Promotion Council (MEPEC); Malawi Investment Promotion Agency (MIPA); Malawi Social Action Fund (MASAF); and the Small Enterprises Development Organization of Malawi (SEDOM) 5

7 The responsibility for coordinating OVOP activities at district level is assigned to a District Commissioner in each of Malawi s 28 districts. Each District has an OVOP Committee which reports to the District Assembly. The District OVOP committee has multiple roles which include (i) promoting the OVOP concept at village level (ii) facilitating formulation of OVOP projects (iii) supporting preparations of OVOP proposals (v) submitting viable proposals to the OVOP Secretariat (vi) supporting implementation of approved OVOP projects, and (vii) liaising with the Secretariat on any OVOP related issue. Lower down are Area and Village OVOP Development Committees which promote OVOP activities in their respective areas. While the OVOP administrative structure is top-down, project conception, development and approval takes a bottom-up approach. At the community level any group that is engaged in a local productive activity can apply to the OVOP district office for certification as an OVOP entity. It submits a proposal containing an annual business plan and the required technical, financial and marketing support. At district level the OVOP office or committee analyses the plan and provides guidance to the relevant community group on how its plan can be improved, and how the group should manage itself and its business with the help of extension workers to be certified as an OVOP entity. At the central government level the National OVOP secretariat examines the proposals forwarded to it by the District OVOP office and awards certification to those with merit. The OVOP Secretariat arranges for the necessary financing, in addition to providing technical support in various areas including packaging, food processing, quality control and business management. This is done with the help of the OVOP Technical Support Centre which coordinates various government institutions and universities. Government has been providing financing to OVOP projects and activities but plans are under way to hand over this function to micro-finance institutions. The division of responsibilities between central and local government levels is quite clear. Central government focuses on formulation of policies and strategies, budgeting and coordinating between the ministries responsible for rural development, namely: agriculture; gender; child welfare and community; education; trade and private sector development; commerce; economic planning and development; finance; lands and natural resources; and tourism and culture. It also coordinates (through the OVOP Technical Support Centre) the activities of the various institutions that provide technical assistance to the implementation of OVOP projects countrywide. These include the Bunda College of Agriculture, the Malawi Rural Development Fund (MARDEF), the Malawi Industrial Research and Technology Development Centre (MIRTDC), the Development of Malawian Enterprises Trust (DEMAT), the Malawi Export Promotion Council (MEPEC), the Malawi Investment Promotion Agency (MIPA), the Malawi Social Action Fund (MASAF), the Small Enterprises Development Organisation of Malawi (SEDOM), and the Enterprise Development and Training Agency (EDETA). The Japanese government, through JICA, has been facilitating the programme with financial support and technical assistance. IMPLICATIONS FOR UGANDA The transferability of development experience from one country to another can be a challenge due to differences in history, culture and socio-economic endowments. However, the experience from other countries, such as Malawi and Thailand, suggests that the OVOP concept can be successfully assimilated and integrated with other development interventions if it has strong political support at the top, if it has a strong income generation motive and is focussed on value-addition, if it is well understood and supported by local communities (who essentially are its main implementers), if it has sound institutional and coordination arrangements, and if the role of government (central and local) is limited to providing technical support, infrastructure and market information while local communities are left to make product choice in response to market forces. The interplay between these elements needs clear thinking, planning, and execution. The starting point is to consider the conditions favouring the introduction of OVOP in Uganda, as well as the policy Institutional factors that must be 6

8 taken into account to ensure that the concept is properly implanted into the country s development framework. Conditions Favouring the Introduction of OVOP in Uganda Uganda has ideal conditions for the introduction of OVOP to transform the livelihoods of people in rural areas. These include a well defined poverty reduction policy framework, an extensive and well tested local government administrative system and a rich experience with implementing poverty reduction strategies from which to draw. Government has also indicated strong interest in OVOP through a Concept Paper submitted to the JICA (Uganda) office by the Ministry of Tourism, Trade and Industry. 13 The concept paper has been discussed with JICA officials and an OVOP Interim Committee has been formed to initiate the start-up activities including developing a country strategy paper for consideration by JICA. 14 Poverty Reduction Policy and Implementation Framework The Uganda Government has long identified widespread poverty as the single most important hurdle in the country s development, and has been pursuing a relentless and sustained campaign to reduce it or, if possible, eradicate it outright. The main instrument in this is the Poverty Eradication Action Plan (PEAP) which has been implemented since The PEAP is implemented by different sectors (e.g. local government, education, health, agriculture, social development, accountability, etc) each its own strategic investment plan. Implementation of the PEAP is coordinated at central level by the Office of the Prime Minister through the National Integrated Monitoring and Evaluation System (NIMES). Progress on Poverty reduction is monitored by The Poverty Monitoring and Analysis Unit in the Ministry of Finance, Planning and Economic Development (MOFPED), the Poverty Eradication Working Group and the Poverty Monitoring Network. Five important poverty- focused instruments with high potential for supporting OVOP have been developed or are in various stages of development, although currently there is no apparent mechanism for coordinating them effectively. (a) Prosperity for all Programme: This programme aims to tackle poverty at household level. Its main focus is on commercialisation of agriculture, enhancing food security and nutrition, and promoting value addition and product stability. Key elements of this programme are that (i) government will assist households in zoning and enterprise selection based on current and predicted future demands and prices at national, regional and international markets (ii) households will be assisted to form business groups/cooperatives so that they can produce big volumes, bargain effectively in the market place and access inputs and extension services efficiently (iii) households will be encouraged to join or form savings and credit cooperative organisations to access financial credit (iv) the programme will be implemented using existing government and private sector structures, which will be streamlined to ensure efficiency and effectiveness, and that resources actually reach the beneficiaries at the grassroots, and (v) the programme will be linked to marketing systems at local and national levels The paper developed by the, Ministry of Tourism, trade and Industry is titled One Village One Product (OVOP): A Strategy to Rural Development and Transformation Concept Proposal. 14 The nucleus of the interim OVOP Committee comprises the Ministry of Tourism, Trade and Industry (MTTI) as Chair; the Programme for Modernisation of Agriculture (PMA) Secretariat; the National Agricultural Advisory and Delivery Services (NAADS); the Ministry of Finance, Planning and Economic Development (MOFPED); Uganda Management Institute (UMI) and the Management Training and Advisory Centre (MTAC). 15 Republic of Uganda, Prosperity For All: Tackling Poverty at Household Level. 7

9 (b) Savings and Credit Cooperatives Society (SACCOS): Government thinking has changed from relying entirely on market forces for delivery of microfinance services because they emphasize collateral, have high interest rates and prefer urban based clients. In a major policy shift government is now promoting Savings and Credit Cooperative Organizations (SACCOS) which do not insist on collateral, can charge interest below market rates, are in close proximity to clients and are owned, used and controlled by their members and communities. SACCOS are currently funded directly by government, but it is anticipated that in future the funds will be channeled through district linkage banks. Automatic teller machines (ATMs) will be set up at every sub county to reduce operational costs. On the regulatory side, the microfinance industry is being regulated by the Microfinance Deposit Taking Institutions (2003) Act and a SACCOspecific Act has been proposed. It is planned to provide entrepreneurial training to microfinance clients so that they can make effective use of their borrowings. The real challenge here will be how to translate intentions into actual reality. (c) The National Agricultural Advisory Delivery Services (NAADS) programme: Under the programme for Modernization of Agriculture (PMA) is being re-oriented and strengthened. One of the key government programmes for implementing the Prospering for All programme, NAADS is intended to ensure that farmers increase their farm productivity and profitability so that they can earn better incomes. NAADS has been recently reviewed and restructured to make it more effective and relevant. Previously the advisory services were provided entirely by the private sector, which created problems of access. However, currently government extension workers are being brought in to provide these services. A small grant, the Integrated Support to Farmers Groups (ISFG), was set up as a revolving fund to enable farmers acquire better technologies to increase production. The programme also supports processing, value addition and marketing on a small scale. More significantly, in 2000/1 government introduced the Non-Sectoral Conditional Grant (NSCG) under PMA to assist local government in empowering rural communities to implement community projects in order to increase their incomes. The NSCG seeks to promote community participation, empowerment, ownership and teaming in the process of service delivery. The NSCG was designed and implemented in line with the Local Government Development Programme (LGDP) modalities which emphasize using existing local government structures and harmonized participatory planning guidelines and procedures. A study carried out in 2006 by the Ministry of Local Government in partnership with the PMA Secretariat under the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) identified a number of challenges as well as good practices brought about by the NSCG. The challenges included weak community participation in project: identification and selection, difficulties in identifying public projects of a truly good nature, and the small size of the funds, which made it difficult to produce the required impact. But it was established that the communities had been effectively sensitized on the objectives of the NSCG, the participatory development of village resource maps could make communities aware of the potential wealth around them, that village development committees could be empowered to implement NSCG projects, and that it is possible for parishes to collaborate on infrastructure projects which are too large to be handled individually, such as repair of a common road 16. Thus, this programme provides solid ground on which to build the OVOP concept. (d) Development Sector Strategic Investment Plan (SDIP): Since 2003 the Ministry of Gender, Labour and Social Development (MOGLSD) has been spearheading implementation of the Social Development Sector Strategic Investment Plan (SDIP) which aims at Integrating human 16 ASPS/MOLG in cooperation with the PMA Secretariat, Handbook on PMA/Non-Sectoral Conditional Grand and Practices, February

10 progress with economic growth for sustainable development. There is a close fit between the mission and vision of the Social Development Sector (SDS) as a whole, and the objectives and goals of OVOP. The mission of the SDS is creation of an enabling environment for social protection and social transformation of communities, while its vision is a better standard of living, equity and social cohesion 17 MGLSD has community development officers in all subcounties throughout the country who would constitute the backbone of an elaborate monitoring and evaluation machinery for OVOP. (e) Area Cooperative Enterprise (ACE): Government has introduced a new initiative known as the Area Cooperative Enterprise (ACE) to try to revise cooperatives at local level, based on lessons learnt from the failure of earlier cooperatives. The old system collapsed due to over dependency on external resources, weak entrepreneurial culture, poor leadership and management, lack of clear benefits to members, huge and costly structures, and inadequate member participation. ACEs are second level farmers organisations formed by primary societies. Their primary aim is to build the business of their members by ensuring that members pool their resources to increase heir bargaining power and add value to their produce. The ACEs market members produce on a brokerage basis, collect and disseminate market information to the members and link them with input dealers. So far 60 ACEs have been established countrywide. 18 These programmes, if implemented and effectively coordinated, can provide a very conducive framework within which to implement the OVOP programme. The main challenge to overcome is the legacy of weak implementation of government programmes. For example, the restructuring of NAADS was prompted by widespread outcry over its lacklustre performance, which its management blamed on underperformance of other components of the PMA. 19 If challenges of this kind can be addressed through effective coordination and implementation, this could lay a good basis for the OVOP programme. Local Government Framework The local government system also provides an excellent institutional framework for adoption of the OVOP Programme. Uganda has a well developed local government system whose centre piece is a fiver-tiered system comprising districts, counties, sub-county, parishes and village councils. In urban areas the system comprises City, Division, Parish and Ward Councils. In this arrangement districts, sub counties, municipalities, city and municipal Divisions and Kampala City Council constitute local governments, while the rest are administrative units. 20 Local governments have extensive planning, budgeting, financial management, human resource management, and revenue generation and development management powers which they can put good effect if they choose or are able to. The main focus of government s poverty eradication at local level drive has been on improving service delivery, with emphasis being placed on the five priority areas of primary education, primary health, agricultural extension, rural roads and water and sanitation. Resources for delivery of these services are provided by the centre through conditional, unconditional and equalisation grants. Utilisation of these grants is monitored through periodic supervision and assessments, and mandatory reports that local governments submit on a regular basis to sector ministries and the Ministry of Local Government. Local governments work in partnership with a variety of actors with interest in local development, including non-governmental organisations (NGOs), Community Based Organisations 17 Ministry of Gender, Labour and Social Development (2003), The Social Development Sector Strategic Investment Plan (SDIP) , p.vi. 18 PMA (2008) From Poverty to Prosperity (Quarterly Bulletin, Vol 6 (I) January March pp The New Vision (Kampala),May 29,2008, p.vi 20 Local governments Act Capt

11 (CBOs), faith based organisations and the private sector. Coordination of the efforts and interventions of all these players by local governments is, of course a challenge. While local governments have gained extensive experience in local administration and service provision they are yet to develop adequate capacity to develop local economies. This is the result of being accustomed to looking to central government for resources and ideas, which has been encouraged by central government unwillingness to grant them adequate discretion to manage resources transferred to them (although decentralisation is based on the devolution principle). In that regard, the OVOP Programme could be of immense help. Strong community entrepreneurial activity can generate substantial taxable incomes to give local governments discretion in funding local priorities and plans - which they currently lack. Taking these considerations in total, excellent conditions exist to facilitate the adoption of the OVOP concept in Uganda, and its adaptation and integration with other ongoing local development initiatives and interventions. CRITICAL SUCCESS FACTORS FOR OVOP IN UGANDA Successful introduction and implementation of OVOP in Uganda is contingent on a number of factors that must be given careful thought. Even in Oita OVOP faced several challenges, notwithstanding Japan s advanced economy and technology, which included local and external resistance, mobilising communities effectively and developing competitive products. The challenges that must be overcome in Uganda include the following. Commitment by the Top National Leadership Experience has shown where OVOP has been successfully implemented as a national programme (e.g. Thailand, Malawi, etc.) that buy in by the top national leadership is extremely important to give it a high profile among contending development programmes. This is very important for Uganda where a large number of poverty reduction programmes are being implemented by different sectors. It would be very helpful for the top national political and technocratic leadership especially the president, his senior advisors responsible for rural development policy and key technical officials in service delivery ministries to visit Japan, to see how this approach has transformed rural economies in those countries. It is crucial for those officials to understand that while OVOP is primarily a local economic development approach, it also has important community and human resource development dimensions as well. Otherwise its total value might be lost if it is looked at from its poverty reduction benefit alone. Appropriate Model to Adopt While OVOP is primarily a local economic development model, there are important variations in its concept and implementation. As indicated earlier, the Japanese (Oita) model emphasises community self-reliance and benefit, as well as gradual build-up to generate gross national satisfaction (GNS). Developing and marketing products that are competitive nationally and internationally is, of course, of primary importance, but developing human resource and enhancing community cohesion and pride are also crucial considerations for the success of the programme. On the other hand, the Thai model places emphasis on rapid, government aided externally marketoriented product development and upgrade with very limited focus on overall community development. Which OVOP model to adopt, and how to customise it to Ugandan circumstances, should be clearly thought through in advance. Secondly, it is important to consider the appropriate institutional framework for the programme. For example, should a dedicated secretariat be set up or would a coordination unit in a specified ministry 10

12 be enough? What should be the composition of the steering committee? What structures should set up all the way from the central government level down to community level to implement the programme, including promotion of public-private-ngo-community partnerships? How would the activities of the different stakeholders be monitored and coordinated with other ongoing poverty reduction strategies? Most importantly, how will the programme be evaluated and its impact assessed to ensure that it realises its goals and objectives? This last point is extremely important because impact assessment is often not built into many government programmes. Whatever the model selected, it might not be a good idea to try to implement the OVOP programme country-wide without first establishing on the ground the conditions that might favour or hinder its successful implementation. OVOP should be piloted in carefully selected districts to establish its most ideal implementation modalities particularly with respect to local leadership development, institutional support (for business, financial and technical services), and coordination of government (central and local), private sector, NGO and community efforts. The successful development of the Local Government Development Programme (LGDP) from the District Development Programme (DDP) pilot should serve as a good example of the value of piloting before scaling up. 21 Development of Local Leaders The success of OVOP is highly contingent on dynamic and entrepreneurially minded local leadership. Uganda s local government systems and extensive decentralisation programmes has provided fertile ground for generation and development of local leadership, but this leadership has focused predominantly on politics, administration and service provision. Means must be found by which an entrepreneurially minded leadership can be developed to give direction to local economic transformation through OVOP. Local leadership that emerges spontaneously from communities would be far more effective than that which is engineered from the above. Countering the Entrenched Dependency Syndrome While the rural, local and community development efforts that have been made in Uganda in the past have meant well, they have also inadvertently led to the entrenchment of a highly developed dependency syndrome among local level operatives. Virtually all local leaders and their subjects are accustomed to looking up to the central government for development solutions and all local government systems are configured to act as mere conduits for transfer of resources from the centre to the local level. This mental frame runs counter to the OVOP concept which emphasizes self-reliance and creativity. Measures must be taken to develop and nurture an entrepreneurial and self reliant spirit and culture among local communities so that they can see themselves as holding the key to their economic well being and success. Government should be seen as only providing support towards product development research, market information, transport and communication infrastructure, and export promotion. Financing 21 The DDP-Pilot, which became operational in July 1998, was a three-year project that aimed at building local government capacity to provide sustainable social services and to alleviate poverty through inclusive participatory planning, allocation and investment. It operated parallel to the Peri-Urban Infrastructure Project (PUIP) that had started earlier in 1997 to test the same mechanisms in an urban setting. Both projects provided crucial information which led to the formulation and implementation of the much larger and very successful Local Government Development Programme (LGDP). See: Ministry of Local Government, District Development Project Pilot Evaluation Review Report: Findings and Recommendations (January 8, 1999); Ministry of Local Government, Assessment of the DDP Pilot Local Governments Minimum Conditions and Performance Measures: Synthesis Report Year 2 (June 1999); and Ministry of Local Government/UNDP/UNCDF, District Development Project Pilot Evaluation Review: Final Report (November 10 December 11, 1999). 11

13 Access to finance and credit is critical to economic enterprise. However, it is risky for government to finance the economic activities undertaken by communities under the OVOP programme, because the whole idea of self-reliance community entrepreneurial action will be lost. An earlier government microfinance support initiative called Entandikwa (seed money) collapsed because many of the recipients mistook the money to be gifts for supporting the ruling party during the 2001 elections. A culture of borrowing and paying back must be carefully nurtured for that purpose. Government should leave financing of OVOP activities to microfinance institutions so that communities develop a culture of working with credit institutions. Community Participation Community participation in local development in Uganda is quite low. The reasons for this include low awareness arising from inadequate sensitisation, participation fatigue, pre-occupation with the daily struggle for survival, and repeated disappointment from unfulfilled expectations arising from bottom-up participatory planning processes.. Because citizens are not provided with adequate space for involvement in decision making, they are often not aware of opportunities decentralization offers 22. Thus, generating and sustaining community interest in the OVOP concept activities must be of paramount importance. This is achievable if the economic benefit can be clearly demonstrated. Getting communities at the grassroots level to participate effectively in local development projects is not a simple task, even if they are expected to be the primary beneficiaries. In addition to the impediments mentioned above, communities also take account of the opportunity cost of participation and whether the projects in question are sensible from their point of view, (i.e. whether they can lead to tangible solutions to their problems). In this respect, an approach that has sustainable and long-term beneficial outcomes is likely to generate higher levels of participation than others. A related issue that must be addressed is the potential tension between community (group) and individual interest in money generating enterprises, especially given that Ugandans have very little experience with cooperatives. Community cooperation in Uganda is more common with respect to social activities (weddings, funerals, etc) than with economic enterprises where individualism as well as family and kinship ties are more pronounced. Ways must be found to ensure that the individuals spirit, a key driver of economic enterprise, does not prevent development of community cohesion and pride one of the most important objectives of OVOP. CONCLUSION There is increasing understanding and appreciation globally, especially in developing countries, of the OVOP concept and its potential for transforming the socio-economic fortunes of communities in rural areas. Uganda is well positioned to adopt the OVOP concept and adapt it to its circumstances because the existing poverty eradication policy framework and implementation modalities, as well as the recent emphasis on exported growth, greatly favour an approach of this kind. A great deal of thought, however, should be given to crafting Uganda s own unique variant out of the OVOP experiments that have been tried elsewhere. It is important that the OVOP model Uganda eventually adopts empowers local people to develop entrepreneurial attitudes and skills, to engage in self-sustaining economic activities, to take pride in transforming their communities and environment, to develop their latent creatively to full potential and to stop looking at government as the provider of solutions to all their livelihood challenges. 22 See: Susan Steiner, Decentralization and Poverty: Concept Framework and Application to Uganda, Public Administration and Development, 27, 2007 (p.179). 12

14 REFERENCES Adachi Fumihiko (2005), Marketing Perspectives of Community Enterprises in Oita Prefecture: Evaluation of Marketing Activities under One Village One Product Movement (Paper Presented at the First Thailand Community Symposium on Knowledge-Based Strategic Development for Community Economies, 8 th and 8 th, December 2005, Chiang Mai, Thailand). Adachi Fumihiko, The World of One Village One Product: Japan and Thailand (Paper Presented at the Joint Seminar on the Occasion of 120 Year Anniversary of Japan Thailand Diplomatic Relations, held at Nanzan University, Nagoya Campus,28 29 September, APU-IDE (JETHRO) Collaborative Research Project (n.d.), Japanese Experiences on Local Industrial Development: Lessons for Development Countries ASPS/MOLG in cooperation with the PMA Secretariat, Handbook on PMA/Non-Sectoral Conditional Grand and Practices, February 2007 Commonwealth Local Government Forum (2007), Meeting the Challenges of the Aberdeen Agenda An Assessment of Local Governance and Democracy in Uganda. Malawi National OVOP Secretariat (September 2004), Strategic Plan for the One Village One Product Programme (OVOP) Hiramatsu Morihiko (January 2008), The One Village One Product Movement Spreading Throughout the World: OVOP International Seminar for African Countries in Malawi Japan Association for International Collaboration of Agriculture and Forestry, (March 2007) One-Village One-Product Movement in Africa. Kaluma-Sulumba K (n.d.), One Village One Product Programme in Malawi: Presentation for OVOP International Seminar. Local governments Act Capt 243. Michio Muramatsu et al (eds.) (2001), Local Government Development in Post war Japan Ministry of Foreign Affairs, Japan s ODA White Paper 2006 Ministry of Gender, Labour and Social Development (2003), The Social Development Sector Strategic Investment Plan (SDIP) , p.vi. Ministry of Local Government (2006) Local Government Sector Investment Plan. Ministry of Local Government, Assessment of the DDP Pilot Local Governments Minimum Conditions and Performance Measures: Synthesis Report Year 2 (June 1999) Ministry of Local Government, District Development Project Pilot Evaluation Review Report: Findings and Recommendations (January 8, 1999). Ministry of Local Government/UNDP/UNCDF, District Development Project Pilot Evaluation Review: Final Report (November 10 December 11, 1999). Ministry of Tourism, trade and Industry is titled One Village One Product (OVOP): A Strategy to Rural Development and Transformation Concept Proposal 13