JUNE 2014 91183 PUBLIC-PRIVATE DIALOGUE IN FRAGILE AND CONFLICT-AFFECTED SITUATIONS Experiences and Lessons Learned Investment Climate l World Bank Group In partnership with PUBLIC-PRIVATE DIALOGUE IN FRAGILE AND CONFLICT- AFFECTED SITUATIONS Experiences and Lessons Learned Investment Climate l World Bank Group In partnership with ©2014 The World Bank Group 1818 H Street N.W. Washington D.C., 20433 All rights reserved. Available online at www.wbginvestmentclimate.org This work is a product of the staff of the World Bank Group with external contributions. The information included in this work, while based on sources that the World Bank Group considers to be reliable, is not guaranteed as to accuracy and does not purport to be complete. The World Bank Group accepts no responsibility for any consequences of the use of such data. The information in this work is not intended to serve as legal advice. 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Funding is provided by the World Bank Group (IFC, the World Bank, and MIGA) and over 15 donor partners working through the multidonor FIAS platform. ii Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned Table of Contents Abbreviations.................................................................................................................................................................iv Introduction.....................................................................................................................................................................v Acknowledgments ........................................................................................................................................................vi Executive Summary.........................................................................................................................................................1 Key Findings and Recommendations.............................................................................................................................3 Project Design............................................................................................................................................................3 Understanding the Context..................................................................................................................................3 Identifying an Appropriate Entry Point..................................................................................................................5 Setting Objectives and a Timeline.........................................................................................................................6 Putting the Team Together...................................................................................................................................6 Communication, Transparency, and Accountability.....................................................................................................6 Creating a Culture of Transparency and Accountability.........................................................................................6 Creating a Communications Strategy...................................................................................................................7 Inclusion.....................................................................................................................................................................8 Promoting Inclusiveness.......................................................................................................................................8 Champion Engagment.............................................................................................................................................10 Working with Champions..................................................................................................................................10 Managing Work with Champions......................................................................................................................11 Stakeholder Engagement.........................................................................................................................................13 Establishing Credibility with Clients and Stakeholders.........................................................................................13 Building Stakeholder Capacity............................................................................................................................13 Working with Other Donors and Implementing Partners....................................................................................14 Flexibility and Risk Management...............................................................................................................................15 Mitigating Risk...................................................................................................................................................15 Ownership and Sustainability....................................................................................................................................16 Planning for Sustainability..................................................................................................................................16 Implementing a Timely and Successful Exit.........................................................................................................17 Monitoring and Evaluation.......................................................................................................................................18 Key Lessons....................................................................................................................................................................21 Table of Contents iii Abbreviations CCIAMA Chad Chamber of Commerce CPIA Country Policy and Institutional Assessment IFC International Finance Corporation FCS fragile and conflict-affected situations GICAM Groupement Inter-Patronal du Cameroon PPD public-private dialogue All monetary values are in U.S. dollars unless otherwise noted. iv Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned Introduction Public-private dialogue (PPD) is highly necessary in fragile and conflict-affected situations (FCS)1 to fill the gap resulting from the lack of legitimate institutions, to help create transparency and trust among stakeholders, and to identify the need for reforms and interventions that can improve the business environment and attract investment. Moreover, creating a platform for PPD can provide a useful starting point for private sector development in FCS for projects in key sectors, such as agribusiness and extractives, where PPD can help build links between large-scale investments and the local economy. To support PPD projects in FCS, the World Bank Group has conducted a survey of 27 Task Team Leaders and other program staff members with experiences from 30 FCS countries. The survey was followed by in-depth interviews with 13 key staff members who have experience from selected countries. By conducting in-depth interviews, the Bank Group aimed to capture important experiences and lessons learned, including a description of challenges, useful tools and methods, and do’s and don’ts. FCS are countries and economies that (a) have a harmonized average Country Policy and Institutional Assessment (CPIA) rating of 3.2 or less (or no 1 CPIA rating) or (b) have had a United Nations or regional peacekeeping or peace-building mission during the past three years or (c) meet both those criteria. The 50 countries and economies classified as FCS for at least one year in the period 2005–12 are Afghanistan, Angola, Bosnia and Herzegovina, Burundi, Cambodia, Cameroon, the Central African Republic, Chad, the Comoros, the Democratic Republic of Congo, the Republic of Congo, Côte d’Ivoire, Djibouti, Eritrea, The Gambia, Georgia, Guinea, Guinea-Bissau, Haiti, Iraq, Kiribati, Kosovo, the Lao People’s Democratic Republic, Liberia, Libya, the Marshall Islands, Mauritania, the Federated States of Micronesia, the Republic of the Union of Myanmar, Nepal, Nigeria, Papua New Guinea, São Tomé and Príncipe, Sierra Leone, the Solomon Islands, Somalia, South Sudan, Sudan, the Syrian Arab Republic, Tajikistan, Timor-Leste, Togo, Tonga, Tuvalu, Uzbekistan, Vanuatu, West Bank and Gaza, Western Sahara, the Republic of Yemen, and Zimbabwe. Introduction v Acknowledgments The Investment Climate Department wishes to thank the government of Austria for its support in funding this report on PPD in FCS. This report was prepared by a team led by Steve Utterwulghe (Senior Private Sector Specialist and Global Lead, PPD, World Bank Group) and Mette Gjerloeff (Senior Specialist, FCS, World Bank Group). Team members were Maha Hussein, Eunice Kim, Patricia Steele, and Jason Wares. The Investment Climate Department gratefully acknowledges the contributions of peer reviewers. They were Michael Engman, Senior Economist, World Bank; Mathias Kruger, Senior Operations Officer, World Bank; Syed Akhtar Mahmood, Lead Investment Policy Officer, World Bank Group; Mark Mattner, Project Manager, German International Cooperation (GIZ); Anna Nadgrodkiewicz, Director, Center for International Private Enterprise; Niraj Shah, Senior Investment Officer, International Finance Corporation (IFC); Lili Sisombat, Program Specialist, World Bank Group. Many thanks and acknowledgment go to the following people who were interviewed for this report and its companion report, “Quick Guide on PPD in FCS”: Mohammed Abdulkader, Operations Officer, IFC; Mary Agboli, Senior Country Officer, IFC; Yehia Eldozdar, Associate Operations Officer, World Bank Group; Maha Hussein, Operations Officer, World Bank Group; Catherine Masinde, Head of Sub-Saharan Africa Investment Climate, IFC; Albena Melin, Principal Operations Officer, IFC; Chris Miller, Operations Officer, IFC; Irina Niederberger, Senior Operations Officer, IFC; Charles Schneider, Senior Operations Officer, IFC; Jose Ricardo Silva, Operations Officer, IFC; Krystle Smith, Consultant, World Bank Group; Alain Traore, Senior Operations Officer, IFC; Laura Watson, former Senior Operations Officer, IFC. Special acknowledgment goes to Cecilia Sager (Manager, Investment Climate for Industry, World Bank Group) for her overall guidance and support. vi Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned Executive Summary PPD project managers operating in FCS face conditions • Engaging stakeholders requires an understanding of the that threaten the weak institutional structure that keeps values and culture in which a PPD project is embedded. the countries they work in standing. In FCS, basic societal Often, this understanding requires that a PPD platform agreements and structures are either failing or so new have a politically savvy staff with a deep understanding that they lack the capacity to comply with their own of political and social networks and how those mandates. Respondents to the survey indicated that weak networks relate to drivers of conflict or tensions. government and private sector institutions present the greatest challenges to achieving PPD project objectives. • PPD in FCS may achieve better results by focusing on a key sector, such as extractives or agribusiness, From January to March 2014, the World Bank Group and by using PPD as a tool for increasing investment conducted a survey and interviews that captured opportunities. the knowledge of 27 professionals with experience implementing PPD projects in more than 30 countries. This • Successful PPD platforms understand the particular report documents their experiences and lessons learned. risks of working in FCS and develop mitigation plans to address them. The main conclusions from the study are as follows: • The timeline for successful implementation and • Project design should be conflict sensitive and based on transition to local ownership in FCS is often much stakeholder mapping and political economy analysis. slower than in other countries. Often, the timeline needs to be extended to ensure a sustainable outcome • Communicating commitments publicly, including in the of the project. media, is an effective means of creating transparency and accountability. • The results of PPD are produced by the reforms it initiates and also the process it implements. In FCS, the • Inclusiveness, although difficult to achieve in FCS, is peacebuilding and conflict-mitigating results are difficult achievable over the long term and is crucial for success. to capture. However, the stakeholders that benefit from the results highly value them. • In FCS, finding people who are available to serve as champions can be difficult. Furthermore, when a This study will inform the design of guidelines intended champion can be found, she or he often lacks sufficient for PPD project managers operating in FCS environments. capacity to implement PPD initiatives. Projects need strategies to work effectively with the champions who are available, while mitigating the risk of depending on one or a few people too heavily. Executive Summary 1 2 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned Key Findings and Recommendations Project Design Understanding the Context Study participants in our survey and interviews pointed Learning history and culture reveals important to stakeholder management as the most resource- information, especially in FCS countries. Without consuming and important part of their PPD platforms. that, you might undermine your own work. Learning They value assessments that map stakeholders and history and culture will tell you how dialogue happens provide information about their political values, networks, in a country. You will find out to whom they listen, and economic relationships (figure 1). Other types of if it’s elders, youth, women, or foreigners. Most assessments that respondents valued were conflict tribal structures require that you master how they assessments and political economy analysis. communicate. Respondents pointed to difficulties with stakeholder —José Ricardo Silva, Operations Officer, Timor-Leste management as their biggest challenge. They also indicated that maintaining close dialogue and understanding how to incentivize desired behavior was EXAMPLE: In South Sudan, analysis of the history the most effective means of troubleshooting challenges and context of the country informed project design. that arise over the course of a PPD project. Foreign companies were seen as colonizers, and the Sudanese government had suppressed South Sudanese entrepreneurship. This context created a deep mistrust in FIGURE 1: MOST USEFUL ASSESSMENTS 70 60 50 Percent 40 30 20 10 0 r erv ce r an ness s me or tor t cap ciety ess der me sk aly t cap ent an flict an lity stu hic ma olde he se up n ing sis s ty sis sis nt y sis ty s nt nt t i int to-fa R iew die ate stme vel sec As Ot ass Gen gro a p aci aci me nm aly aly aly n si so orm gra pp keh Co en Bu ic an op ess e- ver il us clim Inve mo inv l Civ b Sta Inf Fac ing Foc ass Pu Go De Do de Assessments Note: PPD = public-private dialogue. Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. Key Findings and Recommendations 3 public-private sector relations. The government did not • Talk to PPD staffs working in other FCS countries with want to open the possibility of colonization by talking similar classification (the World Bank Group FCS team is to large businesses. Consequently, South Sudan had no developing a classification of different types of FCS). entity able to organize and represent the private sector. Knowing the background of this relationship, the World • Talk to other donors and implementing partners. Bank Group started the project with a very gradual Recommendations: In designing a PPD project, it is process to help the local private sector organize itself into important to understand the relationship between the associations and build trust among stakeholders. economy and the state, including power dynamics and Recommendations: Project managers suggested that triggers of conflict. Survey and interview respondents researching clients and counterparts goes a long way indicated that political economy analysis and tracking in heading off issues that may arise, though sometimes over the course of a project are necessary to keep the it may be necessary to take a chance and work with project on track. Though each country had its specific a particular person or group. They had the following characteristics, common elements of the political economy suggestions: that project managers found valuable to include in the analysis were as follows: • Do Google searches on the people and institutions you will work with. Learn their history and the issues that • A description of different political parties they are struggling with. • A description of the party in power and its path to • Talk to trustworthy local sources about these people and power institutions. Understand their strengths and weaknesses • An explanation of how leaders are determined in and identify anything that could derail the project. government and ministries • If the World Bank Group has an office in the country, • A description of private sector political affiliations interview staff members that have worked with your clients and counterparts previously. • An assessment of triggers of conflict in key sectors, such as extractives 4 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned • A good understanding of basic economic issues and processes, and solving local coordination issues that dynamics, including informal structures do not require legislative action. It is simpler to bring government and business together to benefit the business • Information on the country’s constitution and how it environment at a local level than a national one. structures government and the economy Historically, PPD platforms have focused on economywide • A summary of how stakeholders’ names or backgrounds reforms but increasingly, new PPD projects are focusing might connect with their political alliances and power on a key sector (such as agribusiness or extractives) with a relations strong emphasis on developing investment opportunities and supporting value chain development. However, in • A description of how decisions are made, both formally FCS, a combination of a sector focus and economywide and informally, and the cultural norms for decision interventions is often needed to remove key obstacles making. and improve access to finance, infrastructure, and other broader issues with implication for the sector. Identifying an Appropriate Entry Point In most FCS, public sector institutions are weak, the In a number of FCS countries included in the study, private sector is fragmented, and politics are divisive. staffs found that the private sector lacked representation These elements are the main challenges to achieving entirely. Staffs determined that, for PPD to proceed in project objectives, including PPD. Other externalities may these countries, projects should begin with supporting negatively effect the implementation of projects (figure 2). the creation of institutions to represent the private Consequently, many World Bank Group staff members sector’s side of the dialogue. Doing this requires skills recommended focusing on subnational, sector-specific, in not only dialogue but also organization governance, process-oriented issues, especially in the first stage of a representation, and capacity building. project. Starting a PPD project with a subnational focus Recommendation: Determine the PPD project’s entry allows newly empowered stakeholders to address practical point in the assessment phase. Decisions about point of problems with solutions that require few resources. entry include considerations about the following: Respondents and interviewees also recommend choosing process efficiency issues over addressing the legal • Whether to begin work with the public sector or private framework in a PPD project’s first phase. Examples of the sector types of early interventions that staff-recommend projects target are filling potholes, improving trash collection, • Whether the focus should be the national or making basic improvements to business registration subnational level FIGURE 2: CHALLENGES TO ACHIEVING PROJECT OBJECTIVES Weak government institutions Weak private sector Fragmented private sector Political polarization Land issues Tension among ethnic groups Economic decline or instability Armed conflict Natural disasters Tension among religious groups Natural resource shortages 0 1 2 3 4 5 Challenges (rated on a scale of 1 to 5) Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. Key Findings and Recommendations 5 • Whether the project will start with a sectoral focus or Putting the Team Together an economywide focus or a combination of the two. Respondents and interviewees recognized the importance of having technical staff members who understand Setting Objectives and a Timeline economic issues as well as dialogue and governance FCS contexts slow the implementation of activities and issues. A good understanding of economic issues can the achievement of results. Initiatives that seem basic help project staff members understand the nature in most environments take on new complexities. New, of the process that is required (for example, some game-changing events such as conflict outbreak, radical dynamics in the process may be influenced by economic changes in government, or extreme economic volatility are drivers). Dialogue experts who may have a good generic much more likely. The World Bank Group staff members understanding of process dynamics may be handicapped recommend that project designers take the FCS context if there is no one on the team who can speak to the role into consideration when deciding what is achievable and of economic drivers. In FCS, establishing a successful PPD how quickly benchmarks can be met. In addition to Nepal, process is often just as important as achieving the reforms examples of projects for which initiating the PPD platform or economic results that the process produces. took longer than expected include Cameroon and South Sudan. In retrospect, leaders of those projects felt that EXAMPLE: In Nepal, the project staff created a position project designers should have taken the FCS status of the to track changes in the government and the implications country into consideration when determining how long of those changes. it would take to accomplish objectives. It is also true that Recommendations: Concerning the composition of the one may have to go a step back once in a while and that team, interviewees recommend the following: an incremental approach is desirable. • Hire local staff members who understand the actors EXAMPLE: At the initiation of the PPD project in Nepal, and know how to find local champions to work with. World Bank Group staff members and consultants estimated that the task of conducting the PPD diagnostics • When searching for someone to hire, consider people and holding workshops to engage stakeholders would who are good, quick decision makers who feel take two weeks. Irina Niederberger, Nepal program comfortable to responding to rapid changes in the manager from 2008–10, estimates that the diagnostic project’s environment. phase actually took about two years. • Hire a political economy analyst to serve on staff. Recommendations: Project designers should take the FCS status of the country into consideration • Be sure to hire staff members with leadership skills when determining how long it will take to accomplish and political savvy, which is as important as hiring staff milestones and objectives. They should consider outlining members with deep technical knowledge. an incremental approach to achieving objectives. An incremental approach involves understanding that a legal reform may take longer than the project’s life. Communication, Transparency, Accordingly, an incremental project design would do the following: and Accountability • Determine the steps required to put stakeholders on Creating a Culture of Transparency and the path to reform. Accountability Creating a culture of transparency and accountability in • Focus on achieving those steps that stakeholders will FCS requires balancing the need for public commitments achieve during the project. from dialogue participants, which will drive action, and • Ensure that stakeholders have the capacity to the need to hold open and frank discussions without successfully carry reform forward after the project ends. the threat of punishment for voicing controversial or unpopular ideas. Interviewees emphasized that public commitments, made through publishing meeting minutes and tracking the progress of planned reforms, were the 6 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned most effective means of promoting transparency and • Provide a neutral party to facilitate the process. accountability (see figure 3). However, in some instances, Especially early in a project, FCS PPD participants providing open access to the press can hinder open need a neutral, trusted party to lead the process until dialogue more than it promotes the desired cultural stakeholders are comfortable managing it themselves. changes. • Make decisions public and identify individuals EXAMPLE: FCS may have an underdeveloped media responsible for specific action items. sector, or, as is the case Myanmar, may have had strong government censorship in place until very recently, thereby • Use social media to reach youth groups. resulting in weak journalistic practices. Creating a Communications Strategy Recommendations: Respondents also had these Building credibility is an important part of PPD in FCS. suggestions for creating transparency and accountability: Project leaders have to ensure that promises are specific • Use the media to publish the decisions regarding and delivered on exactly and that successes are not reforms and the progress made in implementing them. exaggerated. • Have working groups report publicy to higher A point of discussion was the role of the media in authoritative bodies. promoting transparency and accountability, which was felt to be potentially in conflict with the need to hold • Have the PPD secretariat maintain a matrix of issues. open discussions. Also, some interviewees felt that in The secretariat may use the matrix to track progress, countries that have historically lacked a free press and a remind government about implementing decisions, and sophisticated media industry, the media often hindered inform monitoring and evaluation efforts. discussions and that their access to PPD participants should therefore be limited to public events. FIGURE 3: HOW PROJECTS MAINTAIN TRANSPARENCY 60 50 40 Percent 30 20 10 0 r pu ere ts o pu ed pu s we ll ly t m wa f f he e o ad cum cts o a . ter h cov ed to wer blis re s blic the essib d flic and ask an eeti ly f in blis w Ot pu refo cess d. . . eti rom te ven s ked pu le est m free ng . he to tings ts. en blic fli con ntify was dia ro me tes f rac an ere l con ng r the ep allo e me op l mee c tor de c nu d m do Th ea st w ntia er blic to cilita w Mi Th en Al to ere Pote a ide ef Th int Actions Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. Key Findings and Recommendations 7 Another note of caution was expressed regarding • Traditional media such as television and newspapers, or, branding the platform as a World Bank Group in countries with high levels of illiteracy, radio project. Staff members felt that doing so could create dependency. Once stakeholders identify PPD as a service • Short message service (SMS), especially to plan of the World Bank Group, extricating the Bank Group and meetings and events with stakeholders in distant handing the platform over to local stakeholders becomes places. more difficult (discussed in more detail in the “Planning for Sustainability” section). Inclusion EXAMPLE: In Liberia, the project leaders held a five-city road show to reach business people who could not easily Promoting Inclusiveness travel to Monrovia. Town hall-style discussion events PPD platforms are most successful when they accurately designed to promote a tax campaign and encourage represent all segments of a population, including people to file taxes were advertised on the radio and held ethnic minorities, women, and youth. Indeed, although in central locations. inclusiveness is a key element of all PPD processes and Recommendations: Study participants ranked the platforms, inclusiveness is even more important in FCS groups they found most difficult to reach with their and postconflict environments where divisions within the communications strategy (figure 4). Among the methods society are prevalent. Participants in this study reported they listed as most successful for reaching stakeholders that poor infrastructure, high levels of illiteracy, traditional were the following: power structures, and other factors contribute to the difficulties of achieving a PPD platform that represents • Road shows that brought public and private sector a population well (figure 5). Geographically, project participants in the PPD platform to rural areas for town managers found reaching groups outside of the capital hall-style discussions city difficult (figure 6). FIGURE 4: THE MOST CHALLENGING GROUPS TO REACH THROUGH COMMUNICATIONS OR OUTREACH Subnational government officers Ethnic group representatives Other Religious group representatives Members of legislature Youth groups Civil society organizations Professional organizations or bodies Private sector firms Women's groups Donors Media National government ministers and officers Private sector associations 0 10 20 30 40 50 60 Percent Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. 8 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned FIGURE 5: MOST DIFFICULT ASPECTS OF BUILDING INCLUSIVENESS INTO PPD PROJECTS Agenda dominated by a small group of elites Ensuring all participants were given a voice Targeting multiple levels of stakeholders Convincing the public sector to value PPD Recruiting leaders from excluded groups Other Including participants outside the capital Convincing traditional rivals to cooperate Convincing the private sector to value PPD Engaging individuals of different rank or status Gathering information about diversity 0 10 20 30 40 50 60 70 Percent Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. FIGURE 6: UNDERREPRESENTED STAKEHOLDER GROUPS 80 70 60 50 Percent 40 30 20 10 0 eas r ity al r cap he t th sec t he nte no cific rtan pit l , e c tor ita st c et l ar Ot l ita Ce Ca o tsid e ra ap spe imp arg an Ru Ou Urb dl a Are on Sec to Location of groups Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. Key Findings and Recommendations 9 EXAMPLE: In Myanmar, project leaders emphasize • Closely monitor the establishment of working groups inclusiveness with every stakeholder. The project works and make sure that the project team participates in with women and is bringing international business into assembling invitations. the discussion for the first time. However, minorities are difficult to engage, especially those that live near the • Consult with traditionally excluded stakeholders border. One action the project takes is to not let the independently so that they are aware of the PPD Federation of Chambers of Commerce, the major private process. sector organization, take sole responsibility for distributing • Be patient and persistent. Building inclusivity takes time invitations to participate in working groups. Instead, and consistency of message. the Bank Group and the Federation of Chambers of Commerce work together to make sure working groups are inclusive and representative. Champion Engagement Recommendations: Participants in the study suggested the following techniques for maximizing inclusiveness: Working with Champions Identifying effective champions is challenging in FCS. In • Understand that inclusiveness starts with a strong countries with a small private sector, many donors want to stakeholder analysis that reveals local political, ethnic, work with the same few people. This may leave the PPD religious, and social relationships, and links that analysis platform with a person who is spread too thin to devote to conflict dimensions. the time required to make the dialogue work. • Have a coordinator who speaks local languages; this Survey respondents indicated that government was their allows for the building of trust and greater inclusion. main source of champions (figure 7). This may be because • Build the capacity of private sector associations to the mandate for the project most often comes from develop subnational chapters and to collect input from national government officers (figure 8). In FCS, the private those chapters for use at the national level. sector is often operating under a transitional status and just beginning to form representative institutions. This FIGURE 7: STAKEHOLDER GROUPS THAT PROVIDED CHAMPIONS MOST IMPORTANT TO PPD SUCCESS National government ministers and officers Private sector associations Private sector businesses Women's groups Other Civil society organizations Subnational government ministers and officers Youth groups Ethnic group representatives Religeous group representatives 0 20 40 60 80 100 Percent Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. 10 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned often makes it difficult to find private sector champions • Look for intellectuals and professors, who are often who have capacity to manage a PPD, are willing to take seen as neutral parties in public-private sector debates. the risk of trying something new, and have the trust of Accountants and lawyers have also worked well. many types of stakeholders. It is also important to bear in mind that elite groups may hijack champions. • Work with your client to recruit champions for stakeholder groups. • Understand that professional groups that provide Maha Hussein recommends that “project managers services to businesses, such as bankers, lawyers, and make sure that trusted local staff [members] advise on accountants, cannot only be part of the dialogue but identifying champions. There are potential champions may also help in dealing with some of the challenges of that might charm foreigners, but that locals know the PPD process, given their leverage on businesses. would hurt the project.” She points out that in FCS, “it’s hard to find ideal candidates, so a project manager has Managing Work with Champions to accept the best people who are available.” A well-respected champion may bring together divided stakeholders and political groups to work toward a —Maha Hussein, Operations Officer for the common goal and serve as the glue that holds the project Middle East and North Africa together. However, in FCS a very strong and effective champion poses a risk. If the champion is forced to leave, the future of the project may be threatened. Survey Recommendations: Study participants had the following respondents identified several important challenges advice regarding identifying champions: regarding their work with champions in FCS, including the following: • Do not rely on only one or two senior champions; instead, make the champion base broader. • Dealing with frequent change in the management of government institutions and private sector organizations • Interview current World Bank staff members, the United Nations, and other key development partners in the • Combating the lack of trust among stakeholders in FCS country. FIGURE 8: GROUP ISSUING THE MANDATE FOR PPD IN FCS Ministry of Commerce or Industry President's or Prime Minister's Office Other Chamber of commerce or other businesses Investment promotion agencies International organizations Ministry of Finance or Trade New and independent institutions 0 5 10 15 20 25 30 35 40 45 Percent Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. Key Findings and Recommendations 11 • Obtaining a time commitment from private sector PPD, it also had to work with the Chamber of Commerce’s champions and the expectation of compensation constituencies. The project worked with subchambers, such as the women’s chamber and sectoral organizations, • Convincing champions to strive for inclusiveness to ensure that they were demanding services and holding the chamber accountable. Their effort was an example of • Understanding the political implications of working the deep institution building that, although not part of with specific champions traditional PPD, was necessary to build a foundation for • The capacity of champions who are available the PPD platform. • Facing the risk of elite groups hijacking the champions. Recommendations: Study participants had the following recommendations regarding working with champions: EXAMPLE: Nepal had a strong champion that was responsible for nearly all of the project’s early • Consider bringing groups together to address small, accomplishments. Stakeholders respected him for his noncontroversial issues before recruiting a champion. independence and honesty. However, when he left • Be careful of relying on large associations for the project, the project fell into crisis. The lesson was champions. You may spend a lot of time recruiting to ensure that when a project relies heavily on one them, but they may never come on board. individual, the staff has a backup plan in place for when that individual leaves. • Ensure that champions have access to decision makers on both the public and private sector sides of the EXAMPLE: In South Sudan, the World Bank Group dialogue. team’s strategy was built on investing heavily in individual champions, but it also went beyond this to work with • Select a number of champions. Having several will organizations. Because the project created the Chamber help ensure inclusiveness and avoid one interest group of Commerce as the main private sector participant in dictating the agenda. 12 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned Stakeholder Engagement Nepal: Recruiting a senior vice minister who was respected and who delivered on promises. Establishing Credibility with Clients and Timor-Leste: Recruiting the vice minister for commerce, Stakeholders who was crucial for convincing the private sector A great challenge to conducting PPD in FCS is the high associations to organize under a single Chamber of levels of mistrust that come along with weak institutions Commerce so as to provide a single voice in dialogue with and sectarian strife. Add to this the large numbers of the government. donors, development organizations, and private charities West Bank: Appointing a project manager with origins in that come through FCS states and the promises they the region and a good command of the language, as well bring with them. Establishing credibility with clients and as bringing in consultants with regional records of success stakeholders requires an understanding of the values to build credibility with public sector stakeholders. and culture in which a PPD project is embedded. In some countries, the World Bank Group’s reputation helps Yemen: Capitalizing on the World Bank’s reputation. establish the credibility of the project. In others, adopting a well-respected elder or statesman as a champion Building Stakeholder Capacity creates enough credibility. Still others rely on the personal relationships and the personal record of achievement of Building stakeholder capacity to communicate and solve the World Bank Group staff. problems is a core part of PPD in FCS. When asked about the readiness of the public, private, and civil society EXAMPLE: Some examples of how projects established sectors to participate in PPD at the initiation of the project, credibility are as follows: survey respondents indicated that most sector members had just enough or less than sufficient capacity to Afghanistan: Hiring a project manager with a strong participate (figure 9). record of accomplishment, making and quickly fulfilling promises, participating in formal and informal events The types of capacity that stakeholders required varied. despite security issues. The skills that stakeholders, in general, most required were FIGURE 9: STAKEHOLDER CAPACITY TO SUCCESSFULLY ACHIEVE OBJECTIVES AT PROJECT INITIATION Private sector Government Civil society 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Capacity (rated on a scale of 1 to 5) Note: A score of 1 means “absolutely no capacity.” A score of 5 means “more than enough capacity.” Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. Key Findings and Recommendations 13 centered on communication skills and data collection organizations, development agencies, and other (figure 10). institutions demanding the government’s attention. Although many government capacity issues center on Recommendations: Some suggestions for building the limited abilities of government employees, in the stakeholder capacity are as follows: West Bank World Bank Group found that government employees were highly capable and fairly well educated. • An early assessment of stakeholder capacity is critical The issue was simply a lack of sufficient human resources. in FCS because it helps the project staff set attainable Also, West Bank government employees were paid objectives. poorly and irregularly. Lack of sufficient capacity in FCS • The staff must ensure the project has a sufficient governments creates a need for more handholding and budget and enough time for technical assistance done support. in partnership with stakeholders to address issues raised EXAMPLE: In South Sudan, the project team spent a during working group meetings. lot of time and resources assisting the government with • Stakeholder capacity needs are very context specific. activities such as writing invitations and initiating basic The staff should keep an open mind and assess needs activities. thoroughly. Recommendations: Things to consider when working with the international donor community are as follows: Working with Other Donors and Implementing Partners • The PPD platform may empower the government to A public sector capacity challenge unique to FCS coordinate donor activities. Many times, governments is the large presence of international donors, relief with limited personnel and resources find that FIGURE 10: TYPES OF CAPACITY DEVELOPMENT MOST NEEDED BY STAKEHOLDERS AT PROJECT INITIATION 80 70 60 50 Percent 40 30 20 10 0 ue with lls ski d old h act ng r a ng ing s me n issu f s r ate ing o he on kill n keh wit na cisio es lls ers ors rs nt es ski tat ch a o cto mo niz Ot cto ati ns nci sec te am on ing sta ging cy ma n de t se e a clim nd rga nic tio sen ear ion ge aca ir c cat tor ess ersta en nat mu tra stit do a ina pre Res i voc oth eng the muni g a city nis nm ordi com an ord d Ad pa mi n er te in ing nd U iou to co o m riva Ad gic Ca go to c lls Co nn sin Ski ate sp Pla kin ver bu ility ility Str ma Ab Ab var Capacity needed Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. 14 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned many donors in their country implement similar and chamber and the platform and were incentivized to return overlapping private sector development projects. to work in the event of disruption. • Leveraging donors who specialize in building the EXAMPLE: When the Bank Group initiated the design capacity of business associations is important. phase of a PPD project in Nepal, the challenge was immediately apparent. As Irina Niederberger, a member • Often, a large international donor and development of the design team, explained, the concern was “How agency presence means that individuals capable of to design (PPD) differently in the context of constantly serving as PPD champions or staff members of PPD changing government and stakeholder lists. Nepal was on secretariats are in short supply. the verge of crisis every day. The labor unions were always on strike. There were 20 to 30 very active political parties declaring ultimatums to each other, leaving and joining Flexibility and Risk Management the government, and reconfiguring themselves. How do you work in those shifting sands every day?” In Nepal, Mitigating Risk the key to overcoming the “shifting sands” was talking to PPD platforms in FCS face unique sets of challenges. every stakeholder. The project staff particularly focused on In highly fragile environments, the possibility of a stakeholders who were members of multiple associations. violent disturbance is ever present. More commonly, Two business associations were the major players, but they wide variation in the beliefs of political parties and would not work with each other. Finding people who had frequent personnel turnover in government and business membership in both to support the project helped bring associations slow down achievement of the project’s the two together. For example, many bankers belonged goals. Consequently, successful PPD projects mitigate to both associations and were influential enough to move common risks and remain flexible in their management the private sector aspect of the project forward. plans to address circumstances as they arise. Common Recommendations: When asked how projects addressed solutions to these problems include ensuring that the these challenges and others the project faced, all PPD secretariat is housed in the most stable institution respondents emphasized the importance of understanding available, maintaining regular contact with a large number stakeholders, clients, and counterparts. Tools for of stakeholders so that the project can replace key points addressing challenges emphasized the importance of contact as the need arises, and being willing to redefine of regular, frequent, face-to-face contact. They also objectives without changing the overall purpose of the recommended that project leaders do the following: project. • Conduct a political economy analysis and conflict Examples of how PPD projects have managed frequently assessment when deciding on PPD platform structure. changing contexts include the following: Look for institutions that are stable and likely to survive EXAMPLE: In forming the Chad Business Forum, the political and economic disturbances when deciding project staff worked with stakeholders to house the where to house the PPD secretariat. secretariat with the Chad Chamber of Commerce • Maintain relationships with all stakeholders, even (CCIAMA) rather than within a government ministry. the political opposition. The message should always Though the private sector was institutionally weaker than be that you are a representative of a development the government, the project staff determined that in the agency and you are there to improve the investment highly likely event of a conflict-related disruption to the climate, regardless of who is in power. Keep a strong project, the CCIAMA would be more likely to reform and relationship with whoever is in charge, but also make continue PPD activities as opposed to the government. sure to keep out-of-power parties informed and feeling Additionally, regular changes in government ministers respected. and cabinet members made the likelihood of continuing, enthusiastic support from the government questionable. • Build relationships with people in key positions— To build ownership within the CCIAMA, the World Bank including lower levels—who are responsible for provided budgetary support and let the CCIAMA hire implementation of decisions. You can stop by their the staff members for the secretariat. Empowering the offices, and also bring new people by and introduce CCIAMA ensured that employees were loyal to both the Key Findings and Recommendations 15 them. This will help build clients’ confidence in their make transitioning the project to local ownership difficult, relationship with the World Bank Group and help especially when a client has become used to receiving the project staff members develop multiple relationships. platform’s management as a service paid for exclusively by international donors. • Take security risk into account and plan for proper security arrangements if needed. Survey respondents indicated that the top two most common means of handing a platform over to local ownership are a government agency or private sector Ownership and Sustainability organization taking responsibility for the management and sustainability of the platform. The third most Planning for Sustainability common method was for an autonomous joint public- private sector semigovernmental institution to house the Interviewees discussing the management of the initial platform (figure 11). stages of PPD in FCS discussed the temptation to become heavily involved in the management of the PPD platform A practical challenge in planning for transition to local in the beginning. Directly managing the secretariat that ownership is timing the project’s exit from the platform. implements the platform, or hiring a coordinator as a There is also a risk that political change at a crucial formal project staff member, creates the possibility of moment could derail the transition. speeding up achievement early on and bringing the PPD platform instant credibility. The temptation is especially The platform’s transition to local ownership should great for PPD projects in high profile countries where coincide with the end of project funding, the completion there is pressure to show quick results. However, giving in of technical and managerial capacity building, and the to the temptation has a big downside. In particular, it can new host of the platform securing sufficient resources. FIGURE 11: PLANS FOR TRANSITION TO LOCAL OWNERSHIP A private sector association, business management organization or other type of private sector representative organization takes over ownership of the dialogue mandate and structure A government ministry, agency, or subnational institution takes over ownership of the dialogue mandate and structure Other The platform becomes funded wholly or in part with client cash and/or in-kind constributions The platform becomes an independant non-governmental organization The platform becomes an autonomous semi-governmental organization IFC plans to exit and terminate the PPD after a specific set of goals is accomplished The platform becomes a private sector consulting organization 0 10 20 30 40 50 60 Percent Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. 16 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned EXAMPLE: Laura Watson, Nepal program manager, took to manage it, and (c) projects make a cleaner break that over as program manager for the Nepal Business Forum leads to sustained reforms. and is currently managing the final phase of the project. Her challenge is to prepare the forum for transition Implementing a Timely and Successful Exit to local ownership, which means reducing technical assistance so that project stakeholders become used to providing technical services themselves. Her second Promoting sustainability and ownership takes door-to- challenge is managing World Bank funding of the project. door sales. You have to communicate regularly with World Bank funding covers the project until June 2014, the business community. Running effective meetings is with a possible follow-on grant in the beginning of 2015. the best public relations you can do. Word of mouth is This leaves the project with a six-month gap for which stronger than all media promotions. the project will have to find funding. This timing also provides an opportunity to transition the project to local —Charles Schneider, Acting Resident Representative, ownership. Since Laura Watson has begun implementing Myanmar the strategy for transitioning to local ownership, the project has housed the project in government offices and handed control of the forum over to government staff EXAMPLE: From 2007–12, the government of Liberia members. The project also has secured a contribution aggressively pursued reforms to improve the business from DANIDA, the Danish development agency, to support environment with the assistance of the World Bank and the project going forward. the PPD portion of the Liberia Investment Climate project. Recommendations: Early project results may come at During these years, the project staff worked with Liberian the expense of longer-term sustainability. Planning for stakeholders to found the Liberia Better Business Forum, sustainability at the beginning of the project ensures that built capacity for PPD, and guided stakeholders through (a) consistent messaging regarding handover takes place several crucial sector-specific reforms. The project also throughout the project’s life, (b) stakeholders expect the secured government approval and enthusiastic private transition and are more prepared with the funds and skills sector support for a transition to local ownership. The forum would be lodged within the Ministry of State, and the government included funding for the forum in its Key Findings and Recommendations 17 next fiscal year. In June 2013, the forum was officially • Avoid providing resources throughout the project registered as an independent entity, and plans were in that will be difficult to sustain after transition to local place for full transition to local ownership by July 2014. ownership. However, the transition faces several challenges common to FCS countries. Liberia’s current government, brought to power in the 2011 elections, is less able to focus on Monitoring and Evaluation reform than previous administrations because it has competing priorities, such as a persistent budget deficit Monitoring and evaluation is a difficult exercise in FCS. that will require tough decisions regarding government Challenges include the difficulty of collecting data and the spending. This makes the Liberian Better Business Forum, challenge of attribution in such a complex environment. at $300,000 a year, less appealing as a locally owned Study participants expressed the belief that the standard asset. In addition to financing issues, the forum will face monitoring and evaluation framework excludes important the responsibility of ensuring that previous reforms stay in results, especially those that represent nonstandard place, that research-based advocacy continues, and that achievements such as increased transparency, trust, and the private sector and government stay engaged at the peacebuilding. Others see the standard indicators as same level as they have in the past. inappropriate for FCS classified countries. Recommendations: Successful transition to local EXAMPLE: The World Bank Group’s standard evaluation ownership happens when the period and terms of the framework measures cost savings as a result of reforms. project are clearly laid out at launch and sustainability However, in a country such as South Sudan, where themes are present in activities through the project’s life. there have been no regulatory processes at all until Study participants had the following suggestions for very recently, implementing processes for the first time implementing a successful transition to local ownership: might increase costs in the short term but simultaneously improve the investment climate. • Start the project with a clear memorandum of understanding that states the period and terms Survey respondents indicated that the most common of the Bank Group’s support for the PPD and the conflict drivers that PPD addresses are corruption and responsibilities of the client in transitioning to local ethnic tension (figure 12). However, more than 50 percent ownership. Throughout the life of the project and its of respondents selected other conflict drivers that they activities, managers must keep the message clear. believe PPD addresses, including the following: mitigating regional instability, creating a more equal distribution of • Find funding as early as possible. National budgets in power, increasing trust among traditionally adversarial FCS are unpredictable and often in deficit. Conduct a factions, and building a sense of pride in the previously thorough consultation with stakeholders and prepare disenfranchised. Those responses demonstrate how a financial plan early in the project. Encourage the dependent PPD projects are on specific contexts and private sector and public sector to acknowledge their political economy. contribution to the organization’s finances. Nearly two-thirds (63 percent) of survey respondents • Create a realistic timeline for the transition. Remember believed that PPD contributed to peacebuilding efforts in that it takes longer to build capacity in FCS countries the country they worked in. The activities that contributed and that they are prone to volatile political and most to peacebuilding were building trust among economic swings. Make sure the FCS context is taken stakeholder groups, creating a culture of dialogue, and into account when committing to a transition to local fostering a culture of transparency (figure 13). ownership. Recommendations: Study participants had the following • Consider the logistics of the project and how they will recommendations on capturing PPD results in FCS: be managed after transition. For example, government may provide office space while private sector • Promote greater understanding of the political organizations may supply staff members to manage the economic context among headquarters and regional platform. managers. Sharing information about the complexities of the environment could lead to improved indicators and more appropriate milestones and objectives. 18 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned Percent Percent 0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 B dif uild fer t Co rru en rust pti t st be on ake twe ho en lde rs Ot he r Cre ate ac of u Eth dia lture nic log ten ue sio n Inc om ee Co qu n alit y tra tribu nsp te are to Ext ncy ern a int l mil erv itar en y tio n FIGURE 12: CONFLICT DRIVERS ADDRESSED BY PPD act None Do ivit me ies of m sti Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. Source: Survey of Task Team Leaders and program staff members in FCS, World Bank Group. con y p r int c mil pe tribu oject erv itar ace ted s en y bu tio n Project activities ildi to ng Civ il r Conflict drivers igh ts i nse cur ity Ot he r Cli ma te cha ng e FIGURE 13: PROJECT ACTIVITIES THAT MOST CONTRIBUTED TO PEACEBUILDING Lin kg Re r ligi pre oups ou vio w s te usl ho nsi y in we on r in volve e con d flic t Cri me rel Addr ate e Foo d t ss is di o c sue on s nse flic cur t ity Key Findings and Recommendations 19 • Negotiate with the monitoring and evaluation team • Set intermediate metrics, such as the degree to which about what constitutes a reform. In environments projects establish new institutions, processes, or systems where establishing or improving a needed process that are the first step to bigger reforms. is what is achievable, define that objective as an important reform to the business environment. 20 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned Key Lessons Because of the challenging contexts in FCS, the design • Engaging stakeholders in FCS requires understanding and implementation of PPD in these countries must take how authority is determined, having an effective means into consideration some unique characteristics, such as the of communication with stakeholders, and establishing following: political and social networks. Projects find local staff members who have a deep understanding of these • In FCS, informal arrangements among political and issues extremely valuable. economic actors often fill the gap left in the absence of strong formal institutions. A variety of stakeholder • In addition to planning for the achievement of and political economy assessments help project leaders objectives, successful PPD projects in FCS develop risk understand informal arrangements and maintain mitigation plans to prepare for the common disruptions current information on them. that characterize work in FCS. • Public media coverage of PPD activities and events • The transition of a PPD platform to sustainable local creates a culture of transparency and accountability. ownership often takes longer than expected because Still, a successful PPD project balances the need for of the limited resources, rapidly changing context, and openness with the need for open discussion and the instability of FCS. often limited capacity of the media in FCS. • The results of PPD are produced by the reforms PPD • Engaging with traditionally excluded groups in FCS is initiates and the process it implements. In FCS, the often difficult. They may be located in remote places, peacebuilding and conflict-mitigating results are difficult and it can be difficult to convince those with power that to capture. However, the stakeholders who benefit from including them is important to achieve economic goals. them highly value the results. Nonetheless, including all stakeholders is crucial to PPD platforms and is achievable over the long term. Creative This report summarizes an initial examination of the ways should be found to include them. challenges and benefits of PPD in FCS. The authors hope that it provides project designers and managers with • PPD initiatives very frequently encounter difficulty some guidance on successful implementation and inspires finding sufficiently qualified and motivated people researchers to look deeper into the topics covered. to serve as champions. PPD projects need strategies to work with champions who are available, while planning for any eventualities that may arise from those champions’ limited time commitments or other difficulties. Key Lessons 21 22 Public-Private Dialogue in Fragile and Conflict-Affected Situations: Experiences and Lessons Learned Investment Climate l World Bank Group In partnership with