UNIVERSAL POSTAL UNION INTERNATIONAL BUREAU

DCDEV Hd 25.7.2007

IPDP FORMULATION GUIDE May 2007

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IPDP FORMULATION GUIDE General contents MODULE 1 – Focus of the Integrated Postal Reform and Development Plan (IPDP) MODULE II – Prototype of the IPDP's contents MODULE III – Standardized material for implementing the IPDP methodology

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Preface The Integrated Postal Reform and Development Plan (IPDP) is a worldwide UPU cooperation project aimed at supporting postal sector reform. It is based on the BWPS guidelines and priorities, and forms part of the projects comprising the regional development plans (RDPs) established by the International Bureau. The IPDP represents the UPU's vision of how to foster postal sector reform. Each IPDP that the International Bureau presents to a government is the fruit of the work of a local team, supported by IPDP experts, and is further proof of the effectiveness of this roadmap to modernizing the country's postal sector and raising the authorities' awareness of the State's obligations and the sector's role in economic and social development. The IPDP methodology rules out a fragmented approach to the sector's problems. In the UPU's experience, most of the failures associated with traditional postal reform stemmed from a partial and fragmented vision of the problems facing the designated operator, or from a tendency to pass legislation that was not based on appropriate technical studies. In this connection, the IPDP methodology considers the postal sector as a whole, in an open, comprehensive and concerted manner. It takes account of all stakeholders and all basic areas, and provides for the short- and long-term needs of a broad spectrum of the sector. The project's pilot phase was completed in 2005, and its validation and consolidation phases in 2006, when IPDPs were presented and implemented in more than 30 countries from all regions. In 2007, the project is in the regionalization phase, and the aim is to speed up its worldwide roll-out. In 2006, as part of the preparation for the system's roll-out, the UPU International Bureau launched a training plan to train IPDP experts worldwide. It is anticipated that, by the end of 2007, more than 100 experts will have been trained in formulating and monitoring IPDPs in the various regions of the world, which will enable them to support integrated reform processes in their own countries and to participate in the formulation of plans in other countries. Notwithstanding the above, in order to ensure the success of the IPDP process on the global stage, the system provides for the rigorous certification of experts. Only experts who have been granted UPU certification are authorized to engage in IPDP processes in other countries. The IPDP system, as will be seen in the various modules of this Guide, contains a fully validated methodology comprising a series of standardized stages and procedures, which must be followed throughout the IPDP's formulation. From 2007, as part of the system's roll-out, the IPDP methodology must be observed to the letter when formulating all UPU-inspired plans, which is why this Guide has been prepared to supplement the training provided in the various regions of the world. This Guide is intended to assist those responsible for formulating IPDPs in making practical use of the methodology, and to serve as reference for authorities and implementers of IPDP reform actions. It seeks to provide the guidance required to ensure that appropriate focus is given to the analyses conducted, so that appropriate decisions are taken. This Guide is supplemented by the "Guide to Postal Reform and Development" (published by the UPU as a practical basic reference document for pursuing integrated postal sector reform processes) and other important related documents. This Guide comprises three modules: I. Module I presents the conceptual core of the approach and methodology required to

produce an IPDP, from the initial stage through to the presentation of the IPDP document to the government. It also presents the UPU's vision of the postal sector and its role in contemporary society.

II. Module II presents all the standardized tools required to properly execute all the IPDP

formulation stages (in electronic format): initial preparation; work in the field for the knowledge-building stage; formulation of the plan contained in the IPDP document; and

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presentation to the country's authorities of the finalized IPDP document. This Guide contains all the material needed to support the technical work required to formulate the IPDP. Module II has been supplemented by examples of two completed IPDPs, which can be used as models for a better understanding of the focus given to all the IPDP's components.

III. Module III presents a prototype of the IPDP's contents. This prototype is a key

instrument, as it enables IPDP experts to clearly understand exactly what is being sought in each area of reform and facilitates their task of preparing the IPDP's contents.

The business and development plans are the result of the IPDP actions. The moderni-zation of services will come about as a result of investments made in implementing those plans. This key component of the reform process, which was previously an area of weakness and a source of constant concern to the UPU, should be strengthened as much as possible.

It should be noted that, in the interest of keeping this guide down to manageable length, the reference documents relating to Module II are provided in electronic format only, as a supplement to the main guide.

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MODULE I

Focus of the Integrated Postal Reform and Development Plan (IPDP)

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IPDP FORMULATION GUIDE Module I Focus of the Integrated Postal Reform and Development Plan (IPDP) Contents of Module I

Page 1 Focus of the IPDP ....................................................................................................7 1.1 IPDP objectives ..............................................................................................................7 1.2 Scope of the IPDP ..........................................................................................................8 2 Postal sector vision encompassed in the IPDP .........................................................9 3 IPDP characteristics...............................................................................................13 4 Key reform components .........................................................................................13 4.1 Defining the universal postal service (first thrust) .........................................................15 4.2 Defining sectoral policy (second thrust) ........................................................................16 4.3 Legal framework (third thrust)......................................................................................16 4.4 Modernizing services and the designated operator (fourth thrust) ..................................16 4.5 Immediate priority actions ..........................................................................................17 5 Stakeholders involved in the IPDP formulation process..........................................17 6 Stages of the IPDP formulation methodology..........................................................18 6.1 Preparation stage ........................................................................................................18 6.2 Knowledge-building stage.............................................................................................20 6.3 IPDP formulation stage ...............................................................................................21 6.4 Presentation stage ......................................................................................................24

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1 Focus of the IPDP 1.1 IPDP objectives The IPDP is an instrument for cooperation, which seeks to meet the current needs for postal sector reform, particularly in developing countries. It has proved to be a powerful tool in producing specific postal reform actions. In developing countries, there is a growing need to reform and speed up the development of postal structures in order to respond effectively to the needs of society. However, countries have not previously had the tools and methods to enable the competent authorities to take decisions and progress towards the desired reform. For this reason, the IPDP has been created as a powerful tool for governments to draw up concrete plans containing the actions that need to be executed to ensure that their countries' postal services effectively contribute to national growth, in perfect line with national development plans and the Millennium Development Goals adopted by United Nations member countries. Through the provision of basic universal postal services, the postal sector is able to contribute to poverty reduction and social exclusion and to help improve gender equality, health and education in developing countries. The experiences of UPU member countries over the last 30 years should serve as a lesson to avoid the confusion and misdirection of the past in undertaking postal reform processes. All these experiences are taken into account in the various stages of the IPDP methodology and in determining the focus of the actions required to resolve the problems facing the sector. The starting point is to ensure that the State's obligations are met while the sector's development is pursued. The IPDP approach disregards isolated reform initiatives taken by individual officials or bodies, but rather considers that postal reform should necessarily be oriented towards the State and society, with the government's commitment and the legislature's endorsement. To this end, great sensitivity is required of all stakeholders, and all the information and data obtained must be supported by technical studies in the areas in which decisions need to be taken. Owing to its comprehensive nature, the IPDP is also a tool that involves, in the first instance, the regulator and the designated operator and, at the appropriate time, all postal stakeholders. As we know, in any postal reform and development process there are many factors to be considered, various steps and stages to be accomplished, and numerous players and stakeholders to be involved, all of which complicates its organization and management. All the components must be coherently and harmoniously assembled, structured and managed, so that they rationally and smoothly fit together to produce the desired results. The IPDP seeks to meet the conditions of cohesion and unity of focus, and to provide objectives in line with the above characteristics of the reform process, in the context of a changing postal environment marked by globalization, liberalization, market requirements and competition, and rapid technological progress. A better understanding of the postal sector's role in contemporary society is required – a role of which the State should be apprised, so that it can develop a broader understanding of the contribution that the sector is able to make to the country's growth and development. The following are key components of the IPDP methodology and reform focus:

– first, the government's commitment to reform, as an expression of the country's political will to back the IPDP and undertake the reform actions recommended therein;

– second, the State's commitment to providing basic postal services as a fundamental obligation enshrined in national and international law; and

– third, it should be emphasized that the IPDP is a "country plan" which transcends individual interests and whose ultimate purpose is to benefit society.

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Prerequisites for IPDP focus When an IPDP is formulated in a country, the political will and commitment of the government to support and foster postal reform are a prerequisite to achieving the desired results. Once this essential condition has been met, the good intentions of authorities can be transferred to the country's decision-making institutions with a view to developing a sector which represents a factor of cohesion and development in the daily life of society. Important observation In the sector reform process implemented in accordance with the IPDP guidelines, the main aim is to ensure that the state obligation to provide the universal postal service is met, and that the conditions required to modernize the postal sector are created. Fulfilment of these criteria will benefit both citizens and businesses, and will result in the growth and development of the postal industry. For developing countries, the IPDP represents a vast and ambitious objective in terms of resources and time. It is thus important to assemble all the elements that will form the basis on which the goals that have been set can be achieved. Awareness of the country's postal needs and reality constitutes the basis for defining the scope of the obligations that the State is able to meet. Consequently, the IPDP should be the main focus of the "country plan". 1.2 Scope of the IPDP While the Integrated Postal Reform and Development Plan addresses aspects which are highly complex when considered individually – such as defining the universal postal services (UPS), a country's postal legislation, the market, technological development plans for services, etc. – the IPDP itself is more straightforward. The analysis document indicates what needs to be done to build the reform process. The IPDP marks the way, mapping out stages and sequences of actions, but it does not attempt to resolve the problems inherent to each area of reform (such problems pertain to the implementation phase, which is the responsibility of the country concerned once the IPDP has been formulated). The IPDP indicates what should be done, and with what focus, but it does not resolve specialized aspects of the studies, plans, projects and actions that need to be executed to bring about the planned changes. To orientate the reform objectives that countries have to set, the IPDP also considers the current situation at world level, as well as domestic postal issues. The IPDP establishes what needs to be defined with respect to UPS, sectoral policy, the legal framework and the modernization of services through development plans. Consequently, when these actions are implemented as part of the process indicated by the IPDP, the various problems can be resolved at the appropriate time. Market knowledge is needed in order to take important decisions in determining the universal postal service. The IPDP describes what should be done and what the market study should find out, but it cannot quantify demand, as that would depend on the results of the market study that should be carried out as a recommendation of the IPDP. Similarly, the IPDP describes what is sought through the objectives and projects under the designated operator's universal postal service development plan. It cannot, however, discuss or go into the detail of technological and commercial solutions for services at the time when the reform is formulated, as this will depend on the technical, economic and commercial design of the projects contained in these plans when they are prepared and drawn up for implementation. The same applies to the legal and regulatory issues. Reform processes, involving as they do various players – government, regulator and designated operator – each with different roles and functions, has generally resulted in the players going their separate ways. In these frequently occurring situations, in view of the latter's active participation in the recommendation formulation process, the IPDP's role is to integrate and channel the actions that those players have decided to include. Likewise, it brings together and coordinates the involvement of external bodies, starting with international organizations. This reduces the risk of losing track of objectives, implementing actions in isolation and squandering resources.

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The IPDP is a strategic plan, which must follow the BWPS guidelines for each one of the points agreed by countries to be strategic. As a State obligation, the universal postal service lies at the very heart of the legal, operational and commercial organization of the country's postal market and activities. It is the key decision point, which defines the fact that services should be of high quality, in an efficient postal network that meets customer needs in the market. If these guidelines are followed, postal reform actions will be structured in a way which recognizes the need to involve stakeholders in order for reform to be possible and successful. This sequence, and the incorporation of BWPS guidelines, is regarded as part of the IPDP's conceptual focus. 2 Postal sector vision encompassed in the IPDP This chapter aims to provide IPDP experts with a vision on which the strategy can be based, and with the arguments needed to show the true role of the Post, particularly to government authorities, and its importance as an instrument that provides for far more than the "simple postcard". This information is intended to provide experts with a clearer postal sector vision before the specific IPDP formulation topics are addressed. Broadly speaking, this chapter contains a summary of the document entitled "Promoting investment in the postal sector as a means of achieving the Millennium Development Goals: Guide for member countries", which is one of the reference documents relating to Module III. The IPDP should provide for the whole postal sector, including its capacity to contribute effectively to the economic and social development of contemporary society. The more stakeholders are aware of and understand the role of postal services in the daily life of modern society, the easier it will be to secure support for postal sector reform. The first stakeholder which should be aware of and understand the sector's role in the country's economic development is the government. It is the government institutions and entities associated with the sector that exercise influence over decisions concerning the economy, finance and national planning. Unfortunately, as things stand in developing countries, those government departments have little knowledge of the postal sector, which is not provided for in government policy and has failed to develop as a result. It is therefore up to the IPDP (and the parties responsible for implementing the actions recommended therein) to emphasize how the postal sector is able to contribute to national life. The outcome of the reform largely depends on the position taken up by the IPDP stakeholders. It is all too common that scant regard is given to how the postal sector actually supports the country's economic and social growth. Regrettably, at the time when they are most needed, few elements are available to argue the sector's case. The UPU links the sector directly to the United Nations Millennium Development Goals (MDGs), among which it includes postal services as a part of life in society. This can be seen in the creative "postal sunflower" depicted below, which clearly shows the potential contribution that postal services can make to the sector in all areas of the country's daily life.

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The postal sector – Post – has been positioned at the core of the sunflower, and surrounded by 16 main petals. These correspond to the various sectors and economic and social activities supported by the postal industry. The same layer of the sunflower also contains eight slightly smaller petals, which represent the products and service groups provided by the Post (there to meet demand). The sector's core, together with the 16 sectors of national activity that are supported by postal products and services, is surrounded by the eight UN MDGs, which are the focus of the 16 sectors. Banking Brazil created a postal bank in 2002, which has become a decisive development factor for large segments of the population. This initiative was mainly intended to encourage small savers, as well as the decentralization of income, strengthening of local markets and development of a new business line for the designated operator. Ten thousand accounts were opened in 2002. Now, in 2007, that number has increased to over four million, which shows the key role that the postal sector can play in the country's economy, as a realistic and concrete alternative for large segments of the population. A study conducted by the World Bank in 2004 revealed that more than a third of the world's post offices provide a postal bank service – and that number continues to rise. The major advantage of post offices which provide banking services is their geographical coverage. Not only are there twice as many post offices as banks, but they offer broad geographical coverage, reaching the heart of rural communities in many countries. Development agencies are keen to extend financial services to rural areas, and post offices should realize their potential by providing such services. Moreover, the postal banks tend to attract low-income segments of the population, which are generally of little interest to the main banks. However, when added together, the savings of a large number of small savers represent large amounts, which is of great relevance to the country's fiscal situation. Posts should pursue this route to development. In China and India, encouraging thousands, or even millions, of small savers to invest in postal savings accounts instead of keeping their money at home will result in significant deposits. Such is also the case in Japan and other countries.

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Payments From payment of bills to social security and pensions, Posts can facilitate payments on behalf of many organizations. Correo de Argentina teamed up with Pago Fácil to accept payment of most household bills. A barcode on the bill is read at the post office, the payment is accepted and the customer receives a receipt. The Post receives a transaction fee for each bill paid, and the customer has local access to this service through the post office. Bill payment systems are an important factor in ensuring that utilities are sustainable, and post offices must demonstrate the importance of their role in accepting payments. In another South American country, the UNDP described the difficulties encountered in paying poor rural mothers a government allowance to encourage them to send their children to school. Mothers were eligible for this allowance provided that their children attended school. It was difficult, however, to physically reach the mothers in order to pay them, as the Post did not provide financial services and there is no banking network in rural areas. This was a clear opportunity for the Post to meet a development need, but the government's approval was required. Posts need to identify such opportunities in their own countries and urge the government to authorize them to provide such services. In the United Kingdom, the government undertook a national study, based on costs and turnover, to evaluate the benefit of rural post offices. The Post wanted to close rural offices because they were loss-making. The study found that, while they were loss-making, rural post offices were offering many hidden benefits to the community, such as saving the cost of senior citizens having to travel to another post office rather than their local post office. It is very difficult to assign a monetary value to the social and community benefits of rural post offices, but Posts should at least consider what the benefits actually are. Remittances Domestic and international remittance services are of great value to many migrant workers who need to send money home to their families. Expensive international companies, which take 20% or more of the transfer in commission fees, are often the only choice available. Moreover, access to money transfer services is limited in rural areas, resulting in people having to travel considerable distances to transfer money or relying on a third party to transfer the money on their behalf, often at additional cost. Posts offer an alternative by providing low-cost domestic and international remittance services. These services, however, are often slow and unreliable, or simply do not exist. There is therefore a need to introduce a faster, electronic service. In Laos, the introduction of a fax money order service has led to a massive growth in money order volumes, as the money transfer times are much shorter. This proves that there is a demand for such services, but Posts must provide an appropriate quality of service. The UPU also has an important role to play – and is doing so – in encouraging countries to take up standard products that can be sold as a global brand. Post offices must aspire to provide a global brand with an impact similar to that of other products which have already achieved great market penetration. E-government Development organizations recognize the importance of providing the general public with more accessible government services. They invest considerable funds in projects aimed at increasing government transparency and access to services, particularly in rural areas. Posts are well placed to benefit from such projects, as their networks are the broadest in their countries. They must, however, show that they are capable of offering such services. Additional benefits are available to providers of E-government services. In addition to revenues for services, Posts must be equipped with computers and Internet access, enabling them to provide other network services and to improve the quality and speed of banking, remittance, payment and express services.

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Information Many development initiatives fail to realize their full potential, as they are unable to reach their intended recipients. Postal networks can be used to disseminate information throughout a country, and individual postal outlets can provide citizens with important information on health, education, social benefits and other government initiatives. The Brazilian Post provides expectant women with information on the importance of breastfeeding for the health of their babies. The Kenyan Post has delivered information on AIDS to help educate its employees and the public. Posts must become aware of the issues in each country and work with the appropriate development organizations to ensure information reaches its intended audience. The government, in particular, should be seen as an important source of information. Posts should also be seen as collectors of information on behalf of government and other agencies. Addressing The postal sector can play an important role in developing addressing systems. Many countries do not yet have an official addressing system, which creates problems with taxation, education, health and other social issues. Posts can utilize their knowledge, initially to develop addressing and postcode systems and subsequently to develop databases of people. This is becoming an important social tool, and a key product to sell to the direct mail community. In the case of Costa Rica, a digital satellite system has been installed, which should enable the country's addressing problems to be resolved and provide the designated operator with a major source of strategic business. This project is also being used by other Latin American countries as a model for developing a reliable and productive system. Mail and express Mail services have failed to develop in many countries, which is generally associated with the (lack of) development of other utilities. The Post, however, is an important tool in the sustainable development of water and electricity services. In Laos, 50% of the population has no access to drinking water. Providing the whole population with access will require significant investment in water and sewage systems, but an appropriate billing and bill payment system must be introduced if such services are to prove sustainable. The Post can provide both services (billing and bill payment). In the letter-post context, the distribution of bills continues to represent an important source of revenue for Posts. Some will argue that the advent of the Internet will lead to a surge in the use of technology, but this is unlikely in the poorest sectors of society. People who scarcely have access to water are unlikely to be able to pay their water bills via the Internet, and will continue to need paper invoices for a long time to come. Express services are particularly important for the development of business and trade. Customers have increasingly high expectations in terms of speed, security, reliability and tracking of information. Consequently, Posts must develop their express services and adopt track-and-trace technology in order to compete with global and domestic operators. Logistics Logistics services are a natural progression for Posts and many larger Posts are moving into logistics. It is common to see the three services – postal, financial and logistics – included in the postal service offering. The three systems are complementary and are used by many mail order companies, which make the customer an offer via a postal item, receive payment for the product and facilitate its delivery. In the age of the Internet, this service will become increasingly important and Posts will have the opportunity to establish themselves as the preferred partners of mail order companies by offering an end-to-end solution (postal, financial and logistics). Developing countries have more basic needs in terms of logistics systems. Since many Posts have their own transport systems to convey mail throughout the country, there is scope for them to use spare capacity to convey other goods on behalf of third parties. In a project to develop a business plan for Malawi Post, this was one of the new products developed to ensure that the Post's vehicles were utilized and revenues maximized.

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In Brazil, the launch of "Exporta Fácil" has simplified the process of exporting small amounts of products. Small handicraft producers are now able to export their products directly from the post office, which has opened up a global market. This initiative has been of benefit to rural handicraft producers, who were previously unable to negotiate the 29 procedures required to export an item. The economy as a whole has also benefited, as the increased revenue brought into the region is spent within the region. 3 IPDP characteristics The IPDP is an instrument designed to provide a global solution. An important component thereof is the Master Plan, which should guide and channel the reform and development of the country's postal sector. The Master Plan contains all the necessary, possible and desired aspects, components, actions and projects to modernize a country's postal services. The IPDP has the following characteristics: Specific: the plan should be tailor-made, in line with the national reality and the situation on the ground. Moreover, it should identify all the issues affecting the various stakeholders. It should be both case specific and problem specific. Comprehensive: the plan should encompass all areas of reform, including legal, regulatory, operational, technological, economic and commercial aspects. The essential characteristic of the IPDP is its "comprehensiveness". It should embrace situations and aspects that are particular to the country's domestic postal sector, as well as all external aspects that impact upon postal services and activities. Scheduled: timeframes and deadlines are a very important aspect of the IPDP, as they guide the IPDP process and actions. This aspect encompasses the short-, medium- and long-term actions and activities decided upon for implementation. The IPDP should also contain a structure for the sequential and progressive execution of the process, including the ordering of priorities, which must be rigorously defined. It is also a means of ensuring that the elements are at hand when required. Concerted: the plan requires the participation of all stakeholders, all of whom will make their contribution "at the appropriate time", in line with the needs of the reform process. The IPDP is not the designated operator's or the regulator's plan, but rather a "country plan" for the postal sector. Once the government, in conjunction with the local team and the IPDP experts, has formulated the plan under which the reform process is to be executed, the stakeholders should begin to participate in the process, each at the appropriate time. First, the government authorities and institutions will take a decision on the conditions that should govern the country's universal service and the domestic policy required to ensure compliance with those conditions and postal sector development. Second, the legislature and society will discuss the legal framework that will create the most favourable conditions for restructuring the postal market and sector. Operators, customers, staff and society, in conjunction with the legislature and the government, will participate in the decision-taking on the most appropriate legal framework for the country. Flexible: the IPDP should be broad and flexible enough to adapt to the particularities of each case, even in situations where reform actions have already been carried out in certain areas. The Plan can thus be adapted, in line with needs, while maintaining its conceptual design and offering a global and integrated solution. 4 Key reform components Execution of the IPDP postal sector reform process should focus on four key thrusts, which are essential to achieving results in a logical and coherent process: defining the universal postal service; issuing sectoral policy; establishing an appropriate legal framework for the sector's development; and modernizing services and the designated operator.

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Thrusts of IPDP postal reform These four elements, on which the decisions to be adopted by the authorities and society and the actions and activities pertaining to the reform process should be based, constitute the main components (thrusts) of the sector's reform. The IPDP seeks to ensure that the activities are carried in a structured and orderly manner, with a view to making steady and sequential progress. The principle on which the restructuring of the sector should be based is the State's obligation to guarantee the provision of basic postal services under acceptable conditions, and the government's commitment to ensuring the long-term viability of those services. Once the universal postal service that the State must and is able to guarantee has been defined, the government is in a position to establish the national postal sector policy and to propose an appropriate legal framework to the legislature, under which the postal service should be able to make an active contribution to the country's development. An appropriate legal framework, together with investment and the introduction of technology, should enable services and operations to be modernized. The IPDP also provides for analysis of the specific case at hand in order to decide on whether or not to include immediate priority actions before all the decisions have been taken and the various procedures approved. These actions are generally associated with the implementation of operational and regulatory activities of an urgent and important nature, which require immediate attention and cannot be put on hold while the actions relating to each area of the reform are implemented. Consequently, a fifth "immediate priority action" thrust should be included in the reform plan.

UNIVERSAL POSTAL SERVICE

SECTORAL POLICY

LEGAL FRAMEWORK

MODERNIZATION OF SERVICES AND OPERATOR

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Thrusts of IPDP postal reform – with additional thrust Areas of reform 4.1 Defining the universal postal service (first thrust) The governments of UPU member countries made a commitment to universal service provision by ratifying the Constitution and the Universal Postal Convention. Moreover, they included the universal service among the key world postal strategy objectives, as an effective means of strengthening the "single territory" concept. Defining the State obligation is a technical task which requires the right balance to be struck (i.e. without any gaps or excesses) in determining the conditions governing the provision of the basic services enshrined in the Convention, which the country must have the operational, technical and economic capacity to sustain. In this connection, various activities and technical studies need to be carried out in order to ascertain the following:

– the domestic postal market, its quantitative and qualitative characteristics, and long-term projections and trends (5 and 10 years);

– the conditions governing the provision of basic services;

– basic service costs. These studies should make it possible to develop a proposal for a viable and sustainable universal service, thereby enabling the government to make a decision. Only once these support elements are in place will it be possible to take a correct decision in respect of the State's postal sector obligations. Unfortunately, it is often necessary to overcome the government's lack of postal knowledge, particularly with respect to the universal postal service. A whole range of awareness-raising activities should therefore be conducted in order to facilitate the taking of decisions that can be supported and substantiated.

UNIVERSAL POSTAL SERVICE

SECTORAL POLICY

LEGAL FRAMEWORK

MODERNIZATION OF SERVICES AND OPERATOR

IMMEDIATE PRIORITY ACTIONS

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4.2 Defining sectoral policy (second thrust) Once the nature and scope of the universal postal service that the country must and is able to provide has been determined, an institutional platform can be established to ensure that those responsibilities are met. The national postal sector policy is the inter-institutional position that the government must adopt to include the postal sector as part of the infrastructure that contributes to the country's economic and social development. An indication should be given at this stage of how the universal postal service will be preserved and sustained, how provision will be made for the market, operation of services, private stakeholders and competition, and how the modernization of the sector's services will be financed (relevant to both the public and private sectors). A fundamental objective of the activities in this area is to ensure that the postal sector is included in the country's national development plans. If this objective is not met, it will be very difficult for the country to secure external resources to finance the sector's reform. Defining all the aspects pertaining to this area of the reform requires information to be obtained and analyses and studies carried out. 4.3 Legal framework (third thrust) The actions and activities comprising the first and second thrusts are geared towards establishing an appropriate legal framework for modernizing and developing the country's postal sector. This area of the reform calls for a large number of actions and activities relating to the country's legal system. It should be noted that, unlike traditional postal reform, which is always launched with a view to amending the existing legal framework and without conducting prior technical studies to support the proposals, under the IPDP approach, it is necessary to carry out all the work and studies (first and second thrusts) which will enable legislation that meets the country's postal needs to be formulated, and which will bring about the restructuring and development of the postal sector while guaranteeing the long-term future of the universal postal service. Legislation without a sound basis may adversely affect the following parties: citizens, who can find themselves deprived of the right to effective communication; the economy of the country, which can be saddled with an unjustified burden due to the failure to carry out economic and cost studies; private operators, which can see their rights curtailed due to a lack of proper legislation or overly protectionist legislation without a sound technical basis; and the designated operator, due to the lack of clarity about its universal postal service obligations and responsibilities, which can hamper its corporate development. In short, each and every postal stakeholder can be adversely affected by legislation that is not based on appropriate studies. The legal framework must be based on market information and studies, the current universal postal service provision, costs, and the most appropriate proposal for a viable state-guaranteed universal service, including its long-term financing and sustainability. The government's sector policy also needs to be clearly defined, specific plans to restructure the sector drawn up, and investments made in order to modernize and improve universal postal service provision (i.e. all the information relating to the actions comprising the first two thrusts). The participation and support of the legislature, which enacts legislation, must be secured. Moreover, as is the case in respect of universal service activities, the actions aimed at achieving an appropriate legal framework require a great effort in raising the awareness of the legislature and society at large (customers, operators, postal staff and trade unions, etc.), which must be provided with sufficient information at this stage, and apprised of the benefits that the reform will bring to the country in general and the sector in particular. 4.4 Modernizing services and the designated operator (fourth thrust) This consists of the actions and activities required to develop the operator designated to provide the universal postal service. The actions and activities comprising this thrust should enable

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short- and long-term development plans to be drawn up, as well as business plans for the postal enterprise responsible for ensuring that the State's obligations are fulfilled. This component of the reform should define the actions required to secure funding for infrastructure in respect of the mandatory universal service determined by the government and the legislature, as well as the actions and activities required to obtain approval to invest in such infrastructure. It should, however, be recalled that neither the strategic plans nor the business plans are drawn up as part of the IPDP process. The IPDP recommends the actions needed to modernize services. 4.5 Immediate priority actions As indicated above, this complementary thrust concerns any urgent actions or activities identified during the diagnostic stage as elements which cannot be kept on hold while legislation is passed or investment plans are launched, and which need to be progressed urgently. For these activities, it is very important to identify the short-term resources available from the national budget of the organizations concerned or from other external sources. 5 Stakeholders involved in the IPDP formulation process The IPDP is the result of teamwork involving the government, the regulatory authority, the designated operator, the UPU International Bureau's Development Cooperation Directorate (DCDEV), the UPU Regional Adviser and the Restricted Union of the region concerned. In the country, there are two groups of IPDP stakeholders. The first group is made up of central government representatives: the sector's ministry (supervisory authority), or the authority representing it, which designates the national coordinator responsible for preparing the IPDP, securing its approval by senior government authorities, and monitoring and following up its implementation; and the ministries of finance, the economy and national planning. The second group comprises the regulatory authority and the designated operator. The government, through the sector's ministry, is responsible for formally designating the members of the local team, which will formulate the Plan, in conjunction with the IPDP experts. The persons designated by the government will be charged with obtaining and supplying the necessary information and data. They should also cooperate with the UPU Regional Adviser, the Restricted Union and DCDEV experts and assistants in analyzing the case, discussing approaches to and guidelines for the reform process, and discussing and adopting proposals on the universal postal service and other aspects of the reform for inclusion in the IPDP. It is also up to the government authorities to foster political goodwill towards the IPDP, and to demonstrate awareness of national postal sector issues and a willingness to assign the resources required to ensure that the Plan is approved and successfully implemented. On behalf of the UPU, the DCDEV Regional Programme (RP), the Regional Adviser (RA) and the IPDP experts will be involved in negotiating and preparing the IPDP. The UPU Regional Adviser will act as the IPDP experts' technical coordinator. The region's Restricted Union plays a key (direct and indirect) role in the process, both in the negotiations and in the various formulation stages. Its most important role is in providing support and raising the awareness of the IPDP beneficiary country's postal and government authorities. Each player at the appropriate time

To avoid confusion, a distinction should be made between the players involved in formulating the IPDP and those responsible for implementing the actions recommended in the IPDP – i.e. implementing the country's postal sector reform process.

In formulating the IPDP, the discussions on the problems facing the sector should be an inter-institutional effort by the government, supported by IPDP experts, to determine the actions to be undertaken. Hence, only a limited number of players participate in this process.

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Quite a different matter is the execution of the IPDP actions, which constitute the implementation of the postal sector reform process. These actions, in respect of which important decisions have to be taken, should involve all the various postal stakeholders: first, the government authorities; and then the legislature, operators, customers/users, trade unions and society at large. 6 Stages of the IPDP formulation methodology A rigorous methodology is required for the formulation stage, in order to ensure that the work is technically structured and that the activities carried out under the methodology are geared towards providing the country with an integrated postal sector reform plan. The IPDP formulation methodology consists of four main stages: preparation; knowledge-building; formulation; and official presentation to the country. As will be seen below, it is essential that the preparation stage is completed before IPDP experts go out to the field; the knowledge-building stage is conducted in the country, as a joint effort between the local team and the IPDP experts; the formulation stage is launched in the country and completed after the mission, as a joint effort between the local team and the IPDP experts; and the official presentation stage takes place in the country as the final part of the formulation process. Module III of this Guide contains a detailed document indicating the exact nature of the activities that should be carried out during each of the four stages. That document is crucial for all parties involved in the formulation of an IPDP, and should be carefully read and studied in order to avoid omitting any of the activities that are essential to the process. The main activities undertaken during each stage are described below. 6.1 Preparation stage During this stage, the International Bureau, the Regional Adviser and the Restricted Union conduct preliminary analyses on the country concerned, the country's national authorities are contacted and the commitments of each player are defined. 6.1.1 Official government approval Initial informal contacts are established with the appropriate parties (designated operator, regulator, etc.) to ascertain their commitment to launching a process of this nature. These contacts should pave the way for an awareness-raising and consultation process to enable the UPU to take a final decision on the appropriateness of the case and the priority it should be given. Once these "informal preliminary" consultations have been held with the above-mentioned parties, it is up to the government of the IPDP beneficiary country to give the official go-ahead for the IPDP to be formulated. This is a prerequisite for the launch of activities. It does not suffice to obtain the agreement of only one (or some) of the independent internal players. The government itself, usually through the ministry responsible for the sector, has to express a clear willingness to engage in the IPDP formulation process.

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KNOWLEDGE-BUILDING

Prior to mission to country

In the mission country

In the country and at respective duty stations

In mission country END OF FORMULATION

1

PREPARATION

3

FORMULATION OF IPDP

4

OFFICIAL PRESENTATION

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6.1.2 Formation of the national IPDP team The government should also establish the local team, which will be responsible for drawing up the IPDP. This task is possibly the most important in the IPDP process, and should be handled with due attention. In traditional cooperation, all the work was undertaken by external consultants, who would arrive, observe and write a report. The IPDP methodology is based on the principle that the country must assume responsibility from the outset. What is innovative is that the IPDP experts must act as facilitators, guides and trainers. The IPDP, however, must be a national initiative arising from the work of the national IPDP team, supported by external experts. Consequently, it must be formulated, developed and adopted by the country concerned. The formation of the national team is a crucial part of the process, and the government must be made aware of the need to appoint the "best people" available. Two or three weeks of intensive work devoted solely to that purpose will bear its fruit through the excellence and effectiveness of the IPDP formulated. The local team should be an inter-institutional national team made up of technical officials from the appropriate government departments (sector ministry (supervisory); ministries responsible for the economy, finance and national planning) and officials of the operator and regulator. These officials should lend their technical expertise to the postal reform process, liaise with the competent postal authorities and, once the IPDP has been formulated, participate in implementing and supporting the actions and activities recommended therein. The participation of the authorities responsible for the economy, finance and national planning is crucial to obtaining easy access to specific country information and, as required, to the country's postal authorities. The support of these authorities is also important in raising government awareness of the contribution that the postal sector can make to the country's social and economic growth. Surprisingly, government authorities that are not involved in the postal sector are generally unaware of the role that the sector should play in the economy and daily life of society. It should be borne in mind that the national IPDP team will be responsible for taking forward the reform process. The technical and political players will put the case for the sector's reform to the government and national authorities. It is most important that all these players are implicated in the IPDP formulation process. Otherwise, who will "defend" the Plan once the IPDP experts have moved on? 6.1.3 Basic information for the training of the national IPDP team During this initial stage in the process, the International Bureau, through the Regional Adviser, should provide the country with all the basic information needed for the initial training of the national IPDP team: UPU Guide to Postal Reform and Development; IPDP Formulation Guide; and other essential consultation materials aimed at providing the team with a homogeneous conceptual and methodological basis. The persons assigned to the team cannot be expected to immediately grasp the full magnitude of the task facing them, and it will be up to the Regional Advisers, in their capacity as technical coordinators, to raise the team's awareness once it has been set up by the government. 6.1.4 Gathering of local data This stage consists of gathering and compiling the basic data needed to develop the country case, using the forms that are part of the standardized material contained in the IPDP methodology.1 The gathering of basic data is an essential part of the work, on which the development of the case largely depends. The data gathered provides a basis for analyzing the current situation with a sufficient degree of certainty to enable valid conclusions and accurate diagnoses to be reached. The basic data, which should be supplied by the local postal authorities, provide the basis for the knowledge-building stage. These data should be checked, validated and supplemented by the local team and IPDP experts. ____________ 1 Module III contains all the standardized material pertaining to the IPDP methodology.

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It should be understood that the data-gathering stage is one of the most complex aspects of the IPDP process, as countries do not generally have market information or traffic volume statistics, etc. It should be emphasized that a particular effort is required of the national team, which must show a willingness to become fully involved in the process and understand that this is serious and methodical work, calling for commitment and effort. 6.1.5 Preparing the fieldwork schedule In view of the heavy workload that the IPDP formulation entails, the fieldwork schedule is a key instrument in correctly preparing the activities to be developed in the second stage of the IPDP process. In this connection, a detailed work programme providing for all the activities to be undertaken during the knowledge-building and formulation stages, should be drawn up during the preparation stage, in close cooperation with the national IPDP team. The work programme is a cornerstone of the methodology.2 The successful achievement of results, with the expected quality and within the time allocated, will depend on the ability to determine the range of activities required, their order and the appropriate timeframes. In preparing the work programme, the UPU Regional Adviser and local authorities will need to make a particular effort to provide for all the particularities of the case, thereby minimizing the need for improvisation. 6.2 Knowledge-building stage This stage, which is conducted in the country, corresponds to the first part of the work carried out jointly by the UPU experts and local team. The successful outcome of the IPDP hinges on this stage, as a wrong application of the methodology during this stage may dash the country's expectations and nullify the efforts of the reform stakeholders. The knowledge-building stage comprises a series of crucial activities, which, if not properly implemented, can jeopardize all the work. These activities are aimed at achieving a number of main objectives. Main objectives of the knowledge-building stage – Validate the local data with which the IPDP will be developed.

– Train the national IPDP team on conceptual aspects of the methodology.

– Carry out a series of exercises on national aspects of the four IPDP reform thrusts, which are essential to the knowledge-building stage.

– Examine the propensity for reform in the prevailing political environment.

– Identify sources of funding for the sector's reform.

– Diagnose the problems facing the country's postal sector During this stage, the national IPDP team must achieve a homogeneous level of knowledge on the country's particularities and postal activities in order to make an effective contribution to the reform activities recommended by the plan. A first knowledge base of the participants in the IPDP formulation process should be developed, with the presentation, validation and discussion of the information obtained via the basic data forms. These presentations should be prepared by the national IPDP team, supported by the operator's and the regulator's specialized staff. The purpose of these presentations is to validate the basic data obtained via the forms that were filled out prior to the mission, and to determine which of those data need to be supplemented, by whom, and by when (generally very rapidly). The methodology provides for a second knowledge base: the national IPDP team as an inter-institutional and interdisciplinary government group tasked with considering postal development issues in general and the UPU's postal sector vision, and with using standardized presentations to foster discussions on the concepts that must be central to the reform.2 The latter include: the

____________ 2 Module III contains all the standardized material pertaining to the IPDP methodology.

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universal service; the market; regulation; operations; postal technology; corporate development; and presentations on countries' practical experiences (i.e. specific examples of the situation in the field). Finally, the methodology provides for a third knowledge base, aimed at enhancing the knowledge of the local team. This involves practical exercises3 on the sector's current situation, based on real data and covering the following topics: the market; the universal service; national postal sector policy; the existing legal framework; and the operator's business development. Once the local team, using actual country data, has completed these exercises on key aspects of the country's domestic postal activities, it will be in a position to reach rapid conclusions and to diagnose the situation calling for reform. It should be recalled that the national IPDP team should have read and digested the UPU Guide to Postal Reform and Development and the IPDP Formulation Guide long before the work in the field is got under way. UPU experts are also intended to build their knowledge during this stage by carrying out an in-depth study of the particularities of the country concerned; discussing, analyzing and validating the data, in conjunction with the local team; carrying out practical exercises on key postal issues; and conducting a field survey of the service offering (visiting key points of the designated operator's domestic network and, as required, key points of private operators' networks). The diagnosis of the national postal sector developed by the end of the knowledge-building phase should be complete enough to enable the following stage of the IPDP process to be launched. 6.3 IPDP formulation stage For practical purposes, this stage should be divided into three parts:

i Formulation of Action Plan and discussions with authorities.

ii Preparation of first draft of IPDP and further discussions with authorities.

iii Finalization of IPDP by all parties – IPDP experts, national team and Regional Adviser – at their respective duty stations.

NB. – The first two parts should be completed before the IPDP experts leave the country, whereas the final part, which involves all parties (national and external), should be carried out remotely. 6.3.1 Formulation of Action Plan The Action Plan forms the core of the IPDP formulation work and requires a major intellectual effort from participants, all of whom should contribute with their individual creativity. The conclusions of the diagnosis and the search for effective solutions to the problems should indicate the actions and activities that need to be implemented in respect of each of the four main reform thrusts. This part of the work consists of using the diagnosis of the problems facing the country's postal sector to identify actions and activities that will result in solutions geared towards the sector's development. As is logical, the Action Plan is structured in line with the main thrusts of the reform, including the complementary thrust (immediate priority actions). Actions under the first thrust: associated with actions that should enable the universal postal service to be defined, in line with the analyses carried out during the previous phase. Actions under the second thrust: actions required for the government to develop the postal sector. To this end, the government should establish its postal sector policy. Actions under the third thrust: legal actions aimed at giving legal legitimacy to the country's postal sector policy (issuance of appropriate legislation to foster favourable conditions, in line with the conclusions of the first and second thrusts).

____________ 3 Module III contains all the standardized material pertaining to the IPDP methodology.

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Actions under the fourth thrust: actions aimed at modernizing services and the designated operator and at implementing the operator's strategic plans, which will necessarily require investment and funding. Actions under the complementary thrust (immediate priority actions): actions identified in the analyses for implementation in the very short term (due to an urgent need to resolve problems generally associated with the operator or regulator). Once the actions required in respect of each thrust have been determined, the country's Action Plan can then be drawn up. The Action Plan should provide for short-, medium- and long-term actions, which should be put into a sequential and strategic order. A number of factors should be determined in respect of each action. Factors which need to be determined for each action contained in the action plan:

– Nature of the work to be undertaken, including specifications in terms of depth, scope, etc.

– Technical requirements and profile of the implementing staff.

– Timetable (implementation timeframe and man-hours of the staff involved).

– Estimated cost of each action. Once the above work has been done, the national team and the IPDP experts should determine the following:

– Specifications of actions and requirements in respect of each area of the reform.

– Timetable (timeframe and sequence of actions).

– Table of estimated costs of the various actions.

– Government organizational chart (to manage implementation of the actions).

– Indication of possible sources of funding: state treasury; regulator or operator; and other sources of funding available to the government (development funding bodies, state reforms, etc.).

The members of the national IPDP team should play a key role in the analyses and discussions on the funding of the Action Plan, particularly the officials of government departments responsible for finance, the economy and national planning, who can easily access specific information and indicate the most viable sources of funding. The IPDP reform costs should be included in the pre-investment costs. It should be noted that, the sources identified do not include sources of funding to modernize the operator and regulator, which cannot be determined until the appropriate post-IPDP studies have been prepared. At this stage, the IPDP group (national team and IPDP experts) should hold a meeting with the main postal authorities (designated operator and regulator) in order to present, discuss and analyze the two main parts of the IPDP document which have now been prepared:

a the diagnosis: conclusions identifying the problems facing the country's postal sector; and

b the Action Plan: specifications; technical requirements; implementation times and sequence; cost table; and possible sources of funding for the actions identified.

The main purpose of these initial discussions is to apprise the authorities of the conclusions of the diagnosis and of the main recommendations of the Action Plan. These joint discussions and analyses should expedite the Action Plan's approval, subject to any changes deemed necessary. Once the Action Plan has been approved, preparation of the draft IPDP document can begin.

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6.3.2 Preparation of the draft IPDP document Once feedback has been obtained from the authorities, the group should immediately begin to prepare the draft IPDP document. The aim is to have the initial draft ready by the time the national team and the IPDP experts have completed their joint work in the country. The work to determine the structure, the content and the preparation of the draft IPDP document can now be undertaken. The draft document should contain charts, tables and graphs, as well as implementation times. Moreover, before the IPDP experts leave the country, meetings to review the document and take stock of progress should also be planned, as should the printing of the document for presentation. The drafting work should be assigned in parts (by content), and the participants divided into balanced groups, each of which should draft its corresponding part, separately and independently, once the structure and content have been determined. As can be seen in Module III, the IPDP document should necessarily comprise the following six parts:

I. Sectoral context – brief description of the postal sector at world level, the postal environment and the UPU's vision for the sector.

II. Status of domestic postal sector – brief description of the status of the country's postal sector, including the most important aspects of the market (current legal framework, status of designated operator, regulator and private operators). This part should include a diagnosis of the problems facing the sector.

III. IPDP objectives and strategy – objectives of postal sector reform.

IV. Master Plan – central part of IPDP document, indicating the benefits to the country of postal sector development. The Master Plan contains a description of the action plan in respect of each area of reform.

V. Details of Plan (Annex) – in the interest of presenting the Master Plan as clearly as possible, and to ensure that the focus is kept on the actions themselves, the actions should be detailed in a separate annex containing: a) the specifications and requirements of each action in each area of reform; b) a timetable; c) a cost table, indicating the cost of implementing the various actions recommended in the plan; d) possible sources of funding; and e) a recommended organizational structure for implementing the postal reform actions.

VI. Executive Summary (separate document) – a six-page summary of the IPDP document. The Executive Summary should indicate the most important aspects of the diagnosis, and should provide senior government officials with an overview of the key components of the main document. While the Executive Summary will not be prepared until a later stage, it should be mentioned here, as it is an essential part of the IPDP.

Once the document has been finalized, and before the IPDP experts leave the country, another meeting should be held with the authorities to obtain their final views on the main conclusions of the work. Once any final observations have been made, the group should organize the work to be carried out by the local team and the IPDP experts, with a view to preparing the final document over the following weeks. Before the IPDP experts leave the country, a schedule should be drawn up, indicating the exact deadlines for completing the various tasks to be undertaken during the following stage. 6.3.3 Preparation of final IPDP document This final part of the formulation process calls for considerable input – communication and responsibility – from all the parties involved in the formulation process (national team and IPDP experts). The work to produce the final document should be carried out by the national IPDP team, in the country concerned, and by the IPDP experts, at their respective duty stations (countries).

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Communication to progress the work and produce the final document should be by e-mail/the most rapid available means. The final document should be reviewed and approved by the Regional Adviser, the technical coordinator of the IPDP. Once this process has been completed, the document should be printed before the following stage is initiated. 6.4 Presentation stage The IPDP document should be formally presented to senior government officials, who should be given a thoroughly prepared and succinct overview of the document's main contents. The aim of the presentation is to obtain the government's endorsement and approval of the IPDP, after which immediate steps can be taken to implement the actions recommended therein. The presentation to high-level authorities should be specific and to the point, and should illustrate the sector's current situation and the actions envisaged to resolve the prevailing problems. During the "official presentation" stage, it is particularly important to bear in mind that the IPDP should also be presented to other government departments and entities, in order to go into technical aspects and details which were not included in the presentation to the high-level authorities. The IPDP should be presented and explained to government officials and technical experts with responsibility for the economy, finance and planning, and to any other entities deemed appropriate, all of which can play a key role in securing funding for the actions provided for in the IPDP and in the analyses conducted in respect of UPS decisions, sectoral policy and investment to develop the designated operator and the sector. The UNDP and the multilateral financial entities should be invited to the protocol and technical presentations. Moreover, in line with the country's particularities and in close coordination with the government, postal and regulatory authorities, presentations may also be given to the staff of the designated operator and regulator, as well as to trade unions. In order to avoid wrong interpretations, which could adversely affect the implementation of the reform process, all these stakeholders should have a clear understanding of where the reform is heading. The IPDP document and the Executive Summary must be submitted to the authorities in both hardcopy (colour) and electronic format, ensuring that there are enough copies for all the government departments (ministries and official entities) and other parties invited to the presentation. The official transmission of the document will be done by the UPU International Bureau, once the IPDP has been officially presented. The formulation process ends here, and it is now up to the country concerned to take the necessary steps to launch the activities. This module has thus provided a comprehensive description of the elements that an IPDP expert must study in detail in order to comply with the IPDP methodology.