Dominic SmithInterim Project Coordinator M4P Phase II - Vietnam

Presentation to the “M4P Approach – What it is and Where it is Going” Workshop, Bangkok, November 26 2008

Moving from Research to Action - M4P as a basis for catalyzing public sector and private sector investment

Contents of PresentationBackground to M4P Research in Phase IExperience of using M4P as a basis for designing public sector investments

Challenges and responsesUsing M4P as a basis for catalyzing private sector investmentChallenges and responsesKey Questions for Consideration

Information about M4P1M4P1 was a regional technical assistance project

implemented in Vietnam, Laos and Cambodia between 2003 and 2007.

M4P1 concentrated on funding research on topics relevant to M4P, building capacity of research organizations and assisting policy makers.

In Vietnam, M4P funded 21 major research activities on a competitive basis and worked with 31 partner organizations

M4P concentration areas were (i) land markets; (ii) labor markets; (iii) commodity markets/value chains; (iv) public-private partnerships for rural infrastructure; (v) service markets.

In addition to research publications, M4P also developed toolbooks for Participatory Market Assessment and Pro-poor Value Chain Analysis.

M4P Research into Action I – Designing Investment Loans

Project worked with IFAD in 2005-2007 to utilize M4P principles and tools as the basis for designing 2 investment projects totaling $US80 million focused on rural development in 4 provinces of Vietnam.

Utilized research results and tools (including PMA toolbook and pro-poor value chains toolbook ) to analyze the interaction of the rural poor with various markets and the impact of those interactions on livelihoods

Resulting investments concentrated on making commodity markets and labor markets work better for the rural poor

ChallengesM4P research was oriented towards developing policy

recommendations – in general trying to find low-cost high benefit solutions. Investment project design involves finding ways to effectively spend significant resources.

M4P covers wide range of markets, and rural livelihood problems are also related to a wide range of markets – however investment projects require great degree of focus.

Many investment solutions - for example for developing rural value chains or improving the interaction of the rural poor with labor markets – can have a wider geographic focus than the “project area”.

Developing a unified project is challenging when investment funds are split between grass-roots level and provincial levels

M4P Research into Action II – Catalyzing Private Sector InvestmentSecond phase of M4P in Vietnam has just commenced

with DFID and ADB financing. Project is being executed and implemented by

Government of Vietnam – Ministry of Planning and Investment, Central Institute of Economic Management and Ministry of Finance.

M4P2 includes action research funding and funding of capacity building for stakeholders.

Majority of funding under the project will be for Vietnam Market Participation Challenge Fund - $US3 million project funding over 3 years for catalyzing pro-poor private sector investment. Will leverage at least another $US3 million from the private sector.

ChallengesDirecting investment support to the private sector

under an ODA project modality is a new concept in Vietnam

Assessing the pro-poor nature of private sector investments in rural labor markets, PPP for rural infrastructure and agricultural value chain development is challenging.

Significant level of interest from the private sector will result in challenges to give focus the fund activities, both geographically and in terms of sectors.

Selection criteria need to be carefully designed to provide a balance between innovation/pro-poor focus and financial performance/low risk investments.

Key QuestionsWhat are the main lessons for organisations

as they face challenges of moving from research/theory into practical action/application?

What can be done collectively (by agencies and others interested in M4P) to help organisations face these challenges more successfully?