PARTNERS IN BUSINESS INNOVATION
A
lasting reduction in poverty is achieved through sustainable and broad-based economic growth. The poor need access to jobs and more productive livelihoods as well as essential services in order to improve their lives in a meaningful way. The private sector is the engine of economic growth. The Market Development Facility (MDF) is Australia’s flagship private sector development programme in the Indo-Pacific region. MDF is focused on reducing poverty by stimulating economic growth and works through partnerships with the private and public sector to identify and develop new products and services or new, innovative ways of doing business or regulatory reform. These partnerships open up markets and provide increased income and employment opportunities for poorer populations, or benefit them as consumers. Each partnership with a business or institution contributes to systemic and lasting changes in the economy to increase its ability to innovate and grow and deal with competitive, regulatory, social and environmental pressures, so that the benefits for the poor are sustainable and continue to expand over time.
WHERE MDF WORKS MDF began in 2011 in Fiji and has expanded to Timor-Leste in 2012, Pakistan in 2013 and Sri Lanka and Papua New Guinea in 2015. In each country MDF focuses on market systems that involve people from rural and urban areas. Under each market system, MDF has a portfolio of partnerships that support private sector businesses on different aspects such as access to technical advisory services, selective infrastructure support, marketing and promotion, and regulatory reform. MDF works in the following sectors and thematic areas in each country: • Fiji: Tourism, Horticulture, Export Processing • Timor-Leste: Agribusiness, Greenfield Industries (Tourism and Manufacturing)
Pakistan
• Pakistan: Horticulture, Diary and Meat, Leather Sri Lanka
Papua New Guinea Timor-Leste
Fiji
• Sri Lanka: Tourism and Related Sectors (Tourism, Sri Lankan Made Goods, Digital Capability, Business Activity in Lagging Regions) • Papua New Guinea: Emerging Industries and Services (ICT and Logistics, Local Value Addition, Agricultural Inputs Services, and Tourism and Hospitality)
HOW MDF WORKS: AT A GLANCE MDF is committed to implementing a market systems approach: • In each country MDF first gathers a rich and diverse body of knowledge about poverty, propoor growth opportunities and bottlenecks, challenges to Women’s Economic Empowerment (WEE), challenges to the environment and the inclusion of persons with a disability. • Market systems are selected that can act as drivers of pro-poor growth and are aligned with the economic and development needs of the country. • MDF works through partnerships with private sector businesses and public sector organisations to ensure that change is locally owned and can last. • With each partner, MDF designs and negotiates detailed business plans, which include clear financial and resource commitments from both MDF and the business (cost sharing arrangement) to arrive at appropriate, innovative and sustainable business models or reforms. • Partners take the lead in implementing activities and improved business practices – increasing the partner’s capacity. But MDF continues working closely with our partners – advising, mentoring, facilitating and planning for the future. • As partners get stronger, start to innovate ways of doing business, or new products and services catch on within a market system – consumers and workers benefit and gain better livelihoods.
By 2021, as a result of all its activities in Phase 1 (2011- 2017), MDF will have: Introduced 199 sustainable innovations to make market systems around the poor work better Leveraged US $8.3 million in private sector investment Benefited 238,000 poor women and men
• Poorer populations gain more opportunities through jobs created and increasing income opportunities, or as consumers of better, more affordable or more available products and services.
Created US $68 million in additional income for poor women and men
• By introducing sustainable solutions through partnerships the benefits introduced reach far beyond the life of the programme. MDF rigorously monitors progress through a state of the art results measurement system.
Created 12,000 full-time jobs for poor women and men
MDF IN FIJI
F
iji has a population of 886,500 with an estimated GDP of USD 4.5 billion. Despite the overall level of development and moderately high average incomes, 32% of the population live below the poverty line (ADB 2014). The highest concentration of poor people live in urban and peri-urban areas with a large concentration in the Northern and Western Divisions (former sugarcane farming areas).
Fiji remains a developing country with a large subsistence agricultural sector despite being one of the more developed economies in the South Pacific. It relies very heavily on its sugar industry, as well as its tourism and fishing industries. Sugar exports make up one-third of the country’s industrial activity, and along with a growing tourism industry, are Fiji’s major sources of foreign exchange. In Fiji, MDF focusses on three growing sectors – Tourism, Horticulture and Agro-exports and Export Processing. The tourism sector has the potential to spread the ‘tourism dollar’ to other destinations across Fiji and spur employment. Though agriculture is on the decline in Fiji, development in the horticulture sector has the potential to turn farming into a more rewarding business, through specialised crops and returning higher yields, by creating access to markets and improvements in inputs and information. The export processing sector can be made more competitive, capture niche exports and create employment for the urban poor, particularly for poor women by opening up new pathways for a wide range of products and services.
HORTICULTURE & AGRO-EXPORTS
TOURISM
Ensuring geographic and ethnic inclusion to expand economic activities in other areas of Fiji besides the developed tourism centres and encourage more representation of indigenous Fijians in business.
Encouraging diversification and commercialisation in agriculture (‘turning farming into a business’), creating off-farm employment for those who have left the land.
Spreading the tourism dollar to remote communities In Fiji, local tourism operators and service providers struggle to properly capitalise on their unique Fijian offerings and activities that will cater to travellers looking to explore more of what Fiji has to offer.
Talanoa Treks is one of the only dedicated hiking tour companies in Fiji offering guided day trip and multi-day group walks, working in partnership with local communities through Viti Levu’s rural areas. MDF’s partnership with Talanoa Treks’ involves offering tourists alternative adventures and working with local communities to raise the standard of services offered to guests.
MDF Fiji: (+679) 3100 272 / 3100 273 info@cardnomdf.org
(+679) 3100 274 www.marketdevelopmentfacility.org
EXPORT PROCESSING
Supporting local entrepreneurship in niche markets, developing better business services and improving aspects of the business enabling environment.
PARTNERING WITH MDF MDF’s flexible design includes country teams within each country supported by a Core Leadership Team responsible for the management of the overall Facility. This design gives the Facility the ability to scale-up efficiently across countries while tailoring strategies and implementation to the local context. We utilise best practices and cross-country learning to create a tailored approach to achieve sustainable economic growth, innovation and poverty reduction in each country. ▪▪ MDF’s Business Advisers continually engage with a wide variety of businesses in each sector. They actively seek out potential partners to discuss opportunities and are always open to new ideas. ▪▪ Potential partners and MDF Business Advisers work closely together to transform initial ideas into detailed business plans. These activities are commercially sustainable and have a demonstrated link to poverty reduction. ▪▪ For each business plan MDF and its partner will sign a partnership agreement, specifying a cost sharing arrangement and other areas of support. ▪▪ The partner implements the partnership as a part of its business activities; while MDF monitors the partnership and measures its pro-poor impact.