Cases and Evidence
The Case Studies Case Stories Map

Japan-Zambia-Malaysia – Investing in the Triangle of Hope

Organization(s):

Japan International Cooperation Agency (JICA), The Government of Republic of Zambia, Zambia Development Agency (ZDA)

Country (ies):

Zambia, Malaysia

Overview:

The Project aims at facilitating promotion of trade and investment to Zambia with JICA's technical assistance. The project pays special attention to how best successful economic development experiences in East Asia (in this case, Malaysia) can be utilized in the context of present economic development challenges in Zambia as well as in Africa. The project is implemented with a Malaysian advisor (Former Deputy Director-General of Malaysia Industrial Development Agency), who has 30 years of practical experiences in successfully promoting trade and investment in Malaysia as a backbone of economic development in Malaysia with three important actors, Government, Public Services and Private Sector working hand-in-hand as Triangle of Hope.

Background:

Purpose and Overall Goal The Project aims at making Zambia a Model for investment promotion that other African countries can emulate by increasing FDI to Zambia and domestic investment with reference to how trade and investment was successfully promoted in East Asian countries. JICA initiated the project under the theme of South-South Cooperation as a mean to contribute to development in Africa under Japan's commitment of Tokyo International Conference for Africa Development (TICAD), while the Government of Republic of Zambia in its foreign policy document, acknowledges the opportunity offered by the shared experiences of South to South Cooperation, in the spirit of self reliance, towards promoting political, economic, social and cultural development. It was for these reasons that the Government of Zambia and JICA agreed to implement the project called the Strategic Action Initiative for Economic Development (SAIED)-Triangle of Hope to formulate and implement a model which can be successful in Africa with special reference to East Asian experiences.

Development Challenge

Despite numerous and massive volume of development assistance to Africa over the four decades, Africa has been left out from global economic development while Asian countries which had gained political independence around the same time as African countries have experienced rapid economic development. Such observation has raised question on the aid delivery mechanisms which are used to deliver aid to Africa and led the Government of Zambia and JICA into the exploration of alternative and possible approach to make aid work more effective and efficient.

Expected Resulted

Through this project, the Government of Zambia has been exposed to opportunities to secure trade and investment from Asian countries, namely Malaysia, India, Thailand and hopefully from Japan as well and to strengthen its capability to manage increase in trade and investment in a sustainable manner with capacity development of Zambia Development Agency (ZDA) and its related Ministries and organizations in partnership with private sector with political will of the cabinet as "Triangle of Hope". As overall goal, the project expects actual investment from Asia and creation of job opportunities in Zambia.

Partners

JICA procured the services of a Malaysian expert as the main advisor to the Government of Zambia to transfer skills and knowledge on trade and investment promotion to Zambia counterparts. JICA through Malaysian expert in partnership with various Malaysian Government organizations such as Malaysia External Trade Development Corporation (MATRADE), Malaysia South-South Association, and Malaysia Industrial Development Authority (MIDA) also assisted the Government of Zambia in organizing trade promotion missions from Zambia to Asian countries and from trade missions from Malaysia and India to Zambia. JICA is also assigning a JICA expert to ZDA to facilitate various project activities at ZDA to assist Malaysian advisor to strengthen the operational capacity of ZDA.

Implementation:

Upon recommendations by the Malaysian advisor, in August 2005, the Zambian President appointed twelve Task Forces to understudy the various selected sectors and make recommendations on the policy framework for Cabinet consideration. These committees were composed of members from the civil service and private sector. In addition, a six-man, high level, ToH Steering Committee was also appointed to supervise their work. The Committee was chaired by the Special Assistant to the President for Economic affairs and deputized by the JICA Chief Representative to Zambia.

In January 2006, the twelve Task Forces reported back to the President and his Cabinet. Using these recommendations, officials from relevant Ministries prepared Cabinet Memorandums. Subsequently, all the Cabinet Memorandums, with the exception of two, were approved and are being implemented. Implementation is being undertaken by the respective line ministries. In order to ensure compliance, a monitoring and evaluation framework has also been put in place.

The number of recommendations, resulting from the approved framework numbered One Hundred and Fifteen (115). The cumulative number of activities to be executed totalled 271 and the resultant number of expected deliverables amounted to 175. One of the most unique concepts under this project was inclusion of health and education sectors as Priority Economic Sectors as indicted in the ZDA Act. This was a unique development because prior to the project, the education and health sectors in Zambia were perceived as primarily being social sectors. This change in mind set led to the aggressive promotion of private sector investment in these areas. The Air- Cargo Hub and the Multi-Facility Economic Zone framework were also vigorously addressed because of the high cost nature of Zambian industry in a land locked country like Zambia.

Outcomes:

At the end of the first phase of the project in March 2009, an assessment of all the recommendations indicate that of the 271 activities, one hundred and ten (110) have now been fully implemented while forty two (42) had not yet been started. Eighty one (81) activities had been implemented and had registered significant progress. The overall tabulation indicates that fifteen (15) percent of the work has not yet commenced. In terms of overall activity achievement, if one combines the completed work and the work that has reached significant progress, the completion rate moves to seventy (70) percent. This is indeed a desirable performance. In terms of deliverables, an analysis of performance indicates that fifty five (55) percent of the expected outputs have been delivered. However, thirty two (32) percent still require some attention. The implementation of the framework is still ongoing as both government and JICA remain committed to the Program. Clearly, the investment environment, resulting from the recommendations of the ToH, and other government related programmes have improved over the implementation period of the initiative. To this effect, Zambia has moved in rank, by 9 points, in the World Bank's 'Ease of Doing Business Survey. Through various trade and investment promotion activities in Malaysia, Indian and Zambia, various MOU were signed between Zambian, Malaysian and Indian companies, which resulted in the establishment of the first-ever mobile telephone manufacturing company in Africa. Joint ventures between Zambia Universities, private companies and Malaysian and Indian companies are in preparation in education, health, construction and agriculture and service industry. The Government of Zambia also initiated the establishment of Multi-Facility Economic Zone (MFEZ) in Zambia and the Government of Zambia in partnership with Malaysian Kulim High Technology Park Corporation and JICA conducted a study on master plan and feasibility of MFEZ in Lusaka. Development of MFEZ in Lusaka influences other development partners like China, which also decided to develop another MFEZ in Chembesi.

Aid Effectiveness:

The project has provided the Government of Zambia and JICA with a unique opportunity to facilitate trade and investment with utilization of experiences of East Asian country (Malaysia) as a triangular cooperation. This approach also expands participation of various stakeholders beyond conventional stakeholders of Government Ministries and Agencies to full participation of other stakeholders from private sectors and countries. It is worthwhile to note that participation of various stakeholders has been dynamic and result-oriented due to nature of goals and objectives in the area of development assistance for trade and investment.

It also should be noted that every recommendations from the Project Task Force are being implemented through the existing Government Institutions and implementation mechanism without creating a parallel process with full participation of relevant Ministries and agencies under the strong leadership of the executive of the Government headed by the President. These recommendations have also been in consistent with priorities of development agenda in Zambia, and provided strategic process for implementation by the respective ministries.

The project is also in close and regular dialogue with other progarmmes/projects in the area of trade and investment and other projects have shown interests in joining the project in terms of approach and implementation structures.

Capacity Development:

One of the important objectives of the project is to assist the Zambia Development Agency (ZDA) build capacity towards investment promotion. It is strongly emphasized in this project that capacity building is to be done through "Hands on Experience" by understanding and emulating the strategies used in Malaysia. In this regard MIDA has assisted in creating a foundation and organizing meetings to enhance capacity building. Towards Investment promotion, the Malaysia South-South Association (MASSA) assisted ZDA in organizing groups of Malaysian companies to visit Zambia. MATRADE also recently assisted ZDA in organizing a mission to Zambia that included nine companies in various sectors, ranging from construction to education. The project also provided ZDA with further challenge and opportunity by organizing three missions to India with practical advice and assistance from Malaysian advisor. As a result of these missions, a major India- Zambia Business forum was hosted in Zambia at the beginning of 2009. Subsequently, ZDA has been able to engage the Confederation of Indian Industry (CII), the Federation for Promotion of India – Africa Industry and Trade (FPIAIT) and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Capacity Development is a challenging issue in development assistance and often difficult to measure with outputs. This project aims at building capacity of ZDA as well as the relevant Zambian Government institutions by organizing practical occasions with hands-on approach involving private sectors from various countries with visible outputs.

Duration:

1. Strategic Action Initiative for Economic Development (Phase I) (20 July 2006 – 31 March 2009) 2. Zambia Investment Promotion Project-Triangle of Hope (Phase II) (21 August 2009- 20 August 2012)

Name of Primary Contact Person:

Mr. Hajime FUKUDA

Title of Primary Contact Person:

Assistant Representative

City:

Lusaka, Zambia