USAID – The Competitiveness Programme ends after 6 years

The Competitiveness Program (TCP), a United States Agency for International Development (USAID) initiative which brought together eight industry clusters in Sri Lanka has completed its 6 year project.

TCP Chief John Varley summarized the cluster and industry achievements during a two day workshop held in August 2007 at which he said, “The clusters have demonstrated the value they can add to national development. In 2006 the export earnings for all firms in the eight sectors with TCP clusters totalled $2.3 billion up from $1.5 billion in 2000 and $1.2 billion in 1995 –Growth in the years since 2001 is double that of the years prior to the TCP clusters. That rapid growth is what Sri Lanka needs to create jobs and improve standards of living.”

TCP has been USAID’s flagship economic growth programme since 2001, focused on private-sector-led development using a cluster approach to advance Sri Lanka’s competitiveness in the global marketplace. The eight industries, namely ceramics, coir, gems and jewellery, ICT, rubber, spices, tea and tourism all agreed to form special working groups or ‘clusters’, replicating the ‘value chain’ of that industry in Sri Lanka.

Varley told The Sunday Times FT that through a special self assessment and an executive opinion survey of the leaders of the eight clusters, the project has been very helpful to the country’s private sector. He credits the clusters for the success of the programme, both their recognition of the challenges of globalization and their readiness to engage in partnerships with each, with TCP and the public sector.

The clusters included not only members from exporting firms but also from activities linked to those exports extending backward to factories, plantations, and associations of rural small holders or microenterprises. Each cluster also reached out to include key government agencies in government and academic centres with resources to help them overcome obstacles to improving competitiveness. The value-chain perspective facilitated better strategic analysis and helped disseminate new knowledge and best practices.

Varley said that the rubber, coir and tourism clusters have all played key lead roles in attracting millions of dollars of international funding for development projects in their sectors. All clusters have worked with the government on practical policies to promote competitiveness and with academic centres on resource and workforce development projects.

Conference speakers, including Kevin Murphy and Christa Lachenmayr, agreed on a number of important lessons from the project. First is that the private sector in Sri Lanka is ready to be more independent and responsible for improving its competitiveness. That means becoming more engaged globally and less dependent on government for subsidies or strategic support. The time has passed, according to Varley, when entrepreneurs in Sri Lanka were businessmen whose only strategy was to wait and see which industries the government would designate and favour as “thrust industries”.

Varley added that another important lesson is that Sri Lanka can compete successfully in the global market place even with countries like China by adopting strategies to compete on quality and higher standards rather than just on low labour costs. Furthermore, the clusters have provided a useful perspective and organization for studying and capturing value addition on the island and helping build an industry-wide reputation for higher quality standards.

Inaugurated by the U.S. Embassy Chargé d’Affaires James R. Moore and concluded by USAID Mission Director Rebecca Cohn, the workshop showcased a series of presentations by industry executives on cluster competitiveness, strategic marketing and branding, workforce development, rural linkages of competitiveness initiatives and public-private cooperation on policy affecting the business environment. Citing examples such as a hot-air drier for spice-growers in Matale, improved looms for coir fiber geo-textiles and rubber seedling cultivation in Eastern Sri Lanka, Moore said, “The winning initiatives in the TCP programme emerged from the efforts of dedicated individuals from the private and public sectors invested in working with fellow cluster members and specialists from TCP to implement strategic ideas that benefit not just one firm but the entire value chain.”

Cohn expressed USAID’s pride in a long list of successful partnerships with Sri Lanka’s private sector. She pointed out that the ‘value chain’ approach to development, pioneered by USAID in Sri Lanka under TCP has since been emulated in many other countries. She said competitiveness is the drive to improve on past performance. “The day should never come when we stop asking how we can improve the way we live, work and govern ourselves.” (NG)