BDS market development guide.pdf - PACA

39
CHAPTER FOUR
HOW DO WE GET THERE?—CORE IMPLEMENTATION CHALLENGES
All forms of outside support are a subsidy in one way or another. A market development approach to
BDS does not mean no subsidy, no way, no how. Instead, it means how much subsidy, in what form,
and how long so that SMEs future service needs can be met through the private provision of BDS in
sustainable markets. All subsidies will distort markets in some way—we to need to anticipate future
implementation challenges so our subsidy develops more than it distorts the market. And, finally, we
need to ask ourselves, as managers of short-term subsidies, how must we change to be effective
practitioners of BDS market development interventions.
This chapter outlines common issues that need to be confronted in designing and managing
interventions. It focuses particularly on how support should be structured to enhance market
development and minimize market distortion and on the selection and management of partner
relationships. It concludes by listing some key implications for donors and facilitators inherent within
the BDS market development approach.
Key Questions:
1. Where should we intervene in the project cycle to minimize the risk of distortion?
2. Is there any justification for subsidizing the transaction between BDS consumer and supplier?
3. How much intervention—in terms of time and resources—is enough? How much is too much?
4. How do we leverage additional private sector investment in BDS?
5. How do we identify and select implementation partners?
6. How do we assess donor skills and capacities to be effective?
COMMON SIGNS OF MARKET DEVELOPMENT OR DISTORTION IN BDS INTERVENTIONS
The overall shape of interventions in BDS is guided by:
1. Analysis of the market in which we are interested and the constraints to market
development revealed by this analysis; and
2. Our view of sustainability in the longer term.
Clearly, interventions built on these foundations may take different forms and each of these
raises its own distinctive problems. However, there are more general issues that commonly
need to be confronted in BDS interventions if they are to be successful. These fall under
three broad categories:
• How support for BDS should be structured;
• Whom we should work with; and
• What are the implications for the capacities of donors and facilitators?
Before assessing these issues, we must be clear about what we mean by market development
and, its converse, market distortion. We need to know what these mean and recognize signs
Chapter Four—How Do We Get There?—
Core Implementation Challenges