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Tuesday, July 14, 2020 07:21:17 PM
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PPP Initiative Good Alternative For Young Entrepreneurs

By Ferdaus Ara Begum
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Outbreak of  Covid-19 and the nationwide long lockdown have resulted in disruption in education system heavily  and job loss specially for youths. Creating new jobs for the youths and improving their skills is one of the concerns for the policy makers. The youth have to adjust with a new set of employability skill for their sustenance, but what type of skills, digital literacy they would require needs a detail exercise and in that respect youths can also contribute strongly.
Youth aged 15-24 years made up almost 20% of the Bangladesh population in 2017, raising possibility of demographic dividend. Youth who are not in education, employment and training (NEET) are 27.4% as of 2017. The situation of youth took an unexpected negative turn with the onset of  Covid -19 in both health as well as socio-economic terms. A number of migrants have returned, added to the job market, making it more susceptible.
According to Bangladesh Labour Force Survey (LFS) about 10.6% youth were unemployed, and 13.4% youth with tertiary education and 28% with  secondary education can be counted as unemployed.
Recent ILO estimates  said that 25 million jobs may be lost around the world due to  Covid -19 economic disruption. According to the UN, youth those aged 15-24 will be disproportionality affected in terms of reduced employment prospects compared to adults in the event of a  Covid -19 induced global recession. In view all these above, it is pertinent to think about the situation of youth segment in our country.
In case of creating youth employment cottage, micro and small enterprises contributed a lot, some figures says that it  created employment of  about 26.5 million, though a significant number of them is informal. But a number of them   have been facing closure now because of not being able to roll out  for lack of finance and disruption of markets. Government immediately announced Stimulus  Package  of about $ 10.9 billion, including  stimulus package for SME/Start up of $ 2.35 billion, these are all concessional loan, refinancing and working capital support. Banks are not yet been ready for starting funding because they are thinking about the risks of funding, as SMEs are already in stake, Banks and FIs are asking for their Credit Guarantee Schemes. Refinancing is much more encouraged, about 44 Banks signed agreement with BB for refinancing of 1500 crore taka. It is hoped that when all banks and financial institution will be in full operation after Eid, the situation of fund disbursement will be improved.
In this milieu, Centre for Research and Information (CRI) organized a Dialogue recently on Post  Covid -19 Youth Development and initiated, among others,  a new idea whether public private partnership(PPP) initiative can work for creating more jobs for youth. A lot of new issues and thinking must be evolved   if   PPP initiative can be made workable for youths. PPP programs in Bangladesh is still at a cross-road. Up to February 2020 we have seen an ample opportunity of PPP initiatives and seen $10 billion investment in 9 projects under G2G arrangements, PPP authority has signed MoU with 4 countries of which Japan and Singapore were important. But after the  Covid -19 situation has changed. Now we do not know when these projects will be in operation.
PPP initiatives are mostly meant for the large scale investment and the initiatives need to go through a bit lengthy and complex process,  it is time consuming also, needs detail technical know-how and management efficiencies, experiences and other related issues. SMEs may find it costly, time-consuming, or otherwise challenging to respond to complex pre-qualification criteria or bidding documents. PPP uptake within a short time is not possible unless we think it differently and policies are reengineered adequately.
For an example we can tell waste management project in Gazipur, a similar type of project were planned which is one of the important projects on waste water management.  But in this huge project there are some soft components which needs to be handled and those are not very much related to the business where return within a short time may not be possible.
Those business which is physical asset oriented could be helpful for small entrepreneurs, some business in the transport sector could have potentials- traditional procurement may not be workable in this respect- need to think out of the box,  total eco system need to be analyzed, political configuration may need changes. In this total eco-system how small fund-based youth can be engaged is a critical aspect and need policy options and new thinking.
City Corporation has been extending a number of services with their limited manpower and infrastructure, such as waste collection, mosquito spray, light post management, electricity billing in the urban areas, can be transferred to SMEs. We can see the example of small ISPs providing excellent internet services. Courier services for e-commerce is doing good and spreading quickly.
A successful example of BRAC can be given which is working with Savar Municipality for waste collection. They have been provided with places by the municipality. MoU signed with BRAC as a local body, it has allowed a non government organization to sign a MoU with a government organization.  Example of BIRDEM is another good example providing services as a sort of PPP initiatives. There are a lot of similar other examples.
Similar type of activities can be initiated with organizations who are allowed to go for this type of jobs. There are some local bodies they can come up with these type of joint activities, and can have partnership in service delivery. Some Authority such as Port Authority can delegate some services to the SME organizations, meaning they can outsource some services from SMEs. Outsourcing policies may be seen to bring some more new services from private sector to the government.
The Procurement Rules may include some changes to invite similar services from SMEs. Governments can provide a number of incentives to SMEs to flourish, such as through procurement incentives or capacity building. At the same time, governments must balance the desire to build and use domestic capacity with the interests of good quality service delivery. It is also important to be realistic about the capacity of SMEs in the relevant market to participate in more complex projects.
In order to engage SMEs in the PPP initiatives, there is a serious need for a Mapping Exercise of activities of local bodies, authorities and what are those potential areas where CMSMEs can be ascertained with responsibilities to provide these services.   The total supply chain of these potential services if analyzed new ideas of PPP initiatives can be derived.
Several PPP initiatives in the service sector such as small water projects, sanitation programs, utility service providing is possible. Public Private Partnership in Gender equality can also work and for these some policies need to be reformed.
In order to become a tenderer under the public procurement platform, threshold level of 5 years' experience and volume of work in terms of monetary value is considered. Practically SME women entrepreneurs do not have this level of experience. Another issue is that work experience in the private sector is not considered for public works contract as per rules and act on public procurement, which also turns as impediment for small women entrepreneurs. With the introduction of e-GP environment is suitable now for WE to participate. With respect to e-GP they tend also not to be aware of the differences in the documents required for tendering in case of goods/works/services (e.g., more documents are required in case of tendering in service, where WE will be more fitted).
There is a provision of subcontracting by the lead in the tender under clause 53 of present policy.  Payment method to subcontractors must be clearly delineated in the procurement regulations. There should be a guideline also for monitoring of payment to subcontractors in the PPRFinancial criteria could be relaxed for WEs in order to increase their participation in the JV.Women may be encouraged to apply in Limited tender, quotation and cash purchase, in that respect Procuring Entity (PE) can prioritize WE as tenderers.  PE also can encourage such bidders with higher percentage of female employment.
PPP initiative could be a good alternative to engage our young entrepreneurs to be engaged in a new set of services and production but for these policies would need to be framed and revisited with an effective manner.
(Ferdaus Ara Begum, CEO, BUILD-a Public Private Dialogue Platform works for private sector development).

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