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Technical Assistance Consultants Report

Project Number: 37151March 2009

Tonga: Youth Enterprises DevelopmentFinanced by the Japan Special Fund

This

Prepared by Ofa-Ki-Levuka Guttenbeil-Likiliki

National ConsultantNukualofa, Tonga

For: Ministry of Training, Employment, Youth and Sports (MOTEYS)Asia Development Bank, Suva Office

consultants report does not necessarily reflect the views of ADB or the Government concerned, ande Government cannot be held liable for its contents. (For project preparatory technical

nce: All the views expressed herein may not be incorporated into the proposed projects design.ADB and thassista

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Project Number: 37151March 2009

TONGA: Youth Microenterprise Development Project

Prepared by Ofa-Ki-Levuka Guttenbeil-LikilikiNational ConsultantNukualofa, Tonga

For: Ministry of Training, Employment, Youth and Sports (MOTEYS)Asia Development Bank, Suva Office

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CONTENTSPage

I. EXECUTIVE SUMMARY 1II. BACKGROUND 3

A. Tonga Situation 3B. Youth Issues 4C. Youth Activities 6

III. THE TECHNICAL ASSISTANCE 8A. Objectives 8B. Changes to Initial Design 9C. Implementation Arrangements and Issues 9D. Phase 1 Study of International Best Practices 12E. Phase 2 National Youth Survey 21F. Phase 3 Implementation Plan 27

IV. CONCLUSION 29APPENDIXES

1. List of Persons Met2. Initial TA4488 TON Technical Assistance Framework3. Revised TYMDP Work plan, November 20074. National TYMDP Survey Report, 2008

33343540

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I. EXECUTIVE SUMMARY

1. With a youth population that makes up more than half of the total population,unemployment on the rise and the increase of emerging challenges in youth dynamics the

Asia Development Bank (ADB) technical assistance (TA) to Tonga TA4488-TON: YouthMicroenterprise Development Project (TYMDP) was readily welcomed by the Government of

Tonga as a means of addressing, to some extent, the issues of youth unemployment and thelack of youth participation in economic development in Tonga. It was envisaged that designing amicroenterprise program that would benefit youth would not only improve their status but wouldalso provide training and support on key business concepts, skills and techniques that isotherwise not available in the existing formal education curricula.

2. The TA aligned with the Tonga National Youth Strategy 2007 2012 (TNYS),1 anapproach by the Government to address youth issues in Tonga. The TNYS envisages that, withthe full cooperation of all involved in addressing youth issues, the young people of Tonga canlook forward to a better future and the fulfillment of their aspirations and needs. Consequentlythe TNYS also aligns itself with the national Strategic Plan 2006/07 2008/09 (SDP-8) and itsobjectives and therefore it is a response at the national level and a strategic framework for

addressing youth concerns and issues and hence calling for concerted efforts amongst allstakeholders.2The vision of the National Youth Strategy is to improve the quality of life of youngpeople through fostering an empowering environment that promotes employment creation, skillsdevelopment, healthy living, community service and mainstreaming youth participation indevelopment.

3. It is hoped that the key outcomes of the project will benefit the core youth groupsidentified in the TNYS, In School Youth- students (15 to 24) enrolled in secondary and tertiarylevel studies to gain secondary, tertiary or technical qualifications, Out-of-School Youth students (15 to 34) who have dropped out of school without qualifications and those who havecompleted studies and attained the appropriate qualifications, Youth with Disabilities those(15-34) with disabilities but who are able to make a contribution to family and economic

activities, Young Offenders young people (especially 2030) who commit crimes and areconvicted in a court of law, Deportees young Tongans deported (15-34) from overseascountries due to criminal convictions all of whom give a good representation of youth groupsin Tonga.

4. One of the key issues raised throughout the implementation of the TA was the criticalimportance of acknowledging and working with the existing resources and partnerships whichalready had strong links to, and who are working with networks of young people throughoutTonga and/or who are participating in, or supporting, local enterprises. In this way, it was hopedthat the TA would build on key local resources and skills when progressing with the TAimplementation.

5. The implementation of the TYMDP was carried out in 3 phases. Phase I was a study ofinternational good and innovative practices in youth enterprise development, Phase II involved anational survey on the current situation of youth identifying their knowledge of microenterprise,economic and literacy skills and leadership potential and Phase III was the development of animplementation plan aimed at a country-wide roll out.

1When the project commenced in 2005 the TNYS was not yet developed, however when the TNYS was launched itshowed clear links to the TA4488 TON TYMDP project objectives.

2Tonga National Youth Strategy 2007 2012, (2007)

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6. Phase I clearly identified a wide-range of international best practices as well asprograms and initiatives whose goals, characteristics and operations might be particularlyrelevant to the Tongan context and in response to the ideas raised in the Inception Report. Thesummary of such practices include those from both the Pacific and internationally:

(i) training resources and materials,(ii) access to markets and the ability to get products and services to buyers (local

and regional export),(iii) access to appropriate vocational/skills training; exposure to new ideas and

concepts,

(iv) access to appropriate financial services (credit for working capital, depositaccounts for security of cash, insurance, etc.),

(v) planning, record keeping, bookkeeping, budgeting, cash flow, etc.(vi) ongoing mentoring, advice and support by experienced, successful business

people

7. Further analysis reiterates the differences in economies and infrastructures, wherebyTonga is clearly at a disadvantage with regards to available resources, trained personnel, keysupporting agencies and well established systems and processes. An attempt to rectify thisconcern is discussed under Phase III with the proposed development of youth microenterprisesupport project hubs.

8. Phase II the national youth survey provided an indication of youth experiences, theirskills and perceptions on microenterprise and their general understanding of how they see thebusiness environment in Tonga. One of the main concerns identified by the survey was that themajority of respondents lacked basic financial literacy, confidence in their leadership skills andwere wary of trying microenterprise development in the fear of failing due to a lack of knowledgeof how to start up and/or maintain a small business. The inspiration to dream about owning abusiness was even a difficult task for most to imagine. Also highlighted was the inability of alarge number of respondents to maintain a savings account with a bank. The survey clearlyidentified and validated the need for the strengthening of financial literacy training, the exposureto new ideas and concepts of microenterprise development and more pressing the need tointroduce more entrepreneurial concepts and ideas into the earliest stage of child developmentas possible (school curricular) and eventually the development of a Youth in Business Awardsto promote and encourage participation in this area amongst youth.

9. Phase III presents the proposed implementation plan as collated amongst keystakeholders throughout the TA implementation. A key component of the plan is based on theidea of creating hubs amongst key stakeholders.3It propose to bring together partners whoseservices and support are required to develop successful youth microenterprises in Tonga andwhose goals are complementary to the TAs overall objective. Due to delays in theimplementation of TA activities, key stakeholders have changed, priorities and initiatives haveshifted and commitments and support for the TA has had mixed responses. The momentum andimpetus shown at the very beginning of the project has lessened which has impacted theachievement of the overall objective of the TA.

3These hubs are detailed in section IV (c)

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10. The final TA activity was a Stakeholders Workshop4which reiterated to stakeholders ofthe overall objective of the TA and highlighted the work already undertaken by the Ministry ofFinance and the Ministry of Training, Employment, Youth and Sports (MOTEYS) with supportfrom the ADB TA. The presentation by MOTEYS discussed: the TAs background, objectivesand outcomes; work undertaken during the initial inputs; issues arising around where to fromhere; and an opportunity for stakeholders to make recommendations on the way forward.

11. It was particularly encouraging to note that the national consultant contracted under theTA has been retained by MOTEYS5and has continued to conduct trainings and workshops onbasic financial literacy and the concept of microenterprise. The training materials used toconduct these trainings was developed under the TA. In addition, the national youth survey isbeing used by to prepare a comprehensive report to guide the development of policies 6 andproposed activities to increase the participation of youth in microenterprise commencing fromthe early stages of the school curricular through to secondary level linking key subject areas tovocational studies and entrepreneurship.

12. Whilst these resources are being used for ongoing and follow on initiatives and despitethe loss of momentum during the prolonged implementation, the overarching idea of providing

young people in Tonga with the opportunity to participate in microenterprise activities is stillmanifested in peoples minds. Whilst it is accepted that it is not the onlyanswer or response toyouths economic inclusion, it is however supported as an optionthat should be made availableto our youth and supported by the relevant stakeholders.

II. BACKGROUND

A. Tonga Si tuation

1. The Kingdom of Tonga has 3 large island groupings: Tongatapu and Eua, Vavau andHaapai and the Northern Island group of Niuafoou and Niuatoputapu. Located in the SouthCentral Pacific, the Kingdom consists of 171 low-lying coral and volcanic islands of which 36 are

inhabited. The total land area is approximately 747km stretching over 360,000km of seawithin the South Pacific Ocean.

2. The November 2006 Population Census of Tonga shows a 0.34% increase, with a totalpopulation of 101,134 compared with 97,784 recorded in 1996. The gender breakdown shows50.6% are male and 49.4% are female. The largest portion lives on the main island ofTongatapu (71,260) followed by the Vava' (15,485), Haapai (7,572) Eua (5,165) and the Niuas(1,652). More than half the total population is under the age of 34 as illustrated in Table 1 below:

4Stakeholders Workshop, March 20095After the completion of her contract with the TA4488 project she is continuing as daily paid staff

6In their National Youth Strategy Policy Document

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Table 1: Population distribution by broad agegroup, dependency ratio, median age and

sex ration

Proportion of population bybroad age group (in %)

Division

0-14 15-24 25-29 60+

Agedependency

ratio(15-59)

Medianage(years)

Sex ratio(males per100 females)

1996 39 20 33 8 88 19.9 103TONGA2006 38 19 35 8 86 21.0 1031996 39 21 33 7 85 19.9 102Tongatapu2006 38 20 35 8 83 21.2 1021996 40 18 33 9 97 19.6 105Vava'u2006 40 17 34 9 96 20.2 1041996 40 17 33 10 101 20.3 102Ha'apai2006 38 18 34 10 91 20.9 1071996 39 20 34 7 85 19.9 114'Eua2006 40 18 34 8 91 19.7 1081996 42 16 34 8 101 18.9 100Ongo Niua2006 38 16 35 10 96 21.5 101

Source: Tonga Statistics Population Census 2006 Analytical Report Volume 2.

This is further reiterated in the Tonga National Youth Strategy7, where it notes that 73% of thetotal population is under the age of 34. The strategy identifies youth as young men and womenbetween the ages of 15 and 34 years

3. Tonga has a non-monetary economy, with remittances from relatives and friends livingabroad recorded as its largest income8. Private remittances from up to 100,000 Tongans livingabroad are a crucial source of additional income for the resident population. A recent WorldBank study showed that total remittances were official recorded as being equivalent to 42.5% ofGDP in 2004, with 91% of households receiving cash remittances averaging US$3,067 perhousehold and US$753 per capita.9 Remittances supported consumption and investment inassets and education, as well as significantly improving average incomes of the poorest

households. Remittance income is also relatively stable, countercyclical offsetting the highvulnerability of the economy to fiscal contraction, natural disasters, crop diseases andfluctuations in world markets.10

B. Youth Issues

4. The changing dynamics in youth culture in Tonga is becoming more evident withemerging youth related issues steadily increasing over the last 10 years, coupled with theoverarching issue of widespread youth unemployment becoming more and more of a problem.Emerging issues such as the increase of deportees mostly from the Tongan diaspora living inNew Zealand, the United States of America and Australia has seen scores of on-goingchallenges faced by Tongan families and societies who are often ill-equipped to cope with the

7Tonga National Youth Strategy 2007-2012, (2007)

8Economy: Tonga 10/07 < www.state.gov/r/pa/ei/bgn/16092.htm - 46k ->

9World Bank 2006. Pacific Islands At Home & Away: Expanding Job Opportunities for Pacific Islanders Through

Labor Mobility.10An index of output volatility calculated by the Commonwealth Secretariat for 111 countries during the period 1980-

92 placed Tonga as the fourth most volatile on the list, attributing this high volatility to economic exposure through anarrow export base, which currently consists mainly of squash and fish exports. Tonga suffered 16 natural disastersbetween 1950 and 2004, with economic losses averaging 14.2% of GDP during the disaster years. (Atkins, J.P. andMazzi, S. 1999. Small States: A Composite Vulnerability Index. Joint Commonwealth Secretariat/World Bank TaskForce Conference on the Small States, St. Lucia, West Indies, 17-19 February 1999. World Bank 2006. Not if butwhen: Adapting to Natural Hazards in the Pacific Islands Region. Washington).

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social, economic, cultural and political demands required by this particular group of youths, tothe steady increase of teenage unplanned pregnancies and sexually transmitted infections(STIs). School drop out rates are also steadily on the rise.

5. Tonga does not have a Social Welfare Department or Ministry neither the capacity toholistically deal with the wide ranging social issues faced by the youth population (teenageunplanned pregnancy, single mums, drugs and alcohol, deportees, school drop outs, attempted

suicide, unemployment). With approximately half the population under the age of 20,government is committed towards the achievement of universal basic education andimprovements to both primary and secondary school education providers.11 Early ChildhoodEducation is not compulsory12, Primary School Net Ratio in 2000 was at 89.4%13, survival rateto grade 5 in 2000 was at 92.5% and a total Secondary School Net Enrolment Ratio of 67.7% ofwhich 61.2% are male and 75.0% are female.14Compulsory attendance at school is betweenthe ages of 6-14 years with a recent proclamation by King George V encouraging an earlier startat the age of 5 years and increasing the leaving age to 18 years15.

6. Early school drop out and unemployment rates among youth are on the rise.Government owns 99% of Primary Schools and 44% of Secondary Schools (majority owned bythe Church). Higher education is available which includes the Queens Salote Nursing College,

Atenisi University, Teachers Training College, Unuaki O Tonga Unitech, Tonga Institute ofHigher Education (TIHE), University of the South Pacific Extension Tonga and a number ofprivate, church and government owned technical and agricultural schools. However, mosthigher education is pursued overseas, particularly in Australia and New Zealand.

7. According to the Youth and Mental Health Situation Analysis Tonga Report (2009),unemployment has remained the number one priority area out of ten priority areas of the TongaNational Youth Congress over the last decade. For many unemployed youth the desire tomigrate overseas to find work has become the solution for many, thus resulting in the increasein illegal immigrant statistics particularly in New Zealand, Australia and the U.S.A. One parentcommented,

I had to send my son to the US because none of us here work. My older son who lived inthe US had passed away and he was the one we depended on to send money home, so Ihad to take my youngest son with me to the funeral knowing that I would return and leavehim behind to stay on and look for work.my son was 15 at the time I left him in the statesand he is now 18 years old and has not yet got his paper to legally reside over there

16

8. The same report notes that for most of the youth who remain in Tonga unemployed arefaced with a whole range of issues. For example, young females choosing to get married earlierthan expected because they feel useless staying at home and not being able to contributefinancially. Alternatively, they find comfort in marrying a person who has a job in the hope thathewould contribute to her familys economic needs. Others find solace in drugs and alcohol

(using and selling) and for male youths in particular they leave home to live with other boys ineither a village hut or another friends home hoping that it would be better off for their immediate

11This commitment is made by Government in the SDP-8 and Tonga Education Support Program

12Tonga Situational Analysis of Children, Youth and Women, 2006

13Pacific Regional MDG Report, 2004

14UNESCO/UIS Database, 2004

15King George Tupou V Speech Opening of Parliament 2007: The intention is that within the next 3 years, 60% ofschool leavers shall be accepted into institutions of higher learning, technical and vocational training and within 5years, 90%

16Youth and Mental Health Situational Analysis Tonga Report, 2008

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families with one less mouth to feed. Others find themselves involved in criminal activities basedon the mindset survival of the fittest.

9. An approach to address these youth issues is evident in the Tonga National YouthStrategy (TNYS), 200717The vision of the TNYS is toimprove the quality of life of young peoplethrough fostering an empowering environment that promotes employment creation, skillsdevelopment, healthy living, community service and mainstreaming youth participation in

development18. Consequently, the TNYS sets out 5 key objectives to achieve over the 2007 2012 timeframe;

(i) Employment Creation economic hardship is eliminated through targeted andequitable employment and income generating opportunities

(ii) Skills Development all young people are provided with educational opportunitieswhich develop their talents and abilities, and help ensure a prosperous future forindividuals and communities

(iii) Healthy Living all youth of Tonga are empowered to practice healthy lifestyles andbehaviour through accessing high quality health education, life-skills training and

youth-friendly health services.

(iv) Community Service the value of community service is recognized at all levels ofsociety and encourage young people to play an active role in communitydevelopment.

(v) Participation and Advocacy the value of community service is recognized at all levelsof society and encourage young people to play an active role in communitydevelopment.

10. The Ministry of Training, Employment, Youth and Sports (MOTEYS) is the nationalcoordinating body for the implementation and monitoring of the TNYS where it notes that

although its timeframe is set for the period 2007 to 2012, the strategies and strategic actions setout in the TNYS will have long-term impacts on the lives of young people.

C. Youth Activ ities

11. A number of youth development projects are currently underway in Tonga. Several haveprevious or existing components which provide useful reference points for the TYMDP. TheTonga Fisheries Project has a Special Incentives Fund and a Community Fund, both aremicrocredit funds specifically aimed at fisherman. The Solid Waste Management Program hashad good experiences mobilizing youth (particularly in schools) by using drama groups topromote their message. The Program tried to have recycling messages introduced into schoolcurricula but found that to add or amend elements of the existing curriculum would take

considerable time and effort. Instead, it was decided to gain permission from schools to runspecial workshops and displays. These were very successful and recycling messages are nowbeing included in some school programs in addition to the existing official curriculum.

17The Strategy was developed in 2006 through the joint efforts of the Ministry of Training, Employment, Youth andSports of Tonga and the Tonga National Youth Congress with the guidance of the Pacific Youth Bureau of theSecretariat of the Pacific Community.18

Tonga National Youth Strategy, 2007

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12. In addition, the MOTEYS is currently preparing to launch a 4 year TVET project19, jointlyfunded by AusAID and NZAID, which identifies specific vocational training needs and enablesinternational trainers with expertise in the identified area of need to come to Tonga to providevocational training which is linked to employment. Wherever possible and/or appropriate,TYMDP could seek to coordinate with these training activities.

13. At present, the Tonga National Youth Congree (TNYC) is the key organization working

with youth on youth-related issues in Tonga. Almost all of its programs are donor-funded andapparently self-initiated or in response to donor requests. TNYC receives very limitedgovernment funds (currently T$10,000 pa) but appears to be very little coordination or directionfrom government in terms of TNYC's policies and programs.

14. Currently, TNYC programs include: organizing an annual youth parliament (funded bythe British High Commission, AusAID and NZAID), Pacific Life Skills (UNICEF and SPC-funded),Tonga National Volunteers (with AusAID, NZAid and UNDP funding) and a very smallmicrofinance program (funded by the British High Commission). Excepting two staff who isspecifically working on funded projects, all others are unpaid volunteers. TNYC has onlyrecently received funding (via an organizational strengthening grant from NZAID) to cover thesalary of its Director. It receives dues (T$300 pa per youth group) from youth group membersbut no other funding to support core operations.

15. TNYC has strong, island-wide networks of youth groups. It has basic infrastructure andboth Tongan volunteers and seconded Peace Corps volunteers in place on all the main islands.For TYMDP, the National Youth Congress would play an important role by using its existingisland-wide networks of youth groups to mobilize young people and build awareness of theyouth microenterprise development program and microenterprise training opportunities. Theirnetwork of volunteers would also provide ongoing support, motivation and direction to youngpeople who may indicate interest in developing a microenterprise and would be able to link themto the TYMDPs various service providers.

16. TNYCs strengths include: access to Tonga-wide youth networks, basic infrastructure onall islands, Peace Corps links and support, prior experience working with young Tongans toinitiate, support and implement microenterprises. Its weaknesses are seriously limited physicalresources (training materials and supplies, computers, vehicles, etc.), disjointed projectmanagement and monitoring experience, a young and currently inexperienced (but keen) leaderand, apart from a few of its Peace Corps volunteers, workers with very limited actual businessexperience.

17. TYMDP, if continued in a nationwide roll-out implementation, would plan to work withTNYC to strengthen their existing microenterprise support programs specifically via (i)assistance in developing and delivering a financial literacy training program, and (ii) a basic

microenterprise training skills program. This has also been supported by the majority ofstakeholders who had been consulted under the TA4488. It is hoped that both of theseinitiatives could benefit from existing materials and programs in use around the Pacific albeitwith some adjustment for the Tongan context. TNYC is currently staffed largely by volunteersand it is expected that TNYC would need to contract in trainers to assist them with developingand delivering financial and business literacy programs. It had been proposed earlier that theTYMDP consultants (international and domestic) would provide technical assistance to ensuregood practice in the content and delivery of training. However as both these consultants have

19July 2009

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moved on to other work, a request could still be made to the ADB to complete Phase III asaccording to the stakeholder recommendations at the recent workshop held in March.

18. The primary focus of Phase III, would be to initiate microenterprise, i.e. micro businesses.It is therefore very important to ensure that the project has a business-like approach in itsmicroenterprise development activities. By linking to and incorporating private enterprise, the

project would aim to provide young microentrepreneurs with examples of business operationsand, hopefully, to provide experience of the practical realities of running a business. (This mightinclude exposure visits and perhaps, work experience opportunities within private enterprises.)

19. There are a number of successful Tongan-owned and operated businesses which couldprovide excellent role models and case studies for young Tongan microentrepreneurs. Anumber of these business people have expressed interest in acting as mentors to young peoplewishing to start microenterprises. The TYMDP could work to incorporate these mentors intotraining and support programs matching mentors from specific industries (e.g. arts, agricultureand tourism) so that young Tongans wanting to start microenterprises in those industries mighthave tangible local examples as inspiration and support.

20. However, although there appears to be considerable verbal support from young peoplefor income-generating opportunities, in reality the demand for, and involvement in,microenterprise activities may be very different. The existence of extended family networks toprovide for basic living needs, the ability to access passive income from remittances, a lack ofaspirations, and prior experience with unsuccessful project attempts make implementation ofthe project, with the target group, a challenge. Careful piloting and close monitoring will be acritical part of the projects implementation. While social and community development areimportant components in the projects implementation and outcomes, ensuring TYMDP has aclear business-like brand, purpose and accountability will be crucial in order to distinguish itfrom other youth projects with more social/community-related outcomes.

21. Consequently, the TNYC is severely under-resourced in terms of physical, operationaland management capacity. They would require close mentoring and monitoring and assistancewith the establishment of suitable project management and monitoring systems. Training oftrainers will need to be undertaken to ensure that TNYC volunteers are able to implementfinancial literacy and basic microenterprise training programs consistently. These are realchallenges that must be taken into account in the future implementation of proposed activities.

III. THE TECHNICAL ASSISTANCE

A. Object ives

22. The overarching goal of TA4488-TON: Youth Microenterprise Development Project

(TYMDP)20

was to provide young people in Tonga with the opportunity to participate inmicroenterprise activities. TYMDPs purpose was to develop a youth microenterprisedevelopment program based on proven models and capable of countrywide implementation.The TA outcomes was therefore aimed to (i) train young people and increasing their financialliteracy, knowledge, skills, and experience in developing microenterprises, (ii) establish pilotmicroenterprises in various locations throughout Tonga, (iii) publish and disseminate a set ofsound practices in microenterprise development, and (iv) encourage the development of agovernment-endorsed implementation plan for the rollout of a youth microenterprisedevelopment program.

20TA4488-TON: Youth Microenterprises Development Project approved in December 2004 for $250,000

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23. The TA was borne from a direct request from the Government of Tonga in 2003 to theAsian Development Bank (ADB) during a Country Programming Mission. The request forassistance was to address concerns regarding the problem of young peoples economic andsocial exclusion. It was also in direct reference to social indicators identifying the increase ofunemployed youth, petty crime, teenage pregnancy and substance abuse. ADB fielded a fact-finding mission in April 2004 to discuss the rationale, scope, cost estimates, implementation

arrangements and financing plan for the TA.

24. The Inception Report highlighted that consultations with various stakeholders confirmedthe need for a microenterprise project, specifically aimed at youth, which is activity-basedwithpractical and tangible outcomes. The possibilities raised in the inception report included:handicrafts - finding new markets (both internal and external) for Tongas handicrafts, identifyingnew product ideas and designs, contemporizing handicrafts without losing traditional techniques;eco-tourism - particularly village-based home stays and day tours opportunities; agriculture enabling accessibility to land and markets; investigating new markets (both internal and external)and new products; investigating value-added opportunities for traditional and new agriculturalproducts, creating supply networks (perhaps via youth cooperatives) using tracts of available

land.

25. The TAs outcomes therefore aimed at training young people with increased financialliteracy, knowledge, skills, and experience in developing microenterprises; the establishment ofpilot microenterprises in Eua, Haapai, Niuas, Tongatapu and Vavau, publication anddissemination of a set of sound practices in microenterprise development; and a government-endorsed implementation plan for the rollout of a youth microenterprise development program.The initial Technical Assistance Framework is attached (Appendix 2) It basically identified thefour following objectives;

(i) To pilot microenterprises in agricultural sector

(ii) Identify young people and provide training to increase knowledge, skills, and experiencein microenterprise development

(iii) To publish and disseminate set of good practices in microenterprise and distribute

(iv) To develop an implementation plan for the roll out of country wide implementation(endorsed by government)

B. Changes to Initial Design

26. Whilst a range of activities was undertaken during the initial stages of the TA4488 TON,revised TYMDP Work Plan, November 2007, attached (Appendix 3) the substantive TAactivities was re-organized under three main phases;

a. Phase I The identification of international and regional best practices in the area ofmicroenterpriseb. Phase II Conducting a national survey amongst youth looking at youths skills,

experience and perception of microenterprisec. Phase III The development of an implementation plan that is capable of a countrywide

roll outC. Implementation Arrangements and Issues

27. The initial implementation plan had originally identified the Ministry of Educations Short-term Training Centre (STTC) as the TAs implementing agency. At the time, the STTC had 5staff that was fully utilized on other existing operations and programs. Office space was limited

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and existing human and physical resources were generally linked to the funding andrequirements of specific donor programs (e.g. the jointly funded AusAID and NZAID vocationaltraining project). There was very little capacity for dealing with any additional monitoring oroperational requirements of the TYMDP and therefore it was noted that the TYMDP projectneeded to be structured so as to be largely self-sufficient. In addition, although there was aprovision in the TYMDPs local counterpart budget for transport costs, the STTC did not have avehicle. The ability to travel to youth group meetings and to monitor microenterprise activities in

areas outside the main towns will be an important part of the TA so the potential lack oftransport was a concern.

28. The TA was temporarily re-assigned to the Ministry of Finance and eventuallytransferred to the Ministry of Training, Employment, Youth and Sports (MOTEYS) established in2007. The new ministry was given the mandate for youth affairs and is working with the TNYCand other stakeholders to achieve the vision and objectives set out in the TNYS, and to alsotake the lead in partnering with the ADB in carrying out and completing the TYMDP.

29. The TAs anticipated implementation plan was set to effectively commence inFebruary/March 2006 with the project finalization expecting to take place 20 months later inOctober/November 2007.

Table 2: Summarized Project Timeline, Acti vities and Deliverables

Trip Summary of Key Project Activities Deliverables Expected Timing

1 INCEPTION Design of framework for microenterprise model

Study of international experience in youth enterprisedevelopment

Inception Report

Study Report

Nov/Dec 2005

2 IMPLEMENTATION Study of agriculture and other business opportunities

Selection of opportunities for initial microenterprisedevelopment

Develop enterprise hub concept

Design content and delivery of training and

microenterprise supportDesign microfinance component

Develop pilot implementation program

Implementation ProgressReport

Commencing

Feb/ Mar 2006

3 Project Monitoring Project Monitoring Monitoring Report Apr/May 2006

4 Project Monitoring Project Monitoring Monitoring Report Aug 2006

5 Mid-Term ProjectReview

Mid-Term Project Review Mid-Term Review Report Oct 2006

6 Evaluation Evaluation of technical, entrepreneurial and otherrelated training and experience for participantsand/or NGOs

Evaluation Report Mar/Apr 2007

7 Guidelines andImplementation

Development of Sound Practice Guidelines &Implementation Program Roll-out

Sound PracticeGuidelines

Program ImplementationReport

Aug 2007

8 FINALIZATION Finalize Project Finalization Report Oct/ Nov 2007

30. However, there have been several contributing factors to the delay of the TYMDP projectwrapping up approximately a further 20 months later. The first issue was the change to theinitial design as noted in B1 (Phase II). This change included the conduct of a national youthsurvey which commenced in August 2007 surveying over 3,000 youths throughout the 5 mainisland groups. Despite tight budgetary constraints the survey went ahead with an approximatebudget of US10,000. The project worked in collaboration with the Department of Statistics to

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ensure that the survey followed normal surveying procedures. The survey was initiallyexpected to be completed within a 3 months, including analysis and recommendations.However, the completion of the survey by enumerators took longer than anticipated due totransportation issues and enumerators dropping out during the process. The questionnaireswere completed and ready for data entry by February 2008. Data entry and input wascompleted by the end of May 2008 and analysis commenced in June 2008. The final surveyreport was submitted at the end of September 2008.

31. As noted in the international consultants Progress Implementation Report21 MOTEYShad no resources available to it at the time of taking over the TYMDP project (i.e. nogovernment budget or any other funding) for its youth division. While the employment, trainingand sports divisions have staff and operating infrastructure, there is no infrastructure and/or stafffor implementation of youth policy or programs. In the previous report, the lack of audio-visualequipment in MOTEYS (useful for documenting and building awareness of Project activities)was discussed and the possibility of re-allocating funds from other areas within the ADBcontribution budget to purchase this equipment was canvassed. However, after a meeting washeld with the Minister of Finance, funds were made available for MOTEYS to purchase variouspieces of equipment.

32. All three phases were completed by the end of March 2009. Whilst the first two phasesare more generic and has already been used as a basis and reference for the development ofresources, training materials and as guidelines for policy development, the final phase washowever more challenging as it required government endorsement and commitment from keystakeholders before it can be implemented.

33. The main issue with Phase III is that the overall implementation of the TA experiencedmany delays. Many key stakeholders were not sure as to whether the TA was still in existence.Most of the key stakeholders have changed jobs or migrated, therefore, keeping themomentum of ongoing support by persons who understood the project in its entirety hadbecome more and more difficult.

34. The international consultant and micro-enterprise specialist recruited under the TA couldnot complete her assignment. This was again due to the delays in the implementation ofactivities and impacted on the timely completion of TA activities and achievement of itsobjectives. A local consultant 22 was contracted to carry out the Stakeholders Workshop,consolidate all activities and prepare the final TA report.

21June 2007

22Responsible for the Survey (Phase II)

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D. Phase 1 Study of International Best Practices

35. The first phase consisted of a study of international good and innovative practices inyouth enterprise development in comparable economies which was undertaken in 2007. Thepurpose of this phase was to undertake a study to identify programs and initiatives whose goals,characteristics and operations might be particularly relevant to the objectives and operational

context of the newly commenced Tonga Youth Microenterprise Development Project (TYMDP).As a whole, the TYMDP encompasses a range of key project components. For most of thesecomponents, the study has found current international projects and initiatives which can provideuseful lessons and, in some cases, which the TYMDP might link to or contact directly forassistance and inputs. The following table gives a summary of the most relevant internationalprojects and initiatives which has to some extent been used in the development of resource andtraining materials under the TA for the domestic consultant.

Table 1: Key TYMDP components and relevant international programs/initiatives

Key componentfor successful

microenterprise

Identified Componentof Tonga Youth

MicroenterpriseDevelopment

Program

Relevant International Programs/ Initiatives

1 An understandingof how enterpriseworks (basicunderstanding ofenterprise: sales,service, cash,credit, income,costs, profit, loss,laws, etc.)

Basic MicroenterpriseTraining

Youth entrepreneurshipprograms

Financial LiteracyPrograms

National Centre for Small and Micro EnterpriseDevelopment (NCSMED) Fiji www.ncsmed.org.fjTraining and business development support programs for smalland micro enterprises in Fiji.

See further details in the Appendix 1.

Know Your Business, Food and Agriculture Organization ofthe United Nations (FAO) www.fao.org

Training package including curriculum, games and materialssuitable for microenteprise training in developing countries andfor rural and agricultural enterprises

Know About Business (KAB), International LabourOrganization (ILO) www.ilo.orgKAB is a training package including curriculum, games andmaterials suitable for microenterprise training in developingcountries. The specific objectives of the KAB package are tocreate awareness of enterprise and income generatingopportunities for young people and to build knowledge of howto operate a successful enterprise.

The KAB training package is directed towards teachers andinstructors in vocational and technical training institutions butcan also be used for general secondary education and highertechnical education. The KAB materials are intended to beused by students in secondary education and trainees/studentsin vocational and technical training institutions whose learningcurricula does not include these components. The typical agegroup would be 15 to 18 years. However, it can be adapted fortertiary education and non-formal education. [www.ilo.org]

The National Foundation for Teaching Entrepreneurship(NFTE) New York www.nfte.com
http://www.ncsmed.org.fj/http://www.fao.org/http://www.ilo.org/http://www.nfte.com/http://www.nfte.com/http://www.ilo.org/http://www.fao.org/http://www.ncsmed.org.fj/

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microenterprise

Identified Componentof Tonga YouthMicroenterprise

DevelopmentProgram


Through entrepreneurship education, NFTE helps young

people from low-income communities build skills and unlocktheir entrepreneurial creativity.

NFTE teaches entrepreneurship to young people from low-income communities to enhance their economic productivity byimproving their business, academic and life skills.

Creates innovative, experiential curricula for educatorsand youth

Provides entrepreneurship educational training andongoing support to educators

Partners with universities, schools and community-based organizations

Offers supportive alumni services [www.nfte.com]

South Australia Young Entrepreneur Scheme (SAYES)www.business-sa.comSAYES project is an initiative of Business SA. It aims to provideyoung South Australians aged between 18 and 30 with theskills and confidence to develop and implement their businessidea and make self employment a viable and worthwhile option.The assistance that SAYES provides helps young people tofine tune their business idea and obtain important informationat first hand from successful South Australian business peoplewho volunteer their time as mentors to the scheme.Successful applicants will be provided assistance for an agreedtime in one or more the following areas:

MentoringDevelopment of a business planFinancial guidanceLegal adviceBusiness/industry referralsNetworking breakfastsTrainingSeminarsIncubator referralMedia exposureInclusion in the SAYES On-line Business DirectoryBusiness loan from the Newmont Youth EntrepreneurFund (providing criteria are met)

[www.business-sa.com]

UNDP Managing Money www.undp.org.fj

A financial Literacy workbook (dealing with basic budgeting andbanking information) developed by NCSMED and the UNDPsPacific Regional office. It is now being used in Fiji (inconjunction with ANZs Rural Banking program).

Money Minded and Money Minded for Youth ANZBank, Australia www.moneyminded.com.au

MoneyMinded is a comprehensive adult financial educationprogram developed to help financial counselors and community
http://www.business-sa.com/http://www.business-sa.com/Content.aspx?p=54http://www.undp.org.fj/http://www.moneyminded.com.au/http://www.moneyminded.com.au/http://www.undp.org.fj/http://www.business-sa.com/Content.aspx?p=54http://www.business-sa.com/

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educators assist people, in particular those on low incomes, tobuild their financial knowledge and make informed decisions

about their money. [www.anz.com.au]

See Appendix 1 for further details.

Consumer and Financial Education in Australian Schools.Report for the Commonwealth Department of Treasury,Aust ral ia

Detailed study of financial literacy education options in schools(primary and secondary) prepared by the CurriculumCorporation, Australia for the Consumer and Financial LiteracyTaskforce

www.MicrofinanceOpportunities.org interesting research onFinancial Literacy programs

2 The ability toestablish anenterprise withouttoo much official orbureaucraticdifficulty (businessregistration, rules,laws, etc.)

Support and mentoringNCSMED Fiji www.ncsmed.org.fj

Conducted study of business environment in Fiji particularlybarriers to entry and costs of doing business; lobbying ofgovernment; support for and input to drafting of legislation forregulatory and supervisory environment for small and microenterprise in Fiji

Pakistan Microf inance Group www.pmn.org.pk

Industry group established by group of microfinanceorganizations in Pakistan with the aim of improving standardsfor the delivery of microfinance services by establishingnational benchmarks, encouraging sustainability, lobbying

government to improve the operating, regulatory andsupervisory environment, training, providing a repository forinformation and disseminating information.

3 The ability todevelop saleableskills and/or newproducts andideas (support fordeveloping newproducts orservices; accessto appropriatevocational/skillstraining; exposure

to new ideas andconcepts)

Links to vocationaltraining

Identifying gaps invocational trainingopportunities

Providing access tonew skills/ideas trainingand workshops

Small Enterpr isE Development (SEED) www.ilo.org

Research work and findings in the Series on Youth andEntrepreneurship from the InFocus Programme on BoostingEmployment through Small EnterprisEDevelopment JobCreation and Enterprise Development (ILO)

Aid to Art isans www.aidtoartisans.org

Aid to Artisans, a non-profit organization, is also a globalcommunity of people. We offer practical assistanceworldwide to artisans who work with us as partners tofoster artistic traditions and cultural vitality, to improvelivelihoods and to keep communities healthy, strong andgrowing. We work with our artisan-partners to developproducts with the appeal to compete successfully in newmarkets around the world and to improve their businessskills so that the changes we achieve as partners areenduring.

Our goal is simple: a world community of entrepreneur-craftspeople who have the ability to improve their ownlives, the lives of their families, the communities in whichthey make their homes, and their livelihoods.
http://www.microfinanceopportunities.org/http://www.ncsmed.org.fj/http://www.pmn.org.pk/http://www.ilo.org/http://www.aidtoartisans.org/http://www.aidtoartisans.org/http://www.ilo.org/http://www.pmn.org.pk/http://www.ncsmed.org.fj/http://www.microfinanceopportunities.org/

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DevelopmentProgram


[www.aidtoartisans.org]


Action fo r En terpr ise www.actionforenterprise.org

Action for Enterprise (AFE) is a leader in the field of privatesector / enterprise development. Since 1991, AFE hasdeveloped state-of-the art training programs, implementedcutting edge field programs, provided technical support toprograms throughout Africa and Asia, and authored numerouspublications.

AFE offers a range of technical assistance including:

subsector/value chain analysis business solution/service assessments program design resulting in commercially viable

solutions and sustainable impact

capacity-building of facilitators and providers ofcommercial solutions

long and short term program implementation training programs and consultancies that use state-of-

the-art tools and methodologies[www.actionforenterprise.org]


4 Accessibility tomarkets and theability to getproducts andservices to buyers(local and export)

Linkingmicroenterprises to

trade associations andmarketing bodies

Identifying potentialnew markets

SEEP Networkwww.seepnetwork.org

The Small Enterprise Education and Promotion (SEEP)

Network is a membership association of over 50 NorthAmerican organizations that support micro and small enterprisedevelopment programs around the world.

The SEEP Network has carried out the significant research andprovides a number of good resources on identifying andestablishing new markets for micro- and small enterpriseproducts


Global Crafts www.globalcrafts.org

Our Mission is to offer income-generating opportunities to

craftspeople in developing countries by following fair tradepractices including paying in advance at least the market pricefor items, ensuring that craftspeople receive payment, andensuring that the craftspeople work in fair working conditions.We work directly with artisans, craftspeople, and producergroups to achieve these goals. [www.globalcrafts.org]

Fair Trade Associations/Catalogue Sales/Retail Outlets andOnline Shops

International Fair Trade Association (IFAT) www.ifat.org

A global network of fair trade organizations. Attempts to
http://www.actionforenterprise.org/mali.htmhttp://www.seepnetwork.org/http://www.globalcrafts.org/http://www.ifat.org/http://www.ifat.org/http://www.globalcrafts.org/http://www.seepnetwork.org/http://www.actionforenterprise.org/mali.htm

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support disadvantaged producers by linking and promoting FairTrade organizations. Incorporates a Catalogue of Catalogues

for wholesale buyers to search for products from fair trademember suppliers.

See Appendix 1 for further details

(Note: There are also various regional and country-specific FairTrade Associations including for Australia & New Zealand.)

The Body Shopwww.thebodyshopinternational.com

Fair Trade Sales: Catalogue, on-line and retail shop Retailerand buyer of raw materials

The Body Shop has a Community Trade programme thatcreates sustainable trading relationships with disadvantagedcommunities around the world. The goal is to help buildlivelihoods and to explore trade-based approaches tosupporting sustainable development by sourcing ingredientsand accessories from socially and economically marginalizedproducer communities.Through this programme, The Body Shop sources rawmaterials for inclusion in some of its best-selling products, fromcocoa butter in Cocoa Butter Hand & Body Lotion to babassuoil used in White Musk Body Lotion, as well as accessoryitems including massagers from India and loofah products fromHonduras. The Body Shop trades with over 35 suppliers fromsome 25 countries.

The Body Shop Foundation www.thebodyshopfoundation.org

Grants available for projects in support of fair trade.

OXFAM/CAA Fair Trade Sales: Catalogue, on-line and retailshop www.oxfamshop.org.au

Apart from operating retail, catalogue and online shops whichsell Fair Trade goods from producers in developing countries,Oxfam also has a Producer Partners program. Through thisprogram, Oxfam works with small scale producers to developnew products, increase their production skills, improve theirquality control systems and business knowledge and tounderstand how to access export markets.

Ebiza www.eziba.comOnline Shop

Described as a virtual bazaar. Operates via a network of

buyers and agents who cover more than 70 countries. Stockabout 1,500 items, ranging in price from US$1,000. Also produces a companion monthly mail-ordercatalog. The mission is to help sustain artisans and theirtraditions through fair pricing and cooperative productdevelopment.

Novica www.novica.comOnline Shop

Another virtual shop (affiliated with National Geographic).Described as an online marketplace representing 10,000craftspeople worldwide. Has Novica arts and technology teams(staffing Novica offices in Brazil, Ghana, India, Indonesia,Mexico, Peru and Thailand) interview each artist, photograph
http://www.thebodyshopinternational.com/http://www.thebodyshopfoundation.org/http://www.oxfamshop.org.au/http://www.eziba.com/http://www.novica.com/http://www.novica.com/http://www.eziba.com/http://www.oxfamshop.org.au/http://www.thebodyshopfoundation.org/http://www.thebodyshopinternational.com/

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DevelopmentProgram


their artwork, post the interviews and photographs online, andhandle all packing and shipping on behalf of the artist.

International couriers deliver the artwork directly to customers,eliminating numerous middlemen and transferring the savingsto creator and customer alike.

Pure Fiji www.purefiji.com Manufacturer and Retailer

Very successful example of a Pacific business that has workedwith local communities to source its raw products from localcommunities (introducing appropriate new productiontechnologies and quality control standards), manufacturing in-country to add value and selling to highly competitiveinternational markets via both physical and online retail.

Pauanesia (Auckland, NZ) Retailer

A retail shop in the centre of Auckland which combinestraditional materials and handicraft techniques with new

designs to create interesting and innovative jewellery, homewares and hand-crafted gifts and souvenirs from New Zealandand the Pacific islands.

GROK(Australia) Retail www.grok.com.au

A retail shop in Sydney with a specific mission to supportsustainability and to source products (art, crafts, oils, etc.) fromcommunities in developing countries.

The Fiji Retail Enterprise Engine (Free Shop) Fiji RetailCooperative

A shared retail space in a shopping precinct which providesmicroentrepreneurs who might not otherwise be able to afford aretail space with the opportunity to display and sell theirproducts and designs. The concept began as a UNDP project.

Eco-Tourism initiatives:

Fiji Lodging Ecotourism Listings www.fiji.pacific-resorts.com/lodging

Green Turtle Tourswww.pacific-resorts.com/fiji/greenturtle-tours

Green Turtle Tours operate tours around Fiji using local guidesand arranging overnight accommodation in traditional villagehousing hosted by local families.

Navala Village Balou s Retreat www.pacific-resorts.com/fiji/navala-village

Balous retreat is a tourism homestay program located close toa traditional village. Guests stay in traditional thatched buresand are hosted by local families. Activities guided by localvillagers.

Eco Tourism Society of Kenya www.esok.org

A useful site for gathering knowledge and resources particularlyin relation to good practice, ratings systems, information and
http://www.purefiji.com/http://www.grok.com.au/http://www.fiji.pacific-resorts.com/lodginghttp://www.fiji.pacific-resorts.com/lodginghttp://www.pacific-resorts.com/fiji/greenturtle-tourshttp://www.pacific-resorts.com/fiji/greenturtle-tourshttp://www.pacific-resorts.com/fiji/navala-villagehttp://www.pacific-resorts.com/fiji/navala-villagehttp://www.esok.org/http://www.esok.org/http://www.pacific-resorts.com/fiji/navala-villagehttp://www.pacific-resorts.com/fiji/navala-villagehttp://www.pacific-resorts.com/fiji/greenturtle-tourshttp://www.pacific-resorts.com/fiji/greenturtle-tourshttp://www.fiji.pacific-resorts.com/lodginghttp://www.fiji.pacific-resorts.com/lodginghttp://www.grok.com.au/http://www.purefiji.com/

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DevelopmentProgram


the experiences of other agencies and organizations attemptingto work with communities to establish eco tourism projects.

Responsible Travelwww.responsibletravel.com

This website provides links to eco- and responsible tourismventures which, in some cases, are either run by or workclosely with local communities. Based around nature, culturaland artistic themes, these ventures may provide useful ideasand examples for similar initiatives in Tonga.

See Appendix 1 for examples of existing operations

Food and Agriculture Organization (FAO) www.fao.org

Research and documentation of Agricultural Support Systemsdivision. E.g. Market Research for Agro processors; Guidelinesfor Small-Scale Fruit and Vegetable Processors; Managementof Fisherfolk Microenterprises

GtZ www.gtz.de

Public-Private Partnership (PPP) program

Private companies in PPPs profit from GTZ's contacts,experience and its global network of experts. At the same time,private sector involvement helps achieve development policygoals by creating jobs, introducing technological innovations indeveloping and transition countries, and improving productionprocesses.

One of GTZ's partners in the PPP programme is the GermanCoffee Association (Deutsche Kaffee-Verband DKV). As aresult of GTZ/DKV cooperation, a code of conduct has beenproduced, the Common Code for the Coffee Community, whichis now internationally observed. The code covers social andecological factors as well as quality improvements within theinternational coffee sector, thus guaranteeing high-qualitycoffee for the companies on a long-term basis. At the sametime, the living conditions of suppliers, most of who are small-scale farmers, are sustainable improved. [www.gtz.de]

Department for International Development (DfID), UKwww.dfid.gov.uk

Value Chain and Enterprise Cluster research. Publications onthe role of the private sector in eliminating poverty and

disadvantage.ADB Ins ti tu te Mak ing Markets Work fo r the Poor(MMW4P) www.adbi.org

Value Chain and market research aimed at identifying andcreating market structures to support small producers.

5 Access toappropriatefinancial services(credit for workingcapital, depositaccounts for

Providing youngmicroentrepreneurswith introductions tofinancial institutionsand support in their

Tonga Fisheries Project provides an example of a localproject working with an established financial institution and adonor (via the funding and establishment of a credit guaranteefund) to enable lending to individuals who would not otherwisehave qualified for credit and to whom the bank would not havebeen able to lend without contravening the banks lending
http://www.respondibletravel.com/http://www.fao.org/http://www.gtz.de/http://www.dfid.gov.uk/http://www.adbi.org/http://www.adbi.org/http://www.dfid.gov.uk/http://www.gtz.de/http://www.fao.org/http://www.respondibletravel.com/

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DevelopmentProgram


security of cash,insurance, etc.)

dealings with financialinstitutions

Working with banks todesign trainingprograms

Working with banks todesign and implementsustainable,appropriately tailoredfinancial services(microcredit, depositaccounts, etc.)

rules. (e.g. Lending and Credit Guarantee program)

Traditional Credit Union Australia www.tcu.org.au

A savings and lending program working across very remoteareas in Northern Australia with individuals with severely limitedaccess to banking services and very low financial literacy.

Westpac Bank Aus tralia Step-Up Loan.www.westpac.com.au

A loan product/linkage program. Westpac Bank Australiadeveloped a step-up loan product for clients who weregraduating from a non-profit lending program.

ANZ Rural Banking www.anz.com.au

ANZ have very successfully piloted a mobile banking service toremote and rural areas in Fiji and are now seeking to pilot thesame service in Tonga. This would provide increased accessto financial services for Tongans living in outlying areas.

6 Access toappropriate,affordablebusiness supportservices (businessplanning, record

keeping,bookkeeping,budgeting, cashflow, etc.)

Linking youngmicroentrepreneurswith appropriatebusiness support fortheir microenterprises

at an affordable cost

Tonga Business Development Services (BDS) Project

The possibility of linking young micro-entrepreneurs from theTYMDP to the existing support services facilitated (at subsidy)via the Tonga Business Development Services program(established and funded by the ADB) should be investigated.

Accion International www.accion.org

ACCIONABCs of Businessprogram is a MicroenterpriseTraining program designed to provide microentrepreneurs withpractical business management and development skills.


Start and Improve Your Business (SIYB), Small EnterpriseDevelopment (SEED) prog ram www.ilo.org

To encourage competitiveness, business growth andemployment creation, SEED assists partners in building

national and local capacity in cost-effective and sustainablebusiness development services; such as management training,access to finance, information on technologies, export anddomestic markets access, and inter-firm linkages. To date, theILO has introduced the "Start and Improve Your Business"methodology in more than 80 countries, most recently to helprebuild war-torn economies in the Balkans. Planned are thedevelopment of an interactive CD-rom version of SIYB, a newExpand Your Business product for growth oriented enterprisesand a renewed effort to measure employment efforts of SEED.[www.ilo.org]
http://www.tcu.org.au/http://www.westpac.com.au/http://www.anz.com.au/http://www.accion.org/http://www.ilo.org/http://www.ilo.org/http://www.accion.org/http://www.anz.com.au/http://www.westpac.com.au/http://www.tcu.org.au/

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The Small Enterpri se Education and Promot ion (SEEP)Networkwww.seepnetwork.org

The Small Enterprise Education and Promotion (SEEP)Network is a membership association of over 50 North

American organizations that support micro and small enterprisedevelopment programs around the world.

The Business Development Services Working Group,comprising SEEP members, seeks to advance and disseminatelearning about services that help the poor benefit from globalmarkets. [www.seepnetwork.org]

USAID Microlinks www.microlinks.org

Valuable site for relevant case studies, research and findingson microenterprise market development issues, value chainanalysis, enterprise cluster and provision of sustainablebusiness development services.

Others:

NCSMED (as previously discussed)

7 Ongoingmentoring, adviceand support byexperienced,

successfulbusiness people.

Day-to-day, ongoingsupport and monitoring

Mentoring

Business and Youth Starting Together www.bystonline.org

Business and Youth Starting Together is an Indian organisationlinking young entrepreneurs with business mentors.

Business proposals from potential entrepreneurs are welcomedirectly or through vocational schools, entrepreneurial traininginstitutions and well established grass root and Non-Governmental Organizations (NGOs). We give assistance tohelp formulate these proposals.

The screening process, done by an Entrepreneur SelectionPanel, (ESP), comprises of experts from the industry inmarketing, finance, management, etc. On approval of theproposal by them, we provide a whole range of BusinessDevelopment Services along with a Mentor, who givesguidance until the venture takes off.

http://www.seepnetwork.org/http://www.microlinks.org/http://www.bystonline.org/http://www.bystonline.org/http://www.microlinks.org/http://www.seepnetwork.org/

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E. Phase 2 National Youth Survey

.I have thought about starting up a little business like sewing school uniforms and clothes for childrenbut it's too hard because I dont own my own sewing machine and I dont know anyone who would giveme one to use until I can buy my own and then give it back to them.23

36. The second phase was a national survey to help better understand the current situationof youth in Tonga; and to identify and assess their interests, skills, needs and qualifications andfor this information to be used when developing a unique and purposeful microenterprisedevelopment program for the youth of Tonga. The total number of respondents who took part inthe TYMDP Survey was 3,680 throughout the Tongatapu, Vavau, Haapai, Eua and Niuagroups. The sample size was estimated at 10% of the age group population size (19-34 years)as directed and assisted by the Department of Statistics which was 3,055. The final result was atotal of 3,680 respondents.

The survey set out to answer the following key questions:

(i) What is the current economic situation of Tongan youth?(ii) What levels of education, skills and training do Tongan youth have? Do theyhave the ability to participate in enterprise?

(iii) Are young Tongans capable of managing their own money? What is the generallevel of financial literacy?

(iv) What do young Tongans know about enterprise? Are young Tongans interestedin running their own enterprises? Who are their business role models in Tonga?

(v) Do young Tongans have ideas about business opportunities?(vi) What are the aspirations and hopes of young Tongans in relation to their

economic futures?

37. For example, one 24 year female respondent shared about how she chose to marry at

20 years of age because she felt she was a burden to her family. The second of 5 children, shehad completed high school at Form 6 with the hope of continuing education at tertiary level,however due to financial constraints she knew that it would be impossible to continue hereducational plans. She thought that by getting married she would be able to help her parents byhaving one less mouth to feed, more importantly, she would be able to give some of herhusband's earnings (a delivery truck driver) to her parents. A 22 year old male respondentstated that the reason why he is living apart from his family is because he feels ashamed thathe is not able to help his parents financially. He noted that his parents are finding it difficult toprovide daily meals for his 6 younger siblings and because he didnt do well in school; hethought it best to leave home and live with friends.

38. The thought about looking for part time employment to pay for continuing education, formany youth, is a very new concept. For many, this concept is not considered during the processof mapping out their life options. Some youths also questioned the availability of part time workin Tonga and thought that the lack of it was also a contributing factor as to why youth did notseek it. A closer study of 5 local businesses on Tongatapu, for the purposes of the TYMDPsurvey report showed the following;

23Survey Respondent, Vahe Loto District. She had taken part in the Tonga National Council of Churches SewingClass over a 12 month period.

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Study of 5 Local Business Part Time Work Availability:

Business Hours Part Time WorkAvailable

YES / NO Time

Pay Rate PerHr

Business 1 24 hours Yes shiftrotation

TOP1.50

Business 2 6:00am 11:00pm No FamilyBusiness

NIL

Business 3 11am 2:00am Yes 5pm 2am TOP2.00

Business 4 6am 10pm Yes 4pm-10pm

TOP1.50

Business 5 8am 5pm Yes Weekends TOP1.75

39. Based on the information sought from the businesses listed above, the average rate perhour available for part time work is TOP1.50 TOP1.80. The hours required under the part timework availability is approximately 7.5 hours per shift with an average weekly take-home-pay ofTOP45.00 TOP55.00 per week. It is also important to note that when the businesses werecontacted, more than half agreed that they did not consider offering part time work to studentsas the hours offered would have an impact on the students studies. They were more in favourof offering work to youths who had no other study commitments24. One local employer forexample noted that it was impossible to offer a form 6 and 7 student part time work because the

nature of his business required that all employees be multi-skilled in receptionist work and barwork. However, one employer thought that the culture of part time work availability should bean area of development that both the Government and Private Sector should work towardsimproving and even suggested that the Ministry of Labour, Industry and Commerce develop aminimum pay rate and age for youths looking for part time work.

40. Another interesting point-of-reference is the fact that most young women who are still inthe formal schooling system are not encouraged to find part time work because of the risks25involved in taking up after-hour employment. The majority of after hour employment availablelocally is heavily focused in the hospitality and tourism industries and shops mainly owned andoperated by the Chinese or family businesses. Therefore, the option of looking for part-timework at least for the younger female populous is out of the question. This in itself reduces the

economic opportunities available, particularly, to young Tongan females.

41. One female respondent noted that she had asked her mother if she could find some parttime work in the weekends while she was in Form 7 and the response from her mother was

24Some employers were more in favour of employing youths who had no study commitments because from pastexperience the students took too much time off for study and exams and often missed their shifts and wereunrealiable.

25For many young girls parents would not be in favour of them working after hours in fear of something negativehappening to their daughters, e.g. getting pregnant

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largely based on societal expectations, .look for work in an office somewhere, work thatinvolves computers, isnt that what you learn at school? Dont go and get work in a shop orsomething like, I didnt send you to school to get an education to work as a shop keeper. Forother types of work such as carrying out odd jobs around the community or village (cuttinggrass, gardening, baby sitting) is largely perceived as economic fundraising activities for localyouth groups and the latter does not have a high demand in Tonga amongst the youth. Child

caring job opportunities are largely taken up by Fijians and older Tongan women.

42. Thinking about saving money is therefore a non-reality for the majority of youths whoparticipated in the survey and discussions. Many highlighted that even if they had an opportunityto undertake part-time work; the pay earned at the end of the week would most probably eithergo to their parents or caregivers to help with the financial needs of the family or would be justenough to cover for weekly costs with next-to-nothing left over for savings. This was evidentwhere the majority of participants indicated that they did not have an account with the localbanks and those who had accounts were quick to highlight the fact that the balance was almostnext-to-nothing. The foremost reasons being that fact that they had no paid job or too manydemands not being inline with the actual wages received from their place of employment.

43. Going further as to suggest considering options of starting up a small business istreading on foreign ground for the majority of the youth who participated in the survey. The termbusiness for most - transcends the scope of opportunities available for youth. Most respondentsbelieve that starting up a business requires a certain set of skills, knowledge-base and financialcapacity which many of them indicated that they did not acquire, moreover, had never (priorto participating in the TYMDP survey) contemplated on trying out.

44. The perceptions about what a business is, i.e. relating it only to well-known commercialentities such as SiI Kae Ola, Western Union, Cowley Bakery and Chinese Shops highlightedthe self-perceptions of smaller businesses such as selling food crops by the road side, sellingsmall handicrafts, washing clothes or providing cleaning services was not seen as an idealbusiness type amongst the youth. The understanding of entrepreneurship and the way they

perceive their own socioeconomic status was not articulated and it became evident during thesurvey project that it was more favorable for one to secure permanent employment than toventure out in an attempt to start a business.

45. For the youth, many of them link economic opportunities to the availability ofemployment. Having a secure job with an assured wage or salary surpasses the opportunityavailable to start up a small business.

..to start a small business, I would have to get some money to help me start it and then I would haveto register my business and get equipment [mechanic business] and then I would have to advertise sothat people would know and make space behind my home to fix the cars and then I would also have tohave money to be able to pre-order car parts otherwise Ill end up waiting and waiting for the customerto buy it and then if the customer is my relative, I most probably wont get paid what I should be paid.So for me its much better to just keep working where I am and that way at least I know that I havewages to look forward to every two weeks..I have 4 children so I cant afford to get a loan. Its muchbetter that I work. (Male Respondent, 28)

46. There were also the spirited minority who communicated their entrepreneurship skillsdetailing business ideas and plans that they had either contemplated in the past or werecurrently thinking about pursuing. These ideas range from operating a small home-based shopto operating a T-Shirt Printing business. One youth in particular highlighted the fact that she was

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determined to start a string of backpacker's accommodation throughout Tonga, even as farreaching to the two Niuas. The majority of survey respondents who indicated that they wereinterested in starting up a business resulted heavily in the shop-operation sector. The view ofoperating a home-based shop meant that they could open for business according to their time-availability rather than the demand from the consumer as they had other obligations to takecare of, for example community activities, child raring and church commitments. Operating a

small home based shop also meant that they did not have to pay for rent or employ someone towork. However, at the same time the majority of the respondents also indicated that one of themost successful businesses in Tonga were the Chinese-owned and operated shops becausethey are cheaper compared to other shops and more importantly they were open for servicealmost 24 hours a day, even on Sabbath day (behind closed doors), when all other shops wereclosed for business.

47. Loaning and borrowing money is also common practice amongst youth, however in itsvarying forms. For example, although some indicated that they applied for loans in a formalprocess, i.e. banks, financial institutions and community/village credit union groups, many alsoindicated that they had borrowed or loaned money informally from friends who had paid jobsand relatives both here in Tonga and those residing abroad. It was interesting to note that the

majority of those who had borrowed money informally resulted in non-repayments because thepressure of paying it back was minimal compared to formal loans. For example, one 28 yearold female commented that she had borrowed money from her brother ($150.00) to help pay forher visitors visa application to NZ and has never paid it back because as she simply put it,.because hes my brother and so he doesnt expect me to pay it back Moreover, manyyouths noted that when they need money for something they usually just ask their parents (forthose who are not married) or siblings who are working or simply just peni-peni26from variouspeople until they get the required amount. So the culture of just asking people for money, ratherthan looking for part time work or taking the incentive to look for odd jobs for the purposes ofearning some money, is very visible amongst the youth, as noted by one of the respondents,.you dont have to go far, especially in town, youths are peni-peni all the time asking formoney from anyone passing bymostly its just for buying cigarettes or food

48. It is clear that to have any type of influence on the youth with regards to their economicdevelopment and participation, it needs to start at the earliest possible stage - not only theformal schooling curricular, but also encouraged in both the village/community and familysettings. There are still some obvious gaps in the area of economic opportunities for youth todevelop and participate in. Whether its the private sector developing its part-time employmentindustry through to the provision of business entrepreneurship sessions built into the formaleducation curriculum (in the subject areas of economics and life-skills career development) tothe development of a savings account program introduced at the primary school level wherechildren can save from 5 cents to $1.00 per week in collaboration with the local banks.

49. Addressing the issue of young women who want to start a career in business

development is also an area that needs to be strengthened and supported vigorously becauseof the current nature of the land tenure system and its connection to collateral and securityrequired by the banks. A research titled Sustaining the Momentum: An Economic Forum onWomen Entrepreneurs Summary Report27noted the following which is very true of the Tonganwomen experience with business entrepreneurship;

26Beg for money

27Asia-Pacific Economic Cooperation, the European Union, the Organisation for Economic Cooperation and Development (OECD),the African Development Bank and the United Nations Economic Commission for Europe.

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50. The research found that women business owners cite common barriers to firm growth,including:

(i) lack of start-up financing;(ii) lack of management skills and access to business network opportunities;(iii) lack of opportunities to learn the practical issues of starting, surviving and

growing their own enterprises;

(iv) lack of adequate daycare; and(v) lack of awareness among young women of entrepreneurship as a career option.

51. As a result, women business owners were found to start relatively smaller businesses,operate younger firms with fewer employees, and grow more slowly and to lower levels.Consistent with Canadian findings, women:

(i) are less likely to export;(ii) have less formal management experience;(iii) are more likely to rely on personal networks for advice;(iv) are less likely to "identify with" entrepreneurship as a career option;(v) perceive additional constraints such as less social capital, lack of access to

resources and increased family responsibilities;

(vi) operate firms that have lower levels of capitalization; and are under-representedusers of small business support services

52. It is hoped that the outcome of the survey report will encourage strengthened supportand activities towards a more proactive business and economic environment that will addressyouths:

(i) access to capital;(ii) access to education/information/training;(iii) access to networks;(iv) access to markets; and(v) recognition as a contributor to economic vitality and growth.

53. The key findings of the TYMDP survey as discussed above has generated the followingrecommendations as key guidelines, for any future youth strategy development andstrengthening of the existing TNYS, in the area of youth and microfinance:

(i) To introduce key business concepts and entrepreneurship into the schoolcurricular, taking into account alternative proven methods such as the use ofdrama and essay competitions, in light of the process and time it takes to changecurricular. However both these methods can be short-term and long-term goals,

(ii) To introduce key savings concept and culture into the earliest sage of educationas possible. For example a savings program within the schools to encouragechildren at the earliest age as possible to open savings accounts and to savefrom as little as 5 cents a week to encourage students to adopt the culture ofputting money away and to show that even as little as 5 cents a week eventually

adds up overtime. This initiative should also be supported by the local banks withinnovative programs and incentives created to encourage and maintain studentsto save money. There should also be information readily available for students toguide and show them how much they can save for specific amounts of depositson a weekly, bi-weekly, monthly basis.

(iii) Budgeting should also be introduced into the school curricular at the seniorsecondary level. The budgeting resources and information should be developedand delivered according to the Tongan social and economic context. This isparticularly crucial as social and economic obligations for Tongans can be theextreme opposite to what youth are experiencing elsewhere in the world.

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(iv) Any further strengthening or development of new microenterprise programs foryouth should be well equipped with the appropriate resources, support andinformation base. Youth microenterprise cannot apply to all youth, however, forthose who do take up an interest in this area, need to be assured the confidencethat they will be able to receive all the appropriate literature, research, assistanceand support they require before taking further steps. It is anticipated that if the

formal school curricular introduces key business concepts, entrepreneurship andmicroenterprise - that this would be an added value and stepping stone for thosepursuing business ideas further after leaving school.

(v) To introduce leadership, aspiration setting, goal setting skills and techniques aslife skills programs within the formal school curricular. This also needs to take amore interactive and encompassing approach, whereby school career guidancecounsellors and social behaviour counsellors are available for students to access.There also needs to be more practical experiences available for students toundertake, particularly in the private sector, to encourage and motivate youngand upcoming entrepreneurs.

(vi) To develop a Youth Entrepreneurship Business Award, reinforcing that youthcan and are able to participate in business

These recommendations should also take into account objective one of the TNYS which isalready in place by enhancing the existing action plans and avoiding duplication of activities;

53.1. TNYS Strategic Act ions 2007-2012

Youth Enterprise Development

(i) Design and implement a country wide program for the development of youthenterprises

(ii) Strengthen youth participation in small-scale fisheries, aquaculture, eco-tourismand micro-business

(iii) Strengthen youth participation in spots as a means of employment(iv) Create the capacity (institutionalization) for youth to actively develop their

creative and artistic talents and participation in both social and economic activityas means of generating income

Resource Mobilization(i) Establish the Tonga Youth Development Trust Fund to support sustainable

youth enterprises

Public Awareness(i) Design and implement a national public awareness and communicationstrategy

for information dissemination on youth enterprises

(ii) Establish an Annual Youth Festival to showcase entertainment, trade and careerOpportunities

(iii) Enforce national employment registration of unemployed youth to improveemployment referral

Equality of Opportunity(i) Ensure equal access and opportunities for youth with disabilities in all

employment sectors(ii) Ensure gender equality in all initiatives

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The full survey report is attached (Appendix 3)

F. Phase 3 Implementation Plan

54. The original project design foresaw that microenterprise hubs would be designed aroundparticular industries, e.g. an agricultural microenterprise hub; a handicrafts hub; etc. It is

recommended however that the hubs should not be formed around a particular industry on thebasis that the core financial and enterprise skills and training required are the same regardlessof the particular industry focus. By creating generic entry points for basic services, it is hopedthat unnecessary replication of scarce resources might be avoided. In addition, as the originalproject design foresaw each hub being located on a different island, making each hub have anindustry focus might mean that young entrepreneurs in a particular location whosemicroenterprise ideas did not fit within that industry, would be excluded from participating.Instead, once young microentrepreneurs have identified the industry they would like to work in,the hub mechanisms would then direct them to an industry-focus cluster incorporating the mostappropriate partners working in that industry, e.g. trade associations, business mentors, andgovernment extension programs.

55. As embodied within successful microenterprise models worldwide, the ability toimplement a microenterprise program effectively relies on the integration of a range of keycomponents. These are likely to include:

(i) an understanding of how enterprise works (basic understanding of enterprise:sales, service, cash, credit, income, costs, profit, loss, rules, regulations, taxes,laws, etc.);

(ii) the ability to establish an enterprise without too much official or bureaucraticdifficulty (business registration processes, rules, laws, etc.);

(iii) the ability to develop saleable skills and/or new products and ideas (support fordeveloping new products or services; access to appropriate vocational/skills

training);(iv) accessibility to markets and the ability to get saleable products and services to

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