PROJECT DOCUMENTNTF III MYANMAR: INCLUSIVE TOURISM FOCUSING ON KAYAH STATE(AUGUST 2014)

A Netherlands Trust Fund III Project

Programme Tit le: The Netherlands Trust Fund III (NTF III) Programme Period: September 2014 to June 2017Project Title: NTF III Myanmar: Inclusive Tourism Focussing on Kayah State Site of the Project: MyanmarPartner Organizations: Centre for the Promotion of Imports from Developing Countries (CBI)Executive Agency: International Trade Centre (ITC)

The International Trade Centre (ITC) and the Dutch Centre for the Promotion of Imports from Developing Countries (CBI) have been cooperating for decades. This cooperation has most recently been embodied in a series of programmes called Netherlands Trust Fund I (NTF I), which ended in 2009, and Netherlands Trust Fund II (NTF II), which started in 2009 and ended June 2013.

Building on the NTFII programme and its lessons learned, the purpose of the Netherlands Trust Fund phase III programme is to increase the income of producers and exporters in selected sectors in selected priority developing countries, including in Myanamar and its tourism industry. The expected impact will be reflected in jobs created and maintained in selected sectors. Job creation reduces poverty and is strongly correlated with reductions in other measures fighting poverty such as access to basic human needs, health and education.

The present project aims to create and maintain jobs in the Myanmar tourism sector. This will be achieved by increasing the income of enterprises and local communities, and by enhancing the competitiveness of Myanmar’s tourism industry and related supply chains, especially at the Kayah state level, ultimately contributing to sustainable economic development.

To achieve this, the project will work along three axes in line with the NTF III programme approach, namely: a) enhancing the export capacity of tour operators as well as of SMEs (both, enterprises that supply goods and services to the Kayah state tourism industry as well as local communities), b) strengthening of tourism-related TSIs in Kayah state as well as Yangon, and c) creating business linkages with tourists and those intermediaries that offer Kayah state as a destination for incoming tourists.

The International Trade Centre (ITC) will emphasize strong involvement of country expertise to design and conduct the planned activities of the programme, to optimize efficiency, engagement and relevance.

Approved:______________________________________ Date:______________________

Mr. Toe Aung Myint Secretary of Myanmar Trade Development Committee, Director General, Department of Trade Promotion, Ministry of Commerce, The Republic of the Union of Myanmar

Approved:______________________________________ Date:______________________

Mr. Tint ThwinDirector General, Directorate of Hotels and Tourism Development, Ministry of Hotels and Tourism, The Republic of the Union of Myanmar

Approved:______________________________________ Date:______________________

Mr. Anders Aeroe Director, Division of Market Development on behalf of Ms. Arancha GonzalezExecutive DirectorInternational Trade Centre (ITC)

Approved:______________________________________ Date:______________________

Mr. Dick De ManDeputy Managing Director and Head Institutional DevelopmentCentre for the Promotion of Imports from Developing Countries (CBI)

3

Disclaimer

The Parties understand that the present document constitutes preparatory work that reflects the Parties’ intentions in relation to the Project. The present document shall not be regarded as a contractual document binding on the Parties. The Parties’ intentions hereunder shall be formalized by subsequent written agreement, subject to ITC internal approval procedures.

PROJECT PLAN

Project title: NTF III Myanmar: Inclusive Tourism Focussing on Kayah State

Country: Myanmar

Duration:

(months)3 years Start date:

Planned 09/2014

End date: Planned 06/2017

Total estimated budget: USD 1,901,108

The Parties understand that the present document constitutes preparatory work that reflects the Parties’ intentions in relation to the Project. The present document shall not be regarded as a contractual document binding on the Parties. The Parties’ intentions hereunder shall be formalized by subsequent written agreement, subject to ITC internal approval procedures.

CONTENTS

Project Document.................................................................................................................................. 1

Project Summary................................................................................................................................... 6

Project Purpose..................................................................................................................................... 7

1. Background & Context....................................................................................................................... 7

2. Rationale......................................................................................................................................... 14

3. Strategy........................................................................................................................................... 20

4. Results Framework..........................................................................................................................27

5. Organization & Management...........................................................................................................28

6. Budget............................................................................................................................................. 33

7. Monitoring & Evaluation................................................................................................................... 34

8. Communication................................................................................................................................ 37

ANNEX I: Logical Framework..............................................................................................................38

ANNEX II: Work plan........................................................................................................................... 43

ANNEX III: Monitoring Plan.................................................................................................................46

ANNEX IV: Risk Management Plan.....................................................................................................49

ANNEX V: Communication Plan..........................................................................................................55

ANNEX VI: Analysis of Additional project stakeholders.......................................................................57

ANNEX VII: Synergies and collaboration of NTF III Myanmar with CBI activities in the tourism sector in Myanmar.......................................................................................................................................... 59

Annex VIII: NTFIII Countries, Sectors and Tentative Budget Allocation..............................................60

Annex IX: Coherence with partner government policies and strategies...............................................61

ANNEX X: Ongoing tourism development projects in Myanmar..........................................................65

5

PROJECT SUMMARY The NTF III Myanmar project is part of the Netherlands Trust Fund III /NTF III programme. NTF III is an Export Sector Competitiveness Programme based on a four-year partnership agreement signed by the Centre for the Promotion of Imports from developing countries (CBI) and the International Trade Centre (ITC) in July 2013. The programme is built around one outcome, namely “export competitiveness of selected sectors in selected countries enhanced”. This will be achieved through an integrated approach to sector development. The Programme will conduct activities in Bangladesh (IT/ITES sector), Kenya (IT/ITES and Avocado sectors), Myanmar (Tourism sector) and Uganda (IT/ITES and Coffee sectors). The planned budget allocation per country and per overall programme is illustrated in Annex .

In Myanmar, the tourism sector has been chosen on the basis of the seven export priority sectors identified under the National Export Strategy (NES) undertaken by the Ministry of Commerce, with technical assistance provided by ITC. ITC analyzed all seven sectors with regard to possible trade-related technical assistance and recommended the tourism sector for NTF III activities. The Ministry of Commerce endorsed the selection.1 The Myanmar state of Kayah was chosen as the destination for project implementation in close consultation with the Ministry of Hotels and Tourism, the Ministry of Commerce, as well as the private sector. Kayah state was chosen because of its culturally rich and untapped potential to develop cultural community tourism tours, linking handicraft and food producers to the tourism value chain, while at the same time addressing high poverty levels especially among ethnic minorities.

NTF III Myanmar follows the same logic as the programme at impact, outcome, and output level. At the impact level it targets job creation in the Myanmar tourism industry and related supply chains. At outcome level it is envisaged to increase the export competitiveness of the Myanmar tourism sector as well as the competitiveness of the sector’s local supply chains. To achieve the long-term impact and the outcome, the project will deliver in three main ways.

Under Output 1, the project will increase the export capacity of tourism enterprises as well as tourism supply chains and community producers and service providers. This will involve building export capacity among Kayah state tourism-related enterprises by (i) developing, in an inclusive approach, new tourism products in the form of cultural community tours with an impact on local revenue generation, and (ii) improving local supply chains for the tourism industry.

Under Output 2, ITC will work with partners to improve performance of tourism associations to provide tourism development support services to members. This includes the Yangon-based Union of Myanmar Travel Association (UMTA) and the Myanmar Tourism Marketing Association (MTM), as well as associations of tourism-related supply chains in Kayah state.

Under this output, ITC will assess the capacity of the only existing tourism association, i.e. the Kayah Hotelier Association as well as the feasibility of supporting SMEs by setting up tourism-related value chain associations (e.g. in crafts). Based on the findings, the project will formalize and strengthen one or both associations. In addition, the project will assist the newly established Kayah branch office of the Ministry of Hotels and Tourism to engage with the tourism-related private sector in Kayah state. Finally, at national level, through a training of trainer approach based on the CBI-developed EXPRO training methodology, the project will enable UMTA and MTM’s staff to, first, analyse and understand the European and Asian tourism markets and, second, to become CBI EXPRO training coaches of other UMTA and MTM’ member tours operators.

1 For more information please refer to the NTF III Sector Selection Report Myanmar.

6

Under Output 3, ITC will strengthen linkages between local producers, service providers and tour operators. The project will enable local producers and service providers to adapt and sell their products and services to the tourism industry. In addition, project advisors will link Yangon-based inbound tour operators to foreign in-bound tour operators through trade fairs. This will include showcasing the unique offering of Kayah state. As part of this, ITC advisors will help partners develop and implement a marketing strategy specifically for Kayah state within the framework of Myanmar Marketing. Yangon-based tour operators will therefore be both direct beneficiaries and act as the market link for Kayah state tourism stakeholders.

PROJECT PURPOSEThe project aims to create and maintain jobs in the Myanmar tourism sector. This will be achieved by increasing the income of enterprises and local communities, and by enhancing the competitiveness of Myanmar’s tourism industry and related supply chains, especially at the Kayah state level, ultimately contributing to sustainable economic development.

To achieve this, the project will work along three axes in line with the NTF III programme approach, namely: a) enhancing the export capacity of SMEs (both, enterprises that supply goods and services to the Kayah state tourism industry as well as local communities), b) strengthening of tourism-related TSIs in Kayah state as well as Yangon, and c) creating business linkages with tourists and those intermediaries that offer Kayah state as a destination for incoming tourists.

1. BACKGROUND & CONTEXT

SITUATION ANALYSIS Myanmar’s tourism sector has a strong potential for growth.

The average annual increase in international visitor arrivals for the period 2009-2013 was 33%.. This potential is attributed mainly to Myanmar’s political and economic reform process, improved connectivity, and rising demand to visit Myanmar from all major source markets.

For the first time in its history, Myanmar received over 2 million international visitors in 2013.2 This is an exceptional increase if one considers that in 2003 Myanmar received less than 600,000 visitors. The total income from tourism activity was USD 926 million in 2013, compared to USD 254 million in 2010. The increase of tourism in Myanmar is an opportunity for local communities – especially rural, poor and marginalized people, to take up gainful employment and income generating opportunities in tourism value chains by providing goods and services to visitors.

Asian arrivals to Myanmar have steadily outpaced their Western counterparts in recent years, and making Myanmar attractive to Asian travellers will be crucial for the development of the tourism sector. The top five origin markets were Thailand (16% of arrivals by air in 2012), the People’s Republic of China (12%), Japan (8%), the United States (6.3%) and the Republic of Korea (6%). France, Malaysia, Singapore, the United Kingdom, and Germany each accounted for about 4-5%. Overall, visitors from Asia accounted for 64.1% of all arrivals by air. 21.9% originated from Western Europe, 7.4% from North America and 3.4% from Oceania. Of the 465,614 arrivals through land gateways in 2012, most were citizens from Thailand, who stayed less than one day. The estimated overall average length of stay in 2012 was 7 days.3

2 It should be noted that the data of the Ministry of Hotels and Tourism may be somewhat inflated. The word “tourist” to the authorities covers anyone who touches Burmese soil without a professional visa, including Thai and Chinese traders that come only for one day and do not stay overnight. The true number of touring holidaymakers in Myanmar is likely substantially lower than the official figure.

3 Ministry of Hotels and Tourism (The Republic of the Union of Myanmar). Myanmar: Tourism Master Plan 2013-2020. Final Draft Report. June, 2013.

7

There is a big difference between arrivals during the low season (April-September) and the high season (October-March). This results in challenges especially in the high season as public services become overwhelmed (e.g. collection of solid waste) and negative environmental impacts are exacerbated (insufficient measures to protect heritage assets and lack of coordinated stakeholder engagement in tourism planning). Moreover, in the high season, the demand for hotels outstrips supply. The resulting price increases lead to visitor dissatisfaction.

Figure 1 presents visitor forecasts (both land and air arrivals) for three different growth scenarios, namely a conservative estimate, a mid-range, and a high growth scenario.

Figure 1: Visitor Forecasts, 2013-2020

Source: Ministry of Hotels and Tourism (The Republic of the Union of Myanmar).

Spending is forecasted to increase from an average of $135 per day in 2012, to $170 in 2020, and the average length of stay is expected to rise from 7 to 8 days. These predictions would imply an increase in tourism receipts to $1.83 billion in 2015 and $3.82 billion in 2020 (conservative growth scenario)4. Creating demand for repeat travellers is significant for the country as typical second-time visitors on average spend 35% more per day than first-time visitors because of a positive first-time experience.

Six main destinations currently receive the majority of international visitors. These are Yangon, Bagan, Inle Lake, Kyaikhto, Mandalay, and Ngapali Beach. Already now the infrastructure in these locations is overstretched and a further increase in tourists could have a negative impact by damaging culture, history, and natural attractions. Therefore it will be important to diversify tourist arrivals into new destinations and locations. The government has changed its policy and started to promote areas that were previously closed to foreign tourists.

Looking at well-established destinations in other countries, tour operators usually tend to increase variety and quality by including in their proposed packages alternative tourism activities, such as nature-based tourism, eco-tourism, adventure and experiential tourism.

Applying this model to Myanmar, Kayah state offers numerous possibilities to enhance the typical Myanmar tourism package. Kayah state has recently been opened to international tourists following the signature of peace agreements. Tourism in the State is therefore still at its infant stage of development, but provides a high potential for development, especially for cultural, wildlife, and community-based tourism.

The unexplored parts of Kayah state are appealing for tourists who are willing to forgo luxury for unspoiled culture, landscape and forests. The state suffers from a high ratio of people living under the 4 Ministry of Hotels and Tourism (The Republic of the Union of Myanmar). Myanmar: Tourism Master Plan

2013-2020. Final Draft Report. June, 2013.

8

poverty line. Tourism development is therefore an important activity for increasing income, jobs and helping to expose the local population to global opportunities. Based on this, and the recommendation of the Minster of Hotels and Tourism, the Vice Minister of Commerce, the Union of Myanmar Travel Association, and various other resource persons, NTF III selected Kayah as the focus for this project on inclusive tourism. ITC’s feasibility and project formulation mission to Myanmar confirmed this choice. During this mission, the ITC team met with the Kayah Chief State Minister and other State Government officers. The Chief State Minister was interested to develop tourism and partner with ITC on a tourism project. The project’s timing is appropriate since the Ministry of Hotels and Tourism plans to open a state-level branch office in Kayah State.

Tourism development must benefit the communities in the area visited, not least because local people make Myanmar a memorable experience. Despite its low tourist penetration, the area is culturally very rich and shows untapped potential to develop cultural community tourism tours, linking handicraft and food producers to the tourism value chain. Furthermore, the region has a good tourism potential being geographically and strategically located close to both, Naypyidaw, the national capital of Myanmar, and the much visited Inle Lake (3 hours by boat or 1 hour by car). Kayah state is also bordering Thailand’s Mae Hang Son Province. At a roundtable organized by ITC on Kayah’s potential for tourism, the large majority of Myanmar’s in-bound Tour Operators associated under UMTA reported to already have Kayah in their offer or the plan to explore Kayah as possible addition to their offer. All welcomed ITC’s plan to assist in increasing and improving the product and services offer to be able to extend the duration of the tourists’ stay. Successful Myanmar tour operators interviewed at the Berlin Tourism Börse who already offer Kayah expressed interest from European outbound tour operators for such authentic places and would welcome more local offer as for example food or presentation of traditional skills for tourists while visiting local communities to enhance the experience. The people of Pan Pet, one of the villages usually visited by tourists in Kayah state, reported that during the tourism peak season (November to February), 2-3 groups visit the village daily, but besides occasional sales of crafts and tips demanded for pictures taken, no revenue remains in the village.

Rural grass-roots organizations already working with rural communities could provide a starting point for the project. Each village elects representatives and 5-6 villages form a Rural Development Committee (RDC). So far, about 70 independent RDCs exist that could be partners in reaching out to rural communities. The expected impact is to create income generating activities and to support jobs in Kayah’s tourism industry and related sectors.

NEEDS ASSESSMENTThe needs of the tourism sector are spelled out in the Government’s tourism sector policies under the Responsible Tourism Policy, the Community involvement in Tourism Policy, the Tourism Master Plan, as well as the National Export Strategy (NES). ITC has undertaken two needs assessment missions, one jointly with CBI, to further assess the needs of the sector from a trade perspective, and with special focus on Kayah state.

As pointed out in the Tourism Master Plan, the main needs at national level of Myanmar’s tourism sector, as formulated by the Ministry of Hotels and Tourism, are:

Strengthening the Institutional Environment Building Human Capacity and Promote Services Quality Strengthening Safeguards and Procedures for Destination Planning and Management Developing Quality Products and Services Improving Connectivity and Tourism-related Infrastructures Building the Image, Position and Brand of Tourism Myanmar

This project will directly intervene on four of them, namely strengthening the Institutional Environment, strengthening safeguards and procedures for destination planning and management, developing quality products and services and building the image, position and brand of Tourism Myanmar. For a detailed description of how ITC’s planned activities tackle the specific needs described in the Master Plan refer to Annex IX.

9

The main constraints and needs identified for tourism development in Kayah state during the feasibility and project formulation mission are described below

a. Low capacity of tourism enterprises and SMEs supplying the tourism industry with knowledge for understanding markets, demand patterns, and how to adapt products to the required level

The general capacity of tourism companies (mainly hotels and tour operators) and tourism related SMEs (craft and food companies), to meet tourist expectations is relatively low. The quality, design, diversification, packaging, and presentation of Kayah’s handcrafted products such as music instruments, wood carving, textiles, and handmade snacks are not appealing to foreign tourists and need to become more attractive.

Attempts to sell crafts by villagers to tourists, for example, are mostly unsuccessful. Handmade traditional products are mixed with cheap imports from Thailand and China without any specification or background information for tourists. In addition to these gaps, agricultural and food products often lack hygiene and sanitary standards. Linkages to the tourism industry are not explored.

Tours in Kayah state are usually combined with tours to Shan State (Inle Lake is one of the three main tourist attractions in Myanmar) and are limited to visiting ethnic groups. neglecting other important cultural assets. As a result, there is little positive economic impact for local producers. All revenues go to tour operators and guides, not benefitting minorities (the ethnic groups receive only a few dollars as tips for photos taken). The area is culturally very rich and there is untapped potential to develop cultural community tourism tours including presentation of the local traditions such as: rice washing, rice wine production and tasting, explanation of the typical architecture, religious sites, dance and music performances, cooking, handicraft production classes (works well in the Inle lake area), and eating in a home style ambience.

Support to SMEs is necessary in the form of awareness raising of the revenue generating potential of tourism, training in product development and standards, market intelligence, and facilitating access to bank loans with reasonable interest rates.

Because of the above-mentioned identified constraints, a 360-degree view of the value chain is regarded as crucial, as currently the different sector stakeholders in Kayah state do not have a common approach and are not aware of their interdependence and connection. Hotels, transport services, tour operators, guides, SMEs, communities and everyone in the value chain needs to understand how they could improve working together, and be concerned about their linkages to other value chain operators. Because of the interconnectedness for quality service delivery in the sector, any disruption anywhere in the value chain will affect everybody else. As a consequence, the revenue and job-creation potential of tourism is not being exploited. Moreover, there is a risk that tourists visiting the state will not come back again and thus could not act as “ambassadors” to attract more tourists.

A complete value chain analysis will be conducted at the beginning of the project to assess bottlenecks for each tourism value chain, and market entry points for Kayah SMEs and communities providing services and products.

The activities under output 1 have been designed to tackle most of these constraints by developing new tourism products in the form of cultural community tours and by improving the quality of local supply chains to meet tourist expectations.

b. Insufficient institutional capacity of sector associations in providing members with relevant services

Apart from a hotelier association, there is a complete absence of associations in the tourism and tourism-supply chain sectors. A MoHT branch office is planned to be opened in mid-2014, but besides its planned regulatory function and organization of festivals to attract tourists, their planned role in developing tourism export capacities, promoting tourism and/or using tourism as a development tool is limited.

The Kayah State Hotel Association was formed at the end of 2013 and regroups 10 of the 14 hotels and guesthouses in the region. The association already organized joint hospitality trainings but they

10

do not have any roadmap, nor do they have a strategy to plan the association’s future activities, and to link these to tourism development at state level and strategic plans. The association also needs help to map existing hotel capacities as well as past and potential tourist occupancy rates. The opportunity to jointly promote the hotels in the region has not yet been taken on board. However, the members are motivated to start the work jointly, and have already established an internal working structure among them.

Artisans lack en entity representing their interests which could organize joint trainings and that could provide a sales channel to the tourism sector, as well as organizing joint promotion for the sector. The same is true for fruit and vegetable producers that are potential suppliers to hotels and restaurants. As a result, tourism and tourism-related SMEs are scattered and hardly any linkages with the tourism value chain exist.

There is a lack of fundamental services that associations should remediate in order to promote the tourism sector in Kayah state, and to link enterprises to the tourist value chain by providing trade intelligence on tourist arrivals, lobbying/advocacy, detection of trends, spending, expectations, as well as marketing of members’ products.

Moreover, there is a lack of awareness about the state’s local products and services to be sold to the tourism industry. One can for example find cheap stationary and home textiles from China or Thailand in hotels, instead of the beautiful locally crafted products (textiles, basketry). This trend to substitute local products by imports can also be observed in other domestic industries such as apparel and is due to the recent opening of the borders after several decades of import blockages. As a result, domestic demand for hand-woven textiles, for example, has dropped, and weavers can only work part-time due to cheaper imports from China and Thailand. The consequences are loss of jobs and emigration in the traditional industries such as cotton weaving.

Because of the above-mentioned constraints, and the lack of tourism products and services, linkages with tour operators from Yangon that are in direct contact with major Myanmar tourism destinations are also lacking, preventing an increase in the number of tourists visiting Kayah state.

The described institutional needs and weaknesses will be addressed by activities foreseen under Output 2 aiming to increase the capacity of tourism associations (UMTA, MTM) as well as associations of tourism-related supply chains in providing sector development support services to their clients.

c) Missing linkages with the export market

For villages as well as enterprises supplying products and services to the tourism industry, the immediate clients and thus the export markets are Yangon-based tour operators. These tour operators attract foreign tourists while proposing packages to visit Myanmar. The first step for the Kayah state tourism sector stakeholders would therefore be to work closely with Yangon-based tour operators, to have tour visits to Kayah state included in their offer. Presently, however, only very few tour operators include Kayah state in their programmes.

Business linkages between local supply chains and the tourism industry are lacking. Hotels and restaurants only randomly source locally. Lack of awareness, inadequate products and unorganized supply channels are the main reasons for not being able to grasp these opportunities. The joint ITC/CBI needs assessment mission, however, identified the potential for handmade organic food products, wood products (e.g. furniture) and other house-ware and textile supplies for hotels and restaurants, as well as direct sales to tourists. The inability to ensure supply contracts also limits participation and revenue share for local enterprises.

Moreover, Kayah state is unknown to foreign outbound tour operators that work with Yangon-based in-bound tour operators. Thus Kayah state does not usually appear in the offer of outbound European or other tour operators. Business linkages between local supply chains and the tourism industry and between in-bound and out-bound tour operators will be facilitated under Output 3.

STAKEHOLDER ANALYSIS The project involves a wide range of private and public sector stakeholders from small to larger enterprises, community producers and service providers, ethnic minority groups, sector associations,

11

national and state government ministries and entities, to other technical assistance providers. Please refer to Annex VI for a detailed description of identified stakeholders. Below is an overview of final and direct beneficiaries, as well as strategic partners.

Table 2 – Stakeholder Analysis

Final BeneficiariesBeneficiary Priorities Strengths Needs

Local communities in Kayah state

Job creation and revenue generation, increase local entrepreneurship

Unique culture, natural scenic beauty, renowned friendliness of Myanmar’s people

Increased work and better job opportunities

Direct BeneficiariesBeneficiary Priorities Strengths Needs

SMEs and informal local producers and service providers in Kayah state

Increased local production and services, job creation and preservation of existing jobs, increased product and service quality, business linkages to tourism industry

Unique but still relatively low-cost handcrafted products, employment and entrepreneurship, potential for women and disadvantage groups employment and entrepreneurship

Increased product adaptation capacities, promotion and marketing knowledge, increased managerial capacities

Visibility of Kayah state tourism potential enhanced (for in-bound tour operators and indirectly for world market)

Inbound tour operators and guides

Strengthened and diversified tourism products, increased revenue through better quality of service delivery and increased length of stay and spending of tourists

Good knowledge of local tourism market, openness to explore new destinations like Kayah, organized in MTF (UMTA and MTM), similar cultural tourism tours in other areas, thus ability to develop tourism destinations in Kayah state

Build human resource capacity and promote service quality, market intelligence, better understanding of tourist needs and demands, promote Kayah state as a tourist destination

Private sector TSIs:

- Union of Myanmar Travel Association (UMTA)

- Kayah State Hotelier Association

Improved capacities in providing support services to enterprises along the tourism value chain, bundle supply base to link to hotels

Willingness to cooperate with the project

Strengthened institutional capacities, improved hotel services, additional sector associations

12

Craft and/or farmer Association (to be created)

Kayah state MHT branch office

Enhance the understanding and effectivedevelopment and management of Kayah state as a tourist destination, integrate tourism planning and management into local governance structures

Led by the MHT that is supportive to the project

Strengthened institutional capacities, add services to the sector beyond regulation like market analysis and research capacities, taking advantage of public-private partnerships

Strategic partnersPartners Priorities Strengths Needs

Government ministries5:

- Ministry of Hotels and Tourism (MOHT)

- Ministry of Commerce

- Ministry of Cooperatives

- Ministry of Agriculture and Irrigation

- Ministry of Forestry and Environmental Affairs

Increased capacity to facilitate economic development, contribute to implementation of government policies in the sector

Power in implementing policies in the sector, full support of the project

Public sector services modernized, improved multi-sector coordination, enhanced capacity to implement, evaluate, monitor tourism sector policies, applying a consistent strategy to develop tourism sector; improved policy and regulatory environment, raise awareness for responsible tourism as well as community involvement in tourism

TSIs:

- Myanmar Tourism Federation (MTF)

- Myanmar Tourism Marketing (MTF)

Increased capacity in providing services to tourism SMEs, improved capacity to promote the sector in foreign markets, improved capacity to promote Kayah state as a new tourism destination, business linkages and technical partnerships/ collaborations expanded

Worldwide connections with relevant tourism organizations, good government connections, large representation of tourism SMEs in the country

Financial resources, strengthened market analysis and research capacities, enhanced institutional capacities, improved capability to promote and develop local tourism market, tourism destination management

5 The Ministries, in particular the MOHT and the MoC will be as well strategic partners as indirect beneficiaries

13

Local NGOs Implementation of aid strategies and programmes with benefits for the tourism industry and related supply chains

Knowledge of and presence in Kayah State

Effective coordination of activities with other programmes and donors

Other technical assistance and donor Organizations:

CBI6, IFC, JICA, UNIDO, ILO, LuxDevelopment, Swisscontact, Hanns Seidel Stiftung

UNWTO7

Implementation of aid strategies and programmes with benefits for the tourism industry

Country presence and intelligence. Local human resources, access to funding. Good coordination, including through Ministry of Planning Tourism sector working group

Effective coordination of activities with other programmes and donors

DEVELOPMENT CHALLENGE Due to a lack of tourism offerings, including products and services that could be sold to the tourism industry, the tourism sector in Myanmar in general and in Kayah state in particular fails to reap the full potential for employment creation and income generation through export development

2. RATIONALE

COHERENCE WITH PARTNER GOVERNMENT POLICIES AND STRATEGIESThe NTF III Inclusive Tourism project proposal is strongly aligned with the Tourism National Export Strategy (NES) and the three policies of the MOHT, namely the Tourism Master Plan, the Community Involvement in Tourism Policy and the Responsible Tourism Policy and will implement part of their recommendations. The direct linkages and more details on the NES and tourism policies are shown in Annex IX.

COHERENCE WITH ITC STRATEGY This project targets tourism and tourism-supply chain SMEs and TSIs with a special focus on Kayah State in line with ITC’s overall mission to enable export success for SMEs. The project will contribute in particular to three of ITC’s six focus areas, namely “connecting to value chains: SME competitiveness, diversification and links to export markets”,“promoting and mainstreaming inclusive and green trade” and “strengthening trade and investment support institutions”

Moreover, the project tackles particularly three of ITC’s four strategic objectives:

1. Enhance trade support institutions and policies for the benefit of exporting enterprises;2. Strengthen the international competitiveness of SMEs; and3. Mainstream inclusiveness and sustainability into trade promotion and export development.

The inclusive tourism approach focuses on the inclusion of local formal and informal sector producers and service providers into the tourism value chain, being it men, women or youth.

Moreover, the project is an integral part of the ITC country programme for Myanmar and in line with 6 See Annex VI for specific synergies in collaborating with CBI.7 Synergies with UNWTO will be sought for specific interventions linked to institutional strengthening and

forward linkages/marketing

14

Myanmar’s national export strategy as described above. ITC’s country programme aims to contribute to inclusive and sustainable export-led growth in Myanmar, by supporting exports of small and medium-sized enterprises (SMEs) and providing an integrated and coordinated response to Myanmar's trade-related needs and requests through:

Direct support to sector value chains with high potential for job creation, poverty alleviation and rural development – the NTF III tourism project in Myanmar falls under this component of the Country Programme;

Reinforcement of trade support institutions to stimulate exports through the provision of trade support services to SMEs;

Assistance to the Myanmar National Export Council, a country-led mechanism bringing together the public and private sectors.

The project builds upon the first two priorities and answers to the expressed need of promoting export diversification in selected industries and services, with tourism as the selected sector.

COHERENCE WITH THE ACTIVITIES OF OTHER DEVELOPMENT AGENCIESAn analysis of relevant activities of the donor community in Myanmar was undertaken during the formulation and feasibility missions in February and April 2014. The detailed results are presented in in Annex XII, mapping the activities targeting the country’s tourism industry. Under the chapter “Project Synergies” more details will be provided as to how and what synergies will be developed with the most relevant projects of other development partners.

Overall, the project will fill a gap in the joint action plan for trade and trade related services for Myanmar that aims at fully integrating Myanmar in the world trading system. Targeting the trade-related aspects of tourism, the project will help to develop one of the seven priority sectors of the National Export Strategy, not only at national but also at state level. This project is one of the first to promote tourism in a newly opened, former ethnic conflict area such as Kayah state. The project will therefore inevitably involve development areas that extend beyond tourism, and into cross-cutting and other thematic issues.

The project will establish linkages with supply sectors along the tourism value chains which are key elements of pro-poor tourism development. This wider perspective is essential for the development of tourism in Kayah state and will positively affect poverty reduction, environmental and cultural protection, and inclusion of women. In doing so, the project will complement other donor projects that have been active in Kayah state or border areas for a long time. These projects have mostly concentrated on support to peace, reconciliation and development and are now moving their focus from humanitarian to development aid. Income increase and job creation through tourism development will be a welcome addition to poverty reduction and livelihood projects already operational in Kayah state. The project aims at bringing poor people into the mainstream of tourism development. At present, the benefits of tourism largely bypass the majority of poor and ethnic minorities. The project will showcase new models of tourism development for the country that involve poor local communities and SMEs. It will develop products and services where the poor live. The establishment of supply chains will increase the contribution of the tourism sector to the local economy in Kayah state. In doing so, the project will play an important role in increasing awareness of governmental and non-governmental professionals, the general public, and private companies, of the importance of social, economic, and environmental issues for sustainable and inclusive development through tourism, and in general.

LESSONS LEARNEDLesson learned can be categorised into two areas. The first area refers to tourism projects and activities in light of recent developments in the country, and is based on the experience of other development partners that have previously been active in the sector in the country. The second area refers to lessons learned by ITC on project implementation of similar projects in the sector, especially with regard to NTF II.

15

a) Lessons learnt from tourism-related projects in Myanmar:

Visitor Management: For tourism development in Kayah state to be responsible, controlling or restricting the volume of traffic flow to a manageable level is paramount. In light of the limited tourism infrastructure and tourist capacity, value is to be given priority over volume. Drawing on the experience in other areas such as Bagan, Inle Lake, Kalaw, etc. the development of tourism influx must be achieved step by step, in a reasonable and manageable volume of tourists with a timeframe set over the next few years. The experience of other projects in the region8 shows that a three-step model is best suited to develop a remote region like Kayah state. The first and crucial step is for the destination to set its objectives and then to market it to the most appropriate tourist groups and countries. An information base on the demand side of tourism (such as the size and composition of visitors, their interests and expenditure patterns, willingness to pay, expectations, and the quality of their experience) should be established as a second step in order to understand what factors attract visitors. Such information is virtually non-existent in the region. Periodic visitor surveys are essential. Tourists’ interviews to understand their perceptions of Kayah state are foreseen as a step of the project’s branding strategy. To assure ongoing production of trade intelligence on tourist arrivals, trends, spending, expectations, the capacities of MOHT Branch office in Kayah and of other Kayah state associations for data collection, interpretation and dissemination will be built The third step is to optimize the responsible behavior of these tourists once they have arrived, through visitor management. The project will apply to the Kayah state tours, including communities, tour operators and guides the sustainability standards and codes of conduct developed by CBI at national level. A reasonable target volume must be set to ensure both a pleasant experience for tourists and sustainability for the host communities.

Bottom-up inclusive approach: One of the most significant problems in tourism development in Myanmar is the shortfall in planning, regulation and consultation with the communities involved in tourism projects. Often, these shortfalls have resulted in limited community awareness and reduced commitment to tourism. The common attitude is that a high level of local community participation might not be possible in the short or medium term due to a lack of experience in decision-making processes in the communities. Therefore, community involvement will be an integral part of the ITC project strategy and a bottom-up participatory and inclusive planning process will be applied. Community participation is a crucial determinant to ensure that local communities will benefit from tourism and that their lifestyles and values are being respected. Destination level communities will be empowered so they can monitor government and businesses to protect their interests. An important lesson learnt from other regions is that the concentration of resources on one population group, even if they are the most vulnerable, can lead to further resentment and mistrust. Therefore, the project will provide equal assistance to different interest groups to the furthest extent possible.

Institutional Development: One of the biggest challenges will be institutional strengthening and coordination between the ministries, and implementation of policies at the local level. The non-alignment between national, state, regional and local regulations presents a further challenge. The project will facilitate continuous feedback from state to national level with the presence of projects’ coordinators in both Kayah state and Yangon. The hierarchical nature of Myanmar’s ministries is problematic, as national security issues are maintained at the core of policy decisions.

Land grabbing and displacement of local communities: Whole communities in Myanmar have been harmed in the interests of the tourism industry. Local populations have been displaced, often without due compensation or satisfactory relocations, to make way for the construction of hotels and other tourist facilities. The most prominent example being the Bagan heritage site. Land issues are likely to become a major hurdle in the development of new infrastructure and hotel zones, as the ownership of land in Myanmar is a question that

8 for example the DED Laos tourism development project in North region, Flora and Fauna Vietnam, Ho Ba Be National park project

16

the relevant Ministries have persistently failed to address and define. There is also widespread disregard for the social and environmental impacts of tourism projects. . The project needs to ensure that land grabbing and displacement of local communities is ruled out in the promotion of tourism in Kayah state.

Ethnic dimensions: Especially projects in conflict ridden ethnic borderlands need to be carefully designed and implemented as they will have to ensure neutrality and thus contribute to appeasement in the specific regions they work in. Many projects have not been conflict-neutral and have in some cases fuelled local grievances and stimulated ethnic conflict.9

Therefore, the project needs to develop a clear understanding of the ethnic dimensions in its activity area, and be sensitive to the potential of exacerbating conflict.. Any new conflict could bring the project to an immediate halt. Aware of this situation, ITC has involved in the assessment phase one of the two Kayah state ethnical leaders (who is now the owner of the biggest Hotel in Kayah state) who contributed with in-kind time of his general manager and who is supportive of the planned activities. Dialogue with local peace groups will also be sought since the beginning.

Lack of trust: There is a lack of trust between communities, ethnic minorities and authorities, between authorities and donors, and between authorities and local businesses. This may affect the project and even weaken or interrupt its implementation. The project will maintain a regular dialogue with concerned line ministries, local authorities, ethnic minority groups and communities to encourage trust building and ensure smooth implementation of the project.

SME development: Special attention will be given to the assistance and empowerment of SMEs in Kayah’s tourist industry. The extent of direct benefits to communities and poverty reduction will largely depend on the percentage of tourism needs that are locally supplied, such as products, labour, tourism services, and increasingly “green services” in energy and water efficiency and waste management. Community members will be supported to start their own enterprises or to act as investors, or even enter joint venture partnerships with the public or private sector.

b) Lessons learned by ITC in the implementation of similar projects:

Lessons learnt from NTF II: The 2013 NTFII evaluation confirmed the validity of a TSI-centred value-chain based approach to create exporter competitiveness in selected sectors. The evaluation recommended to: “pursue and expand the NTF Model based on creating exporter competitiveness for SMEs through a TSI-centred value-chain based approach.” This recommendation is taken into consideration in the design of the Myanmar project, creating export competitiveness in close collaboration with UMTA and MTM (the tourism TSIs at national level). Moreover, the NTFII evaluation specifically recommended: “to use the general model combining sector-specific/technical TSI(s) and one general/political TSI coordinating general project implementation”. In Myanmar the project will not work directly with a general/political TSI (i.e. Myanmar Tourism Federation, the MHT branch office in Kayah state), but the two-fold approach will be respected working simultaneously with specific/technical TSIs at local and national level (the Kayah State Hotelier Association, probably a local craft association yet to be created, and at national level UMTA, MTM and specific associations like the national Tour Guide and the national Hotel Associations). Last but not least, the NTFII evaluation recommended: “to focus on strengthening TSIs with special attention on fostering TSIs to financially sustain their results (increase income generation activities geared to continued service provision) and ensure buy-in amongst stakeholders”. The project will contribute through training of future tourism export promotion coaches of UMTA and MTM to their financial sustainability, as well as help selected TSIs improve services offered to their members and therefore their willingness to pay for the received services.

9 see also “Responsible Tourism in Myanmar: Current Situation and Challenges, Ko Ko Thett, 2012” (www.burmalibrary.org/docs14/Responsible-Tourism-in-Myanmar-Current-Situation-and-Challenges-red.pdf)

17

CROSS-CUTTING ISSUES

The increase of tourist arrivals and spending in Myanmar can be best managed to benefit people by applying basic principles promoted by UNWTO such as respect for the local culture, buy local, protect heritage, save energy, and use local transport. Tourism can have a positive impact on MDGs 1, 3 (most of the employees are usually women), 7 (destinations should have better environment conditions due to tourism) and 8 (the project seeks cooperation between aid providers, public and private sectors, civil society and the government) if negative potential impacts resulting from tourism are mitigated.

Poverty reduction and inclusive growth

In particular, the project will contribute to inclusive growth in the tourism sector in Kayah state and will seek ways to engage and support nascent community producers and service providers, local tour operators, guides, and SMEs. So far, the liberal economic reforms that have been signed into law favor the urban elite and middle-class entrepreneurs, despite the government’s stated commitment to pro-poor policies and people-centered development to benefit farmers and ethnic minorities. Some of the main reasons why the poor seem to have been unable to benefit much from tourism are that the linkages between tourism and the local supply chains are weak. Also, supply side planning and management has been poor and, in some cases, even completely ignored. The project will contribute in the long-term to maintain and increase jobs and revenue in the Kayah tourism sector by including tourism and tourism-supply chain product and service providers in the new cultural tourism tours to be developed, harnessing their entrepreneurial capacities and by linking them to the tourism industry (e.g. hotels and restaurants). Provided with the capacities of offering higher quality products and services, Kayah producers and SMEs will be able to sell to individual tourists and tourism industry increasing their revenues. In the long-term a multiplier effect will allow local producers to widen their network and, beyond the project, also sell to other segments and export directly. With its flexibility and capacity to include the most unskilled and disadvantaged people, such as rural communities, women, indigenous people, and ethnic minorities, the project aims at reducing poverty among poor and socially excluded groups in Kayah state. It creates opportunities ranging from large-scale businesses to SMEs, micro-enterprises, and services.

Gender- MDG 3 Promote Gender Equality and Women Empowerment

Tourism is the only industry in Myanmar where women contribute as much as men. Taking account of direct and indirect employment, Myanmar’s travel and tourism industry sustained 735,000 jobs in 2012 or 2.8% of total employment. Women are estimated to represent at least half of Myanmar’s tourism workers.10 Although women have a high rate of contribution and involvement in tourism, they still remain behind in terms of access to resources and benefits. Like any other sector, the tourism sector is mainly dominated by men in terms of decision making and controlling resources. The top positions in Myanmar’s tourism industry are mainly occupied by men in travel agencies, tour operators, airlines, accommodation, and transport services, with good remuneration. Women are often found in the lower (paid) positions, and are often a neglected stakeholder in tourism development, if ever seen as stakeholders at all.

There are many opportunities for the project to empower women and socially-excluded groups through tourism development in Kayah state. The project will provide them with new entry points for (formal and informal) employment and opportunities for self-employment. Furthermore, it can allow them to carry out new roles for themselves and their families at home, as well as in the local power structures, and to become increasingly involved in the decision-making process. Women have also benefited significantly from tourism through micro-enterprise development, e.g., in the form of producing handicrafts, weaving, agro-processed products and tea stalls in other areas in Myanmar. The project will also seek experiences and lessons learned from the Yangon-based Myanmar Women’s Entrepreneurs Association, a strategic alliance of business women and women from academia who give the association a very firm foundation for women empowerment, appropriate for meeting the challenges of a global society.

Environment- MDG 7 Ensure environmental sustainability

10 ADB Myanmar Tourism Fast Facts

18

Environmental issues will also be taken into consideration in at least three ways:

1. by raising awareness of the potential negative effect of tourists presence on natural environment;

2. by providing tour operators with a code of conduct and sustainability standards which stress the importance of preserving the environment of the tourism destination;

3. by including product development training in tourism-related supply chains, namely crafts and food-products, modules on environmental sustainability (e.g. organic food, sustainable sourcing) and waste management.

At the community level, local people are expected to benefit from the project through the creation of jobs, preservation and valorization of their culture and promotion of environmental conservation in their villages. Tourism-related investment in environmental protection, renewable energy, water and waste management will have long-term positive poverty reduction effects for local communities. Strengthening protected areas to maintain ecosystems and biodiversity conservation allows destinations to manage, maintain, and generate sustainable economic benefits from natural resources.

Youth

Myanmar is an LDC with the lowest social development indicators in the region and quite a young population. The average age is 27 years. The country suffers from not just high rates of youth unemployment but also underemployment of youth. There are many former child soldiers who often lack identity papers due to their under-age recruitment. For them the task of finding a job is even more challenging.11 For these reasons, young people in Myanmar are often referred to as “the lost generation”.

In rural areas, the lack of diversification of agricultural crops and non-farm work opportunities are difficult challenges for the younger generation. Tourism has proven to be a sector able to create job opportunities for youth and the project can provide an entry point in the industry for Kayah youth and an alternative to migration from the rural areas to crowded cities.

The Myanmar Young Entrepreneur Association stressed the lack of support for youth entrepreneurship in rural regions. Inclusive tourism can provide a good opportunity for young people in Kayah state, especially in the hospitality industry and as tourist guides, jobs for which language skills, more common amongst the young generation, are a decisive asset.

11 ILO (2013): World of Work: Myanmar turns a corner. Available at : http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_216068.pdf

19

MDG 8 Global Partnership for development:

ITC, seeking collaboration in the design and implementation phases with other international organizations and in particular with CBI, sets an example of best practice in terms of coordination between organizations sharing a common development objective.

3. STRATEGYThe NTF III approach to sector competiveness is built around one outcome, namely enhancing the export competitiveness of the tourism sector, and four outputs:

1. Putting in place a validated plan for sector and enterprise development, 2. Building capacity of male and female owned SMEs, 3. Improving support services through TSIs, and 4. Improving sector positioning and business / technical linkages in markets.

The Myanmar Inclusive tourism project does not include NTFIII Output 1 (Validated Plan) which has already been produced in the framework of the National Export Strategy and the Tourism Master Plan (please also refer to “Chapter 2 Rationale”), but integrates all other three programme outputs.

The project aims to create and maintain jobs in the Myanmar tourism sector. This will be achieved by increasing the income of enterprises and local communities and by enhancing the competitiveness of Myanmar’s tourism industry and related supply chains, especially at the Kayah state level, including improved support services of TSIs.

The expected impact of the project will be measured through jobs created and maintained in tourism industry and the tourism-related supply chain and increased income for local providers of products and services. The baseline will be identified at the beginning of the project. Annex I presents the logical framework with additional detail on indicators and methods of verification.

OUTCOME: EXPORT COMPETITIVENESS OF THE MYANMAR TOURISM SECTOR STRENGTHENED WITH FOCUS ON KAYAH STATE

The inclusive tourism project aims at enhancing the export competitiveness of Myanmar tourism sector in general and that of Kayah state in particular. Moreover, the competitiveness of sectors supplying products and services to tourists in Kayah state will be enhanced. The indicators to measure this outcome are the increase of new clients acquired and new developed tours, the increase of locally sourced products by the tourism industry as well as the number of tourism institutions reporting improvements in their managerial performance.

Output 1: Export capacity of tour operators and tourism-related suppliers of goods and services in Kayah state increased

Export capacity among Kayah state tourism-related enterprises will be created in two ways. Firstly, by developing, in an inclusive approach, new tourism products in the form of cultural community tours with an impact on local revenue generation. And secondly, by improving local supply chains for the tourism industry.

At the beginning of the project, a baseline survey will be undertaken among all targeted beneficiaries of the project. This survey will be repeated during a mid-term review, and at the end of the project to track performance over the project period (Activity 1.0).

Activity 1.1 Cultural tourism tours assessment and development

20

The output will start with the mapping of existing and potential destinations, attractions, products and services, as well as accommodation and transport facilities. Study tours to neighboring states (e.g. Shan State with the well-developed Inle lake tourism site) and neighboring countries will be organized, to provide insights and experiences from other areas on tour development and craft production aimed at tourists.

Subsequently, cultural community tourism tours will be developed in an inclusive and bottom-up approach in collaboration with local tourism stakeholders The community producers will be trained and coached on the job to improve the quality of the offered products and services, including food safety issues for catering services. Once the tours are set up, the project will assist in running and improving them.

The CBI Tourism project in Myanmar will develop sustainability standards and codes of conduct at national level based on inputs and gathered field experience from the NTF III project. In turn, the developed sustainability standards and codes of conduct will be applied on a pilot basis to the Kayah state tours, including communities, tour operators and guides.

In addition, the project will facilitate the development of promotional material and information about the new tours and products with the Union of Myanmar Tourism Association (UMTA) and the Myanmar Tourism Marketing Association (MTM) at national level, and with the Kayah MHT Branch Office, tour operators, guides, and input from communities at state level. Hotels in Kayah state will also play a role in marketing the tours to individual tourists. In partnership with UMTA and MTM, the promotional material on the new tours will be disseminated during tourism fairs and events (see output 3).

Strong synergies are foreseen with tourism stakeholders in the Inle Lake area, since Kayah state can be reached by a beautiful boat ride (an enriching tourism experience in itself) of 2-3 hours. Furthermore, learning from the experience of Shan State (the Inle lake area is located in Shan state), with an already significant presence of tourists, and well developed cultural and nature tours, will be a useful starting point for Kayah state stakeholders to develop its offerings.

Activity 1.2 Improve local supply chains for the tourism industry

The improvement of local supply chains for the tourism industry will start with a value chain analysis of sectors supplying the tourism industry and tourists directly in Kayah state.

Building on ITC experience in Laos, where a handicraft label of origin was developed in Luang Prabang, a feasibility assessment for a Kayah label of origin aimed at tourists will be undertaken. Depending on the outcome of the feasibility study, the creation of such a quality label could help Kayah local crafts to develop a unique identity and to reassure tourists about the quality of the crafts.

Activity 1.3 Create EXPRO export marketing capacities among selected tour operators who offer Kayah products

Export marketing capacities will be created among tour operators that are members of UMTA and MMA and offer tourism products in Kayah state.

At the beginning of the project, enterprises will be thoroughly selected based on identified indicators and “light” company audits. Two audits will be prepared to assess tour operators and local tourism-related SMEs.12 The 25 tour operators selected through the initial audit will attend 5 days of tourism export promotion training that will be a replication of the CBI tourism EXPRO training tailored to the specific needs of Myanmar inbound tour operator.

12 These audits will be in line with the “Real-time impact monitoring and evaluation” (PRIME) standards the NTF III programme considers to join.

21

After the training, 15 tour operators will be selected from the participating 25 to be individually coached by the formally trained UMTA and MTM staff (see activity 2.4).

Output 2: Increased capacity of tourism associations (UMTA, MTM) as well as associations of tourism-related supply chains in providing sector development support services to their clients

Under the TSI development output, the project will strengthen the institutional infrastructure related to the tourism sector in Kayah state. Moreover the project will support Yangon-based associations such as the Union of Myanmar Travel Association (UMTA), and Myanmar Tourism Marketing (MTM) to reach out to markets. Both will be key partners in linking local providers of tourism services to the market.

Activity 2.1 Identify and assess the capacity of existing associations (i.e. Kayah Hotelier Association); Assess the feasibility of setting up tourism-related supply chain association(s) (e.g. in the crafts sector)

First, the capacity of the only existing tourism association, i.e. the Kayah Hotelier Association will be assessed. In addition, the feasibility of setting up tourism-related value chain associations (e.g. in the crafts sector) will be analyzed.

Activity 2.2 Strengthen and formalize up to two tourism and tourism-related associations (subject to a positive assessment)

Moreover, the project envisages strengthening up to two other private sector tourism and tourism-related associations. Currently only one tourism TSI exists in Kayah, namely the Kayah Hotelier Association. This association will be assisted in putting in place an institutional strategy for its development. Furthermore, capacities in the association will be built in collecting data on tourist arrivals, map existing hotel capacities, as well as past and potential tourism occupancy rates. The association will be assisted to promote the hotels in the region. The association could also take on the role of facilitating local supply for the hotels.

In addition to the already operational Kayah Hotelier Association, a second association, in the crafts sector for example, could be created and supported.

Activity 2.3 In collaboration with UMTA and the Myanmar Tour Guide Association (1) assist the MHT Branch office in Kayah to engage in public-private partnerships, as well as build their capacity and the ones of other Kayah state associations for data collection, interpretation, and dissemination on tourist arrivals, trends, spending, expectations at regional level (Kayah State), and (2) improve tourism-related association sales and marketing services with special focus on Kayah state

Under this activity the Kayah MHT Branch Office will be assisted to engage in public-private partnerships between the public tourism sector authorities and private sector tourism players through trainings and advisory services. The project will help to strengthen the local government’s ability to mainstream tourism planning into local governance structures. The project will furthermore build the capacity of the MHT Branch Office staff, as well as the capacity of other tourism-related private Kayah state association representatives, to better understand the market by increasing their knowledge on data collection, interpretation and dissemination on tourist arrivals, trends, spending, and expectations at regional level (Kayah State).

To ensure ownership and sustainability, selected staff from the Yangon-based UMTA and MTM will be trained to become CBI EXPRO training coaches (i.e. training of trainers). This activity will be done in collaboration with CBI. The trainees will thus be enabled to provide future coaching services to UMTA/MTM member tour operators operational in Kayah state. Using this train-the-trainer multiplier

22

effect, the project will improve institutional capacities of UMTA/MTM, and develop tourism-competent human resources.

Output 3: Business linkages and collaboration created and enhanced

This output aims at creating and strengthening business linkages for local producers (Activities 3.1, 3.3 and 3.5) and tour operators (Activities 3.2 and 3.4). Yangon-based inbound tour operators are crucial as they represent the market link to tourists who will be visiting and spending money in Kayah state.

Activity 3.1 Raise awareness among tourism associations, State Government entities and concerned communities about Kayah tourism products and impact of sourcing local products on revenue generation as well as on international tourist satisfaction

Implementation of the third output will start by raising stakeholders’ (tourism associations, state Government entities, concerned communities, local producers and providers of services) awareness about the potential of Kayah tourism products and the expected positive impact of sourcing local products. Tourism stakeholders will be made aware of the positive repercussions that sourcing locally could have on local producers and also of how availability of high-quality local products can enhance the appeal of Kayah as a tourism destination.

Activity 3.2 Create/strengthen linkages between Yangon-based tour operators and Inle lake guides and local tourism stakeholders offering newly developed products in Kayah state.

Under the second activity, linkages between Yangon-based tour operators and Inle lake guides and local tourism stakeholders, who offer newly developed products in Kayah State, will be developed to attract more tourists to Kayah state. This will be done through promotional meetings in Yangon and Inle lake and by inviting the targeted tourism industry “customers” to test-tour events in Kayah state.

Activity 3.3 Develop model contracts (including an adapted version of the code of conduct for tour operators that will be developed by CBI) between providers of cultural products and services in communities and tour operators and guides and train stakeholders on how to apply these

Under the third activity, a mechanism will be established to distribute the expected generated revenues from tourism in a fair manner. This will be done through training on fair and transparent contracts between tour operators and communities, as well as though the establishment of community funds in an inclusive manner. After the training, the project will also help to actually set up contracts between (i) providers of cultural products and services in communities, and tour operators and guides as well as between (ii) local SMEs providing food and crafted products and hotels and tour operators. Local SMEs and community producers and service providers will be coached on drafting these contracts.

Activity 3.4 Link Outbound tour operators in target markets with Yangon-based in-bound tour operators that offer Kayah state tours: prepare inbound tour operators for international trade fairs and facilitate participation. Jointly organize side event with CBI on international fair on tourism in Kayah

The project will facilitate participation of inbound tour operators offering Kayah state to at least one international trade fair and jointly organize with CBI a high-level side event at the selected tourism fair (e.g. Internationale Tourismus Börse Berlin) focusing on Kayah state. Trade fairs and events are the best platform for linking and making business contacts with international outbound tour operators. As a result of the development of new offers in Kayah state, higher quality products, newly acquired marketing and market intelligence skills, the number of effective business linkages with international outbound tour operators is expected to grow.

23

Training will be provided on sales and negotiation and preparing outbound tour operators for trade fairs with specific promotional material on the tourism offer of Kayah State, in line with the developed branding/marketing strategy for Kayah state tourism. 

A three-phase branding strategy will be applied to Kayah state: opportunity assessment (exploring customer and potential customer attitudes to visit Kayah state), stakeholders engagement (workshop with UMTA and MTM), brand design (ideation exercise conducted to define key messages and graphical devices that can be used in communications) and brand implementation.

Activity 3.5 Develop a marketing strategy and train enterprises and community producers on the job, in promoting and linking their products to Kayah state tourists and the tourism industry

At state level in Kayah, the project will formulate a marketing strategy and train SMEs and community producers on the job, in promoting and linking their products to individual tourists and the tourism industry (tour operators, hotels).

PROJECT SYNERGIESProject interventions, especially in terms of product development and linkages to tourism value chains, complement the approach of other organizations and programmes such as CBI, SDC, ILO and Lux-Development’s educational program. Please also refer to Annex X for ongoing tourism development projects.

CBI: Close synergies will be developed with CBI’s Export Marketing and Management training (EXPRO training) to familiarize tour operators with European markets and equip them with practical skills on export marketing, export management and promotion in Europe. Tailoring the EXPRO training to Myanmar, the project will also include presentations on the Asian market. The CBI project will focus on the following activities: (i) capacity building of in-bound tour operators under UMTA on enterprise management aspects; (ii) market intelligence and destination marketing on Kayah state with MTM and MOHT; (iii) social responsibility in the tour operator value chain with UMTA, MTF, MOHT, MCRB, MTT; and (iv) product diversification through community involvement in tourism, focusing on training and capacity building with MTF, guide associations, individual tour operators, and community organisations in Kayah state.

Discussions between ITC, CBI, and the Myanmar Tourism Marketing Association, have led to the agreement to use the existing content of the training, adapt it to the Myanmar context, and replicate it to a wider group of tour operators to be selected based on their willingness to offer Kayah based tourism products or already offering tours to Kayah.

Possibility of using the adapted content for E-learning in collaboration with ITC E-learning team to reach a wider audience will be explored. The country’s web restrictions might impede a full e-learning implementation, however. An eventual solution could be a blended-approach combining in-country workshops with pre and post workshops e-learning sessions.

The 15 Myanmar tour operators that have already profited from the EXPRO training in spring 2014 and who are offering tours to Kayah state or being open to do so, will become partners of the project, assuring a direct market link for Kayah state products and service providers in the tourism sector. This collaboration will help widen the impact of the EXPRO training, and provide the NTF III inclusive tourism project with tour operators as partners that have already been exposed to international markets, and who have a basic knowledge of export marketing and management. Please refer for more details to Annex VII “Synergies and collaboration of NTF III Myanmar with CBI activities in the tourism sector in Myanmar.

Switzerland Development Cooperation (SDC): SDC’s Hospitality Training Initiative (HTI) provides the opportunity to cooperate on human resource development of hotel staff. The SDC initiative will be

24

realized through private sector initiatives such as leading hotels and a suitable business association. An output target of 500 graduates per year is planned. The initiative will rely on existing training capacities, generated by leading hotels. SDC is also supporting the Centre for Vocational Training (CVT) to introduce ASEAN hospitality training standards. The annual output of this component is planned to be around 250 trainees per year. Although the initiative focuses on Yangon in the first phase there may be possibilities to place some students from Kayah state in its training courses.

ILO: ILO is preparing the introduction of an entrepreneurship support training programme, using the Sustaining Competitive and Responsible Enterprises (SCORE) training scheme, and the Start and Improve Your Business (SIYB) packages in the tourism sector, focusing on employment creation through small enterprise development. These trainings acquaint potential entrepreneurs with basic management skills, such as planning and managing a small firm, managing growth and development, and planning for competitive advantage. Moreover, they draw on business cases and create awareness of potential pitfalls in running their own enterprise. These trainings could be used to encourage local entrepreneurship and support enterprise growth in Kayah state.

Hanns Seidel Stiftung: The foundation has supported the Ministry of Hotels and Tourism in formulating policy and regulations since 2004. Currently, the foundation supports the implementation of the ASEAN Bed & Breakfast standards for community based tourism in Myanmar. They have appointed experts from industry and umbrella organisations in the Ministry. The NTF III project will keep close contact with the foundation and their staff so as to ensure access to up-to-date information on the further developments of tourism regulations and policies in the country.

SUSTAINABILITY OF THE PROJECTPro-active participation of national (Ministries, MTF, UMTA) and state-level stakeholders (public and private) is crucial to assure the sustainability of the project. In particular on-going discussions with UMTA and MTM will be maintained to have continuous feedback from state to national level. UMTA and MTM need to be proactively involved in project implementation, especially through the train the trainers’ approach of UMTA and MTM coaches of the tourism EXPRO programme.

The project’s focus on creating and strengthening tourism and supply chain sector associations in Kayah state will contribute to the sustainability of the project. An institutional structure must be put in place, and TSI capacities for assuring services to their members (such as trade intelligence, marketing and lobbying) are needed to represent and accompany SMEs in the process.

Partner TSIs are expected to support their members and client enterprises, and provide this support not only to NTFIII beneficiary companies, but to the sector in general including other enterprises.

Direct interaction between the project and enterprises will be gradually reduced and substituted by local service providers, coached by ITC (e.g. trained coaches from UMTA and MTM). The established structures (e.g. supply chains between hotels and providers of goods and services) will be formalized to be functional also after completion of the project.

The methodologies and results of the interventions will be disseminated to other states in Myanmar, enabling them to replicate the approach. Staff of related Ministries and associations will be involved as much as possible to enable them to replicate the project inputs in other areas.

EXIT STRATEGYThe project’s exit strategy incorporates collective participation, empowering local stakeholders, promoting development ownership through localization, and building individual and institutional capacity at national and local level.

Institutions and Associations

At the national level, the project is working with established TSIs with a focus on improving their capacity and transferring skills to better serve their members. With strengthened capacities, TSIs will

25

be able to mobilize and absorb resources from other partners, including government, in order to carry out their mandated activities effectively and in a sustainable manner in the future.

At the local level, the Kayah state MOHT branch office is planned to be established during the project. The project will closely support the office in areas directly linked to project activities, well aware that it does not have the capacity to support the immense capacity-building needs in other areas of the office’s responsibilities.

The project is planning to work with the Kayah Hotelier Association as well as formalize other tourism and tourism-related supply chain associations, subject to a positive assessment during the project. In both cases this will require a careful planning and an inclusive stakeholder approach so as to ensure that the associations serve their members in the best possible way, meeting stakeholder expectations. Please also refer to the chapter on Risk Management where risk mitigation measures are described, going a long way in ensuring a successful project exit.

Enterprises and Communities

The project interventions will prepare and link inbound tour operators to international markets. This market-led approach will establish long-term partnerships between local and international tourism industry practitioners in the public and private sector. These partnerships will provide the framework for mobilizing resources and expertise for the development of sites and attractions, even beyond the lifetime of the project. Destination capacity management at the national and local level will be a logical evolution of project activities.

By the end of the project, the selected tour operators will be able to organize tours to Kayah state and promote the destination independently. The promotional material will be tested and ready to use on a continued basis and at larger scale for the whole sector. The promotion of Kayah state as a new destination will have taken its own momentum and awareness will be sufficiently established to guarantee the sustainable growth of tourism in the area.

At community level, the project will act as a catalyst for exploring and facilitating business opportunities by linking communities and their product and service offering to the tourism industry. By the end of the project, the communities will have increased their understanding of tourism, explored pros and cons of involvement, generated realistic expectations to be able to harness the opportunities of tourism by themselves. It is expected that enough investment in innovative and pro-poor tourism products and services, benefiting poor communities, will have been attracted. In addition, tourism will increase demand for goods and services provided by the local communities to an extent that the project will have reduced vulnerability for many. With the experience and expertise to sell products and services to tourists profitably, there will be an in-built incentive to continue the envisaged approach, leading to an easy exit of the project.

The project will facilitate “positive” cultural exchanges between local communities and visitors and to a certain extent contribute to create a new generation of more conscious and pro-active entrepreneurs.

26

4. RESULTS FRAMEWORK

28

5. ORGANIZATION & MANAGEMENT

COUNTERPARTSThe Ministry of Hotels and Tourism (MOHT), together with the Ministry of Commerce (MOC), are the main counterparts for any export oriented tourism project in the country. MTF and particularly its member associations UMTA and MTM which group Myanmar’s tour operators will be the key partners in linking local providers of tourism services to the market. Below is a short description of each identified counterpart, starting with the public sector.

1. Ministry of Hotels and Tourism (MOHT) is the government’s designated agency tasked with guiding the development of the tourism sector and coordinating activities among other ministries and associations with respect to tourism. The Ministry is responsible for the systematic development of the tourism industry, but at least 25 ministries have some sort of tourism-related role or responsibility, the extent of which varies considerably.

The MOHT is the lead ministry in charge of vetting investment in the accommodation and tour services subsectors, and sets out requirements for tourism enterprise registration and classification. The MOHT also coordinates with relevant government departments and organizations to set licensing fees, duties, and taxes related to the hotel and tourism industry. Although its activities include policy making, planning, project management, and regulation, it also engages in business-related activities such as tour operation, accommodation services, and beverage production. The Ministry’s deep involvement across the sector makes it uniquely qualified to direct and monitor the efforts undertaken in-line with this sector strategy.

Other than the Minister’s Office, the MOHT’s organizational set up is built on two directorates i.e. the Directorate of Hotels and Tourism (DHT), with departments responsible for Tourism Promotion, Tourism Regulation, Project and Budget, and the Myanmar Hotels and Tourism Services (MHTS), with departments responsible for Planning, Budget and Administration, Travels and Tours, Hotels and Beverages. DHT also has branch offices in Yangon, Mandalay, Bagan, Taungyi and Pathein. The MHTS is present in Yangon, Yangon Airport, Mandalay, Muse, Myitkyina, Bhamo, Tachileik, Taunggyi, Bagan and Kawthaung.

A new branch office of the MOHT is planned for Kayah state to facilitate tourism planning and management. The office will also facilitate the implementation of destination-level projects and activities. The office will engage with MOHT, MTF, and other actors to implement tourism-related policies, projects, and activities, report key tourism-related issues arising in the state, and provide appropriate guidance and support to relevant actors in Kayah state.

The MOHT will be the main partner at the national and local level concerning activities in tourism planning and management, as well as with regard to policy and legal concerns. In addition, the MOHT is in charge of training and certifying tour guides for Kayah state, and providing training in its Yangon training facility, as well as conducting skills assessment through its regional office.

At the local level, the project will work with the MOHT branch in Kayah state. Given the lack of tourism experience by public and private actors in the state, the office will need support from ITC to strengthen their ability to mainstream tourism planning into local governance structures. The project will also train the office in engaging in public-private partnerships including setting up of new tourism and tourism-related associations to support local SMEs and producers and helping enterprises and community producers in promoting and linking their products to tourists and the tourism industry.

2. The Ministry of Commerce (MOC) The Ministry comprises of the following departments: (i) office of the minister; (ii) directorate of trade; (iii) department of commerce and consumer affairs; and (iv) department of trade promotion. MOC activities are relevant for the project in supporting external trade and encouraging trading activities of private entrepreneurs. MOC is committed to tourism development, and was one of the key actors in the formulation of the country’s Tourism Export Strategy as part of the National Export Strategy supported by ITC.

MOC will play a vital role in the project at national level and will be a key partner in improving the export competiveness in the tourism sector implementing policies and regulations.

3. Myanmar Tourist Federation (MTF): In 2012, Myanmar’s tourism businesses and associations formed the Myanmar Tourist Federation. The stated mission of the MTF is to (i) promote Myanmar as a tourism destination; (ii) help in the process of sustainable tourism development; (iii) welcome and assist investors; and (iv) develop human resources for tourism-related industries. MTF is a new addition to Myanmar’s growing network of civil society organizations and is encouraged to voice private sector concerns in the tourism sector. Although MTF plays a vital role in tourism marketing, its efforts are constrained by a lack of human and financial resources. Similarly, a shortage of resources has restrained MTF’s aspirations to improve its member’s environmental practices and develop tourism-competent human resources. It requires assistance to provide industry knowledge and tools to promote responsible tourism, as well as strengthen its ability to manage and represent its full membership base. MTF is the major actor in Myanmar’s tourism sector and the project aims at improving the capacity of the MTF, and especially its members UMTA and MTM, in providing sector development support services to tourism enterprises along the tourism sector value chain.

MTF is the umbrella organization gathering relevant national tourism organizations such as:

- Myanmar Hoteliers Association (MHA)- Union of Myanmar Travel Association (UMTA)- Myanmar Tourism Marketing (MTM)- Myanmar Tourist Guides Association (MTGA)- Myanmar Tourism Human Resources Development Association (MTHRDA)- Myanmar Hospitality Professionals Association (MHPA)- Myanmar Restaurant Association (MRA)- Myanmar Tourism Transportation Association (MTTA)- Myanmar Souvenir Entrepreneurs Association (MSEA) (dormant)- Domestic Pilgrimage & Tour Operators Association (DPTOA)- Myanmar Tourist Health Care and General Services Association (MTHCGSA)

4. Union of Myanmar Travel Association (UMTA): UMTA was formed under the supervision of the MOHT in 2002 and is the principal association for organizing the private sector travel agencies, tour operators, and travel related businesses in the promotion of Myanmar as a travel destination. Working under the guidance of the MTF, UMTA is also responsible for the comprehensive and systematic development of the tourism-related sectors in Myanmar. According to the MOHT there are currently more than 1,300 licensed tour companies of which nearly 400 are active members. The organization also includes some associate members from the hotel sector and other tourism related industries, such as media and transport. There are 17 joint venture companies and one foreign-owned tour company operating in this sector. Most local tour operators and travel agencies are based in Yangon as the infrastructure there is far more developed than elsewhere in Myanmar. In collaboration with UMTA and the Myanmar Tour Guide Association, the project aims at building the capacity of the state-level government and associations on data collection, interpretation and dissemination on tourist arrivals, trends, spending patterns, expectations at regional level (Kayah State), as well as improving the associations' sales and marketing services. As most tour operators lack the capacity to organize customized tours to Kayah state, the project will create linkages between Yangon-based companies and local tourism stakeholders to promote Kayah state as new tourism destination. The project will train tour operators in market analysis, marketing and product-market matching with a focus on Kayah State. In addition, UMTA, in cooperation with MTM, will be the partner for the CBI EXPRO training model to create a sector wide understanding of tourism demand in Europe and how to tap into it.

5. The Myanmar Tourism Marketing (MTM): MTM is a non-profit organisation created in the 2000 to act as the marketing arm of the Myanmar Tourism Federation. They have 124 members, 80% of which are tour operators, with the remaining 20% being airlines and hotels. Its main functions are (i) the dissemination of information to promote Myanmar as a preferred destination for tourists; (ii) participation in national and international tourism events; (iii) co-

30

operation with international tourism bodies; (iii) organization and participation of Myanmar in international tourism trade fairs, including stand organization, displays, etc. (e.g. ITB, WTM, ASEAN Tourism Forum, JATA, ITB Asia); (iv) publication and distribution of news bulletins, promotion brochures and an up-to-date website. MTM will be an ITC partner to promote products and services developed in Kayah state to the international tourism market through trade fairs and exhibitions.

The number of counterparts involved is an indicator of the coordination challenge between the different organizations involved. Addressing this challenge will require strong multi-sector coordination to ensure that tourism development in Kayah state will proceed in a systematic and responsible manner. In order to allow the various agencies to effectively fulfill these roles, capacity building is required in many areas, particularly for government officials and private associations that will cooperate in the implementation of the project.

PROJECT IMPLEMENTATION STRUCTUREThe Project Management Team (PMT) oversees day to day activities, management and tracking of budget and resources, administrative oversight including monitoring and compliance and managing the relationship with partner organizations in Myanmar. The PMT is composed of:

1. The Geneva-based NTFIII Myanmar Project Manager is responsible for implementation of the project and takes responsibility for results, as well as compliance. S/he ensures the coordination of the different components of the project. In his/her technical capacity, s/he provides technical leadership, strategic vision and travels to Myanmar periodically. The Project Manager will also coordinate the inputs of other ITC in-house inputs, especially in marketing and branding and TSI development to ensure that they are adapted to country and project specific needs.

2. The Project Manager will be supported by technical consultants in the field and at ITC HQ. The NTFIII Programme Manager supervises the NTF III Programme overall, including development of the individual country projects as well as monitoring and reporting and will ensure coherence of the Myanmar project with the NTF III overall programme.

3. The full-time National Project Coordinator based in Loikaw, Kayah State, Myanmar, oversees project planning, implementation and reporting with Myanmar counterparts on the ground on a day-to-day basis. The National Project Coordinator acts, to the extent possible, as representative of NTF III in Myanmar.

31

The relationship between the different project stakeholders is shown in Figure 2.

Regular exchange with ITC’s Country Manager for Myanmar, OAP/DCP will guarantee a good coordination with the ITC Myanmar country programme. The country manager will provide advice and connect to relevant initiatives and stakeholders and will be a member of the Project Steering Committee.

The Programme Management Unit reports to the NTFIII Steering Group, which is composed by the Director, Division of Market Development of ITC and the Deputy Managing Director of CBI and provides support to the Project Management Team.

Implementation of this project will be guided by a Myanmar-based Project Steering Committee (PSC). The PSC will be composed of the Ministry of Commerce and the Ministry of Hotels and Tourism, the Myanmar Tourism Federation (MTF) and possibly its members, the Union of Myanmar Travel Association (UMTA), the Myanmar Tourism Marketing, Kayah state authorities, the Dutch embassy/representative and ITC.

The PSC will:

Provide strategic guidance for project implementation and will ensure liaison with other development partner activities in the same sector by reporting to the Myanmar Trade Council and the Tourism Sector Roundtable on project achievements and results.

32

Project Manager

Ultimate responsible for project delivery

National Project Coordinator, supported by Assistant-Delivery arm in the field-Coordinating work with public and private partners

CBI Myanmar tourism project team:Cooperates with Project Management Team in delivery of joint project components

NTFIII Programme Manager-Supports Project Manager-Ensures coherence in NTF III

NTFIII Steering GroupOverall supervision and quality control

Members of Project Steering CommitteeCooperationReporting

Figure 3. Project Management Structure.

ITC Project Management Support-Supports Project Manager on a daily basis and replaced him/her when on leave/mission

Oversee planning, implementation and reporting issues, for instance approving the work plan and contributing to evaluation and monitoring. The objective is to develop a network that will continue to work together after the project ends.

Confirm and refine the division of labour in project implementation. Develop a process for information sharing and collaboration for instance monitoring and

information sharing meetings (sharing monthly monitoring reports). Implement monitoring mechanisms for the activities of the network. Identify common strategic objectives designating partner roles and how partners will

cooperate by activity.

The Project Steering Committee will meet biannually, either during missions or through video conferencing, to develop and review work plans, resolve disputes and review overall progress and recommend changes in project implementation. The Project Steering Committee approves the annual work plans and the NTF III Myanmar Project Manager oversees implementation in line with these work plans. Biannual reports, annual work plans, activity reports and meeting minutes will be considered adopted by the PSC in the absence of any comment within 2 weeks after distribution of the documents.

For effective implementation of the project ITC will set up a “project coordination office” in Kayah State with a full time Coordinator and assistant and one part-time “liaison staff” in Yangon to maintain ongoing discussions and collaboration at state and central levels.

LOCAL OWNERSHIP

ITC’s assistance supports the government's priorities as set out in the National Export Strategy and the Tourism Master Plan. With this project, ITC is responding to a request by the MOHT as well as the MOC. The project design is demand-driven and was designed based on a participatory approach supported by the government and various TSIs at national level. All proposed interventions are based on research as well as participative consultations involving stakeholders from the public, private and civil society sectors (including both men and women). This keen level of participation during the project formulation is a strong indicator for the expected local ownership during project implementation.

The complexity of the project requires developing ownership at multiple levels, with special focus at the local level. Improving public awareness of the importance of tourism among the local population will be central to achieving ownership in Kayah state. The project is designed in a way to develop and strengthen local capacities and ownership in Kayah state without increasing dependency. The proposed interventions are based not only on a detailed needs assessment, but also reflect the culture-oriented way of thinking of the people in local communities. The focus will be on human growth instead of only technical assistance. Local actors will take responsibility and ownership, which is expected to lead to the long-term success of all interventions.

Counterparts have also confirmed ownership of the project through their willingness to contribute various in-kind resources, including staff time (especially for the train the trainer approach of preparing future coaches), office space, and dissemination of reports to concerned entities. At the end of the project, these counterparts will be the anchors through which the project’s results can be extended in a sustainable manner.

Counterparts were not only actively involved in project planning, but they will continue to be involved during the project’s implementation as the design is tailored to meet the evolving needs of the beneficiaries.

33

6. BUDGETThe Myanmar project is part of a US$ 9,813,390 grant that ITC received from CBI/Netherland Trust Fund III. It aims to enhance export competitiveness of selected sectors in Bangladesh, Kenya, Uganda and Myanmar through an integrated approach to sector competitiveness.

Budget lines 2014 2015 2016 2017 Total

11.51 141,334 254,033 185,075 30,608 611,051

11.0128,700 45,100 32,800 106,600

16.01 15,906 22,723 30,995 9,089 78,71217.01 84,000 126,250 131,000 65,250 406,500

42.013,750 3,750 3,750 3,750 15,000

22 30,000 70,000 60,000 160,00032.76 11,250 11,250 11,250 11,250 45,000

32.01 2,000 72,000 99,500 15,000 188,500

7,500 7,500 7,500 7,500 30,000 Sub-total 1 295,740 596,205 574,170 175,247 1,641,363

Sundry (2.5%)7,393 14,905 14,354 4,381 41,034

Sub-total 2 303,133 611,111 588,524 179,629 1,682,397

Support Cost (13%) 39,407 79,444 76,508 23,352 218,712

GRAND TOTAL 342,540 690,555 665,033 202,980 1,901,108

Budget based on ITC technical sections estimates

(based on ITC’s standard rules and practices)

Equipment

Grants

Operational costs

Group Training

Communications

Category

Int'l Experts

ITC Advisors

ITC Staff Travel

Nat'l Experts

The total projected budget for the Myanmar NTF III project is USD 1,901,108. Necessary costs for project completion include procurement services, personnel, travel, research (studies and surveys), advisory services and trainings, and a limited amount of equipment.

The budget is based on previous ITC Inclusive Tourism projects and discussions about likely costs on the ground with local partners. The budget is built on the following assumptions:

International consultants: An average monthly cost of 13,000 (daily fee of 500 USD *20 days = 10,000 USD, and the travel cost of 3,000 USD (DSA for 10 days, economy air ticket from Europe or elsewhere similar distance)

National consultants: An average daily cost of 100 USD Trainings and Workshops: a cost ranging from 1,500 to 3,000 USD depending on the number

and type of participants including organization, the rent of premises, simultaneous translation and reproduction of documents

The envisaged grants are foreseen to be channelled to partner organizations like MTF, UMTA, the Hotelier Association and/or the MHT Branch Office in Kayah state to develop tourism tours, including promotional material and for the organization of workshops and information material to enhance the associations

It is expected that the project counterpart institutions in Yangon and in Loikaw will provide in-kind contributions, such as staff time (by UMTA/MTM and by the MHT branch office in Kayah state), office facilities (in particular an office room for the Yangon Liaison Coordinator provided by UMTA),

34

organization of workshops and meetings (UMTA, MTM and MHT branch office), and dissemination of reports to concerned stakeholders.

7. MONITORING & EVALUATION

The NTFIII Myanmar Project Manager, with the support of the Kayah Project Coordinator, will take the lead on monitoring progress in the implementation of project activities as well as monitoring progress against outputs and overall objectives.

Monitoring at the project level will include standard monthly monitoring per ITC procedure and a biannual project progress report, which will be produced by the NTF III Myanmar Project Manager with the support of the Kayah Project Coordinator and shared with the Project Steering Committee (PSC). In addition:

i). The Programme Management Team (PMT) will compile a Consolidated Progress Report from the respective Project Progress Reports, to be submitted to the NTFIII Steering Group and the Quality Assurance Advisor from CBI;

ii). The Steering Group will then inform the Executive Committee, which will in turn give strategic directives on Programme implementation, and achievements.

The baseline for the indicators will be confirmed after initial assessment.

PROJECT QUALITY ASSURANCEAn ITC appointed Quality Assurance Adviser will be responsible for developing, implementing and reporting against a quality management approach for the NTFIII programme and projects, including this one. The adviser also focuses on risk management. For more information on the role of the QA, consult the programme document for NTF III.

EVALUATIONITC will manage an independent external evaluation of NTF III at the programme level with due respect to internationally-recognized norms and standards for conducting evaluations, with the support of the partner TSI. This process will be supported by the ITC Evaluation Unit at each step of the evaluation process. The purposes of the evaluation will be to:

Play a critical and credible role in supporting accountability in the design and the implementation of the project;

Ensure targets outlined in the project document are met;

Contribute to building knowledge and organizational learning; and

Promote the work carried out by the NTFIII project.

The terms of reference of the evaluation will be consulted with all NTFIII stakeholders including the NTFIII Management Team and approved by the ITC Evaluation Unit. The evaluation will be launched during the second quarter of 2017.

ITC has committed that NTF III will join the “Pioneering Real-time Impact Monitoring and Evaluation” (PRIME) project that will carry out impact monitoring and evaluation of CBI and PUM (Dutch senior experts programme) activities in TRTA. As PRIME has the double objective of being a research and a monitoring/evaluation methodology, it could provide valuable information on which aspects of TRTA work, and those that do not. Moreover, it will provide in-depth information on impact through case studies to be carried out in all four NTF III countries. NTF III (incl. the Myanmar tourism project) involvement in PRIME will be managed at programme level.

RISK MANAGEMENTAlthough the feasibility study has identified a number of risk factors regarding project success, a number of strategies exist in order to avoid or minimize impediments. The Project Management Team

35

(PMT) will regularly monitor these risks and will have contingency plans in place to be able to react fast and appropriately to changes.

a) Risk related to the impact level:

The project benefits might be unevenly shared among stakeholders: The tourism sector in Myanmar is dominated by an economic elite based in Yangon. The elite controls a wide range of tourism activities at both the regional and national level, and its interest in supporting local communities, local businesses, and non-elite business partners is unclear. They are often connected to the powerful political elite at the national level and can have enormous influence in local affairs. The project needs to ensure that interventions do not risk reinforcing the interests of economic elites and have no influence on the dynamics of conflict in Kayah state. Reinforcing the interests of economic elites would lead to a smaller impact on local communities in terms of jobs created.

Possible Mitigation: The project needs to carefully monitor how efforts to promote tourism interact with the dynamics in Kayah state, and who profits from tourism development. The interventions need to ensure an equal participation of different stakeholders and that no group profits substantially more than any other. In addition, the project needs to carefully select the companies and communities to ensure minority (incl. ethnic) groups and small businesses are well represented and ensuring their views are given priority.

b) Risks related to the outcome level

The volatile political situation (especially with regard to the 2015 general elections) and possible backlashes of the peace negotiations may impact negatively on the security situation in Myanmar and Kayah state. Political instability and security concerns could lead to fewer visitors coming to Myanmar and to Kayah state.

Possible Mitigation: Regular dialogue between the project and the concerned line ministries, state authorities, donors and NGOs (also beyond private sector development and trade) facilitated by ITC presence in Yangon and Loikaw to ensure that the above risks do not threaten the existence of the project or constrain its activities; Reducing the scope and changing geographic coverage of the project in case of violence in Kayah state is an aspect which will receive due consideration, should the situation arise.

Lack of trust and cooperation between Government, state level peace groups and local communities may affect the project to a point where activities are significantly disturbed or interrupted.

Possible Mitigation: Trust building measures will be encouraged by the project, particularly at community level. The project will encourage cooperation among stakeholders and will define clear roles and responsibilities for each of them taking into account the evolution of the political context.

Poor follow up and/or absorption capacity of partner TSIs and project partners.

Possible Mitigation: Most of the partners are experienced with existing and well developed international relationships. They are aware of the needs for improving the tourism sector in Myanmar. Therefore the project needs to emphasize the benefits of the project for the country, and the value of gaining knowledge and expertise for the individuals involved

c) Risks related to the output level

Output 1: Export capacity of tourism enterprises and tourism-supply chains enterprises and community producers and services providers in Kayah state increased

Local companies and communities might not be willing to allocate time for training. Despite the presence of incentives, local companies and community producers may not be interested to cooperate with the project for various reasons including (i) unwillingness to allocate time for training; (ii) uninterested in adapting product and service offerings to international tourist demand, (iii) higher income generation by other activities; (iv) not willing to work with donor projects cooperating with the government; and (v) negative socio-cultural factors.

36

Possible Mitigation: The project will identify catalytic firms and community producers that are willing to work with the project and operate as a value chain catalyst by investing and driving innovation. Catalytic firms can be sellers of inputs or buyers of value chain products and will be targeted by the project because of their potential to shift the norms of behaviour in the tourism value chain in Kayah state. Their immediate impact and demonstration effect can produce rapid change and innovation, leading to higher levels of commitment for the project.

The project may face difficulties to contract suitable local trainers and staff, especially if salary expectations are high. National consultants speaking the local languages may be difficult to identify and/or not available.

Possible Mitigation: All donor projects and international companies face similar problems. These issues however do subside over time with a trained workforce. To a certain extent, this risk can be mitigated by teaming up with other donor projects focusing on training and human resource development in tourism.

Output 2: Capacity of tourism associations (UMTA, MTM), as well as tourism-related supply chain associations is improved in providing sector development support services to their clients

Weakness in government institutions at national and local level remains a big obstacle to the implementation of the project. Senior officials in the MOHT and MOC now appear to be grasping the need for more radical changes to tourism development. However, mid-ranking staff in many cases remain limited in skills and education. A new branch office of the MOHT is planned for Kayah state to facilitate tourism planning and management. This office could stick to outdated guidelines discouraging productive sector development. In addition, ministries run on minimal budgets. Low salaries, weak management and poor entry-level standards are further challenges for undertaking project activities.

Possible Mitigation: The design of the project recognizes these risks and resources are directed towards mitigating actions. The project essentially provides technical assistance to help build ministerial capacity and to directly contribute to better understanding of tourism development and destination marketing, in order to bring about the desired short and long term outcomes. Regular dialogue between the project and the MOHT branch office to ensure that the above risks do not threaten the existence of the project and ensure awareness is raised on project benefits.

Lack of common vision and willingness to cooperate among tourism-supply chain stakeholders. Inadequate TSI and private sector capacity is a major risk to initiate meaningful tourism development in Kayah state. The private sector is fragmented, small, lacks the critical mass, financial resources, and sufficient capacity to organize itself in associations. Setting up new tourism-related associations, and providing services along the value chain will be a new approach in Myanmar. The project will need to gain experience while being implemented. This will also be the case in working with the new branch of the MOHT in Kayah state. The project will operate in a difficult environment and has hardly any previous experience in the country to draw upon with regard to the proposed delivery approach.

Possible Mitigation: The project needs to emphasize the benefits of the project for the country and value of gaining knowledge and expertise for individuals involved; the project needs to be flexible in its approach and management system, and work with those partners that are willing to cooperate and have the greatest potential to produce results. Engagement at TSI level is always dependent on the dynamism of the organizations, and progress will be hard to predict. Therefore, these interventions will be treated in an “opportunistic” way. The project will accelerate its support, when things are moving forward, and become less engaged when there is less interest in participating in project activities.

Output 3: Business linkages and collaboration facilitated

Supply-side constraints to supply tourism market in a timely manner can weaken the business linkages that will be facilitated by the project.

Possible Mitigation: The project needs to carefully select the companies and communities to work with and run light audits of all supported beneficiaries. Facilitators with value chain and local knowledge in Kayah state will be chosen.

37

The increased number of tourists could negatively impact local communities in Kayah state

Possible Mitigation: The project will facilitate “positive” cultural exchanges between local communities and visitors and to a certain extent contribute to create a new generation of more conscious and pro-active entrepreneurs. Furthermore, in collaboration with CBI, the newly designed code of conduct for visiting communities will be disseminated to tour operators and tourists directly.

Please also see risk management plan in Annex IV.

8. COMMUNICATIONThe NTF III programme seeks to influence a wide number of stakeholders, as well as to coordinate the inputs of a heterogeneous project team located at ITC across the four selected countries. Effective and coherent communications therefore play a critical part in achieving the project’s objectives. In addition, a good communication strategy is essential to support the donor’s objective of visibly contributing to the development of these strategically important partner countries.

Communications for Myanmar will have three functions. The following paragraphs present each function and how it will be carried out:

To coordinate and manage project implementation among stakeholders. This includes communications related to the operational aspects of the programme and to its day-to-day management, as well as forward planning, strategic guidance and navigation.

To report progress on project implementation to donors and ITC management and share information and lessons learned. Continuous exchanges of information will also enable the NTF III programme to react to, support, and benefit from new developments and programmes and initiatives in its target countries in a timely manner, and build synergies where possible.

To promote project activities and results among beneficiaries, development partners, and the wider audience, thereby increasing impact, and visibility for the programme itself.

Special attention will be paid to inform local ethnic leaders about the project activities so that they can communicate them to the designated local beneficiaries. Local NGOs will be involved in spreading information on project activities not only within Kaya state, but also on a national level.

ITC will actively seek participation in ongoing tourism and trade roundtables to communicate information on the project and seek synergies with other actors.

For more details, please refer to the communication plan in Annex V.

38

ANNEX I: LOGICAL FRAMEWORK

Objectives Indicators* Baseline Targets Means of Verification

Risks/Assumptions

IMPACT: Contribute to job creation and support in the Myanmar tourism industry and related supply chains

* All data will be collected in a gender-disaggregated manner

a. created and/or maintained jobs in tourism industry-related sectors

and/or

b. % increase of income for local providers of products and services sold to tourists and tourism-related enterprises with focus on Kayah state

a. Tbd*

b. Tbd

a. 10% increase in jobs

b. 20% increase in income

• ITC/CBI final project evaluation report

• Survey of beneficiary tourism and tourism-related enterprises

Risks:

• Project benefits unevenly shared among stakeholders

Assumptions:

• Relationships between Myanmar government and donor government remain stable throughout the project's implementation period

Outcome: Export competitiveness of the Myanmar tourism sector strengthened with focus on Kayah state

a. Percentage increase in the value of tourism exports (i.e. tourist spending in Kayah state directly or indirectly benefitting selected enterprises and communities

b. Number of new tour packages to Kayah state offered by national and international tour operators

c. % increase of value and/or volume of local products and services to be supplied to the tourism sector

a. Tbd

b. 0

c. Tbd

d. 0

a. 20% increase

b. 2 (incl. 1 with Inle Lake)

c. 30%

d. 2

• Consultant reports

• ITC/CBI final project evaluation report

• Survey of beneficiary tourism and tourism-related enterprises

Risks:

• Political instability (especially with regard to the 2015 general elections) leading to less visitors to Myanmar

• Lack of trust and cooperation between Government, peace groups and local communities

• Poor follow up and/or absorption capacity of partner

d. Number of tourism and tourism-related institutions reporting improvements in their managerial performance and/or services to small and medium-sized enterprises as a result of ITC assistance

• Survey among tourists by local stakeholders and ITC project office

TSIs and project partners

Assumptions:

• Central and State Government provides political support to the project

• Local project partners are willing to cooperate in a proactive manner and are able to assure the sustainability of the intervention

• Tourism project has influence on increase of export revenues generated in Kayah state

• Political stability, especially in Kayah state

Output 1: Export capacity of tour operators and tourism-related suppliers of goods and services in Kayah state increased

a. Number of new and/or improved tourist offerings/ products developed

b. Number of tour operators that report increased understanding of export market operations as a result of ITC assistance

a. 0

b. 0

a. 3

b. at least 15 trained tour operators satisfied with acquired skills

• Survey of beneficiary tourism and tourism-related enterprises

• Consultant reports

• ITC/CBI project monitoring and evaluation reports

• Workshop and

Risks:

• Local companies and community producers are not willing to allocate time for training

• Trainers, staff and national consultants speaking the local languages difficult to identify and/or not available

Assumptions:

• Tour Operators and

40

training evaluations

• Evaluation surveys of EXPRO training and coaching

enterprises willing to cooperate in a proactive manner and are openly sharing information

• Concerned companies can be identified

• Local companies and community producers are interested in adapting product and services offer to international tourist demand

Output 2: Increased capacity of tourism associations (UMTA, MTM) as well as associations of tourism-related supply chains in providing sector development support services to their clients

a. Number of staff from the Union of Myanmar Travel Association and the Myanmar Tourism Marketing trained to become EXPRO tourism coaches

b. Number of newly developed promotion and marketing materials on Kayah destination designed and validated (e.g. brochures, flyers, web entries, give-aways, etc.)

a. 0

b. 1

a. 3

b. 3

• Consultant and evaluation reports

• Mission reports

• List of networking events/training participants

• TSI surveys conducted by ITC

Risks:

• Weakness in government institutions at national and local level

• Lack of common vision and willingness to cooperate among tourism-supply chain stakeholders

Assumptions:

• Existing tourism-related associations interested in participating in project activities and are interested in enhancing quality of their offer

• Tourism-supply chain associations work as a sustainable multiplier of knowledge from which a

41

significant number of enterprises and community-based producers and service providers take advantage

Output 3: Business linkages and collaborations facilitated

a. Number of tourism and tourism-supply chain enterprises having met potential buyers

b. Number of linkages between inbound and outbound tour operators facilitated

a. tbd

b. tbd

a. at least 10 SMEs and community producers and service providers having met potential buyers

b. 10

• Reports of having met potential buyers through notes for file and company reports on business generation events or other events

• Consultant and evaluation reports

Risks:

• Supply-side constraints to supply tourism industry in a timely manner

Assumptions:

• Enterprises are responsive and follow up on buyer solicitations

• Tourism industry favourable of buying local

• Controlled impact of tourism on local communities and habits

42

ANNEX II: WORK PLAN 

Outputs & ActivitiesResponsibility

2014 2015 2016 2017

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Output 1: Export capacity of tour operators and tourism-related suppliers of goods and services in Kayah state increased

DMD/SCDBIS/EC

                     

1.0 Undertake Baseline assessment, mid-term review and final assessment survey for Tour Operators, enterprises and community-based producers and services providers participating in the project undertaken

DMD/SC                      

1.1 Cultural tourism tours assessment and development DMD/SCDBIS/ECUMTA

                     

1.2 Improve local supply chain for the tourism industryDMD/SCDBIS/EC

                     

1.3 Create EXPRO export marketing capacities among selected tour operators who offer Kayah products

DMD/SC

Output 2: Increased capacity of tourism associations (UMTA, MTM) as well as associations of tourism-related supply chains in providing sector development support services to their clients

DMD/SCUMTA

                     

43

MTGA

2.1 Identify and assess the capacity of existing associations (i.e. Kayah Hotelier Association); Assess the feasibility of supporting SMEs by setting up tourism-related supply chain association(s) (e.g. in the crafts sector)

DMD/SC                      

2.2 Strengthen and formalize up to two tourism and tourism-related associations (subject to a positive assessment)

DMD/SC                     

2.3 In collaboration with UMTA and the Myanmar Tour Guide Association (1) assist the MHT Branch office in Kayah to engage in public-private partnerships as well as build their capacity and those of tourism-related Kayah state associations for data collection, interpretation and dissemination on tourist arrivals, trends, spending, expectations on a regional level (Kayah State), and (2) improve tourism-related associations' sales and marketing services with special focus on Kayah state

DMD/SCDBIS/TSUMTAMTGA

2.4 Train trainers of UMTA/MTM or other relevant multiplier on the CBI EXPRO training model to create a sector wide understanding of tourism demand in Europe and how to tap it

DMD/SCCBI

Output 3: Business linkages and collaborations facilitated

DMD/SCUMTAMTMDBIS/ECDBIS/TFPB

                     

3.1 Raise awareness among tourism associations, State Government entities and concerned communities about Kayah tourism products and impact of sourcing local products on revenue generation as well as on international tourist satisfaction

DMD/SCDBIS/TS

3.2 Create/strengthen linkages between Yangon-based tour operators and Inle lake guides and local tourism stakeholders who offer newly developed products in Kayah state

DMD/SC                     

44

3.3 Develop model contracts (including an adapted version of the code of conduct for tour operators that will be developed by CBI) between providers of cultural products and services in communities and tour operators and guides and train stakeholders on how to apply these

DMD/SCDBIS/TFPB

                     

3.4 Link Outbound Tour Operators in targeted markets with Yangon based Tour Operators that offer Kaya state tours: prepare inbound Tour Operators for international trade fairs and facilitate participation. Organize jointly with CBI side event on international fair on tourism in Kayah

DMD/SCDBIS/EC

                     

3.5 Develop a marketing strategy and train on the job enterprises and community producers in promoting and linking their products to Kayah state tourists and the tourism industry

DMD/SC                     

Final Evaluation

45

46

How? Who? When?

Insert Indicator Data collection methods and sources

Responsibility

Before project (establish baseline)

Frequency during project

2014 2015 2016 2017 After 2017

IMPACTa. created and/or maintained jobs in tourism industry-related sectors and/orb. % increase of income for local providers of products and services sold to tourists and tourism-related enterprises with focus on Kayah state

• ITC/CBI final project evaluation report• Survey of beneficiary tourism and tourism-related enterprises

ITC/CBI a. Tbd*b. Tbd

At the end of the project as well as one and two year after its termination

OUTCOMEa. Percentage increase in the value of tourism exports (i.e. tourist spending in Kayah state directly or indirectly benefitting selected enterprises and communitiesb. Number of new tour packages to Kayah state offered by national and international tour operatorsc. % increase of value and/or volume of local products and services to be supplied to the tourism sector d. Number of tourism and tourism-related institutions reporting improvements in their managerial performance and/or services to small and medium-sized enterprises as a result of ITC assistance

• Consultant reports• ITC/CBI final project evaluation report• Survey of beneficiary tourism and tourism-related enterprises • Survey among tourists by local stakeholders and ITC project office

ITC/CBI

a. Tbdb. 0c. Tbdd. 0

Not measured

Once at end of year

Once at end of year

Once at end of the project

One year after the project

OUTPUT 1a. Number of new and/or improved tourist offerings/ products developedb. Number of tour operators that report increased understanding of export market operations as a result of ITC assistance

• Survey of beneficiary tourism and tourism-related enterprises • Consultant reports• ITC/CBI project monitoring and evaluation reports• Workshop and training

ITC and partner TSIs

a. 0b. 0 biannually biannually biannually None None

ANNEX III: MONITORING PLAN

ANNEX IV: RISK MANAGEMENT PLAN

Identified risk

Probability of

occurring (H/M/L)

Impact on project results (H/M/L)

Risk reduction/mitigation Additional resources/activities needed

Responsibility

Names and organization(s)

Impact LevelProject benefits unevenly shared among stakeholders. The tourism sector in Myanmar is dominated by an economic elite based in the capital. The elite controls a wide range of tourism activities at both the regional and national level, and its interest in supporting local communities, local businesses, and non-elite business partners is unclear. They are often connected to the powerful political elite at the national level and can have enormous influence in local affairs. The project needs to ensure that interventions do not risk reinforcing the interests of economic elites and have no influence on the dynamics of conflict in Kayah state. Reinforcing the interests of economic elites would lead to a smaller impact on local communities in terms of jobs created.

M H The project needs to carefully monitor how efforts to promote tourism interact with the dynamics in Kayah state, and who profits from tourism development. The interventions need to ensure an equal participation of different stakeholders and that no group profits substantially more than any other.

The project needs to carefully select the companies and communities it will be working with at national level as well as in Kayah state, to ensure that they are not linked to political elites. Doing so will also ensure higher probability of job creation.

ITC

47

Identified risk

Probability of

occurring (H/M/L)

Impact on project results (H/M/L)

Risk reduction/mitigation Additional resources/activities needed

Responsibility

Names and organization(s)

Outcome LevelThe volatile political situation (especially with regard to the 2015 general elections) and possible backlashes of the peace negotiations may impact negatively the security situation in Myanmar in general. Political instability and security concerns could lead to fewer visitors to Myanmar and to Kayah state.

L H Regular dialogue between the project and the concerned line ministries, state authorities, donors and NGOs (also beyond private sector development and trade) facilitated by ITC presence in Yangon and Loikaw.

Reducing the scope and geographic coverage of the project in case of violence in Kayah state is an aspect which will be taken in due consideration

ITC, MOHT, MOC

Lack of trust and cooperation between Government, state-level peace groups, local communities may affect the project to a point where activities are significantly disturbed or interrupted.

M M Trust building measures will be encouraged by the project, particularly at community level

The project will encourage cooperation among stakeholders but will define clear roles and responsibilities for each of them taking into account the changeable political context

ITC, TSIs, branch MOHT, associations in Kayah state, MOHT, MOC, UMTA, MTF, MTM

Poor follow up and/or absorption capacity of partner TSIs and project partners.

M H Most of the partners are experienced with existing and well developed international relationships. They are aware of the needs for improving the tourism sector in Myanmar. Therefore the project needs to emphasize the benefits of the project for the country, and the value of gaining knowledge and expertise for the individuals involved

ITC, TSIs, branch MOHT, associations in Kayah state, MOHT, MOC, UMTA, MTF, MTM

48

Identified risk

Probability of

occurring (H/M/L)

Impact on project results (H/M/L)

Risk reduction/mitigation Additional resources/activities needed

Responsibility

Names and organization(s)

Output 1 LevelLocal companies and communities might not be willing to allocate time for training. Despite the presence of incentives, local companies and community producers may not be interested to cooperate with the project for various reasons including (i) unwillingness to allocate time for training; (ii) uninterested in adapting product and service offerings to international tourist demand, (iii) higher income generation by other activities; (iv) not willing to work with donor projects cooperating with the government; and (v) negative socio-cultural factors.

M H The project will identify catalytic firms and community producers that are willing to work with the project and operate as a value chain catalyst by investing and driving innovation. Catalytic firms can be sellers of inputs or buyers of value chain products and will be targeted by the project because of their potential to shift the norms of behaviour in the tourism value chain in Kayah state. Their immediate impact and demonstration effect can produce rapid change and innovation, leading to higher levels of commitment for the project

ITC, SMEs, community producers, hotels, etc.

The project will face difficulties to hire suitable local trainers and staff, especially if salary expectations are high and aligned to other countries in the region. National consultants speaking the local languages are difficult to identify and/or not available.

M M All donor projects and international companies face similar problems. These issues however do subside over time with a trained workforce.

To a certain extent, this risk can be mitigated by teaming up with other donor projects focusing on training and human resource development in tourism.

ITC

49

Identified risk

Probability of

occurring (H/M/L)

Impact on project results (H/M/L)

Risk reduction/mitigation Additional resources/activities needed

Responsibility

Names and organization(s)

Output 2 Level

Weakness in government institutions at national and local level remains an obstacle to the implementation of the project. Senior officials in the MOHT and MOC now appear to be grasping the need for more radical changes to tourism development. However, mid-ranking staff in many cases remain limited in skills and education. A new branch office of the MOHT is planned for Kayah state to facilitate tourism planning and management. This office could stick to outdated guidelines discouraging productive sector development. In addition, ministries run on minimal budgets. Low salaries, weak management and poor entry-level standards are further challenges for undertaking project activities.

H H The design of the project recognizes these risks and resources are directed towards mitigating actions. The project essentially provides technical assistance to help build ministerial capacity and to directly contribute to better understanding of tourism development and destination marketing, in order to bring about the desired short and long term outcomes.

Regular dialogue between the project and the MOHT branch office to ensure that the above risks do not threaten the existence of the project and ensure awareness is raised on project benefits

ITC, MOHT, MOC Kayah MOHT branch office,

Lack of common vision and willingness to cooperate among tourism-supply chain stakeholders forming the associations. Inadequate TSI and private sector capacity is a major risk to initiate meaningful tourism development in Kayah state. The private sector is fragmented, small, lacks the critical mass, financial resources, and sufficient capacity to organize itself in associations. Setting up new tourism-

M H The project needs to emphasize the benefits of the project for the country and value of gaining knowledge and expertise for individuals involved; The project needs to be flexible in its approach and management system, and work with those partners that are willing to cooperate and have the greatest potential to

Engagement at TSI level is always dependent on the dynamism of the organizations, and progress will be hard to predict. Therefore, these interventions will be treated in an “opportunistic” way. The project will accelerate its support, when things are moving forward, and become less engaged when there is less interest in participating in project activities.

ITC, MOHT, MOC Kayah MOHT branch office,UMTA, MTM, MTF, Kayah Hotelier Association

50

Identified risk

Probability of

occurring (H/M/L)

Impact on project results (H/M/L)

Risk reduction/mitigation Additional resources/activities needed

Responsibility

Names and organization(s)

related associations, and providing services along the value chain will be a new approach in Myanmar. The project will need to gain experience while being implemented. This will also be the case in working with the new branch of the MOHT in Kayah state. The project will operate in a difficult environment and has hardly any previous experience in the country to draw upon with regard to the proposed delivery approach.

produce results. Engagement at TSI level is always dependent on the dynamism of the organizations, and progress will be hard to predict. Therefore, these interventions will be treated in an “opportunistic” way. The project will accelerate its support, when things are moving forward, and become less engaged when there is less interest in participating in project activities.

Output 3 LevelSupply-side constraints to supply tourism market in a timely manner can weaken the business linkages that will be facilitated by the project.

M M The project needs to carefully select the companies communities to work with and run on-going background check of all supported beneficiaries

Facilitators with value chain and local knowledge in Kayah state

ITC

The increased number of tourists could negatively impact local communities in Kayah state

L L The project will facilitate “positive” cultural exchanges between local communities and visitors and to a certain extent contribute to create a new generation of more conscious and pro-active entrepreneurs. Furthermore, in collaboration with CBI, the

The code of conduct will be mainly developed under the CBI sustainable tourism project.

ITC, CBI

51

Identified risk

Probability of

occurring (H/M/L)

Impact on project results (H/M/L)

Risk reduction/mitigation Additional resources/activities needed

Responsibility

Names and organization(s)

newly designed Code of Conduct for visiting communities will be disseminated to Tour Operators and tourists directly.

52

ANNEX V: COMMUNICATION PLAN

Communication Purpose Audience Message Responsibility Means of communication Frequency

ITC website; NTFIII Myanmar page

Share experience, show progress, build credibility with a wider audience

All Purpose of the project, its development and results achieved

Project manager with CE

Online At least every two months

Contribution to NTFIII newsletter

Share experience on a regular basis at the activity level, drive interest in the site

Registered usersProgramme stakeholders

Contribution of the project to the programme, results achieved, activities undertaken, upcoming events, new videos

Project manager Electronic by e-mailOnline

Every two months

Press release Create awareness, build interest and demand for NTF III. Increase visibility of ITC and CBI

ITCCBIPartner TSIs

Specific activities contributing to the progress of the project

Programme Management at ITC, Project Managers, Beneficiaries, national coordinatorsITC Communication team

PaperElectronicOnline

Periodic

Articles in newspapers and magazines about the project

Disseminate results and build project visibility, Strengthen ITC and CBI Brand

Wide audience Existence and progress of the project, as well as work of ITC and CBI

Programme officer (programme consultant)

PaperElectronicOnline

Ad-hoc

Articles in newspapers and magazines about Kayah state

Promote Kayah state as new tourism destination

Wide audience Introduce and describe different destinations in Kayah state

Project manager, TSIs PaperElectronicOnline

Ad-hoc

Brochure and leaflets Create awareness, build interest and demand for tourism in Kayah state.

Wide audience Uniqueness of Kayah state as new tourism destination

Project manager, TSIs, tour operators

PaperOnline

Once

53

Trade Fair Introduce Kayah state as a new tourism destination internationally

Wide audience Uniqueness of Kayah state as new tourism destination

ITC, CBI, TSIs, tour operators

BrochureOnline,Presence at trade fair

Once

54

ANNEX VI: ANALYSIS OF ADDITIONAL PROJECT STAKEHOLDERS

i) Ministry of Cooperatives13

The Ministry of Cooperatives, through its Small-scale Industries Department, carries out registration and promotion of small-scale industries and provides technical assistance to industrial cooperatives and SMEs. Another main function of the Department is that it is empowered to advise and supervise economic activities of Cooperative Societies, and to keep them in line with the government policy. In the framework of the project, the Ministry will be the public national counterpart for the crafts value chain development.The Ministry’s objectives are:1. To improve the socio-economic lives of rural and urban people at grass-roots level.2. To support cooperative development as an important factor for the economy.

These objectives are spelled out in five tasks:

1. To organize at least one cooperative society in every village across the country and to lend the needed capitals to the present cooperative societies to be sustainable development on their own for the next 4 or 5 years.

2. To establish a public owned financial institution or Microfinance Bank in order to get the capital to assist the loans.

3. To develop the organized cooperative societies at different levels and to widely support with financial assistance, technology and market access in productive, trade and services sectors.

4. To produce the youth educate cooperator with national and social spirit from the Cooperative Universities and Colleges.

5. To produce the vocational technicians with National and social spirit from the Cooperative Training Schools.

As part of its tasks, the Ministry supports the establishment and functioning of cooperatives in the Myanmar traditional handicrafts sector. The Ministry’s Small-scale Industries Department monitors technical vocational training in product areas such as lacquer-ware (Lacquere-ware Technology College in Bagan), weaving (Weaving and Vocational Training School in Amapura). The Ministry’s major focus is on technology transfer to local communities and small-scale entrepreneurs.

ii) Ministry of Agriculture and Irrigation14

Renamed as the Ministry of Agriculture and Irrigation in 1996 in order to acknowledge the importance of irrigation in agriculture, the Ministry collaborates with a number of agriculture-related organizations such as the Myanmar Jute Industries, the Myanmar Sugarcane Enterprise (MSE), and the Myanmar Cotton and Sericulture Enterprise (MCSE).

The Ministry’s mission is to

1. Attain a maximum market share in regional and global markets for agro-based value added agriculture and speciality food products,

2. Improve food security and poverty alleviation especially in rural areas and to

3. Manage green growth.

13 www.myancoop.gov.mm/14 www.moai.gov.mm/

In the framework of this project the Ministry of Agriculture and Irrigation will be the main national public counterpart for the food products value chain development.

iii) Ministry of Forestry and Environmental Affairs

The Ministry of Forestry and Environmental Affairs became a separate entity in 1992 when the Ministry of Agriculture and Forest was restructured into two separate ministries. The Ministry has five departments including the Forest Department (FD), the Myanmar Timber Enterprise (MTE), the Dry Zone Greening Department (DZGD), the Planning and Statistics Department (PSD), and the National Commission for Environmental Affairs (NCEA). The FD is responsible for the protection, conservation and sustainable management of forests, and is in charge of eco-tourism and manages the fifteen ecotourism sites in Myanmar15.The NCEA is the national focal point and coordinating agency for environmental matters dealing with environmental policy planning at the national level.

iv) Partners at Kayah state level

The Kayah State Government (Chief Minister and cabinet) is committed to develop tourism and especially its backward linkages as a means to reduce poverty. Much of the tourism development responsibilities have been passed from the national central level, to the state level. An MHT branch office is planned to be opened in May 2014 in Loikaw, staffed with 8-10 employees from the MHT in Nay Pyi Taw. Also in this regard, the Chief State Minister welcomes ITC’s assistance to strengthen the public support to tourism. In general, the capacities of tourism officials are weak. Most officials in regional tourism offices lack the necessary knowledge to undertake basic tourism planning, marketing, regulatory, and monitoring functions; and have no experience in mainstreaming poverty reduction into their plans. Managers of tourism heritage sites do not have the competencies needed to manage those sites on a sustainable basis. The educational institutions responsible for improving the knowledge of tourism public sector officials lack the training programmes and trainers required to strengthen capacities in these areas.

About 20 local NGOs and organizations are starting to mobilize communities, but so far did not provide any assistance in the field of tourism. Dialogue with local NGOs will be fruitful to better understand communities’ needs and interests. In addition to formal education and training, NGOs can play an important role in facilitating the transfer of grassroots knowledge. Therefore, it is important to involve these NGOs at an early stage as they have long-term experience in mechanisms for delivering programmes that support sound planning and development processes.

The Kayah State Hotelier Association has been formed at the end of 2013 by 10 of the 14 Hotels and Guesthouses (only six of which have currently a license to host foreigners) in Kayah. Hotels in Kayah state offer 269 rooms in total, of which 100 are available to foreigners. This makes it approximately 147,277 bed nights per year, of which 54,750 bed nights are available to foreigners. The association’s first activity was a joint hospitality training for its staff, with support from MHT. They plan to continue to request hospitality training for their staff from the Government and to explore the opening of souvenir shops in hotels. So far, members do not pay any membership fee. The US$ 100/year paid by hotels in Shan state to the regional hotel association in the state was perceived as too high for Kayah hotels. The Association would welcome assistance from ITC in mission and roadmap formulation.

15 Hlawga Wildlife Park, Yangon Zoological Garden, Moeyingyi Wetland Wildlife Sanctuary,Mainmahla Kyun Mangrove Wildlife Sanctuary, Inlay Wetland Wildlife Sanctuary, ShwesettawWildlife Sanctuary, Popa Mountain Park, Alaungdaw Kathapa National Park, Chatthin WildlifeSanctuary, Natmataung National Park, National Kandawgyi Garden, Khakaborhazi National Park, PoKyar Elephant Camp, Indawgyi Wetland Wildlife Sanctuary, and Myaing Hay Wun Elephant Camp

56

ANNEX VII: SYNERGIES AND COLLABORATION OF NTF III MYANMAR WITH CBI ACTIVITIES IN THE TOURISM SECTOR IN MYANMARThe NTF III Myanmar inclusive tourism project will closely collaborate with CBI and possibly other Dutch initiatives along all three proposed outputs.

Under output 1 “Export capacity of tourism-related enterprises and community producers increased” ITC will create export marketing capacities among selected tour operators, based upon the ECP EXPRO training methodology already provided by CBI during a one-week seminar in the Hague to 15 Myanmar tour operators. NTF III Myanmar will train an additional 25 tour operators working in Kayah state, or who plan to offer tours to the state, using the existing training material and possibly established tourism experts from CBI. Moreover, out of these 25 additional tour operators, NTF III Myanmar will provide coaching to selected 15 tour operators with Kayah state offerings through local trainers embedded in local institutions (see output 2 on TSI strengthening), with technical back-stopping from CBI trainers.

Furthermore, NTF III Myanmar will ensure that tour operators and guides as well as hotels working in Kayah state will participate and benefit from training and advisory services provided by CBI on corporate social responsibility in the tourism value chain. CBI will elaborate codes of conduct and sustainability standards for community-based activities in Myanmar with inputs from ITC. Based on internally accepted existing standards, and in line with the Myanmar Responsible Tourism Policy, ITC will ensure their adaptation to and application in Kayah state when developing and applying tourism products during visits of foreign and domestic tourists. Training on the sustainability standards and Codes of Conduct will be part of ITC’s tour operators training.

Finally, CBI and NTF III Myanmar will collaborate on the aspect of south-south cooperation, as relevant expertise and experiences from South-East Asia will be jointly brought in and applied, most notably on the development of community-based tourism products.

Under output 2 “Capacity of tourism-related associations improved to provide services to members” NTF III Myanmar will target the same associations as CBI does, namely the Myanmar Tourism Federation overarching the Union of Myanmar Travel Association (UMTA), the Myanmar Tourism Marketing Association (MTMA), as well as to a lower extent the Myanmar Hotel Association, and the Myanmar Tour Guide Association. More specifically, NTF III Myanmar will build capacity within selected associations such as UMTA and MTMA by training selected staff to act as trainers for the CBI EXPRO tourism marketing training. These trainers will provide training to more members and, under the guidance of CBI consultants, provide coaching to 15 tour operators offering Kayah state as a tourism destination (see output 1). This collaboration will ensure that the knowledge and market know-how on the European market is being extended to a larger number of tour operators.

Under output 3 “Business linkages with the market created” NTF III Myanmar will work with tour operators coached by CBI or through local trainers that incorporate Kayah state tours and products into their product portfolio. Moreover, NTF III Myanmar will ensure the marketing of Kayah state as a tourist destination. This includes specific sub-websites of the official Myanmar tourism website that will receive upgrading from CBI, as well as brochures and other marketing materials developed for Kayah state products. All these materials will be aligned to the overall messaging and marketing approach of the country. Furthermore, NTF III will collaborate with CBI on trade fair participation, most notably during ITB in Berlin, and WTM in London. While CBI will support MTMA in stand design, stand behaviour, and messaging etc., NTF III Myanmar will ensure that a component for the stand will be designed and designated to Kayah state products in line with the overall stand design. Finally, CBI and NTF III Myanmar will jointly organise a side event on one of these trade fairs to raise visibility and

attract European outbound tour operators to incorporate Myanmar in general and Kayah state in particular into their tourism portfolio.

ANNEX VIII: NTFIII COUNTRIES, SECTORS AND TENTATIVE BUDGET ALLOCATION

The Export Sector Competitiveness Programme (ESCP) also called Netherlands Trust Fund phase III Programme (NTFIII) is based on a partnership agreement signed by the CBI and ITC in July 2013. ESCP aims to enhance export competitiveness of selected sectors in selected countries through an integrated approach to sector competitiveness built around one outcome and the four following outputs:

Validated plan for sector and enterprise development in place Export capacity of male and female owned SMEs increased sustainably Capacity of TSIs improved in providing sector development support services to SMEs along

the sector value chain Business linkages and technical partnerships/collaborations expanded.

The programme will be implemented through country/sector projects developed individually in line with this overall outcome and the outputs above. Beneficiary countries include Bangladesh, Kenya, Myanmar and Uganda.

ITC launched the programme in August 2013 focusing primarily on putting in place the programme structure and starting off identification and feasibility missions for the country projects indicated above. NTF III projects are developed in three phases, namely (1) “identification”, wherein participating countries, sectors and, so far as possible, institutions are selected; (2) “feasibility and Project plan development”, wherein a comprehensive assessment of the sector, the capacity of enterprises and of support institutions is made and a country project document and work plan are designed; and (3) “Inception and strategic embedding”.

The below table provides an overview of the programme and project related funding envisaged as per 30 June 2014, pending the approval of all project plans.

Programme/Countries SectorsAllocated funding (US$)

NTF III Management and Technical Leadership 2,378,523

Bangladesh IT/ITES 1,900,185

Kenya IT/ITES, Avocado 1,844,894

Myanmar Tourism 1,844,894

Uganda IT/ITES, Coffee 1,844,894

TOTAL 9,813,390

58

59

ANNEX IX: COHERENCE WITH PARTNER GOVERNMENT POLICIES AND STRATEGIES

NTF III Inclusive Tourism Project alignment with the NES, Master Plan, Community Involvement in Tourism (CIT) Policy, and Responsible Tourism (RT) Policy

NES, Master Plan, CIT Policy and RT Policy ITC NTF III Inclusive Tourism project outputs

Master Plan Strategic Programme 1: Strengthen the Institutional Environment

Master Plan Strategic Programme 1.3 Create state and regional tourism committees and local destination management organizations

Master Plan Strategic Programme 1.4: Strengthen data systems and metrics to measure industry performance, particularly regarding information on income and employment to assess the economic impact of tourism and help guide policy making

NES Strategic Objective 1.1: Build capacity of the tourism industry to collect, analyse and disseminate data and information on market demand and trends

NES Strategic Objective 2.1: Develop qualifications and capacities of human resources

NES Strategic Objective 2.5: Improve tourist information provision

NES Strategic Objective 3.2: Raise public authorities’ awareness about the economic importance of tourism

CIT Objective 1: Strengthening the institutional environment and civil societies

RT Aim 7: Institutional strengthening to manage tourism

Output 2: Capacity of tourism associations (UMTA, MTM) as well as associations of tourism-related supply chains improved in providing sector development support services to their clients

2.1 Identify and assess the capacity of existing associations (i.e. the Kayah Hotelier Association); Assess the feasibility of supporting SMEs by setting up tourism-related value chain associations (e.g. in the crafts sector)

2.3 In collaboration with UMTA and the Myanmar Tour Guide Association (1) assist the MHT Branch office in Kayah to engage in public-private partnerships as well as build their capacity and those of tourism-related Kayah state associations for data collection, interpretation and dissemination on tourist arrivals, trends, spending, expectations on a regional level (Kayah State), and (2) improve tourism-related associations' sales and marketing services with special focus on Kayah state

2.4 Train trainers of UMTA/MTM or other relevant multiplier on the CBI EXPRO training model to create a sector wide understanding of tourism demand in Europe and how to tap it

Master Plan Strategic Program 4.1: Design and implement tourism product development strategies that meet market expectations and are suited to the local context

Tourism Master Plan Strategic Program 4.3: Strengthen tourism related supply chains

NES Strategic Objective 1: Strengthen capacities of the tourism sector to understand source markets and adapt and promote its product offer accordingly

NES Strategic Objective 1.3: Strengthen and diversify tourism product offers at the local level

NES Strategic Objective 1.4; Promote emerging

Output 1: Export capacity of tourism enterprises and tourism-supply chains enterprises and community producers and services providers increased

1.1 Cultural tourism tours assessment and development

1.2 Improve local supply chain for the tourism industry

tourism product segments

NES Strategic Objective 2.1: Develop qualifications and capacities of human resources

NES Strategic Objective 2.3: Increase quality and level of service

CIT Objective 2: Capacity building for community related activities in tourism

CT Objective 4: Encouraging local entrepreneurship through micro- and local enterprises

CT Objective 5: Diversifying and developing quality products and services at community level

NES Strategic Objective 1.5: Strengthen promotion and branding of the tourism sector

NES Strategic Objective 1.6: Strengthen backward linkages with other industries

NES Strategic Objective 2.1: Develop qualifications and capacities of human resources

Output 3: Business linkages and collaborations created and enhanced

3.2 Create/strengthen linkages between Yangon-based tour operators and Inle lake guides and local tourism stakeholder who offer newly developed products in Kayah state

3.3 Develop model contracts (including an adapted version of the code of conduct for tour operators that will be developed by CBI) between providers of cultural products and services in communities and tour operators and guides and train stakeholders on how to apply these

3.4 Link Outbound Tour Operators in targeted markets with Yangon based Tour Operators that offer Kayah state tours: prepare inbound Tour Operators for international trade fairs and facilitate participation. Organize jointly with CBI side event on international fair on tourism in Kayah

3.5 Develop a marketing strategy and train on the job enterprises and community producers in promoting and linking their products to Kayah state tourists and the tourism industry

Below please find a short description of the main objectives of the Tourism Export Strategy as part of the national Export Strategy as well as the Tourism Master Plan:

National Export Strategy

The Ministry of Commerce is currently finalizing a National Export Strategy (NES) with the assistance of ITC. The NES is expected to be formally launched in summer 2014. The government identified 7 priority sectors for export development (fish and crustaceans, pulses and oilseeds, rice, wood

61

products, textile and garments, rubber and tourism) and 4 cross-sector functions (access to finance, trade facilitation and logistics, trade information and promotion, quality management) through a participatory approach. Moreover, much analytical work on the trade-related situation identified and documented border in and border-out issues. Based on 9 selection criteria, the tourism sector was selected as the most suitable sector for trade-related technical assistance provided by ITC under NTF III.

The Tourism Export Strategy elaborated under the NES identified 3 strategic objectives, each having various operational objectives. The following strategic and corresponding operational objectives were defined in an inclusive stakeholder-driven approach:

Strategic Objective 1: Strengthen capacities of the tourism sector to understand source markets and adapt and promote its product offer accordingly

Build capacity of the tourism industry to collect, analyze and disseminate data and information on market demand and trends

Develop marketing strategies for target markets to diversify markets and products Strengthen and diversify tourism product offers at the local level Promote emerging tourism product segments Strengthen promotion and branding of the tourism sector Strengthen backward linkages with other industries Diversify entertainment and nightlife offer

Strategic Objective 2: Improve the level and quality of service for visitors in the tourism sector

Strengthen tourism management education training to build the capacity for increasing quality of service

Develop qualifications and capacities of human resources Increase quality and level of service Facilitate visa issuance process Facilitate currency exchange and expand the use of electronic payment modes Improve tourist information provision Improve tourist safety

Strategic Objective 3: Operational facilitation of the tourism sector

Improve the legal and regulatory framework for tourism Raise public authorities’ awareness about the economic importance of tourism Increase accessibility of tourist sites and destinations Increase air accessibility of Myanmar

Ministry of Hotels and Tourism Policies

The Ministry of Hotels and Tourism (MOHT) has launched the Myanmar Tourism Master Plan 2013-2020 with assistance from the Asian Development Bank and funding from Norway, as well as the Policy on Community Involvement in Tourism and the Responsible Tourism Policy, which were elaborated with funding and assistance from the Hanns Seidl Foundation and the Myanmar Tourism Federation, in a bottom up approach involving state level participation.

For the MOHT, the Tourism Master Plan is the guiding document for all initiatives in the tourism sector in the country. The goal of the Master Plan is to maximize the contribution of tourism to national employment and income generation, and ensure that the social and economic benefits of tourism are distributed equitably. The key objectives for each strategic programme are listed below.

Strategic Programme 1: Strengthen the Institutional Environment

Establish a Tourism Executive Coordination Board (TECB) to oversee tourism development and coordinate plans and programs of the Government and private sector;

Develop a planning framework to support the TECB; Create state and regional tourism committees and local destination management organizations;

62

Strengthen data systems and metrics to measure industry performance, particularly regarding information on income and employment to assess the economic impact of tourism and help guide policy making;

Develop systems and procedures to promote visitor safety and consumer protection; Strengthen the legal and regulatory environment for tourism to encourage inclusive and

responsible investment in hotels and other tourism-related enterprises.

Strategic Programme 2: Build Human Resource Capacity and Promote Service Quality

Design and deliver a comprehensive human resource development and capacity building strategy;

Create conditions, programmes, and actions to expedite the implementation of the human resource development strategy;

Develop multi-stakeholder partnerships and policies to improve tourism products and service quality.

Strategic Programme 3: Strengthen Safeguards and Procedures for Destination Planning and Management

Design and implement innovative, integrated, and participatory approaches to destination planning;

Strengthen tourism-related social and environmental safeguards; Improve zoning practices and controls in tourism destinations; develop tourism and climate

change adaptation strategies; Promote innovative and green technologies; and strengthen community involvement in tourism.

Strategic Programme 4: Develop Quality Products and Services

Design and implement tourism product development strategies that meet market expectations and are suited to the local context;

Develop an ecotourism management strategy for protected areas; Strengthen tourism-related supply chain linkages.

Strategic Programme 5: Improve Connectivity and Tourism-related Infrastructure

Promote complementary expansion of the aviation and tourism industries; Ensure the integration of tourism considerations into national and local transportation planning; Invest in tourism-related infrastructure and environmental services to promote balanced and

inclusive growth; Progressively ease barriers to visitor entry and movement around the country.

Strategic Programme 6: Build the Image, Position, and Brand of Tourism Myanmar

Determine the supply, demand, and gap characteristics of the tourism system; Create a strategic marketing map that includes a range of niche market actions; Raise national awareness about the nature and significance of the tourism industry, responsible

tourism, and the characteristics of quality service; Effectively position and brand Myanmar in the international marketplace.

63

ANNEX X: ONGOING TOURISM DEVELOPMENT PROJECTS IN MYANMAR

DEVELOPMENT PARTNER ONGOING PROJECTS Asian Development Bank

(ADB) Local value chain analysis in Kayin for fruit and vegetables and handicraft;Regional infrastructure development project (Lao, Cambodia and Vietnam) has been approved this year). Myanmar will follow at a later stage;Organization of Greater Mekong tourism working group (regional, knowledge sharing events).The Mekong Tourism Forum will take place this year in Myanmar.

CBI CBI works through MTF and MHT on the following outcomes:1. Export related capacity of Myanmar incoming tour operators

increased; 2. Effective national and regional destination branding and

marketing of Myanmar based on reliable market intelligence systems;

3. Sustainability integrated in the operations and supply chain of incoming operators;

4. Regional community related suppliers integrated in the tourism value chain (focus EU markets).

The project will run from June 2014 to December 2017. For synergies and collaboration of NFT III Myanmar with CBI activities in the tourism sector in Myanmar please refer to Annex VIII.

European Union The project ‘Support to Peace, Reconciliation and Development in Myanmar, started in 2013 and aims at helping those affected by conflict and communal violence in the country. In Kayah state, the EU has undertaken a comprehensive exercise of stakeholders' mapping and consultation linked to a socio-economic analysis of Kayah state. Discussions have taken place with Karenni Refugee Committees, CBOs active in cross-border humanitarian and development projects as well as with the Karenni National Progressive Party (KNPP).

GIZ (1) Technical Vocational and Educational Training (TVET) and Private Sector Development (PSD) Programmes;

(2) “Facility for partnerships”: Assistance to kick-start local initiatives (up to US$ 100,000 per initiative);

(3) develoPPP.de programme: develop partnerships with private sector (www.develoPPP.de), one partner is for example the German tour operator TUI.

Lux-Development Cooperation for Vietnam,

Myanmar and Lao

(1) The Myanmar project is at the planning stage, and will tentatively start in Q2 2014. It is planned to last for 5 years, with a budget of US$ 5 million.

(2) 3 result areas for Myanmar (programme in planning phase):Governance : Institutional development (policy, planning and information system development; Educational Programmes : Human Resource Development, also in the sector of tourism, working with existing training institutions Private sector and industry : Service quality development

(3) Implementation modalities: MoHT is the implementation partner, 2 Lux

64

advisers are planned to sit inside MoHT, offices will be opened at Yangon and Nay Pi Taw.

(4) Regions will be chosen in the first phase of project implementation, depending on other development assistance player’s activities (to avoid duplication).

UNESCO (1) Technical vocational training strategy development with MOHT (TWIT)(2) Inle lake cultural assets

UNDP Funding and assistance in implementation of local projects in the area of: Environment protection Access to safe water Rehouse displaced populations

UNDP has experience in micro-finance, social cohesion and livelihoods support at Kayah state level and maintains a regional office in Loikaw that looks at local governance; this office could be useful for liaison at state level.

UNIDO A pilot Resource Efficient and Cleaner Production (RECP) programme in Myanmar will be implemented by the United Nations Industrial Development Organization (UNIDO), funded by the State Secretariat for Economic Affairs of Switzerland (SECO). UNIDO, in collaboration with the Ministry of Industry, as well as other government agencies and private sector actors, aims to help improve resource productivity and environmental performance of Myanmar enterprises, in particular SMEs. The pilot project will target the food processing, textile and tourism sectors in Yangon and Mandalay regions. UNIDO will work on a value chain analysis for lacquer-ware production in Inle lake, including products and design development and export promotion through an Italian-funded project. Although lacquer-ware is not produced in Kayah, synergies like exchange of trainers will be sought in design development and adaptation to tourism market requirements.

Flora and Fauna International

(1) Indawgyi community-based eco-tourism group: development of eco-friendly tourism activities in remote area to extend tourists’ length of stay and spending (kayaking, hiking, bike tours), training of local guides, marketing of the areas;Meinmahala Kyun Wildlife Sanctuary: development of eco-tourism (turtles) recreational area for domestic tourists close to Yangon.

Hans Seidel Foundation (1) Policy support (Communities Involvement in Tourism Policy and Responsible Tourism Policy development and training on its content on national and state levels);

(2) Funding of “Do’s and Don’ts” (developed by Tourism Transparency);(3) Tour guide training curriculum development in Bagan and Inlay lake;

Supporting the implementation of the Myanmar Bed & Breakfast (B&B); Standards elaboration for community based tourism.

International Centre for Integrated Mountain

Development (ICIMOD)

ICIMOD is a research centre undertaking environmental research and works on the protection of Inle lake. Farmers need income generating alternatives to tomato plantations that threaten the lake’s ecological balance.

ILO Value chain development (including some tourism enterprises) in Bagan and Yangon (SECO-funded, US$ 1,3 million). ILO works in 3 sectors: fish, garments and tourism a) running a labour market survey (country-wide), b) review of the labour legislation and impact on employment in the 3 sectors, c) providing institutional support.

Enterprise development (Norway funded, US$ 5 million)

65

An initial market assessment of business development service providers, in the tourism sector was undertaken. This is in preparation for coordinated major projects with both the Government of Norway and the Government of Switzerland for the introduction of entrepreneurship support.

In tourism ILO is: a) finalising a report on financial opportunities for micro and small

enterprises and services offered; what enterprises know about these services and how they can or why they cannot access these services (cross-sectoral), and who is who in the tourism sector and where should ILO be working in/with?

b) Providing entrepreneurship training on tourism and tourism-related enterprises using the standard entrepreneurship training kit of ILO (generate, start, improve and grow your business).

c) Carrying out Tourism-related vocational training with the Centre for Vocational Training (same counterpart as Swisscontact). For this they collaborate with the Dutch vocational training provider SPARK!

d) Supporting the Myanmar Tourism Federation (MTF) in identifying and elaborating MTF’s service offerings to members and the tourism industry and training on understanding core labour standards and the new labour law and its implications for the tourism sector.

e) Supporting enterprises including community-based training on the above-mentioned subjects

ITC’s activities will complement ILOs work and use finding of its reports (i.e. on financial opportunities for MSMEs). Especially the tourism sector core labour standards, if developed in time, will be an important input to the sustainability standards and Code of Conduct that CBI will develop and disseminate with ITC’s contribution from Kayah.

Institute for International Development (IID)

(1) IID coordinates incoming aid (mainly from NGOs) to Inle lake, a hub for tourists to surrounding areas

International Finance Corporation (IFC)

IFC has opened its office in August 2012 in the country. It works hand in hand with the World Bank and has started its engagement in the country with:

A legal and regulatory review on the country's investment climate

A business environment perception survey of SMEsItalian Development

CooperationTechnical assistance to MOHT to:

(1) Update the tourism law to be in line with the Tourism Master Plan(2) Direct coaching for implementation of the Master Plan (3) Past joint project with UNESCO on cultural specialist training

JICA Japan International Cooperation Agency (JICA) signed a Grand Agreement (G/A) with the Myanmar government in March 2013 with a largest-ever grant aid amount of US$ 191 million (for 10 projects). These cooperation projects aim to improve the living standards of Myanmar people as well as the basic infrastructure in order to sustain the economic growth, provide support for the ethnic minority areas, and thereby support Myanmar's efforts toward economic reform and national reconciliation. The projects will provide support for the "improvement of living standards" and "infrastructure improvement for sustainable economic growth" through bilateral cooperation.

Two projects target Kayah, among other states: (1) The Programme for Strengthening Local Governance Capacity, Livelihoods and Social

66

Cohesion in Ethnic Minority Areas (collaboration with UNDP) and (2) The Programme for Assistance to Displaced Persons in Ethnic Minority Areas (collaboration with UNHCR).

JICA’s project for Establishment of the Pilot Model for Regional Tourism Development will be implemented in Bagan, for three years starting April 2014. Through the implementation of activities for human resource development, tourism management and promotion, and improvement of tourism infrastructure, the project aims to establish a model for tourism development which can be applied to other areas in Myanmar. Under the project, officials and staff from the Ministry of Hotels and Tourism and the JICA experts will work closely for project activities. The duration of the Project is three years.16

Swisscontact Hospitality Training Initiative (HTI):(1)(2) The programme consists of 4 interlinked areas: Vocational education and

training, SME promotion, resource efficiency, financial services(3)(4) Swisscontact works on hospitality training and skill development:

Training delivery through hotels, using existing infrastructure Training coordination and organization through industry associations Funding mechanism for a training fund in the hospitality sector Envisage also a mobile training unit (not clear if this will include the

hospitality sector or not) Support to the national skills development authority (accreditation

and certification for vocational training)

Focus on Yangon and Nay Phi Daw for the moment, activities in Kayin and Mon States will be added later: No activities foreseen in Kayah state.

Project partners include Hotel School of Luzern (SHL) as well as the German agency INPAS and hospitality training will take place in Mon state, Kayin state and Nay Phyi Daw.

(5)(6) The project plans to involve local artisans in the tourism value chain.(7)(8) Swisscontact is strongly supporting the Centre for Vocational Training

(CVT), Kandowgyi Hotel school and the Star Academy to introduce ASEAN hospitality training standards

(9) Total funding value: US$ 19 m

World Bank The World Bank launched a national enterprise survey (November 2013) to assess the business environment and barriers facing firms doing business in Myanmar in order to inform the government on how to best promote investment, productivity and economic growth.

16 www.jica.go.jp/english/news/press/2012/130322_01.html

67