International Labor Office IFP/SKILLS

Training for Rural Economic Empowerment (TREE)

PRIMER

Expanding Economic Opportunities and Income Security through Workforce Education, Skills Training, Employment Creation, and Local Economic Development in Pakistan and the Philippines

Project Component in the Philippines

Funding provided by the United States Department of Labor under a Cooperative Agreement with ILO

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Brief Background Within the framework of ILO’s decent work agenda, the ILO and the US Department of Labor had entered into a Cooperative Agreement regarding implementation of a project to improve the social and economic status of vulnerable groups in Pakistan and the Philippines. The Project has been funded by the US Department of Labor, Bureau of International Affairs (USDOL/ILAB) and is being implemented by ILO. In the Philippines, it addresses the needs in developing human potential and local economies in the post conflict and poor areas of Mindanao. More specifically, the Project builds on previous ILO technical cooperation experiences in skills and enterprise development for employment promotion, income generation, and local economic development in Mindanao and enhances capacities of national and local institutions in planning, designing, and implementing community-based training and support programmes as part of local empowerment efforts and decent work promotion. It is intended that the Project will further develop and practically apply the Training for Rural Economic Empowerment (TREE) community-driven methodology on planning and delivering skills and enterprise development training, preparing and implementing practical transition enterprise plans through forecasting techniques, small group organizing, creating community enterprise systems, and linking with the corporate and formal economic sector.

ILO’s Assistance Programme in Mindanao, Philippines Immediately after the signing of the GRP-MNLF Peace Agreement on September 2, 1996 ILO joined other UN agencies in the SPCPD-NEDA-UN Multi-donor Assistance Programme with its Vocational Training & Enterprise Development Project, or VTED. The Project was designed for the reconstruction stage of the peace process where building trust and confidence among the rebels was the primordial concern. Hence it was implemented in direct partnership with the Moro National Liberation Front or MNLF. The programs and activities were delivered through its 16 “state” committees down to the provincial, municipal, and village level organizational structures. As a strategy, the Project developed a practical and community-driven methodology on planning and delivering skills and enterprise development training, preparing practical Transition Enterprise Plans through forecasting techniques, small group organizing, and linking with the corporate and formal economic sector. The Project also developed a strategy for constructing community enterprise centers for the target groups through bayanihan training scheme. While doing the Project, ILO conducted studies on follow-up intervention strategies. Such studies revealed the importance of CAPITAL in the reconstruction and development process. However, the project's beneficiaries and their needs did not qualify them to access formal credit programs. Hence, the VTED project developed a concept and guideline on community enterprise system and community fund scheme, a new grassroots economic model based on community-based economic theories and principles. The scheme was pilot tested by the MNLF through its women committee, specifically the Federation of United Mindanaon Bangsamoro Women Multi-purpose Cooperatives. It was supported by the successor project of VTED, the Project on Community Enterprise and Entrepreneurship Development or PROCEED, which is the current fifth component of the GOP-UN Multi donor Program III. These various field experiences in community based training, enterprise development, small group organizing, enterprise system, and community funds scheme led to the development of the TREE Methodology, which is now a comprehensive strategy for rural economic development.

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Project Objective The objective of the Project is to contribute to lasting peace and development in Mindanao by providing assistance to poor and disadvantaged sectors in expanding their economic opportunities and income security through workforce training and employment creation.

Priority target areas and target groups The Project is designed to introduce economic dynamism primarily to poor and marginalized communities in (initially) the Autonomous Region in Muslim Mindanao (ARMM) The Project is targeting the working poor, among them are Women, Differently Abled Persons, and Youth (14 – 18 years old or entrants to the labor force)

Intervention Strategy The Project’s programs and services are delivered through local partners whose capabilities are developed in the utilization of the TREE Methodology and other Project strategies. The local partners also compose the Project’s Executive Committee (EXCOM).

Project Components The Project is composed of four (4) components: • • • •

Developing institutional and staff capability of partner agencies and organizations including target groups in the communities Provision of skills and entrepreneurship training to target groups and other beneficiaries Organizing Corporate Community Groups (CCG) and installing Community Enterprise System (CES) and Community Fund (Co-Fund) Development and enhancement of the Methodology and related strategies

Specific Programs and Services for Target Groups Using the TREE Methodology, the Project provides (through its local partners) the following programs and services to target groups: • • • • • • • •

Identification of individual and group enterprise ideas in their communities Preparation of training project proposals to realize their enterprise project ideas Skills and enterprise development training, and preparation of Transition Enterprise Plans (TEP) Provision of training and business start-up tools and equipment Organizing and registering Corporate Community Groups and installation of community enterprise system (as Rural Workers Association under the DOLE) Assisting the CCG to access capital to start-up their Community Fund Scheme Linking the Corporate Community Groups to the formal sector or “big brother” companies. Skills upgrading, leadership training, and management development

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Specific Programs and Services for Partner Agencies and Organizations The Project trains technical staff, provincial focal persons, and community training and employment coordinators (CTEC) of the partner agencies, and also other community actors, using structured program design based on the requirements of the TREE Methodology. The program design is composed of three modules: • • •

Community mobilization and rapid assessment techniques to cover the first element of the Methodology Implementing and managing skills training and enterprise development projects to cover the second and third elements of the Methodology, and Community enterprise system and community fund scheme to cover the fourth, fifth, and sixth elements of the Methodology

Practical application of the theories and utilization of implementing instruments and guidelines are done after every training module. The aim of the program is to develop capabilities and install development systems both at the actor's level and that of the target groups in their communities. Project Implementing Partners ARMM Regional Offices • • • • •

Department of Labor and Employment (DOLE) Technical Education and Skills Development Authority (TESDA) Department of Social Welfare and Development (DSWD) Regional Commission for Bangsamoro Women (RCBMW) Regional Planning and Development Office (RPDO)

NGO partners • • •

Moro National Liberation Front (MNLF) SZOPAD Livelihood and Development Foundation, Inc. Federation of United Mindanaon Bangsamoro Women Multi-purpose Cooperatives (FUMBWMC)

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The TREE Methodology The TREE Methodology is a people-centered, community-driven training strategy that was developed by ILO together with the MNLF in Mindanao. It aims to create economically empowered communities managed by small corporate community groups operating mini economic systems catalyzed by indigenous community fund scheme. This is carried out through skills and entrepreneurship training and organizing activities that are planned and implemented by the target groups themselves. It is designed as a tool to fight poverty in order to promote lasting peace and development. The Methodology is composed of six elements: • • • • • •

Practical and rapid community assessment Provision of skills training and transition enterprise development Implementation of Transition Enterprise Plans Organizing small Corporate Community Groups Installing Community Fund and Community Enterprise System Linking the Target Groups with the formal economic sector

Training for Rural Economic Empowerment (TREE) Methodology

Institutional Development of Actors & Target Groups

community assessment & planning

- identification of economic opportunities & needs - organizing economic & enterprise project ideas - preparation of project or training proposals

provision of training & capability bldg

production /service skills training -entrepreneurship training - preparation of Transition Enterprise Plan (TEP)

implementation of transition enterprise projects

- implementation of Transition Enterprise Plans - monitoring & evaluation of transition enterprise activities - provision of technical advisory

Social & Economic Preparation

organizing Corporate Community Groups (CCG)

- organizing the trainees into corporate community groups (CCG) - training members in group management system

installing Co-Fund & Community Enterprise System in the CCG

- training the CCG on the CoFund scheme - provision of start-up capital for the Co-Fund - training the CCG on the workings of a community enterprise system

linking the CCG with communities & the formal economic sector

-management & skills upgrading - expanding individual and group enterprise projects - participation in community development & the formal economy

Participation in Development

Monitoring and Evaluation

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Transition Enterprise Projects or TEP

These are small, short-gestation, one-cycle enterprise projects using practical and adult-oriented business forecasting techniques that are suited to the educational preparation of the target groups. The transition enterprises are designed to introduce basic corporate concepts such as strategic time frames, markets, production, financing, and operations management. The objective is to initiate the target groups into the world of entrepreneurship through actual practice. Furthermore, the TEP are designed to work within a Community Enterprise System run and managed by the community and powered by their own Community Fund. The target groups are given the opportunity of choosing whether to remain participating in a small rural economy that will be energized through the TREE Project, or to join and compete with the formal economic sector. The concept supports a transition economy for the poor under a market system. It is the missing mechanism in the on-going anti poverty development intervention in Mindanao.

Common approach in enterprise & entrepreneurship development long-term enterprise based on market feasibility compete in the open market economy

6. Members gain experience & make economic decisions

livelihood project

formal economic structures

5. Members implement Transition Enterprises using their Co-Fund

2. Organize Corporate Community Groups (CCG)

The Poor

1. Locate the poor in their community

4. Provide Co-Fund to the CCG & make the Fund operate based on guidelines 3. Train in skills, entrepreneurship, Community Enterprise System & Co-Fund Scheme

What is a “transition enterprise” in a Community Enterprise System

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Corporate Community Groups or CCG

These are groups of 25 – 50 poor individuals who are organized, registered, and provided training on the economic principles, concepts and strategies of the TREE Methodology. Their operations and capability building revolve around five basic elements such as skills training and enterprise development, community enterprise system, community fund scheme, linking with the formal sector economy and continues skills upgrading, leadership training and group management development. The concept is neither a cooperative nor a people’s organization but a “community corporation” energizing rural economies in transition.

What is a “Corporate Community Group” or CCG? A. Definition – A CCG refers to a small group of poor people organized with corporate personality, trained, oriented, and committed to social and economic development as a tool to fight poverty - with 25 to 50 individual members - officially registered with any government agency - organized for a social and/or economic development objectives

B. Present examples - Until the concept ripens into an appropriate form of “corporate community” a CCG may include the following: - a small people’s Cooperative - a Rural Workers Association - a civic or social club - a small production group, etc.

C. Programs and projects– The CCG is expected to carry and promote development programs such as the following: - skills training, entrepreneurship development - leadership & group management - community enterprise system - community fund or Co-Fund - community development

D. Requirements – A group with the preceding qualifications can become a CCG by registering & undergoing training on the following concepts and principles: - total democratic participation as members & as officers - committee/group-based management, volunteerism - one-member, one-vote, ultimate powers of a general assembly - respect for religious edicts & indigenous community relations & practices - internal market system, free enterprise, socialized profit among members - velocity of money principle, transition enterprises - partnership venture, profit & loss sharing between the Co-Fund & the members - interest-free capital assistance, rational re-payment schemes - continuing individual, family, & group education & training - people-centered & community-driven development principles

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Community Enterprise System or CES

This is the basic economic system that is installed in the community structure through the corporate community groups. It revisits basic principles of community economics, velocity of money transfers through transition enterprises, forward and backward linkages, developing internal production and market systems, saving on economic added values, primary and secondary enterprise units, and linking with “big brother” companies. The concept operates on the basic free capitalist principles and social enterprise.

- adopts forward & backward linkages & creates internal market structure using the Fund as catalyst - promotes internal velocity of money transfer among the members & the community - provide competitive linkages with “big brother” companies or the creation of secondary enterprises

Characteristics: - community (CCG) ownership & management of C0-fund - equal access to Co-Fund of members or nonmembers for any kind of economic undertaking - short term transition enterprises (venture partnership & profit & loss sharing between the CoFund & the borrowers) - recognizes free enterprise principles, division of labor, product diversification & market agricultural differentiation producers

“Big brother” or Secondary Enterprise

“Big brother” or Secondary Enterprise

service enterprises / local “importers”

non-agri traders

Co- Fund

agriculture traders

processors fabricators

“Big brother” or Secondary Enterprise

What is a “Community Enterprise System” or CES? A CES is a mini economic system owned and managed by a Corporate Community Group or CCG, powered by a Community-owned Fund or CoFund, and catalyzed by a structured methodology on training, enterprise development, organizing, and linking with the formal sector.

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Community Fund or Co-Fund

This is a community (CCG) owned and managed fund that powers the community enterprise system and the individual enterprises of the members. It is utilizes the principles of partnership venture in TEPs, interest-free capital assistance, profit and loss-sharing scheme (Indigenous and Islamic financing), social entrepreneurship and socialized profits, total participation in management, and individual and group investments. It is based on the principle of freeing capital for the poor a real egalitarian and free enterprise system.

What is Community Fund or Co-Fund? Community Fund or Co-Fund is a micro-finance facility & scheme that is owned & managed by a Corporate Community Group (CCG) to power a community enterprise system. It is characterized by the following: A. It adopts to productive & acceptable indigenous practices & religious tenets such as the following: - Non-interest capital assistance (Riba-free) for business & social enterprises - Business partnership ventures rather than ordinary loan among CCG members, borrowers, & the Co-Fund - Profit & loss sharing in short-term business ventures (transition enterprises) without fixed payment schedules B. It catalyzes employment & self-employment among the members of the corporate community group through the following: - Developing a community enterprise system among CCG members & other members of their community - Creating internal & community-based market system & structures - Maintenance of internal social & economic added values C. It is specifically designed to address basic economic theories & human development principles such as the following: - Freeing capital for a real free enterprise & market system (e.g. Co-Fund) - Velocity of the flow of money among various actors in the (local) economy (e.g. transition enterprises in a community enterprise system) - Challenging the human spirit against apathy, inertia, & indifference towards corporate thinking (e.g. Corporate Community Groups)

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For Project Assistance Interested individuals or target groups in the communities may contact the Community Training & Employment Coordinators (CTEC) of any of the following agencies and organizations in the ARMM: Department of Labor and Employment (DOLE) Technical Education & Skills Development Authority (TESDA) Department of Social Welfare & Development (DSWD) Regional Commission on Bangsamoro Women (RCBW) Moro National Liberation Front (MNLF) SZOPAD Livelihood Development Foundation, Ind. (SLDF) Federation of United Mindanaon Bangsamoro Women Multi-purpose Cooperatives (FUMBWMC) Project Address Training for Rural Economic Empowerment ILO-USDOL Project Project Management Office Suite B 202, Plaza de Luisa Bldg. R. Magsaysay Avenue, Davao City Tel. Nos. (082) 225-19-72 and (082) 225-19-73 (Telefax) E-mail Address: [email protected]

Training for Rural Economic Empowerment or TREE is part of an inter-country project of the International Labor Organization (ILO) and the United States Department of Labor (USDOL) that includes the Philippines and Pakistan. Addresses: The Project Director Training Policies and Programmes InFocus Programme on Skills, Knowledge and Employability International Labor Office 4 route des Morillons 1211 Geneva 11 Switzerland Email Address: [email protected] The Director International Labor Organization Sub Regional Office, Manila 5th Floor, NEDA Building Amorsolo St. Legaspi Village Makati City, Metro Manila, Philippines The Office of the Labor Attache United States Department of Labor c/o US Embassy Roxas Blvd, Manila

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