Closeout of the IESC technical assistance to business : project no. 519-0395

The International Executive Service Corps (IESC) implemented the project. Although a 6/93 amendment freed IESC from assisting clients connected to the Salvadoran Industrial Association (ASI)'s Industrial Reconversion Program, originally the project's main beneficiaries, the project was terminated 3 months before the extended PACD due to poor performance. Assistance (in the areas of production, information systems, and administrative and financial controls) had been provided to only 22 of 40 planned companies. Results of these efforts included: 233 new jobs in 12 companies; 10%-20% increased productivity in 13 companies; and partial achievement of technology transfer in 22 companies. No business closures were avoided as a result of the project. One of the causes of the project's poor performance was the inability of IESC and ASI to work together. ASI took too long to carry out the diagnoses on which IESC TA was to be based. During the first year of IESC project implementation, ASI did not request assistance from them. In many cases in which the client firm needed to restructure or resolve problems related to its administrative and accounting systems, ASI provided the TA itself without any involvement from IESC. The project's problems were compounded by the high cost of IESC's services, which was not competitive with similar, but lower-cost services being provided by other international organizations and higher than what many companies were willing to pay. As a result, many ASI clients requested TA to solve only their major problems and did not carry out a complete reconversion program, and some even contracted other international organizations at a lower cost. This uncompetitive cost structure continued to hinder IESC even after it was freed from the commitment to work exclusively with ASI clients. Lessons learned are as follows. (1) Project design did not consider competition from other international organizations providing the same services as IESC, but at lower cost. The design also did not take into account the client companies' ability and willingness to pay for such services. (2) Project accomplishments showed that, given the type and cost of TA, the project was more suited to medium and large firms. Of the 22 enterprises that received assistance, 65% were large firms. Additionally, the impact on productive employment generation was low. (3) The lack of a promotional program was reflected in the low accomplishment of the project. In spite of a project amendment to free IESC from the restriction of carrying out 30 projects with ASI only, IESC was unable to service many other local industries organizations because it did not sufficiently promote its services.