Rural industries and employment (RIE)

The evaluation covered the period 8/86-11/89. The project has helped the Federation of Thai Industries (FTI) and the Thai Chamber of Commerce (TCC) expand their activities and memberships outside of Metropolitan Bangkok and has accelerated the formation of strong business organizations in rural areas. Additionally, the Small Industries Guarantee Facility (SIGF) has enabled banks to make larger loans to small borrowers, though it offers little prospect for solving the general constraint faced by rural borrowers to obtaining commercial credit. Training provided by the Institute for Management Education of Thailand (IMET) has improved the management and technical capacities of rural industries, and the Information Services Unit (ISU) has provided the latter with useful information. Through its support for provincial associations the project promotes dialogue and builds capacities for collective action among rural businesses. On the down side, the International Executive Services Corps (IESC) and Thai Executive Services Corp (TESC) have fallen short of their objectives of improving rural industry management, although volunteer assistance has resulted in some improvements in business performance. There is still considerable scope for improving the fit between the assistance provided and the needs of rural businesses and for reducing the cost of volunteer services. The following lessons were learned. (1) The project"s "hands off" model was effective in encouraging local institutional development and minimizing the administrative burden on USAID. In some instances, however, allowing implementing institutions to determine objectives and targets without USAID involvement may be ineffective. Additionally, it is often difficult for local implementing agencies to evaluate their own performance, and they may need the Mission to provide them with sustained assistance. (2) Support for local business associations is an effective means for promoting policy dialogue and strengthening local political institutions. (3) Directed credit programs similar to the SIGF may have little chance of encouraging long-term changes in the behavior of local financial institutions if they are not combined with efforts to change relevant government policies concerning financial markets.