Using Public-Private Dialogue as a Policy Advocacy Tool


3rd Place, 2012 CIPE Leading Practices Contest


The Problem:

Through dissemination and advocacy efforts the Chamber's activities aim at improving general understanding among private and public sector entities, whose inclusion in state level policies and activities make them an inseparable part of policy advocacy.

The practice:

Recognizing that Public-Private Dialogue (PPD) has proven to be a best practice in governance around the world, the Mongolian National Chamber of Commerce and Industry (MNCCI) has employed the approach to participate in the policy making process. PPD allows private business entities, the main economic burden bearers, to be heard at the state decision making level and thus results in reducing state interference and regulation. There has been an ever-increasing demand for intensifying PPD and implementing it in the Mongolian environment in order to reach consensus between the private and public sectors. Working to reach this goal, MNCCI successfully advocated for the Mongolian Parliament to adopt a State Policy on PPD in 2009 and a Law on Concession in 2010, which provided state officials with guidance on the subject.

As the main representative of the private sector in Mongolia, MNCCI engages in regular PPD to reduce state interference in the economy, save on expenses, create more opportunities for private enterprise and improve political support for the free market. Such promotional activities largely contributed to the economic development of Mongolia. Because of the PPD mechanism developed with input from MNCCI, state bodies now seek consultation with the private sector when making important policy decisions.

How and Why:

According to the Law on Trade and Commerce, MNCCI is responsible for representing the business community and their common interest. PPD is a necessary step in achieving that purpose. On the other hand, PPD and related mechanisms play a vital role in reducing bureaucracy in state apparatuses, establishing a business-friendly environment, increasing private sector participation in policy decisions, and enhancing the business competency of Mongolia.

For spreading PPD in Mongolia, MNCCI completed the following steps:
  • Reformed the policy and law making mechanisms of the state to include private sector voices in the process
  • Created a new legal environment, enabling the transfer of some state functions into the private sector
  • Reduced state bureaucracy and its interference in the economy

Steps and Tips for Implementing the practice:

  1. The Public and Private Sector Consultative Committee was established in 2006 with an aim to include private sector voices in the government decision making process. The Minister of Finance, on behalf of Government, and the Chairman of MNCCI, on behalf of the private sector chair this committee. Other members are equally represented on both sides from ministries and government agencies as well as business and professional bodies. This committee is in charge of implementing the National Strategy on Private Sector Development, which was distributed in 2011.
  2. In order to promote PPD at the local level, sub-committees are established at provincial levels. All 21 provinces have such committees functioning within the Governor’s office. In addition, by government decree, trade and service sectors are also expected to have similar committees represented by respective Ministers and Heads of Agencies.
  3. Each district of Ulaanbaatar city also has a Business Council in order to cooperate with district governor offices. Sub-delegates are appointed by MNCCI who can sign the cooperation agreement and promote PPP at the lowest administrative units. Results of such efforts can be seen from Bayangol district, which has become the best district to have such exemplary effort.
  4. MNCCI has over 50 sub-committees which specialise in sector specific PPP. In this sense, MNCCI has become an effective bridge between government bodies and business entities. These sub-committees are the most active players in voicing their opinions and interests in legislative and other state processes.

Results:

  • National Strategy on Private Sector Development was adopted
  • "Regulation for all" a new mechanism, has been adopted, which states that at each and every level of decision making, all the stakeholders should be consulted
  • Government had declared 2010 to be the "Year of Business Innovation" and taken the following measures:
    • 113 special licenses were cancelled
    • 10 special licenses were transferred to NGO and private sector
    • Special committee headed by Deputy Prime Minister worked towards the transfer of some state functions to the private sector
    • 78 legal "holes" were corrected
    • "Regulation for all" has been reviewed and renewed
  • Concept of Green Economy and Green Business has been included in state policy and as a result, the following projects are being implemented:
    • Transition project from "Brown Economy" into "Green Economy"
    • Promote exportation
    • National tourism project
    • National Project "Single electronic windows"
    • "Organic Mongolia" project
  • Created Award for Economic Freedom which Members of Parliament are awarded for contributions to the development of PPD
  • Government Organizations are signing cooperation contracts with MNCCI and other professional bodies
  • Government promised to transfer business-incubators into the private sector
  • The first National Forum on PPD was organised by MNCCI in June 2011; it will continue on an annual basis

Lessons from the experience:

  • Training manuals, advocacy brochures, and other materials should be developed and distributed to overcome limited understanding of public-private dialogue and its benefits.
  • Creating the necessary legal environment is only half the battle. Implementation will not always immediately match expectations so clear accountability mechanisms must be provided.
  • While introducing PPD is in itself a significant step, the process can always become more efficient. MNCCI recommends the following:
    • Establish and maintain a regular and sustainable mechanism for PPD
    • Implement PPD in all sectors of society
    • Clearly define the cooperative framework
    • Incorporate PPD as a tool for dealing with complex socio-economic development issues
    • Draw on the best practices of international PPD
    • Train and prepare individuals for a specialization in PPD. This should be done with special attention and support from the State (most importantly in financial terms).