2013 gabonaise of the Gabonese Economy/ of the Gabonese Moving to the Diversification the Diversification to Moving Vers la diversification de l’économie de l’économie la diversification Vers

Moving to the Diversification of the Gabonese Economy / Vers la diversification de l’économie gabonaise2013

.go.kr www. ksp www.kdi.re.kr Tel. 82-2-958-4114 Tel. www.facebook.com/cidkdi Ɣ cid.kdi.re.kr cid.kdi.re.kr Knowledge Sharing Program Sharing Program Knowledge KDI Development, International for Center Seoul, 130-740 47, Dongdaemun-gu, 113 Hoegiro Box ƔP.O. 82-2-958-4224 ƔTel. Ɣ www.mosf.go.kr www.kds.re.kr 30-740, P.O.Box 113 Hoegiro 47, Dongdaemun-gu, Seoul 47, Dongdaemun-gu, 113 Hoegiro 30-740, P.O.Box Ministry of Strategy and Finance and Finance of Strategy Ministry City 339-012, Korea Sejong Special Self-Governing 477, Galmae-ro, Complex-Sejong, Government 82-44-215-7732 Tel. Institute Development Korea 1 Strategy Development for Institute Korea Gangnam-Gu, Seoul, Korea 135-867, WIZ Building 5F, 429, Bongeunsa-ro, 82-2-539-0072 Tel. Moving to the Diversification of the Gabonese Economy Moving to the Diversification of the Gabonese Economy

Project Title Moving to the Diversification of the Gabonese Economy

Prepared by Korea Institute for Development Strategy (KDS)

Supported by Ministry of Strategy and Finance (MOSF), Republic of Korea Korea Development Institute (KDI)

Prepared for Republic of Gabon

In Cooperation with Ministry of Foreign Affairs, International Cooperation and Francophonie, Republic of Gabon

Program Directors Hong Tack Chun, Executive Director, Center for International Development (CID), KDI MoonJoong Tcha, Senior Advisor to Deputy Prime Minister and Minister of Strategy and Finance, Former Executive Director, CID, KDI Taihee Lee, Director, Division of Knowledge Sharing Program (KSP) Consultation, CID, KDI

Program Officers Mikang Kwak, Senior Research Associate, Division of KSP Consultation, CID, KDI Soyen Park, Program Officer, KDS

Senior Advisor Kyoshik Kim, Former Minister of Gender Equality and Family

Project Manager Jaeho Song, Professor, Jeju National University

Authors Chapter 1. Jaeho Song, Professor, Jeju National University Cesar Assele, Ministry for the Equipment, Infrastructures and the Town and Country Planning Chapter 2. Hyunseok Oh, President, Academy of Territorial Development SienoLingombe Ponga, Ministry of Agriculture, Breeding and Rural Development Chapter 3. Sungyoun Oh, Senior Researcher, P&J Vivianne Nguema Ondo, Ministry of Small and Medium-sized Enterprises and the Small Business Craft Chapter 4. Hongmin Chun, Research Fellow, KDS Simon Pierre Ndombi, National Agency for Digital Infrastructures and Frequencies

English Editor Ji Hyun Lee, Research Assistant, KDS Enkoline.co., Ltd.

Government Publications Registration Number 11-1051000-000341-01 ISBN 978-89-8063-757-7 94320 978-89-8063-739-3 (set)

Copyright ⓒ 2013 by Ministry of Strategy and Finance, Republic of Korea Government Publications Registration Number 11-1051000-000341-01

Knowledge Sharing Program

Moving to the Diversification of the Gabonese Economy

2013 Preface

In the 21st century, knowledge is one of the key determinants of a country’s level of socio- economic development. Based on this recognition, Korea’s Knowledge Sharing Program (KSP) was launched in 2004 by the Ministry of Strategy and Finance (MOSF) and the Korea Development Institute (KDI).

KSP aims to share Korea’s development experience and knowledge accumulated over the past decades to assist socio-economic development of partner countries. Former high-ranking government officials are directly involved in policy consultations to share their intimate knowledge of development challenges, and they complement the analytical work of policy experts and specialists who have extensive experience in their fields. The government officials and practitioners effectively pair up with their counterparts in developing partner countries to work jointly on pressing policy challenges and share development knowledge in the process. The program includes policy research, consultation and capacity-building activities, all in all to provide comprehensive, tailor-made assistance to the partner country in building a stable foundation and fostering capabilities to pursue self-sustainable growth.

2012 is the second year to conduct KSP with Gabon. Based on the written demand survey form as well as the discussion with the Gabonese government, the program entitled ‘Moving to the Diversification of the Gabonese Economy’ was re-launched in June 2012, continuing from the 2011 KSP with Gabon and focusing on the following four sectors: tourism, agriculture, small and medium enterprises (SMEs) and information communication and technology (ICT).

I would like to take this opportunity to express my sincere gratitude to the Senior Advisor Mr. Kyosik Kim, the former Vice Minister of the Ministry of Gender Equality and Family and the Project Manager Dr. Jaeho Song, as well as all the project consultants including Dr. Hyunseok Oh, Dr. Sungyoun Oh and Mr. Hongmin Chun for their immense efforts in successfully completing the 2012 KSP with Gabon. I am also grateful to Director Dr. Sungil Bae, Team Manager Ms. Hyejin Kim and Program Officer Ms. Soyen Park, all of the members of the Economic Development Division, KDS for their hard work and dedication to this program. Lastly, I extend my warmest thanks to the Ministry of Foreign Affairs, International Cooperation and Francophonie, the Ministry of Economy, the Ministry of Trade, the Ministry of Industry, the Ministry of Tourism of the Republic of Gabon and other related Gabonese government agencies, local consultants, program officers and participants for showing active cooperation and great support.

In your hands is the publication of the results of the 2012 KSP with Gabon. I believe that KSP will serve as a valuable opportunity to further elevate mutual economic cooperation of Gabon and Korea to a new level. I sincerely hope the final research results including policy recommendations on the selected areas could be fully utilized to help Gabon in achieving economic development in priority areas in the near future.

Seung-Hun Chun President Korea Institute for Development Strategy Abbreviations

AfDB African Development Bank ANPN Agence Nationale des Parcs Nationaux (National Agency for National Park) APIP Private Investment Promotion Agency APZ Agricultural Production Zone B.I. Business Incubator BGD Gabonese Development Bank CFAF Communaute Financiere Africaine Franc (African Financial Community Franc) EUR Euro; the official currency of the Eurozone FAGA Gabon Assistance and Guarantee Fund FDI Foreign Direct Investment FEZ Free Economy Zone FODEX Development and Expansion Fund GDP Gross Domestic Product GNI Gross National Income GTO Gabon Tourism Organization HDI Human Development Index ICT Information Communication Technology IGAD Insitut Gabonais d'Appul au Development (Gabonese Institute for the support of Development) ISIC International Standard Industrial Classification IT Information Technology KCTI Korea Culture and Tourism Institute KTA Korea Tourism Association KTO Korea Tourism Organization MICE Meetings, Incentives, Conferences, and Exhibitions MOA Ministry of Agriculture MOAF Ministry of Agriculture and Forestry MOCST Ministry of Culture, Sports, and Tourism MOSF Ministry of Strategy and Finance NACF National Agricultural Cooperative Federation NTC National Tourism Committee OHADA L'Organisation pour l'Harmonisation en Afrique du Droit des Affaires (Organisation for the Harmonization of Business Law in Africa) PPP Public-Private Partnership PTDPME Plan Triennal de Developpement de Petites et Moyennes Entreprises (Triennial Plan for the development of SMEs/SMIs Gabon) R&D Research and Development RDA Rural Development Administration SBC Small and Medium Business Corporation SEZ Special Economic Zone SME Small and Medium Enterprises SMEPA Small and Medium Enterprise Promotion Agency SOC Social Overhead Capital TP Techno-Park TSA Tourism Satellite Account UNDP United Nations Development Program UNESCO United Nations Educational, Scientific and Cultural Organization UNWTO United Nations World Tourism Organization Contents

2012 KSP with Gabon ……………………………………………………………………………………………… 016 Executive Summary ………………………………………………………………………………………………… 018

Chapter 1 Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign

Summary …………………………………………………………………………………………………………… 028 1. Introduction ………………………………………………………………………………………………… 031 2. Current Condition of Gabonese Tourism and Evaluation of the Government’s Policy Expectation ……… 033 2.1. Current Condition of Gabonese Tourism ……………………………………………………… 033 2.2. Understanding the Tourism Policy Expectations of the Gabonese Government ………… 039 3. Korean Experience in Establishing a Governance System for Tourism …………………………… 040 3.1. Theory of Tourism Governance ………………………………………………………………… 040 3.2. Korean Development Experience ……………………………………………………………… 042 4. Pilot Project Proposal for Tourism Governance in Gabon: ‘Visit Gabon Year’ Campaign ……… 046 4.1. Organization of the Tourism Governance System …………………………………………… 046 4.2. ‘Visit Gabon Year’ Campaign Program ………………………………………………………… 047 4.3. ‘Visit Gabon Year’ Project’s Promotion Process and Marketing …………………………… 050 4.4. Organization to Promote the ‘Visit Gabon Year’ (Tentative Organization of Tourism Governance) …………………………………………… 053 4.5. Budget for the Project …………………………………………………………………………… 056 4.6. Training and Use of Experts……………………………………………………………………… 058 5. Expansion in the Future: Establishment of the Gabonese Tourism Governance System ………… 058 References …………………………………………………………………………………………………………… 060 Chapter 2 Agricultural Production Base Development, Agricultural Workforce Training, and Rural Extension System Implementation for Food Security in Gabon

Summary …………………………………………………………………………………………………………… 062 1. Conditions and Limitations of Gabon’s Agricultural Development ………………………………… 064 1.1. Conditions for Gabon’s Agricultural Development ………………………………………… 064 1.2. Current Status and Conditions of Gabonese Policies on Agricultural Development …… 067 2. Korea’s Agricultural Development Experience and Policies during the Modernization Process ……… 075 2.1. Korea’s Economic Growth and Development of the Agricultural Sector ………………… 075 2.2. Major Policies for Agricultural Modernization in Korea …………………………………… 077 2.3. Implications of Korea’s Experience on Agricultural Modernization ……………………… 087 3. Policy Recommendations for Modernization of Gabon’s Agricultural Sector …………………… 090 3.1. Establishing an APZ in Connection with Land Reforms ……………………………………… 092 3.2. Establishment of an Agricultural Education & Training Institute to Nurture the Future Workforce …………………………………………………………………………… 093 3.3. Expansion of Rural Training Functions in Connection with Agricultural Education ……… 094 References …………………………………………………………………………………………………………… 096

Chapter 3 Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency

Summary …………………………………………………………………………………………………………… 097 1. Current Economic Situation in Gabon ………………………………………………………………… 100 1.1. ‘Le Gabon Emergent’ Strategy ………………………………………………………………… 100 1.2. Gabon’s Industrial Foundation ………………………………………………………………… 100 2. Industrialization of Gabon and SME Promotion Policy ……………………………………………… 102 2.1. Constraints on the Gabonization of Industry ………………………………………………… 102 2.2. Strategies of the Gabonization of Industry …………………………………………………… 103 Contents

3. Establishment of SME Promotion Agency (SMEPA)…………………………………………………… 122 3.1. Current SME-supporting Organizations in Gabon …………………………………………… 123 3.2. Establishment of SMEPA ………………………………………………………………………… 126 3.3. Role of SMEPA …………………………………………………………………………………… 128 3.4. Organizational Structure of SMEPA …………………………………………………………… 132 3.5. Korean Model …………………………………………………………………………………… 133 4. Conclusions and Policy Recommendations …………………………………………………………… 135 4.1. Summary and Conclusion………………………………………………………………………… 135 4.2. Policy Recommendations ………………………………………………………………………… 136 References …………………………………………………………………………………………………………… 139

Chapter 4 Establishment of IT Parks for the Innovation of the Gabonese Economy

Summary …………………………………………………………………………………………………………… 142 1. Preface ……………………………………………………………………………………………………… 144 2. Gabon’s IT Park Development Plan and Major Challenges ………………………………………… 145 2.1. ‘Digital Gabon’ Strategy and Institutional Framework ……………………………………… 145 2.2. Gabon’s IT Park Establishment Plan and its Status …………………………………………… 149 2.3. Major Challenges of Establishing IT Parks in Gabon ………………………………………… 154 3. Case Study on Korea’s IT Park Experience ……………………………………………………………… 155 3.1. Overview of Various IT Park Models …………………………………………………………… 155 3.2. Case Study on R&D Special Zone ……………………………………………………………… 158 3.3. Case Study on Techno Parks …………………………………………………………………… 160 4. Recommendations for Establishing IT Parks in Gabon ……………………………………………… 164 4.1. Basic Policy Direction……………………………………………………………………………… 164 4.2. Detailed Policy Suggestions for Each Subject ………………………………………………… 164 References …………………………………………………………………………………………………………… 173 Contents | List of Tables

Chapter 1

International Tourist Arrivals and Receipts of Gabon ………………………………………… 033 Statistics of the Tourism Industry in Gabon ……………………………………………………… 036 Major Policy Issues of the Departments Responsible for Tourism …………………………… 037 Changes in the Concept of Governance ………………………………………………………… 041 Comparison between the 2001-2002 and 2010-2012 ‘Visit Korea Years’ …………………… 045 ‘Visit Gabon Year’ Projects by Stage ……………………………………………………………… 051 Responsibilities of the ‘Visit Gabon Year’ Secretariat ………………………………………… 054 Budget for Personnel and Operational Costs of ‘Visit Gabon Year’: Estimated …………… 056 Project Costs for ‘Visit Gabon Year’ ……………………………………………………………… 057

Chapter 2

General Conditions of Agriculture in Gabon …………………………………………………… 064 Imports of Major Agricultural Products in Gabon ……………………………………………… 065 Main Statistics for Agricultural Production in Gabon ………………………………………… 067 Production and Export of Cacao and Coffee …………………………………………………… 067 Imports of Agricultural Products in Gabon ……………………………………………………… 070 Korea’s Agricultural Sector ………………………………………………………………………… 075 Land Use in Korea …………………………………………………………………………………… 075 Major Policy Recommendations for Gabon’s Agricultural Development …………………… 088 Comparison of Korea’s and Gabon’s Conditions for Agricultural Development …………… 089

Chapter 3

Growth Rate by Sector in Gabon ………………………………………………………………… 101 Comparison of Education Related Index in HDI (2011) ………………………………………… 104 Major Export and Import Items of Gabon (2010) ……………………………………………… 105 Core Competency Changes in Korea per Decade ……………………………………………… 109 Employment Distribution per Sector……………………………………………………………… 112 GDP Distribution by Industry in Gabon (2010) ………………………………………………… 113 Contents | List of Tables

GDP Distribution by Industry in Korea (1991) …………………………………………………… 113 Comparison of Number of Enterprises of Korea and Gabon ………………………………… 114 Comparison of SME Numbers per 1,000 People of Korea and Gabon ……………………… 115 B.I. Classification of Operating Bodies ………………………………………………………… 120 Current Status of Korean B.I. Center …………………………………………………………… 121 B.I. Designation by Operator in Korea (2011. 6) ……………………………………………… 121 Area per B.I. in Korea (As of end, 2010) ………………………………………………………… 121 Major Changes in Legal Frameworks Related to SME Development ……………………… 123 Composition of SME Promotion Fund in Korea (1979-88) …………………………………… 134 Spending Breakdown (1979-1988) ……………………………………………………………… 134 Agency Service Achievement (1979-1988) ……………………………………………………… 135 Contents | List of Figures

Chapter 1 [Figure 1-1] 2011 Air Traffic of Libreville International Airport ……………………………………………… 034 [Figure 1-2] 2011 Monthly Visitors in Gabon …………………………………………………………………… 035 [Figure 1-3] Steps to Establish a Governance System for Tourism …………………………………………… 040 [Figure 1-4] Organizational Chart for the 2010-2012 ‘Visit Korea Year’ …………………………………… 044 [Figure 1-5] Establishing a Governance System to Promote Tourism ……………………………………… 047 [Figure 1-6] Goals and Promotion of the ‘Visit Gabon Year’ ………………………………………………… 048 [Figure 1-7] Organization for the ‘Visit Gabon Year’ (Tourism Governance System)……………………… 053 [Figure 1-8] Organization by Development Stages of the ‘Visit Gabon Year’……………………………… 055 [Figure 1-9] Organizational Changes after the ‘Visit Gabon Year’ Project ………………………………… 059 [Figure 1-10] Development Stages of Gabonese Tourism …………………………………………………… 059

Chapter 2 [Figure 2-1] Major Agricultural Export Zones in Gabon ……………………………………………………… 068 [Figure 2-2] Korea’s Economic Development Process and Agricultural Development …………………… 076 [Figure 2-3] Agricultural Development in Korea and the Role of Major Organizations ………………… 076 [Figure 2-4] Korea’s Farmland Development and Management System …………………………………… 080 [Figure 2-5] Korea’s Agricultural Technologies Development and Dissemination System ……………… 084 [Figure 2-6] Summary of Policy Recommendations for Gabon’s Self-sufficiency in Food ………………… 091

Chapter 3 [Figure 3-1] Three Pillars of ‘Le Gabon Emergent’……………………………………………………………… 101 [Figure 3-2] Comparison of Gabon’s Growth Rate per Sector ……………………………………………… 102 [Figure 3-3] Trends in Gabon’s HDI ……………………………………………………………………………… 103 [Figure 3-4] Occupying Ratios of High Tech and Medium-high Tech in Manufacturing Industry Exports …… 106 [Figure 3-5] Changing Trends per Each Stage in the Labor Market ………………………………………… 108 [Figure 3-6] International Correlation between the Numbers of SMEs and GNI per capita …………………… 115 [Figure 3-7] B.I. Operation System ……………………………………………………………………………… 118 [Figure 3-8] Government’s Supporting Direction for Start-up Enterprises ………………………………… 118 Contents | List of Figures

[Figure 3-9] Triennial Plan for the Development of SMEs/SMIs in Gabon, PTDPME ……………………… 124 [Figure 3-10] Creating SME Promotion Fund …………………………………………………………………… 127 [Figure 3-11] Major Jobs of the SMEPA ………………………………………………………………………… 129 [Figure 3-12] SMEPA’s Organizational Chart …………………………………………………………………… 132 [Figure 3-13] Proportion of「 SME Promotion Fund」(2010) ………………………………………………… 135

Chapter 4 [Figure 4-1] Framework for Implementing ‘Digital Gabon’ ………………………………………………… 146 [Figure 4-2] Institutional Framework of ‘Digital Gabon’ ……………………………………………………… 148 [Figure 4-3] Major Role of GMDC ………………………………………………………………………………… 148 [Figure 4-4] Idea of ‘Cloud Gabon’ ……………………………………………………………………………… 149 [Figure 4-5] Gabon’s IT Park Establishment Plan ……………………………………………………………… 150 [Figure 4-6] Master Plan of the Cyber City ……………………………………………………………………… 151 [Figure 4-7] Major Components of the Cyber City …………………………………………………………… 152 [Figure 4-8] Location of Libreville IT Park ……………………………………………………………………… 153 [Figure 4-9] Libreville IT Park Outline …………………………………………………………………………… 153 [Figure 4-10] Major Challenges for Establishing IT Parks in Gabon ………………………………………… 155 [Figure 4-11] Spectrum of IT Parks ……………………………………………………………………………… 156 [Figure 4-12] Coverage of IT Park Functions by Model………………………………………………………… 156 [Figure 4-13] Models of IT Park …………………………………………………………………………………… 157 [Figure 4-14] Outlines of R&D Special Zone and Techno Park ……………………………………………… 157 [Figure 4-15] Designation Status of R&D Special Zone………………………………………………………… 158 [Figure 4-16] Industry-University-R&D Network in Daedeok Innopolis……………………………………… 159 [Figure 4-17] Supporting Programs and Tax Benefits to Tenant Labs and Enterprises in Daedeok Innopolis …………………………………………………………………………… 160 [Figure 4-18] Status of Designating Techno Parks in Korea ………………………………………………… 161 [Figure 4-19] Industrial Environment of Chungnam TP ……………………………………………………… 162 [Figure 4-20] Supporting Programs for Tenant Firms in Chungnam TP …………………………………… 162 [Figure 4-21] Implications from Korea’s IT Park Experience ………………………………………………… 163 [Figure 4-22] Phased Approach for Establishing IT Park in Gabon…………………………………………… 165 [Figure 4-23] Vision and Strategy for Establishing IT Parks in Gabon ……………………………………… 166 [Figure 4-24] Specialization Strategy of IT Parks in Gabon …………………………………………………… 167 [Figure 4-25] Creation of Industrial Clusters for IT Parks in Gabon ………………………………………… 168 [Figure 4-26] Linkage of Cooperation Agencies for IT Parks in Gabon……………………………………… 168 [Figure 4-27] Operational Programs for IT Parks in Gabon …………………………………………………… 169 [Figure 4-28] Organization Chart of IT Park Management Agency in Gabon……………………………… 170 [Figure 4-29] Funding Source for Developing IT Parks and Revenue/Expense Structure ………………… 171 [Figure 4-30] Monitoring and Evaluation Criteria of IT Parks in Gabon …………………………………… 172 2012 KSP with Gabon

Soyen Park (Korea Institute for Development Strategy)

The Ministry of Strategy and Finance (MOSF) of the Republic of Korea, in collaboration with the Korea Development Institute (KDI), has been implementing the Knowledge Sharing Program (KSP) with selected development partnership countries since 2004 with the overarching goal to assist in enhancing national competitiveness and the institutional restructuring efforts of partnership countries by sharing Korea’s development experience.

The KSP with Gabon has started since 2011. During the visit of President Ali Bongo to Korea in 2010 and 2012, the President made a remark about Korea as a trustworthy partner and asked for support in establishing policies for industrial diversification. Thus, the KSP with Gabon has started with the theme of ’Moving to the Diversification of the Gabonese Economy’ with a reference to the Korean experience in relevant sectors. The four sectors focused on in the KSP consultation were as follows: tourism, agriculture, small and medium enterprises (SMEs), and information communication and technology (ICT).

With successful execution of the 2011 KSP with Gabon, the Gabonese government applied for the 2012 KSP with a proposal under the same topic, ‘Moving to the Diversification of the Gabonese Economy,’ as a series of studies to follow the 2011 KSP with Gabon.

016·Moving to the Diversification of the Gabonese Economy Consultation Topics Korean Researcher Gabonese Researcher Tourism Dr. Jaeho Song Mr. Cesar Assele Agriculture Dr. Hyunseok Oh Ms. Sieno Lingombe Ponga Small and Medium Dr. Sungyoun Oh Ms. Vivianne Nguema Ondo Enterprises (SME) Information Communication and Mr. Hongmin Chun Mr. Simon Pierre Ndombi Technology (ICT) Role Name Project Manager Dr. Jaeho Song Program Officer Ms. Soyen Park

For the first stage of the KSP, the Demand Survey and Pilot Survey Study were carried out from 30th July to 9th August, 2012. The Korean delegation headed by Dr. Jaeho Song, the Project Manager (PM), visited Gabon to meet with high-level government officials and specialists and discussed policy priorities regarding the policy solutions for the Gabonese government.

For the next stage, the Interim Reporting & Policy Practitioners’ Workshops were held in Korea from 4th to 12th November, 2012 for the purpose of presenting interim progress findings and sharing comments. The Gabonese delegation participated in a one-day seminar for Interim Reporting, and paid visits to the Erica Campus at Hanyang University, Daedeok Innopolis, Techno-park (TP) in Choongnam province, etc.

For the final stage of KSP, the Korean experts group headed by H.E. Mr. KyoSik Kim, the former Vice Minister of the Ministry of Gender Equality and Family, visited Libreville from 16th to 21st February, 2013 for the Senior Policy Dialogue and Final Reporting Workshop to deliver final findings to the Gabonese senior policy-makers and other stakeholders related to the agenda. The Korean delegation successfully disseminated the result of the 2012 KSP with Gabon to 70 Gabonese government officials and the audience showed active participation.

2012 KSP with Gabon·017 Executive Summary

Jaeho Song (Jeju National University)

Gabon is a country with abundant natural resources, political and social stability, and rapid economic growth.

Research findings and policy recommendations are as follows:

1. Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign

Gabon has a high per capita income and a relatively well-functioning welfare system compared to other African countries. As there is increasing interest towards sustainable and local tourism recently, the Gabonese government is seeking to accelerate national development through the promotion of tourism for a forward- looking, stable economic and social system.

While most visits to Gabon were for business, education and family so far, it is expected that the number of visitors to enjoy nature and adventure will increase. As the government recognizes the important role of the tourism industry on the country’s development agenda, it hopes to support the specialization of the relevant government organizations related to tourism and to develop citizen and private sector organizations. In response to the government’s expectations, this KSP project proposes establishing a tourism governance system for the development of the Gabonese tourism. In particular, through the ‘Visit Gabon Year’ pilot project, it aims to provide policy options regarding the development of tourism governance.

While accurate statistics do not exist on the number of visitors to Gabon, according to the United Nations World Tourism Organization (UNWTO), the country

018·Moving to the Diversification of the Gabonese Economy recorded 186,000 international visitors (inbound) in 2009. The Gabonese government estimates that there are approximately 330,000 international visitors (inbound) each year. Most visits are for business, study and family, but an increasing number of visitors come for the purpose of tourism.

The Gabonese government is expecting to reorganize the governance system of the tourism industry and the role of tourism in national policy in order to strengthen the foundations of the industry, which is entering the development stage. It is expected that tourism governance will contribute to the development of tourism- related policies, revitalization of the private sector, and strengthened civil society capacity in which cooperation is needed.

However, establishing a governance system that is consistent to the nation’s policies to promote tourism is necessary when organizations and institutions are in a state of fragmentation. Recognizing the need for a special opportunity, we considered the ‘Visit Gabon Year’ as a pilot project to form a tourism governance organization. The ‘Visit Gabon Year’ would be the most effective way to publicize the potential and attractiveness of the Gabonese tourism and host foreign tourists at a time when there is little recognition of the country as a tourist destination.

A. Pilot Project Proposal for the Gabonese Tourism Governance: the ‘Visit Gabon Year’ Campaign

Organization of Tourism Governance The governance system needs to be established through tourism-related projects, such as the creation of tourism resources, operation of tourism programs, and hosting festivals. Hence, reorganizing tourism infrastructure through the ‘Visit Gabon Year’ and transforming the country to an attractive tourist destination are needed.

Campaign Program for the ‘Visit Gabon Year’ - Setting the Goal The duration for the ‘Visit Gabon Year’ was set for 2015-2016. The goal is to host 400,000 foreign tourists under the theme of ‘The Unknown World - Admire Gabonese Tourism.’ The three goals for the 2015-2016 ’Visit Gabon Year’ are as follows: improving the reputation of Gabonese tourism in the international community; expanding Gabonese international tourism development; and establishing a tourism governance system.

- Programs The five programs of the ‘Visit Gabon Year’ are as follows: improving hospitality and tourism services; hosting foreign tourists; systematic marketing

Executive Summary·019 and formation of a network; developing attractive tourism packages; and reorganizing and supporting tourism infrastructure.

‘Visit Gabon Year’ Process & Publicity The implementation of the 2015-2016 ’Visit Gabon Year’ project is divided into four stages: planning and preparation; declaration and preliminary events; main event; and monitoring and evaluation.

Organization for the ‘Visit Gabon Year’ (Example for the Tourism Governance System) Gabonese tourism is at a pre-development stage. Without a mature private sector, the government’s role is critical in enhancing the ability of the private sector and creating a tourism governance system. Hence, to create the system, the public and private sectors need to play their roles effectively and systematically for the organization and operation of the ‘Visit Gabon Year’ project.

The successful implementation of the ‘Visit Gabon Year’ project will enhance the organizational capacity for tourism development as well as the capacity of the country’s citizens. In particular, improvement in hospitality will become a foundation for community tourism, which in turn will support local development.

The organizational committee and secretariat can be reorganized into the Gabon Tourism Organization (GTO), whose status will be in between that of the government and a private institution. On the other hand, the supporting committee for the ‘Visit Gabon Year’, which led the support and cooperation from the government, can be transformed into a National Tourism Committee (NTC) directly placed under the president and a system capable of implementing government-wide tourism governance.

Ultimately, from 2020 Gabonese tourism will enter into a development stage and bring national wealth. During the development stage there will be a balance between foreign visitors and domestic visitors.

2. Agricultural Production Base Development, Agricultural Workforce Training, and Rural Extension System Implementation for Food Security in Gabon

Despite favorable natural conditions and diversified domestic markets due to the petroleum-based economy, Gabon’s agricultural sector faces many limitations. Lack of effort to develop farmland, declining workforce, inadequate technologies and their dissemination, absence of agricultural finance and insufficient infrastructure in rural areas serve as obstacles to the country’s agricultural sector from reaching its

020·Moving to the Diversification of the Gabonese Economy potential. Hence, Gabon relies on imports for forty percent of its food consumption and less than one percent of the country’s land is used for agriculture.

The Gabonese government has announced a new national vision called ‘Le Gabon Emergent (Emerging Gabon)’ in order to diversify the economy and move away from an economic structure dependent on exports of natural resources. While detailed plans for implementation are being prepared, the government’s attention towards the agricultural sector remains very weak. The government has a medium to long- term goal of increasing agricultural production from the current level of 5% of the GDP to 20% by 2020. Specifically, the government plans to achieve an annual growth rate of 8% in the agricultural sector, increase the proportion of farmland to 25% of the country’s total area, and substitute approximately 50% of rice, fruits, vegetable, and meat imports. However, the goals seem far-fetched at the moment due to the postponement of land reform, an insignificant agricultural budget of 1% of the total government budget, and the lack of educational institutions to train an agricultural workforce.

First and foremost, agricultural policies are needed to develop Gabon’s agricultural sector. Gabon needs to benchmark Korea’s systems and policies for agricultural development during the early stages of economic development in the 1960s. During the 1950s, Korea implemented a land reform policy named ‘distributing land to farmers.’ When the economic development plan was in full force in the 1960s, major policy initiatives were introduced, including: establishment of the Rural Development Administration (RDA) and local training institutions to develop and disseminate agricultural technologies; creation of the ‘Comprehensive Agricultural Cooperative System’ to organize producers and distribute policy loans; as well as founding an organization in charge of developing and maintaining farmland. In addition to such policies, the full-fledged New Community Movement in the 1970s improved the living conditions in rural areas and Korea was able to achieve self-sufficiency in staple grains.

On the other hand, the Gabonese government’s role in developing and managing farmland, a basic factor in agricultural production, is very inadequate. Deterioration of farmland in plantations, extensive use of land, as well as inadequate development of farmland in plots and irrigation facilities are pervasive in Gabon. The agricultural sector is short of labor due to the migration of young adults following the development of the petroleum sector. Mechanization and dissemination of new technologies are also difficult because of the aging population in rural areas. Without educational institutions to train the next generation of farmers, there are limited new hires in the agricultural sector. The lack of organization amongst producers makes group marketing and purchases difficult, and a system to transfer agricultural policy loans has yet to be formed. Policies to develop and disseminate agricultural technologies for diversification of the sector are also much needed.

Executive Summary·021 Considering Korea’s agricultural development experience and given Gabon’s current condition, major policy recommendations are summarized as follows:

A. Create an Agricultural Production Zone (APZ) in Connection with Land Reform - Large-scale farmland development using state-owned land and farmland distribution to next-generation farmers - Create 24,000 hectares (ha) of farmland and train a next-generation workforce of 5,000 people - Develop an APZ in connection with education and training facilities in nine pilot farms - Establish a public institution under the Ministry of Agriculture (MOA) to be in charge of creating and managing farmland

B. Establish Agricultural Education and Training Facilities for the Next Generation of Farmers - Approximately 10,000 next-generation farmers are required by 2020 in order for agricultural production to reach 20% of the GDP - 50% will come from newly established agricultural high schools. The remaining 50% will be from unemployed young adults in urban areas absorbed by vocational training institutions. - Establish a curriculum in national universities to foster teachers for the agricultural sector

C. Expand Rural Training Functions in Connection with Agricultural Education - Drastically increase the rural training function of Institut Gabonais D’appui Au Development (IGAD)

3. Developing Small and Medium Enterprises (SMEs) in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency (SMEPA)

In August 2009, Ali Ben BONGO Ondimba was elected as the President of Gabon. The President is developing strategic programs and projects along with a periodical growth plan for up to 2020 to make Gabon one of the newly emerging economic nations.

This plan is comprised of three pillars to tow Gabon’s growth and secure national competitiveness, namely, industrial development, eco-friendly growth, and advancement in the service industry. These three pillars are based on expanding human resources and Social Overhead Capital (SOC) facilities, creating appropriate and effective business surroundings, and gaining access to markets through assistance to the private sector.

022·Moving to the Diversification of the Gabonese Economy However, there exist several barriers in the course of promoting industrialization by the Gabonese government. First, economic growth is led by the development and sale of natural resources. Second, the ongoing industrialization is driven by major overseas capital, rather than by domestic capital. Third, the domestic technology and technical manpower for industrialization is in shortage. Fourth, SMEs, which are the foundations basis of a national economy and social security through poverty reduction and formation of the middle class, are in dire need. Thus, as a means of industrialization, the Gabonization of industry and promoting SMEs are absolute preconditions.

Among the several conditions for the Gabonization of industry, in regard to promoting SMEs, the top priority is training and protecting skilled and technical manpower, and creating a climate where technical manpower is specially favored. Second, it is necessary to make a favorable environment for entrepreneurs, who have innovative technology and creativity so that they can run businesses well, along with improving entrepreneurship. Today, economic growth and technology innovation are inseparable. Skilled manpower is especially the best property of a nation and the main core of economic growth.

For the specialized timber industry, Gabon is planning to establish a technical high school. However, considering major imports like construction machinery, etc., the ripple effects of general industry and diversification of the industry, it is desirable to fix a strategic industry, like a root industry, and expand it to machinery, metal, chemical, and knowledge-based industries.

To promote the start-up of SMEs with good business ideas and technical competitiveness, the existing promotion policy for start-up SMEs is necessary; however, the promotion policy to support innovative new SMEs to grow is needed as well. Active starting up of SMEs’ movement has a great ripple effect not only on the regional economy but also on the national economy. But, new SMEs’ failure at the beginning stage of start-up can be a fatal loss to the local and national economy. So, the effective support of the government for start-up SMEs is very important for the national economy and job creation.

Gabon is in dire need of expanding SMEs and improving competitiveness to prepare for the Gabonization of industry and diversification, the establishment of social security nets, job creation for balanced income distribution, increased national competitiveness, and for industrial restructuring to prepare for long term natural resources depletion. Therefore, it is high time to establish a promoting agency for SMEs.

We cannot promote SMEs only with loan support. Along with loan support, we need comprehensive government support in cultivating technology and

Executive Summary·023 management know hows, timely information on the market and general economic situations, and continuous education and training for SMEs employees and related persons. It is true that this is a rather more interventionist view than the laissez-faire view. But, it is unavoidable at this point of time, when Gabon needs the Gabonization of industry and job creation through promoting SMEs.

In the effort to promote SMEs, the Gabonese government is trying to do its best, enacting relative laws and establishing a promoting agency, etc. However, the implementation of laws is unsatisfactory, and the promoting agency has been closed or exists in name only. Thus, it is absolutely necessary to establish a SMEPA.

The SMEPA will be established by amending the existing law, or by enacting a new law, and it will be set up as a non-profit governmental organization which will exclusively carry out the government’s SME promotion policy. Also, the government will establish SME promotion fund to assure professional effective implementation of the SME promotion policy. Utilizing this fund, the SMEPA will carry out comprehensive measures to support promoting SMEs, like loan support, consulting, training, information providing, etc.

4. Establishment of IT Parks for the Innovation of the Gabonese Economy

The Gabonese government is currently driving the nation-wide transition into an information society based on its Digital Gabon strategy. Especially with the African Coast to Europe (ACE) undersea cable and a nation-wide fiber-optic network project, Gabon is accelerating the flow of investment to provide the top communication environment in the region. In addition, Gabon is planning to build the biggest Cyber City in the region to become an ICT Hub in Central Africa, and to create IT Parks in major cities.

This plan is quite meaningful in the sense that it will spark the growth of the premature Gabonese ICT industry, while bringing added value and efficiency to existing industries like energy, timber, minerals, tourism, etc. This plan also may be efficient for improving the quality and delivery system of the public services like education, health care, etc.

In this sense, detailed benchmarking of Korean experiences of Research Complexes and TPs will present a lot of hints and help the present Gabonese government’s effort in establishing IT Parks. In particular, the Korean experience of laying out innovative foundation of national science and technology through Innopolis, and invigorating the local economy through creating TPs, can be directly connected to the Gabonese government’s ICT development task.

024·Moving to the Diversification of the Gabonese Economy In this project, the Gabonese government expects the basic concept for IT Parks in six major cities, and this report will focus on providing policy advice for a number of critical factors in establishing IT Parks, plus a guide in formulating the specialization strategy for different IT Parks. As already laid out in the Digital Gabon strategy, the policy recommendations have been derived focusing on the function of ICT as an enabler.

Focusing on the task of establishing IT Parks in Gabon, based on Korean examples, the following recommendations have been derived. Below is the summary of basic policy direction by subjects.

Establishing a clear policy direction for developing IT Parks Considering the present Gabonese ICT sector development level, and supplementing weaknesses in relevant sectors.

Preparing a specialization strategy for each IT Park Considering local products, R&D capability, Special Economic Zone (SEZ) strategies, etc.

Creating an Industrial Cluster Strategy for the activation of the IT Parks Connecting various supporting agencies on the value chain, front/back enterprises, R&D labs, universities, financial institutions, etc.

Laying out an institutional foundation for IT Parks Enacting special laws, and creating a one-stop service center to support tenant enterprises.

Preparing IT Park operational programs Preparing operational programs in cooperation with the government, supporting agencies, R&D labs, universities, tenant firms, etc.

Securing the development funds for IT Parks The Central government should play the leading role, and the Local government as well as the private sector should actively participate.

Monitoring and evaluating the IT Parks Conducting annual evaluations focusing on self-sufficiency, with tenant firms supporting performance.

Executive Summary·025

Moving to the Diversification of the Gabonese Economy Chapter 1

Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign

1. Introduction 2. Current Condition of Gabonese Tourism and Evaluation of the Government’s Policy Expectation 3. Korean Experience in Establishing a Governance System for Tourism 4. Pilot Project Proposal for Tourism Governance in Gabon: ‘Visit Gabon Year’Campaign 5. Expansion in the Future: Establishment of the Gabonese Tourism Governance System ■ Chapter 01

Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign

Jaeho Song (Jeju National University) Cesar Assele (Ministry for the Equipment, Infrastructures and the Town and Country Planning)

Summary 1. Introduction

Gabon has a high per capita income and a relatively well-functioning welfare system compared to other African countries. As there is increasing attention towards sustainable and local tourism recently, the Gabonese government is seeking to accelerate the national development through the promotion of tourism for a forward-looking, stable economic and social system.

While most visits to Gabon were for business, education and family so far, it is expected that the number of visitors to enjoy nature and adventure will increase. As the government recognizes the important role of the tourism industry on the country’s development agenda, it hopes to support the specialization of the relevant government organizations related to tourism and to develop citizen and private sector organizations. In response to the government’s expectations, this KSP project proposes a tourism governance system for the development of Gabonese tourism. In particular, through the ‘Visit Gabon Year’ pilot project, it aims to provide policy options regarding the development of tourism governance.

2. Current Condition of Gabonese Tourism and Evaluation of the Government’s Policy Expectation

While accurate statistics do not exist on the number of visitors to Gabon,

028·Moving to the Diversification of the Gabonese Economy according to the UNWTO, Gabon recorded 186,000 international visitors (inbound) in 2009. The Gabonese government estimates that there are approximately 330,000 international visitors (inbound) each year. Most visits are for business, study, and family, but an increasing number of visitors come for the purpose of tourism.

The Gabonese government is expecting to reorganize the governance system of the tourism industry and the role of tourism in national policy in order to strengthen the foundation of the industry, which is entering the development stage. It is expected that tourism governance will contribute to the development of tourism- related policies, revitalization of the private sector, and Capacity building of civil society capacity in which cooperation is needed.

However, establishing a governance system in relation to the nation’s policies to promote tourism is necessary when organizations and institutions are fragmented. Recognizing the need for a special opportunity, we considered the ‘Visit Gabon Year’ as a pilot project to form a tourism governance organization. The ‘Visit Gabon Year’ project would be the most effective way to publicize the potential and attractiveness of Gabonese tourism and host foreign tourists at a time when there is little recognition of the country as a tourist destination. 3. Korean Experience in Establishing a Governance System for Tourism

As Korea launched its autonomous local government system in the late 1990s, decision making on tourism-related policies have been delegated or transferred over to the local governments. As the selection of projects as well as budget and planning have been mostly handed over to the local governments with the initiation of the Special Account for Balanced National Development in 2005, the need for cooperation between the central government and local governments to promote tourism policy has increased.

An agency-wide cooperation system has been formed through the above- mentioned governance system between central and local governments as well as the Tourist Policy Deliberative Committee, which is composed of ministers and based on the Framework Act on Tourism.

In 1999, the Korean government hosted the Tourism Promotion Forum chaired by the president, which reflected the government’s proactive policy stance towards developing the tourism industry. Representatives from private firms and related organizations as well as ministers have been collectively discussing current issues and seeking measures to develop the tourism industry.

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·029 Korean tourism governance can be found in the system to promote related policies. There are also examples of the establishment and operation of the tourism governance system in the implementation of special projects. For the government’s systematic and efficient operation of the tourism industry, the Ministry of Culture, Sports and Tourism (MOCST), the Korea Tourism Organization (KTO), various tourism associations, and the Korea Culture & Tourism Institute (KCTI) play central roles. The ‘Visit Korea Year’, a special project led by the government, is promoted through an interagency system. As an organization for tourism governance, the ‘Visit Korea Year’ committee is composed of an operating committee and a secretariat. In particular, the committee is chaired by a representative from a private firm to induce voluntary participation and cooperation by the private sector and maximize the private sector’s capacity. 4. Pilot Project Proposal for Tourism Governance in Gabon: ‘Visit Gabon Year’ Campaign

4.1. Organization of Tourism Governance in Gabon

The governance system needs to be established through tourism-related projects, such as the creation of tourism resources, operation of tourism programs, and hosting festivals. Hence, reorganizing tourism infrastructure through the ‘Visit Gabon Year’ and transforming the country to an attractive tourist destination are needed.

4.2. ‘Visit Gabon Year’ Campaign Program

Setting the Goal for the ‘Visit Gabon Year’ The term for the ‘Visit Gabon Year’ was set for the years 2015-2016. The goal is to host 400,000 foreign tourists under the theme of ‘The Unknown World: Admire Gabonese Tourism.’ The three goals for the 2015-2016 ’Visit Gabon Year’ are as follows: improving the image of Gabonese tourism in the international community; expanding Gabonese international tourism development; and establishing a governance system.

Programs for the ‘Visit Gabon Year’ Project The five programs of the ‘Visit Gabon Year’ are as follows: improving hospitality and tourism services; hosting foreign tourists; systematic marketing and formation of networks; developing attractive tourism packages; and reorganizing and supporting tourism infrastructure.

4.3. ‘Visit Gabon Year’ Project’s Promotion Process and Marketing

The implementation of the 2015-2016 ‘Visit Gabon Year’ project is divided into

030·Moving to the Diversification of the Gabonese Economy four stages: planning and preparation; declaration and preliminary events; main event; and monitoring and evaluation.

4.4. Organization to Promote the ‘Visit Gabon Year’

Gabonese tourism is at a pre-development stage. Without a mature private sector, the government’s role is critical in enhancing the ability of the private sector and creating a tourism governance system. Hence, to create the system, the public and private sectors need to play their roles effectively and systematically for the organization and implementation of the ’Visit Gabon Year’ project. 5. Expansion in the Future: Establishment of the Gabonese Tourism Governance System

The successful implementation of the ‘Visit Gabon Year’ project will enhance the organizational capacity for tourism development as well as the capacity of the country’s citizens. In particular, improvement in hospitality will become a foundation for community tourism, which in turn will support local development.

The organizational committee and secretariat can be reorganized into the GTO whose status is in between that of the government and a private institution. On the other hand, the supporting committee for the ‘Visit Gabon Year’, which led the support and cooperation from the government, can be transformed into a NTC directly placed under the president and a system capable of implementing government-wide tourism governance.

Ultimately, from 2020 Gabonese tourism will enter into the development stage and bring national wealth. During the development stage, there will be a balance between foreign visitors and domestic visitors.

1. Introduction

Gabon has large oil and natural gas reserves in addition to an abundant supply in minerals, such as iron and manganese. Given the natural resource endowment, Gabon has high per capita income and a relatively well-equipped welfare system compared to other African countries. Nevertheless, the government is seeking to accelerate national development through the promotion of tourism for a forward- looking, stable economic and social system.

The rainforests covering 80% of Gabonese territory belongs to the Congo Basin, which is also known as the Earth’s second lung. This is why Gabon needs to deeply

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·031 consider developing eco-tourism given the rainforest’s natural and ecological resources. As there has been recent increased interest towards sustainable and community tourism, today’s tourism can contribute to Gabonese local development.

Located in Central Africa with a coast along the Atlantic Ocean, the majority of visitors to Gabon arrive by air travel. Therefore, they are dependent on the condition of the airline industry, such as routes and cancellations. Most visits to the country are for business, education and family. While the most common tourist activity is leisure fishing, it is expected that tourists will increasingly enjoy the nature and other adventures.

Gabon possesses rich natural resources, including a tropical rain forest and diverse species of animals and plants. However, national parks are the only accessible areas for tourists. Currently, there are 13 national parks in Gabon, covering 11% of the territory. Despite the lack of infrastructure, the government is preparing eco-tourism programs for the national parks because of their differentiated development conditions, environmental conditions, and natural and ecological resources.

Eco-tourism in national parks depend on sustainability. Hence, the cooperation and participation among interest groups need to take priority. While the government is considering a governance system for tourism, a trigger is needed. The development of Gabonese tourism along with the discovery of new tourism resources and programs through the creation of a governance system are necessary.

Hence, the ‘Visit Gabon Year’ will be promoted as a Public-Private Partnership (PPP), i.e. a nationwide event to establish a governance system, and to increase the potential of Gabonese tourism and the number of foreign tourists. The ‘Visit Gabon Year’ will be an effective way to publicize the country’s potential at a period when there is little awareness despite the move to initiate tourism.

Therefore, this KSP project aims to prepare the foundations to establish a tourism governance system as the government hopes to develop the tourism industry as an important part of Gabonese industry diversification. After understanding the expectations of the Gabonese government on tourism policies, we propose the ‘Visit Gabon Year’ as a pilot project to establish tourism governance in the country. We also suggest the organization and operation of the tourism governance system. The ‘Visit Gabon Year’ project will be the most effective way to publicize the potential and attractiveness of Gabonese tourism, when the country has a relatively well functioning restaurant and hotel industry despite low recognition as a tourist destination.

032·Moving to the Diversification of the Gabonese Economy 2. Current Condition of Gabonese Tourism and Evaluation of the Government’s Policy Expectation

2.1. Current Condition of Gabonese Tourism

2.1.1. Tourism Resources and Status

According to the UNWTO, the number of international tourists visiting Gabon was 186,000 in 2009. (In 2008, international tourists accounted for approximately 56% of the total inbound and outbound tourists.) The number of international tourists in neighboring Cameroon in 2009 was 498,000, 2.7 times that of Gabon. The number of international tourists in Congo was half of that of Gabon. However, the Gabonese government estimates that approximately 330,000 international visitors (inbound) come to the country each year. No statistics on Gabon’s net revenue from tourism are available. However, considering that Gabon accounted for 0.66% of Sub-Saharan Africa’s international tourists in 2009, it is possible to calculate that Gabon’s revenue amounted to approximately 1.37 million USD in 2011 based on UNWTO statistics.

Most visitors travel to and from Gabon by air. Currently, there are direct flights from Libreville to Brussels, Paris, Rome, Madrid and Geneva in Europe, as well as flights to Dubai.

In 2011, there were more than 7,000 international arrivals and 5,000 international departures for the Libreville International Airport in Gabon’s capital.1)

International Tourist Arrivals and Receipts of Gabon (Unit: million, %, billion) International Tourist Arrivals International Tourist Receipts 2009 2010 2011* Share (2011) 2010 2011 Share (2011) World 883 940 983 100.0 927 1,030 100.0 Africa 45.9 49.7 50.2 5.10 28.3 30.4 2.95 Sub-Saharan 28.3 31.0 33.1 3.37 18.5 20.7 2.01 Africa Gabon 0.186 na na 0.02 ('09) na na - Cameroon 0.498 0.573 na 0.06 ('09) 0.270 0.159 0.015 Congo 0.094 0.101 na 0.01 ('09) na na -

Note: * are estimates Source: UNWTO, Tourism Highlights 2012 Edition

1) Information provided by Gabon.

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·033 If we look into the monthly visitors to Gabon, 50% visited in August and a high number visited in May. According to the Gabonese Tourism Satellite Account (TSA) Report in 2009, 38% of visitors are French, 9% Cameroonian, 7% British, 7% Gabonese, 3% American, 3% Senegalese, 2% Ivoirian, 2% Filipino, 2% Belgian, 2% Dutch, and 25 % others.

[Figure 1-1] 2011 Air Traffic of Libreville International Airport

Departules

Source: domestic sources from Gabon

Leisure fishing is the most common tourist activity, but it is expected that there will be more tourists in the future who enjoy nature and adventure. According to the statistics of the Gabonese government, approximately 45,000 tourists have enjoyed ‘adventure tourism’ in Gabon in the past two years. Of these, 55% were Gabonese nationals, 25% were resident foreign nationals, and 20% were non-resident foreign nationals.

According to the Gabonese TSA Report, the main holiday destinations for foreign tourists in Gabon are Paris CDG, KoualaObs, Cotonou, Abidjan, Johannessburg Tambo, Lagos, Birazzavill Maya-Maya, LomeTokoin, and Addis AbebaBote, while Gabonese mainly visit Port-Gentil, Mvengue, Oyem, Mouila, Koulamoutou, Bitam, Makokou, Tchibanga, Gamba, and Mayumba for vacation.

Gabon holds rich natural resources, including a tropical rain forest and diverse species of animals and plants. However, national parks are the only accessible areas for tourists. Currently, 13 national parks exist in Gabon, covering 11 percent of the territory; only three of these, Lope, Loango, and Pongara, are equipped with tourist facilities. About 5,000 tourists visit these three national parks each year, and 5 percent of these participate in eco-tourism. In recent years, there has been a noticeable increase in the number of Japanese and Chinese tourists to these parks.

034·Moving to the Diversification of the Gabonese Economy [Fiigure 1-2] 2011 Monthly Visitors in Gabon

Source: domestic sources from Gabon

The other five parks, Akanda, Ivindo, Mayumba, Moukalava-Doudou, Plato, Bakete are available for adventure tourism, but the remaining five are not accessible, and also lack facilities.

The Gabonese government is planning to develop eco-tourism products, as the thirteen national parks have distinctive developmental and environmental conditions as well as natural and ecological resources. However, the lack of infrastructure is making it difficult. The government is spending a large portion of its budget on national park preservation, and is currently not charging admission fees to the parks. For this reason, the government needs to consider policies that can expand tourism revenue and employment through the promotion of eco-tourism; national parks should be much more accessible, and links between national parks need to be systemized and strengthened. Also, as local residents still reside within the national parks, it is important to develop eco-tourism that is in accordance with the lives of these residents.

Rare animal and plant species that only exist in Gabonese national parks include luth turtles, which lay eggs along the coast, humpback whales that are observed along the coast of Cap Lopez (Port-Gentil), silverback gorillas that live around Mikongo, south of La Lope, and plants such as the begonia and the orchid.

In terms of cultural resources, wood sculptures and masks are well known. The National Museum of Arts and Traditions, Lambaréné - the village of Schweitzer, and Chicken Muamba are also well known. Gabonese masks show artistic excellence with elaborate and sensual forms, but these can only be found in museums. The National

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·035 Museum of Arts and Tradition is one of the best museums in Central Africa. Chicken Muambais a dish from traditional Gabonese cuisine, cooked with chicken, hot chili, garlic, tomato, pepper, salt, okra and palm butter; it ranked 10th on CNN Go’s ‘The World’s 50 Most Delicious Foods’ ranking published in July 2011.

Tourism occupies a major position next to wood-related industries in the Gabonese economy. Employment growth within the industry is robust, and tourism investment accounts for about 80% of Gabonese GDP.

In 2009, there were 5,161 hotel rooms and 299 restaurants in Gabon. Although there were 1,000 rooms in four global standard hotels in early 2009, more than 1,600 rooms are expected to be ready in 2012 to host visitors for the 2012 Africa Cup of Nations (CAN). Hence, it can be said that the CAN is invigorating the hotel industry in Gabon.

Statistics of the Tourism Industry in Gabon Estimate 2009 2010 2012 2015 Hotels 320 327 360 396 Hotels Rooms 5,161 5,274 5,758 6,334 Hotels with 199 203 224 246 Restaurants Restaurants Hotels without 100 102 112 124 Restaurants

Source: Gabonese Tourism Satellite Account (TSA) Report 2009

2.1.2. Tourism Policies

The four departments - General Tourism Direction, Gabon Tour, Hotel Direction, and the National Agency for National Parks (ANPN, Agence Nationale des Parcs Nationaux) - within the Ministry of Economy, Commerce, Industry and Tourism are responsible for tourism policy. General Tourism Direction is in charge of the planning and promotion of tourism development. The main work of the departments responsible for tourism policy is to control the quality of the industry through hotel and restaurant licenses and permits, and to monitor sanitation. ‘Gabon Tour’ promotion is another task of the departments. Currently, the tourism departments are under the Ministry of Economy, Commerce, Industry, and Tourism, and the budget is 5000-7000 CFAF, which is too low to run the departments efficiently. There is barely any budget for promotion. Thus there is an urgent need to expand the budget for tourism departments and to secure funds for tourism industry promotion.

036·Moving to the Diversification of the Gabonese Economy The following table shows the major policy issues of the four departments.

Major Policy Issues of the Departments Responsible for Tourism Department Major Policy Issues Management of facilities and site/ Accessibility/ System General Tourism Direction improvement/ HR training Tourism product development and distribution/ Gabon Tour advertisement and promotion/ Merchandising Staffed with experts for hotel quality control/ Improvement Hotel Direction and extension of tourist accommodation Accessibility improvement and establishment of facilities for ANPN eco-tourism

Strategic objectives and agendas proposed by experts for tourism industry development are as follows:

1. Tourism Revenue: 80~100 billion CFAF per year 2. Job Creation: 10,000 jobs in 10 years * 500 ~ 1,000 billion CFAF would be possible in 2020 3. Government Revenue: in 2020-2025, one trillion CFAF per year *The goal is approximately 90 billion CFAF per year from additional tax income

The first Gabonese government plan for tourism dates back to 1976. The plan was established by the Société d’Etudes pour le Développement Economique et Social (SEDES) with financial assistance from the Caissedes Dépôts et Consignations (CDC) of France, and was revised until 1981. Since then, the Ministry of Tourism focused on the promotion of tourism in Gabon, and Gabon Tour started in 1988. From 1994 to 1995, research has been conducted at the government level, including the UNWTO, and a new master plan to develop tourism in Gabon was introduced. In the 2000s, there were legislative efforts to privatize the hotel industry in order to create an investment-friendly environment for tourism. In 2002, Gabon designated thirteen national parks as potential tourist destinations to attract international visitors. In late 2008, the U.S. Forest Service proposed the necessary conditions for Gabon to develop eco-tourism.

Tourism plays a major role in the Gabonese economy comparable to Gabonese lumber-related industries. Employment growth within the industry is robust, and the size of investment is equivalent to 80% of the assets owned by the Gabonese. As the

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·037 country has emerged from amongst African tourism destinations, the government of Gabon is planning to attract an additional 200,000 foreign tourists within ten years, half of them for eco-tourism. If the country is successful in doing so, these tourists will create more than 30,000 jobs.

Following the growth of the global tourism industry, the president is paying close attention as tourism is increasingly recognized as an industry with high potential in Gabon. However, the promotion of tourism is in the hands of multiple agencies. While a presidential aide is in charge of overall coordination, systemic organization to promote policies is much needed.

2.1.3. Opportunities and Challenges of Gabonese Tourism

Gabon’s excellent ecological and unique culture resources, its stable and globalized social order, and the government’s strong will to develop the tourism industry make Gabon a place with great potential for tourism. The Gabonese tropical rain forests make superb natural scenery. The 13 national parks each possess different natural resources, which make them highly attractive. Because local residents still reside within these national parks, traditional African cuisine and lifestyle can be also found. Like other African regions, Gabon, as the ‘Unknown Land,’ is considered a mysterious and attractive place to visit, and it is working to formulate its own identity based on its unique and special African culture. The Gabonese social system is Europeanized due to the long period of French colonization, and, as a result, foreign tourists can travel without much difficulty. Furthermore, it is safe to travel around, as the country enjoys a fairly good level of political stability. President Bongo is determined to develop the tourism industry as a part of his economic diversification plan; as a result, more investment in the industry is expected. Last but not least, the will and passion of Gabonese government officials show that tourism in Gabon has huge potential.

As a resource repository and area of biodiversity, the 13 national parks have enormous potential on their own; however, commercialization is limited due to the difficulties involved with access and lack of facilities. It is necessary to pursue and develop eco-tourism products while preserving wildlife. Moreover, as awareness of Gabonese natural and cultural resources are relatively low, it is necessary for the parks to be listed on UNESCO’s World Cultural and Natural Heritage to provide wider publicity. Also, resource preservation and management has been identified as an issue, as local residents live in the parks. There are problems related to communication and hospitality by local residents, and thus a limited area is available for tourism.

038·Moving to the Diversification of the Gabonese Economy 2.2. Understanding the Tourism Policy Expectations of the Gabonese Government

The Gabonese government is expecting to reorganize the governance system of the tourism industry in order to strengthen the foundations of the industry, which is entering the development stage, and the role of tourism in national policy. It is expected that tourism governance will contribute to the development of tourism- related policies, revitalization of the private sector, and strengthened civil society capacity as cooperation is needed.

In the rapidly globalizing world economy, there have been suggestions on the need for a governance system to develop the tourism industry within the government. While cooperation within the government for tourism development is possible, condition may not have matured enough to establish a cooperation system with local governments, citizens, and private organizations.

Hence, the Gabonese government is seeking to achieve specialization within the government and to improve citizen and private organizations. However, establishing a governance system in relation to the nation’s policies to promote tourism is necessary when organizations and institutions are fragmented. In recognizing the need for a special opportunity, we considered the ‘Visit Gabon Year’ as a pilot project to establish a tourism governance organization.

As the first step, a governance system needs to be established for the promotion of the ‘Visit Gabon Year,’ and programs and processes for implementation need to be designed. After the implementation of the ‘Visit Gabon Year,’ the organizational committee should be transformed into a presidential committee for tourism as the second step for sustainable development of the Gabonese tourism industry. The third step is related to the stabilization of the established governance system and involves creating a plural system with industry associations and a national research institute. This project is expected to lead to a tourism governance system with enhanced private sector capacity and institutionalized national tourism organization and industry associations.

The background for promoting the ‘Visit Gabon Year’ is to bring change to the nation’s economy through tourism and to improve the image of the Gabonese tourism industry in the international community. Private and civil organizations, in addition to the government, can gain experience in establishing a system to promote tourism. This can also upgrade Gabonese tourism by institutionalizing an advanced governance system for tourism.

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·039 [Figure 1-3] Steps to Establish a Governance System for Tourism

Establishing the tourism Reorganization of the Stabilization of tourism governance system tourism governance system governance

National Committee on National Committee on Supporting Committee Tourism directly under Tourism directly under the president the president

Organizational Committee Gabon Tourism Organization GTO (+Secretariat) (GTO)

Tourism industry associations

National research institute on tourism

1st Step 2nd Step 3rd Step

3. Korean Experience in Establishing a Governance System for Tourism 3.1. Theory of Tourism Governance

Unlike the past when most decision making was made unilaterally by government officials, governance is a form of public decision making process in which stakeholders - the central government, local governments, grass root organizations, private organizations, and citizens - participate to solve problems and are held accountable in an institutionalized policy system. Hence, governance can be defined as ‘a collective rule and management system through direct participation and cooperation by not only the government but various interest groups in the process of public decision making and implementation of policies (Shim, 2009).’ This idea implies that public decision making and implementation does not depend on a bureaucratic organization. Instead, it is derived from various actors within the national and local policy network.

Given the progress in political democracy and in the separation of powers in Korea, the government has become unable to make decisions unilaterally; hence governance has become increasingly important. Due to the segmentation of community functioning and social organizations, and the increasingly influential voice of the private sector, comprehensive responses from the government are

040·Moving to the Diversification of the Gabonese Economy

Changes in the Concept of Governance 1970s 1980s 1990s-2000s - Same meaning as - Increased attention in - Emphasis on the government the international democratic - Interested in the theory towards characteristics of management ability at governance governance, such as the national level - Focused on the ability participation by civil - Interested in the to manage social society and consensus Concept system providing integration and building and public services as the development at the - Emphasis on the role Focus source for economic national level of NGOs and social - Emphasis on the PPPs - Recognition of the development to develop the local need to develop a - Emphasis on the economy new system, function government and the and process national level

- State-centered theory - State-centered theory - Rise of theories - Regime theory centered on civil Related - Growth coalition society and markets Theories theory - Good governance - Management by - Internet governance network

Source: Mi-sook Cha, Establishment and Operation of a Governance System for Local Development becoming more difficult. Governance rejects the government’s unilateral and coercive manner. By enhancing the role of the civil and private sectors, the government is protecting their functions by sharing the responsibility and power for an advanced society. In particular, the expertise of the private sector and professional organizations should be applied to the promotion of tourism, which is part of the hospitality industry. Governments around the world are utilizing the private sector to solve social problems in the tourism industry together.

Tourism governance is a mutual cooperation and partnership system among stakeholders related to the tourism industry and development. However, it is difficult for Gabon to immediately establish a tourism governance system when the country lacks an important stakeholder: mature citizens, and private and grass root organizations. Hence, cooperation among central government agencies and between central and local governments should first be promoted. Based on this, the expansion into private organizations and local citizens was suggested.

The governance system that the 2012 Gabon KSP project suggests is one that promotes exchange, negotiation, and agreement amongst different interest groups

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·041 to achieve an economic and social purpose. Unlike the common governance system for tourism, there is an emphasis on the role of private firms over that of citizens, and in establishing a tourism promotion system.

The role of tourism governance in Gabon is to effectively implement the government’s policy goals. While common tourism governance prioritizes participation of the civil society, in the case of Gabon, public and private firms and experts will play major roles and draw local participation. The Gabonese tourism governance system will take the form of a PPP.

This is because, given that tourism in Gabon is in its initial development stage, there are limits in solely relying upon the capacity of citizens. In addition, the country’s economic growth is dependent on the government’s investment and resources. As the improvement in service, not facilities, is on the rise, there are also limits in entrusting the task solely to the government. Hence, the governance system needs to be established in a way that private firms and experts are utilized as a medium between the public sector and citizens. 3.2. Korean Development Experience

As Korea launched the autonomous local government system in the late 1990s, decision making on tourism-related policies have been delegated or transferred over to the local governments. As the selection of projects as well as budget and planning have been mostly handed over to the local governments with the Special Account for the Balanced National Development in 2005, the need for cooperation between the central government and local governments to promote tourism policy has increased.

The tourism governance system in Korea is integrated with the system used to promote tourism policies. There are examples of the establishment and operation of the tourism governance system in the implementation of special projects. For the government’s systematic and efficient operation of tourism industry, the Ministry of Culture, Sports and Tourism (MOCST), the Korea Tourism Organization (KTO), Tourism associations, and the Korea Culture & Tourism Institute (KCTI) play central roles.

Established in 1962, the KTO is developing and providing high value-added tourism products, such as medical tourism products and Korean-branded products, to host foreign tourists and increase income from tourism. With 28 offices in 19 countries, the KTO pioneers overseas markets, while supporting the marketing of local governments and the tourism industry. The KCTI is a government-affiliated organization in charge of surveying and conducting research on the government’s tourism policies. In addition, there are many tourism associations which cooperate with domestic and foreign organizations for the development of the tourism industry

042·Moving to the Diversification of the Gabonese Economy and the interest of member organizations. Policy issues reported by such associations are reflected in government policies.

Along with the working-level governance system, there is also an interagency partnership system, such as the Tourist Policy Deliberative Committee based on the ‘Framework Act on Tourism.’ In 1999, the Korean government hosted the National Tourism Promotion Forum chaired by the president, which reflected the government’s proactive policy stance towards developing the tourism industry. Representatives from private firms and related organizations as well as ministers are collectively discussing current issues and seeking measures to develop the tourism industry.

In terms of the role played by interest groups, the MOCST, a government agency, is in charge of establishing policies on tourism as well as securing the budget and maintaining the system. The KTO, as a government investment agency, implements the government’s policies on tourism. In addition to the KTO, tourism associations, which are composed by personnel from the private sector, also play an important role in promoting tourism. There is one central Korea Tourism Association (KTA), and 16 provincial and city-level local tourism associations. Additionally, associations for specific sectors have also been established and are in operation, such as the Korea Association for Travel Agents, the Korea Hotel Association, the Resorts and Condominium Association, and the Korea Casino Association.

The ‘Visit Korea Year,’ a special project led by the government, is promoted through an interagency system. As an organization for tourism governance, the ‘Visit Korea Year’ committee is composed of an operating committee and a secretariat. In particular, the committee is chaired by a representative from a private firm to induce voluntary participation and cooperation by the private sector and to maximize the private sector’s capacity. Compared to the 2004 ‘Visit Korea Year,’ which was led by the KTO and the government, the private sector led the 2010-2012 ‘Visit Korea Years.’ Support was provided by the government and the KTO. The operating committee is composed of representatives of private firms, the CEO of the KTO, the CEO of the KTA, government officials, representatives from tourism-related organizations, as well as experts from the private sector. The members of the secretariat were also from the central government, the KTO, as well as researchers, who were seasoned experts from different fields.

The Korean experience with the implementation and operation of the ‘Visit Korea Years’ is as follows: the first ‘Visit Korea Year’ was in 1994, followed by the ‘Visit Korea Year’ projects in 2001-2002. From 2010 to 2012, the ‘Visit Korea Years’ are currently in progress over the course of three years.

The first 1994 ‘Visit Korea Year’ started as an effort to revitalize the tourism

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·043 industry after the ‘88 Olympics. The year 1994 was selected as it was the 600th anniversary of Seoul being designated as the capital of Korea. As part of the 1994 ‘Visit Korea Year,’ approximately 200 programs were implemented, including tourist events, overseas marketing, special projects, development of tourism packages, improvement of readiness, and promotion of participation by citizens. The project had the quantitative goal of hosting 4 million foreign tourists and earning 4.20 billion USD worth of foreign exchange from tourism. While Korean tourism stepped into the scene of international tourism through this project, it fell short of publicizing the country’s image as a tourist destination. The project was a ‘tourism promotion campaign’ attempting to eliminate negative perceptions.

The purpose of the 2001 ‘Visit Korea Year’ was to move the status of the country’s tourism to the center of Asia. Quickly overcoming financial crisis in the late 1990s, the Korean government implemented globalized and advanced projects. The 2001 ‘Visit Korea Year’ attempted to publicize the Korea identity domestically and internationally using the slogan ‘Visit Dynamic Korea -the Hub of Asia.’ In 2001, Korea achieved its goal of 5 million foreign tourists and a 9 billion USD income from tourism. The project had 52 programs under 5 fields, including hosting events, marketing to draw foreign tourists, improvement of the readiness of the tourism industry, and encouraging citizen participation.

[Figure 1-4] Organizational Chart for the 2010-2012 ‘Visit Korea Year’

044·Moving to the Diversification of the Gabonese Economy

Comparison between the 2001-2002 and 2010-2012 ‘Visit Korea Years’ 2001-2002 ‘Visit Korea Years’ 2010-2012 ‘Visit Korea Years’ Decision- ‘Visit Korea Year’ Promotion ‘Visit Korea Year’ Promotion making Committee (Government-led) Committee (Private Sector-led) Organization

2001 ‘Visit Korea Year’ Promotion Composition of Committee members: 20 Approximately 32 Promotions Committee 2002 ‘Visit Korea Year’ Promotion Committee members Committee members: 46

Administrative Secretariat for the ‘Visit Korea Support of the ‘Visit Korea Years’ Planning Group Years’ Committee

Total of 36: workers from central Approximately 26: private sector Employees agencies, local governments, experts relevant organizations

planning by the ‘Visit Korea Year’ Project Mainly through the internal ‘Visit Secretariat, implementation by the Implementation Korea Years’ Promotion Group government and private sector

10 million visitors, 13 billion USD, Goal 5.7 million visitors, 9 billion USD enter Top 20 in terms of global tourism competitiveness Promotion Strategy - Strengthen private sector leadership and hospitality service - Continuous promotion for 3 Years - Korean Tourism brand marketing 5 Strategic Projects - Develop high quality cultural and - Host Visit Korea events tourism products - Special programs to host visitors Project Details Main Project Areas - Strengthen overseas promotion - Host special events with a - Improve service for visitors differentiated theme each year - Encourage citizen participation - Host foreign visitors through special overseas marketing - Improve hospitality service by citizens - Implement programs with special incentives

‘Visit Dynamic Korea, the Hub of Slogan 2010-2012 ‘Visit Korea Years’ Asia’

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·045 The 2010-2012 ‘Visit Korea Year’ project led by the private sector will be implemented throughout this year. It is a special project attempting to increase foreign tourists dramatically. The project aims to improve the image of Korean tourism and the tourism industry as well as strengthen Korean competitiveness through maximizing synergy through large-scale national events and reorganization of the tourism industry.

In terms of the organization and operation of the ‘Visit Korea Year’, the Committee was chaired by a CEO from a private firm and included 26 members. There were 7 ex officio members including the CEOs of the KTO and KTA and the 1st Vice Minister of the MOCST. In addition, there were 25 commissioned members, including representatives from the tourism industry and related organizations as well as experts.

It will be inappropriate to directly apply the Korean tourism governance system to Gabon. The KTO was established in 1962 and has been in operation for 50 years already. In addition, 10 million foreign tourists are visiting Korea annually. Hence, the Gabonese tourism governance and ‘Visit Gabon Year’ should take into account the development stage of the country’s tourism as well as the economy, society, and culture.

4. Pilot Project Proposal for Tourism Governance in Gabon: ‘Visit Gabon Year’ Campaign 4.1. Organization of the Tourism Governance System

Because of the government’s continual support and investment to develop tourism, the tourism in Gabon is graduating from the initial stage and is entering the development stage. However, as tourism is part of the hospitality industry, voluntary participation by the private sector and citizens is needed to establish a firm tourism governance system.

The governance system needs to be established through tourism-related projects, such as the creation of tourism resources, operation of tourism programs, and hosting of festivals. Hence, a reorganization of the tourism infrastructure through the ‘Visit Gabon Year’ and transformation of the country as an attractive tourist destination are needed.

The promotion of the ‘Visit Gabon Year’ starts from setting a goal and a theme for the project. Gabon can establish two goals. Externally, the country can improve its image as a vacation and tourist destination towards tourists from Central Africa and

046·Moving to the Diversification of the Gabonese Economy Europe, and host foreign tourists. Internally, by establishing a governance system to move to the development stage, Gabon can create an advanced tourism organization.

[Figure 1-5] Establishing a Governance System to Promote Tourism

4.2. ‘Visit Gabon Year’ Campaign Program

4.2.1. Establishing Goals for the ‘Visit Gabon Year’

The term for the ‘Visit Gabon Year’ is decided as 2015-2016. The quantitative goal is to host 400,000 foreign tourists under the theme of ‘The Unknown World - Admire Gabonese Tourism.’ The 2015-2016 ‘Visit Gabon Year’ project will have 20 programs under 5 fields and 3 goals. For implementation, a specialized organization will be formed.

The three goals of the 2015-2016 ‘Visit Gabon Year’ are like as follows: improving the image of Gabonese tourism in the international community; expanding the Gabonese international tourism development; and establishing a governance system.

Names: Option 1. ‘Visit Gabon Year’ Campaign (VGYC) Option 2. Attractive Gabon Campaign (AGC) Examples: 2010~2012 Korea Sparkling Campaign Visit Japan Campaign Visit Malaysia Year Campaign Amazing Thailand Campaign

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·047 4.2.2. ‘Visit Gabon Year’ Programs

The five fields of the ‘Visit Gabon Year’ are as follows: improving hospitality and tourism service; hosting foreign tourists; systematic marketing and formation of networks; developing attractive tourism packages; reorganizing and supporting tourism infrastructure.

[Figure 1-6] Goals and Promotion of the ‘Visit Gabon Year’

4.2.2.1. Improvement of Hospitality and Tourism Service

Hospitality not only includes what foreign tourists enjoy, such as hotels, restaurants, and shopping centers, but also facial expressions and attitudes of the Gabonese people. Hospitality depends on how citizens and employees in the tourism industry treat foreign tourists and perceive the tourism industry.

048·Moving to the Diversification of the Gabonese Economy The area that needs most improvement through the ‘Visit Gabon Year’ is the overall improvement in hospitality by citizen and increased awareness on greeting tourists and showing kindness towards domestic and foreign tourists.

Preliminary preparation and campaign for the ‘Visit Gabon Year’: Set the basic plan for the ‘Visit Gabon Year’ project for systematic implementation Improve hospitality of the citizens: Campaigns to improve greeting and hygiene Improve hospitality services by employees in the tourism industry

4.2.2.2. Hosting Foreign Tourists

The greatest purpose of promoting the ‘Visit Gabon Year’ is to host foreign tourists. This entails not only enhancing Gabonese tourism resources and attractiveness, but also marketing towards foreign markets as an important strategy to increase the number of foreign tourists. However, as a campaign towards the entire world is costly in terms of time and resources, a systematic and strategic method to focus on key markets through partnerships and cooperation is important.

Market differentiation and strategies for tourism packages Host tourists from key markets Promote Year of Tourism Exchange with key markets: countries from Central Africa, Europe, and Asia Promote exchange and cooperation with sister cities Discover partnerships with other nations Support the efforts to host Meetings, Incentives, Conferences and Exhibitions (MICE): incentive tours, hosting of international meetings and sporting events

4.2.2.3. Systematic Marketing and Formation of Networks

The country needs to effectively promote and proactively publicize the ‘Visit Gabon Year’ by connecting with appropriate media outlets. The country can improve its reputation in the international community by publicizing the ‘Visit Gabon Year’ while hosting an international conference. To define the image of Gabonese tourism, various means of online and offline promotion are needed.

Hosting of the Rainforest & Eco-tourism World Conference Publicizing of Gabonese tourism as a brand (tentatively named ‘Unknown Utopia Gabon’) Secure online channels (develop a website, use social networks, such as Facebook and Twitter) Distribute marketing materials

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·049 4.2.2.4. Develop Attractive Tourism Packages

Tourism packages that demonstrate Gabon’s uniqueness and attractiveness need to be provided to foreign and domestic tourists. Tourism packages that are based on the potential of the country’s natural resources and are appropriate for targeted markets are also needed.

Increase the attractiveness of natural resources: - mainly Rainforest Tourism, the 13 national parks, cuisine that was selected by CNN, and the Albert Schweitzer village Develop tourism packages that can appeal to the various target markets, which are seasonal and have local flavor: medical, luxury, and eco-tourism Develop itineraries linked with the benefits of the local community

4.2.2.5. Reorganization of and Support for Tourism Infrastructure

Because Gabon has relatively strong social overhead capital, there are no big obstacles for foreigners to visit the country. However, the designation of the ‘Visit Gabon Year’ as a special event is to host even more visitors. Reorganization of tourism infrastructure and basic facilities are needed. In particular, IT infrastructure, such as providing information, will play an important role in the development of a modern society.

Improve readiness to receive visitors and enhance convenience for visitors: immigration services, lodging, and food Support tourism infrastructure: accessibility of transportation Improve tourist information services and create a base to utilize information technology Increase income of citizens and support employment 4.3. ‘Visit Gabon Year’ Project’s Promotion Process and Marketing

4.3.1. Promotion Process

The implementation of the 2015-2016 ’Visit Gabon Years’ project is divided into four stages: planning and preparation; declaration and preliminary events; main event; and monitoring and evaluation.

050·Moving to the Diversification of the Gabonese Economy

‘Visit Gabon Year’ Projects by Stage Year of Promotion Fields Project Responsibility 2014 2015 2016 Field 1: Improvement of Hospitality and Tourism Service 1. Preliminary preparation and campaign Planning & for the ‘Visit Gabon Year’ ○ Events Team 2. Improve hospitality of citizens ○ ○ Events Team 3. Improve hospitality service by Events Team employees in the tourism industry ○ ○ Field 2: Hosting Foreign Tourists 4. Market differentiation and strategies Planning for tourism packages ○ Team 5. Host tourists from key markets ○ PR Team 6. Discover partnerships with other nations ○ PR Team 7. Support the efforts to host MICE ○★ ○ Events Team Field 3: Systematic Marketing and Formation of Networks 8. Hosting of the Rainforest & Planning & Eco-tourism World Conference ○★ Events Team 9. Opening Ceremony for Events Team 2014 ‘Visit Gabon Year’ ○★ 10. Publicize the brand of Gabonese tourism ○ ○ PR Team 11. Secure online channels ○ ○ PR Team 12. Distribute marketing materials ○ PR Team Field 4: Develop Attractive Tourism Packages 13. Increase the attractiveness of natural Operations resources ○ ○ Team 14. Develop tourism packages that are a Product comparative advantage ○ ○★ Team 15. Develop tourism packages that are Product seasonal and with local flavor ○ ○ Team 16. Develop itineraries linked with the Product local community ○ Team Field 5: Reorganization of and Support for Tourism Infrastructure 17. Improve readiness to receive visitors Operations and enhance convenience for visitors ○ ○★ ○ Team Operations 18. Support tourism infrastructure ○ ○ ○ Team 19. Improve tourism information services Operations and create a base to utilize IT ○ ○ ○ Team 20. Increase income of citizens and Events Team support employment ○ ○

Note: ★ means ‘more important projects’

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·051 A. Planning and Preparation (2014. 01 ~ 2014. 06) Establish a detailed plan for the implementation of the ‘Visit Gabon Year’ project Create an advisory board with foreign and domestic experts and select an agency for the project Organize the project by forming a tourism governance system following the detailed plan and reflecting the budget

B. Declaration and Preliminary Events (2014. 06 ~ 2014.12) Confirm details on the event and develop tourism packages to attract foreign visitors Focus on publicizing the ‘Visit Gabon Year’ through the media Declare the ‘Visit Gabon Year’ and host an international conference to gain international attention

C. Main Event (2015. 01 ~ 2016. 12: two years) Implement the ‘Visit Gabon Year’ project following the detailed plan

D. Monitoring and Evaluation (2015. 01 ~ 2016. 12) Perform periodic monitoring on the implementation of the ‘Visit Gabon Year’ project and seek policy directions through mid-term and final evaluations

4.3.2. Marketing

Marketing for the ‘Visit Gabon Year’ should focus on overseas. However, it needs to be complemented by marketing within the country to increase recognition among Gabonese citizens. Overseas marketing needs to target Gabon’s major foreign markets for the purpose of improving awareness of Gabonese tourism and increasing the number for foreign visitors. In order to improve awareness, the country should host the Rainforest & Eco-tourism World Conference as a preliminary event and declare the designation of the ‘Visit Gabon Year’. The world renowned conference on eco-tourism will draw attention to the country.

The first targeted market for overseas marketing will be Central Africa and European countries, such as France, and will be followed by America, Oceania, and Asia. Special advertisements differentiated for each market need to be planned. Overseas marketing should also include booths during international events in 2014, briefing sessions to tourist agencies and foreign media, joint promotion with relevant institutions, as well as social networking through social networking services such as YouTube or Facebook.

Domestic marketing should comprehensively utilize various media and events in order to improve the awareness of tourism. TV commercials, news articles, billboards

052·Moving to the Diversification of the Gabonese Economy can also be used. Appointing a well-known, familiar sports player or actor as an ambassador for the ‘Visit Gabon Year’ will also improve awareness.

Along with overseas and domestic marketing, the organizational committee and the tourism industry needs to jointly participate in overseas trade fairs to publicize the ‘Visit Gabon Year.’ Promotion in Europe should be carried out effectively by cooperating with the French Tourism Organization. 4.4. Organization to Promote the ‘Visit Gabon Year’ (Tentative Organization of Tourism Governance)

4.4.1. Organization and Operational System

Gabonese tourism is at a pre-development stage. Without a mature private sector, the government’s role is critical in enhancing the ability of the private sector and creating a tourism governance system. Hence, to create the system, the public and private sectors need to play their roles effectively and systematically for the ‘Visit Gabon Year’ project’s organization and operation.

[Figure 1-7] Organization for the ‘Visit Gabon Year’ (Tourism Governance System)

The supporting committee for the ‘Visit Gabon Year’ needs to be a public organization chaired by the prime minister and should be composed of the ministers of tourism, finance, foreign affairs, congressional representatives, domestic and international experts, as well as representatives from the private sector. The supporting committee needs an expert advisory group to monitor the project.

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·053 The promotion committee is a tourism governance organization composed of representatives from the tourism industry, including airlines, lodging, restaurants, travel agents, business, academia, civil society, and other relevant organizations. The committee is a private network promoting the ‘Visit Gabon Year’ project and monitors, cooperates with, and supports the organizing committee’s planning and implementation.

The organizing committee is in charge of directing the ‘Visit Gabon Year’ project. The committee makes decisions and performs an advisory role on the implementation of the project, including planning, monitoring, and providing support.

The ‘Visit Gabon Year’ secretariat is responsible for strategic decision-making, marketing, and implementation of the project. Once the project concludes it will be transformed into the GTO and will become a public organization for sustained development of the country’s tourism. The secretariat will have one director-general, seven team leaders, and 40 team members, who should partially be recruited in the field in need of specialized skills.

Responsibilities of the ‘Visit Gabon Year’ Secretariat Employees Team Main Responsibilities (Estimated) Overall planning and coordination of the‘ Visit Gabon 1 director Year project Planning ’ 1 team leader Form the organization and manage personnel Team 5 team Operate and support the organizing committee members Monitoring, evaluation, and management of the project Host international conferences Host various events 2 team leaders Events Improve citizen participation 10 team Team Make sales calls to travel agencies in the field members Invite and support travel agencies and well-known individuals Host incentive groups Develop tourism products for foreigners to experience Gabon Product Develop products for the Gabonese 1 team leader Develop Develop tourism souvenirs and PR schemes to encourage 5 team -ment consumption members Team Manage African and European markets and develop products Overseas promotion and participation in fairs overseas Promote hosting of visitors 1 team leader PR Team Domestic PR 10 team Produce videos and advertisements in print members Online marketing and manage social network services

054·Moving to the Diversification of the Gabonese Economy Employees Team Main Responsibilities (Estimated) Improve infrastructure and services (e.g. hotels, transportation) Improve information on national parks and their facilities Reorganize and support major tourist destinations Facilities, Improve the conditions of restaurants, train workers in the 2 team leaders Service and industry 10 team Operations Organize volunteers to provide foreign language translation, members Team train drivers Improve services for visitors (e.g. food and translation services) Train the related service personnel (esp. secretariat)

The organization of the promotion committee will first take place during the policy decision-making step, prior to the actual planning and preparation step, so that the ‘Visit Gabon Year’ project can be implemented under the tourism governance system. The promotion committee will mainly be composed of interest groups, but also include representatives from firms that affect the real economy for the success of the ‘Visit Gabon Year’ project.

Once entered into the planning and preparation stage, the organizing committee will be formed. The secretariat, which will implement the organizing committee’s plan, will also be formed and will start operations. Later on, with the declaration and preliminary events the organization will expand and become more mature from the implementation stage for a successful ‘Visit Gabon Year’.

[Figure 1-8] Organization by Development Stages of the ‘Visit Gabon Year’

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·055 4.5. Budget for the Project

The budget for ‘Visit Gabon Year’ can be categorized as organizational operating costs (personnel costs), organizational management costs, project costs, consulting costs and operating costs. The budget for project cost may fluctuate depending on the size and management of the project. The current project costs can be divided into the direct implementation portion, which is appropriated by the organization in charge, and the portion implemented by agencies, worth 1.339 million EUR. The budget for the 2014-2015 ‘Visit Gabon Year’ is approximately 6 million euros.

Budget for Personnel and Operational Costs of ‘Visit Gabon Year’: Estimated Team Number (Estimated) Unit Cost (in EUR) Total Cost (in EUR) 1 director 80,000 80,000

Planning Team 1 team leader 50,000 50,000

5 team members 25,000 125,000

2 team leaders 50,000 100,000 Events Team 10 team members 25,000 250,000

Product 1 team leader 50,000 50,000 Development Team 5 team members 25,000 125,000

1 team leader 50,000 50,000 PR Team 10 team members 25,000 250,000

Facilities, Service, and 2 team leaders 50,000 100,000 Operations Team 10 team members 25,000 250,000

Total 48 - 1,430,000

Note: 1) Forty percent of the personnel will be composed of dispatched government officers 2) The expected annual personnel costs will be approximately 60% of the budget, or 858,000 EUR.

056·Moving to the Diversification of the Gabonese Economy

Project Costs for ‘Visit Gabon Year’ Project Costs Fields Project Operation (in EUR) Field1: Improvement of Hospitality and Tourism Service 1. Preliminary preparation and campaign for the 50,000 Internal ‘Visit Gabon Year’

2. Improve hospitality of citizens 20,000 ″ 3. Improve hospitality services by employees in the 30,000 tourism industry ″ Field 2: Hosting Foreign Tourists 4. Market differentiation and strategies for tourism 70,000 Agency packages

5. Host tourists from key markets 70,000 ″ 6. Discover partnerships with other nations 100,000 ″ 7. Support the efforts to host MICE 240,000 ″ Field 3: Systematic Marketing and Formation of Networks 8. Host the Rainforest & Eco-tourism World 200,000 Agency Conference

9. Opening Ceremony for 2014 ‘Visit Gabon Year’ 150,000 ″ 10. Publicize the brand of Gabonese tourism 50,000 ″ 11. Secure online channels 50,000 ″ 12. Distribute marketing materials 100,000 ″ Field 4: Develop Attractive Tourism Packages 13. Increase the attractiveness of natural resources 150,000 Internal

14. Develop tourism packages by the target markets 70,000 ″ 15. Develop tourism packages that are seasonal and 30,000 with local flavor ″

16. Develop itineraries 100,000 ″ Field 5: Reorganization of and Support for Tourism Infrastructure 17. Improve readiness to receive visitors and 150,000 Internal enhance convenience for visitors

18. Support tourism infrastructure 400,000 ″ 19. Improve tourism information services and create 150,000 a base to utilize information technology ″ 20. Increase income of citizens and support 20,000 employment Total Costs: 2,200,000

Note: International marketing fees, such as those for CNN or BBC, are estimated separately.

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·057 4.6. The Training and Use of Experts

In order to increase the effects of the ‘Visit Gabon Year’ and continually expand the operations of the organization, there is a need for experts to implement projects. However, training and employing Gabonese experts within 1-2 years to implement the ‘Visit Gabon Year’ is impossible. Hence, it is necessary to train the workforce.

Given the character of the ‘Visit Gabon Year’ project, global minded experts with basic knowledge of the MICE industry are needed. Hence, the government must proactively scout Gabonese experts working overseas and other experts who are amicable towards Gabon.

Tour guides who need expert knowledge should be able to relay accurate information quickly through standard manuals and service training. Gabon can gain a positive reputation from domestic and international visitors through the service training of drivers and restaurant workers who will become contact points for visitors.

40% of the workers at the ‘Visit Gabon Year’ secretariat should be government workers. The remaining 60% should come from Gabon and overseas. For the sustainability of the project, more than 30% of the overall workforce should work in Gabon. There should be education and training for the internal workforce from the early stages of the project. The secretariat should lead the project, while consulting agencies with expert knowledge and experience should be in charge of overseas events.

5. Expansion in the Future: Establishment of the Gabonese Tourism Governance System

The successful implementation of the ‘Visit Gabon Year’ project will enhance the organizational capacity for tourism development as well as the capacity of the country’s citizens. In particular, training to plan projects, hosting foreign visitors, marketing, improvement in hospitality amongst citizens and employees during the implementation of the ‘Visit Gabon Year’ will become a foundation for the country’s strategic development of the tourism industry in the future.

In addition, the organization implementing ‘Visit Gabon Year’ will have 2-3 years of practical experience and will be easily transformed into an National Tour Operation (NTO). The organizing committee and secretariat can be reorganized into the GTO, whose status is in between that of a government and private institution.

058·Moving to the Diversification of the Gabonese Economy On the other hand, the supporting committee for the ‘Visit Gabon Year,’ which led the support and cooperation from the government, can transform into a NTC directly placed under the president and a system capable of implementing government-wide tourism governance.

[Figure 1-9] Organizational Changes after the ‘Visit Gabon Year’ Project

In addition, based on the successful hosting of the 2015-2016 ’Visit Gabon Year,’ the country can improve the quality of the tourism industry. Through the ‘Visit Gabon Year,’ the country can diversify its tourism, which is currently based on national parks. Particularly, the improved national consciousness will allow for community tourism for local development. Ultimately, from 2020, Gabonese tourism will enter into the development stage and bring national wealth. During the development stage there will be a balance between foreign visitors and domestic visitors.

[Figure 1-10] Development Stages of Gabonese Tourism

Chapter 1 _ Developing the Gabonese Tourism Governance System: Centered on the ‘Visit Gabon Year’ Campaign·059 References

Bramwell, B. and Bernard Lane, Tourism Collaboration and Partnerships, Bristol, UK: Channel View Publications, 2000. Cha, Mi Sook, Governance System Development and Management for Regional Growth, Seoul, Korea: Korea Research Institute for Human Settlements, 2003. Choi, Gyung Eun, Local Visit Year: Achievement and Prospect, Seoul, Korea: Korea Culture and Tourism Institute, 2012. Chun, Hyo Jae, Cooperation System Development among Regions for Tourism Network Building, Seoul, Korea: Korea Culture and Tourism Institute, 2009. Kim, Duk Gi, “Korea Visit Year 2010-2012, Korea Tourism Policy”, No. 40, 2008. Kim, Hyang Ja, Cooperation among Stakeholders in Tourism, Seoul, Korea: Korea Culture and Tourism Institute, 2010. Lee, White, A Vision for Gabon: Tourism, Parks and Sustainable Development in the 21st Century, NY, USA: Wildlife Conservation Society, 2010. African Economic Outlook Website www.africaneconomicoutlook.org Shim, Won Sup, Structure and Management of Regional Tourism Promotion Cooperatives for Regional Tourism Partnership, Seoul, Korea: Korea Culture and Tourism Institute, 2008. UNWTO, “Tourism Highlights 2012”, 2012. World Bank, Doing Business 2012, Washington DC, USA:World Bank Publications, 2012.

060·Moving to the Diversification of the Gabonese Economy Moving to the Diversification of the Gabonese Economy Chapter 2

Agricultural Production Base Development, Agricultural Workforce Training, and Rural Extension System Implementation for Food Security in Gabon

1. Conditions and Limitations of Gabon’s Agricultural Development 2. Korea’s Agricultural Development Experience and Policies during the Modernization Process 3. Policy Recommendations for Modernization of Gabon’s Agricultural Sector ■ Chapter 02

Agricultural Production Base Development, Agricultural Workforce Training, and Rural Extension System Implementation for Food Security in Gabon

Hyunseok Oh (Institute of Territorial Development) Sieno Lingombe Ponga (Ministry of Agriculture, Breeding and Rural Development)

Summary

Despite favorable natural conditions and diversified domestic markets due to the petroleum-based economy, Gabon’s agricultural sector faces many limitations. Lack of effort to develop farmland, a declining workforce, inadequate technologies and their dissemination, the absence of agricultural finance and insufficient infrastructure in rural areas serve as obstacles to the country’s agricultural sector from reaching its potential. Hence, Gabon relies on imports for forty percent of its food consumption and less than one percent of the country’s land is used for agriculture.

The Gabonese government has announced a new national vision called ‘Le Gabon Emergent’ in order to diversify the economy and move away from an economic structure dependent on exports of natural resources. While detailed plans for implementation are being prepared, the government’s attention towards the agricultural sector remains very weak. The government has a medium- to long-term goal of increasing agricultural production from the current level of 5% of the GDP to 20% by 2020. Specifically, the government plans to achieve an annual growth rate of eight percent in the agricultural sector, increase the proportion of farmland to 25% of the country’s total area, and substitute approximately 50% of rice, fruit, vegetable, and meat imports. However, the goals seem far-fetched at the moment due to the postponement of land reform, an insignificant agricultural budget of 1% of the total government budget, and the lack of educational institutions to train an agricultural workforce.

062·Moving to the Diversification of the Gabonese Economy First and foremost, agricultural policies are needed to develop Gabon’s agricultural sector. Gabon needs to benchmark Korea’s systems and policies for agricultural development during the early stages of economic development in the 1960s. During the 1950s, Korea implemented a land reform policy named ‘distributing land to farmers.’ When the economic development plan was in full force in the 1960s, major policy initiatives were introduced, including: establishment of the RDA and local training institutions to develop and disseminate agricultural technologies; creation of the ‘Comprehensive Agricultural Cooperative System’ to organize producers and distribute policy loans; as well as founding an organization in charge of developing and maintaining farmland. In addition to such policies, the full-fledged New Community Movement in the 1970s improved the living conditions in rural areas and Korea was able to achieve self-sufficiency in staple grains.

On the other hand, the Gabonese government’s role in developing and managing farmland, a basic factor in agricultural production, is very inadequate. Deterioration of farmland in plantations, extensive use of land, as well as inadequate development of farmland in plots and irrigation facilities are pervasive in Gabon. The agricultural sector is short of labor due to the migration of young adults following the development of the petroleum sector. Mechanization and dissemination of new technologies are also difficult because of the aging population in rural areas. Without educational institutions to train the next generation of farmers, there are limited new hires in the agricultural sector. The lack of organization amongst producers makes group marketing and purchases difficult, and a system to transfer agricultural policy loans has yet to be formed. Policies to develop and disseminate agricultural technologies for diversification of the sector are also much needed.

Considering Korea’s agricultural development experience and given Gabon’s current condition, major policy recommendations are summarized as follows:

A. Create an APZ in Connection with Land Reform Large-scale farmland development using state-owned land and farmland distribution to next-generation farmers Create 24,000 ha of farmland and train a next-generation workforce of 5,000 people. Develop an APZ in connection with education and training facilities in nine pilot farms Establish a public institution under the Ministry of Agriculture to be in charge of creating and managing farmland

B. Establish Agricultural Education and Training Facilities for the Next-Generation of Farmers Approximately 10,000 next-generation farmers are required by 2020 in order for agricultural production to reach 20 % of the GDP.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·063 and Rural Extension System Implementation for Food Security in Gabon 50% of the next-generation farmers will come from newly established agricultural high schools. The remaining 50% will be from unemployed young adults in urban areas trained by vocational training institutions. Establish a curriculum in national universities to foster teachers for the agricultural sector

C. Expand Rural Training Functions in Connection with Agricultural Education Drastically increase the rural training function of the Institut Gabonais d’Appui au Développement (IGAD).

1. Conditions and Limitations of Gabon’s Agricultural Development 1.1. Conditions for Gabon’s Agricultural Development

1.1.1. Gabon’s Dual Agricultural Structure

Similar to most African countries, Gabon has a dual agricultural structure, in which two forms of outdated and modern agricultural production methods coexist: subsistence farming that produces tuber crops as staple foods and plantation agriculture formed by immigrants during the colonial era that produce export crops such as coffee and cacao. Subsistence farming uses farmland obtained by burning forests and has low labor productivity as it relies on manual labor. Because periodic non-cropping is required to restore the fertility of the soil, forests are burnt to obtain new farmland for subsistence farming. Hence, farmland is mostly owned by villages, and subsistence farming takes place through the village. On the other hand, Gabonese farmers also play a major role in supplying labor to cacao and coffee plantation farms.

General Conditions of Agriculture in Gabon Category Unit Total area 267,667 km2 Population 1.5 million persons Population density 5.6 persons/km2 forest, savanna, plains and unclaimed Ecosystem land within forests Climate tropical climate 22-32 degrees celsius Area of forests 198,600 (74.1%) km2 Area for cultivation (estimated) 151,550 km2

Source: The Gabonese Ministry of Agriculture

064·Moving to the Diversification of the Gabonese Economy 1.1.2. Change in Agricultural Structure

Gabon’s dual agricultural structure entered a new stage after the country’s independence. The newly emerging petroleum industry created a dual structure for the country’s overall economy, bringing major changes to the role and structure of subsistence farming. The rapid development of the petroleum industry brought rapid urbanization as well as poverty in cities and areas nearby. This led to a quick collapse in the structure of the workforce in rural areas. The exportation of natural resources, such as petroleum, and importation of industrial and agricultural products also brought major changes in consumption patterns. Gabonese citizens became used to consuming agricultural products and foods that were not previously produced within the country.2) On the other hand, with the retreat of colonial powers, plantation agriculture came close to collapse. By the 1970s, Gabon had lost its reputation as a country of high quality production and the foundation for production became dismantled. As a result, despite favorable natural conditions, Gabon’s agricultural sector has not reached its potential due to the lack of a trained workforce, inadequate foundations for production, and the absence of infrastructure connecting production to consumption.

With fluctuating international food prices, Gabon imports approximately 40% of its food. Only around 1% of the land is used for agricultural production3). While about 270,000 people, 17.3% of the total population, reside in rural areas and

Imports of Major Agricultural Products in Gabon Item Domestic Production (tons) Imports (tons) Rice Less than 1,000 68,000 Potatoes 0 1,400 Fruit n/a 3,000 Palm oil 4,100 18,000 Vegetables 3,613 6,000 Meat (Beef, Poultry, and Pork) 6,900 50,000 Dairy products 0 18,500 Eggs 52 million 1

Source: The Gabonese Ministry of Agriculture

2) Given the economy’s rapid shift to petroleum exports, Gabon’s agricultural sector was unable to fulfill the general functions of the sector during the economic growth process, such as responding to the changing demands of agricultural and food products. With increasing exports, population in rural areas shrunk severely. With the fluctuation of global prices of tropical crops, such as coffee and cacao, investment to the agricultural sector declined and the status of the sector in the economy also deteriorated. 3) According to sources from the Gabonese Government, Gabon has approximately 20 million ha of cultivable land that has not been developed although official statistics record 15.16 million ha. Major crops include cassava, bananas, taro, peanuts, sweet potatoes and corn.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·065 and Rural Extension System Implementation for Food Security in Gabon 150,000 people participate in agricultural production, the agricultural sector accounts for less than 5% of the GDP. On the other hand, urban areas suffer from dense population and poverty. Hence, developing the agricultural sector to absorb the excess workforce from urban areas, creating employment through increased agricultural production, as well as decreasing the reliance on imported food are the national task for Gabon.

1.1.3. Agricultural Production by Sector

The Gabonese MOA divides agricultural production into four areas: vegetable production, food production, cash crops production, and fruit production.

The production of vegetables, food, and fruit is mainly for domestic consumption, while the production of cash crops, such as cacao and coffee, is targeted at overseas markets and has been increasing since 2005 following privatization. Vegetable production mostly takes place near the cities. IGAD under the MOA provides technological support.4) Farming area reached 40 ha and production of vegetables recorded 4,242 tons with revenues of 290 million CFAF. The area of cultivation in 2010 a lmost doubled from the previous year. However, production increased by only 10%. The number of trainees in new farms is rapidly increasing in this area. Gabon’s cacao production reached its peak of 17,000 tons in 1975 and has decreased rapidly since the decline in global prices and suspension of government support in the 1980s.5)

4) IGAD is in charge of providing technical and educational support for SME/SMI entrepreneurship in order to develop agriculture near cities. IGAD significantly increased its activities since 2008, educating approximately 400 entrepreneurs and producing 221 entrepreneurs in 2010. 5) In 1976, the Gabonese government established a state-owned firm Société Nationale de Développement des Cultures Industrielles (SNDCI) to develop the cacao industry. However, the exports were disappointing at approximately 1,000 tons and the firm was privatized in 1998.

066·Moving to the Diversification of the Gabonese Economy

Main Statistics for Agricultural Production in Gabon Category 2008 2009 2010 2011 Estimation Vegetable production 3,613 3,857 4,242 4,773 Food crops production 1,885 2,066 2,272 3,136 Manioc production 480 520 572 1,029 Total (tons) 5,978 6,443 7,086 8,938 Farmland area for vegetables 18 16 40 45 Farmland area for food crops 183 173 363 558 Others 479 544 712 958 Total (ha)* 680 733 1,115 1,561 Number of rural households 2,189 2,541 3,129 3,974 Production value of vegetables 1,626 1,736 1,910 2,196 Production value of food crops 414 454 500 575 Production value of manioc 96 104 114 206 Total (million CFAF) 2,136 2,294 2,524 2,977 Number of trainees 273 235 920 1,120

Note: Although the farmland area for vegetables and the farmland area for food crops have increased by 1.5 and 1.1 times respectively in 2010, production has barely increased. Whether the cause is due to climate change or lack of the agricultural statistical system in Gabon is not clear. Source: IGAD

Production and Export of Cacao and Coffee (Unit: tons) Category 2007 2008 2009 Coffee production 83.3 90.7 153.4 Cacao production 109 167 136 Coffee exports 66.3 25.9 40.7 Cacao exports 93.5 160 70.5

Source: Oxford Business Group. The Report 2011 Gabon Economic Dashboard 2010

1.2. Current Status and Conditions of Gabonese Policies on Agricultural Development

1.2.1. Agricultural Administration’s Goal in ‘Le Gabon Vert’

Gabon’s policies towards agricultural development are based on ‘Le Gabon Vert (Green Gabon)’, as part of the nation’s vision, ‘Le Gabon Emergent.’6) Le Gabon Vert’s

6) For the major strategies and details of ‘Gabon Vert’, refer to “Moving to the Diversification of the Gabonese Economy: Lessons Learned from Korea,” 2011, the Ministry of Strategy and Finance of Korea.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·067 and Rural Extension System Implementation for Food Security in Gabon future development strategy for the agricultural sector is very enthusiastic for now. Under the long-term goal of the agricultural sector producing 20% of the country’s GDP, Gabon established 5-year term programs. According to the 2011-2016 5-year Implementation Plan (Food Security and Agricultural Growth Program), Gabon aims to substitute 50% of its rice imports (42% of the total grain imports), all fruit and vegetable imports, and approximately 60% of meat imports by 2016.7) The target annual growth rate for the agricultural sector is 8% for the 5-year period. The size of the budget for investment and credit extension is seven times greater than that of the previous five years. In 2011, the government’s budget for the agricultural sector was 3.5 billion CFAF (53 million EUR).8)

[Figure 2-1] Major Agricultural Export Zones in Gabon

Cacao plantation restoration project. WoleuNtem

Project to purchase cacao and coffee. Moyen-Ogooué

Development zone for palm oil (20 ha) Olam company Palm oil processing plant Ngounié

Source: The Gabonese Ministry of Agriculture

7) Gabon’s recent plan for self-sufficiency in food (un programme agricole de sécurité alimentaire de croissance/PASAC, a program of food security and agricultural growth) has 3 major programs: 1) food security (un programme national de sécurité alimentaire/PNSA, a national food security program), 2) restoration of exports (un programme de la réhabilitation des exportations agricoles en difficulté/PREA, a program of rehabilitation of agricultural exports in difficulty), and 3) intensive agriculture (un programme agricole de production intensive/PAPI, an agricultural program of intensive production). For this purpose, PASAC selected 6 strategies: publicizing PASAC programs; strengthening agricultural research and capacity; the supply of materials for agricultural production and fishery; promotion of intensive agriculture; organizations to commercialize agricultural products; and improving access to the financial sector. The plan is promoted by five agencies: IGAD, l’Office National de Développement Rural (ONADER, the National Rural Development), le Fonds International pour le Développement de l’Agriculture (FIDA, the International Fund for Agricultural Development), le CIAM et le CATH. (Source: http://www.gabon- vert.com/le-pilier-gabon-vert/les-enjeux-par-secteur/l-agriculture) 8) Gabon is a member of the CEMAC (Communauté Économique et Monétaire de l’Afrique Centrale, “Economic and Monetary Community of Central Africa”), using the CFAF asits currency. CFAF has a fixed exchange rate to the EUR. (1 EUR = 656 CFAF)

068·Moving to the Diversification of the Gabonese Economy Expanding farmland is critical to achieve such goals. The Gabonese MOA plans to expand the area of farmland to 25% of the country’s total land, designating one-third for food production and the remaining two-thirds for exports, such as coffee and cacao9). ‘Le Gabon Vert’ categorizes the agricultural sector as follows: commercial agriculture near cities producing tuber crops, fruit, vegetables, poultry, eggs, pork, etc.; subsistence farming in rural areas producing rice, corn, and beans; and export- oriented farming producing palm oil, coffee, cacao, and rubber involving private firms and foreign investment. It also intends to convert extensive farming into intensive farming. By 2020, the government plans to secure an additional amount of farmland of 70 ha. For this purpose, the government recently planned to create nine pilot farms amounting to 50 ha as well as additional farmland of 120 ha nearby to be used by farmers.

Reference 1: Contents of Gabon’s Agricultural Development Program (2011-2016) (Food Security and Agricultural Growth Program)

Implementation plans for ‘Le Gabon Emergent’ Substitute 50% of the rice, fruit, vegetables, and meat imports Annual growth of 8% for the agricultural sector Transform 25% of the total land to farmland (1/3 for food production and 2/3 for exports) 3 areas: commercial farming near cities, subsistence farming in rural areas, export oriented farming to attract foreign investment Establish nine pilot farms amounting to 50 ha of land Increase agricultural production from 5% to 20% of the GDP by 2020

Recently, high global food prices have worsened the food crisis in Gabon. In order to counter the food crisis and the continuous increase in imports of grains, such as rice, as well as fruits, vegetables, and meat, the Gabonese government has established plans to increase self-sufficiency in food. As shown in the table below, the Gabonese government has set the goal of reducing imports and increasing production of crops by up to 60,000 tons (nine times increase compared to 2008), fruits by up to 5,000 tons, vegetables by up to 8,000 tons, meat by up to 29,000 tons by 2016, when the 5-year

9) In 2009, Gabon introduced agricultural policies to develop the cacao and coffee industries. In order to re-establish its reputation for high quality cacao and coffee production in the 1970s, the government is restoring small-scale, family-operated plantations near the cities that are more than 30 years old. This is to slow the migration away from rural areas. Currently, Gabon produces approximately 300 tons of coffee and cacao, which are mainly exported to Spain, France, the Netherlands, and the United States. Through the restoration project, Gabon plans to increase the production to 2,500 tons and double the current cultivation area of 1,000 ha by 2013.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·069 and Rural Extension System Implementation for Food Security in Gabon plan will conclude. However, imports of grains are still rising because they are also used as animal feed for the production of meat. Despite the plans to substitute food imports, the country lacks detailed plans on how to secure farmland, develop and disseminate technologies, and train a skilled workforce.

Imports of Agricultural Products in Gabon (unit: 1,000 tons) Imports Production Goal Products / Year 2004 2005 2006 2007 2008 2008 2016 Rice 45 58 38 67 68 0 35.0 Grains 112 134 116 143 140 6.9 60.0 Tuber crops, such as 2.6 3.1 2.4 1.8 1.4 286.0 350.0 cassava Fruits 2.51 2.73 2.72 3.41 3.32 ND 5.0 Vegetables 5.79 6.79 6.35 5.56 6.13 3.6 8.0 Meat 28.1 31.8 31.5 43.9 48.3 ND 29.0 Dairy Products 12.2 11.8 13.3 13.7 14.3 ND -

Source: Le Gabon emergent : Plan Opérationnel 2011-2016, Volume 2 / Plan Agriculture et Elevage

1.2.2. Actuality and Limitations of Agricultural Policy in Gabon

Despite such enthusiastic plans for self-sufficiency in food production like ‘Gabon Vert’, Gabon does not have sufficient policy measures to achieve its goals. While the government plans to improve the status of the agricultural sector in the economy in addition to achieving self-sufficiency in food, in reality the budget remains minuscule. As a result, the government’s effort to build infrastructure for farmland, labor, and technology, and basic factors for agricultural development, is slow in progress. The morale of public servants is low due to the lack of policy measures. Hence, Korea’s experience in the 1960s, when policies for agricultural development were formulated, may serve as a lesson for Gabon.

1.2.2.1. Insufficient Budget for the Agricultural Sector

The budget for the Gabonese MOA in 2012 was approximately 2.2 trillion CFAF (33.5 million EUR), far less than the amount required in the 5 year plan. Of the budget, approximately 700 million CFAF (10.7 million EUR) will be used for operating expenses, such as personnel costs, leaving only 1.5 trillion CFAF (22.8 million EUR) for investment in the agricultural sector. The Ministry of Agriculture accounts for less than one percent of the government budget in Gabon.10)

10) Shown by the small allocation of budget to the agricultural sector, the lack of government attention towards agricultural development is causing indifference amongst citizens.

070·Moving to the Diversification of the Gabonese Economy 1.2.2.2. Ineffective Import Substitution of Agricultural Products

While imports account for 40% of Gabon’s food consumption, the government has yet to introduce elaborate programs for import substitution.11) Although there are numerous targets for major imported products, there is an absence of detailed programs and effective policies in terms of how the substitution will be made. Although production from small-scale commercial farming which is voluntarily popping up near cities may gradually have an impact, there is no consistent systematic, technical or marketing support. Moreover, the administrative structure for support remains obscure. Such commercial farms are under the supervision of the agency responsible for small and medium enterprises, not the MOA.

Few of the plans of the Gabonese MOA to increase agricultural production in support of small-scale farms as well as exports have been implemented. While the government announced that it will establish a fund to promote agricultural production, there have been no concrete results. In 2008, ‘La loi n°23/2008 portant politique de développement agricole durable (Law No. 23/2008 concerning sustainable agricultural development policy)’ was introduced as an incentive to increase production through tax exemptions for intermediate input. However, it has yet to be sufficiently utilized by farmers.

1.2.2.3. Lack of Effort to Develop Farmland

Regionally conducted soil surveys to discover crops best suited for agricultural production are the most basic project for all nations. So far, Gabon has not yet conducted such nationwide surveys. As a result, the government cannot make an accurate evaluation on the potential of agricultural production or regional plans for agricultural development. Furthermore, without private land ownership or an agreement amongst different industries on the distribution of land, little progress on land reform has been made.

1.2.2.4. Insufficient Training of the Workforce in the Agricultural Sector

Due to its small population and aging society, Gabon is suffering from a structural problem in securing an agricultural workforce, preventing agricultural development in Gabon. The workforce problem prevents Gabon from reaching its potential in terms of agricultural production. While Gabon’s total land area is 268,000 km2, the total population is only 1.5 million. The population is as scarce as only 5.6 people per

11) This is an indicator used for food distribution on official documents released by the Gabonese Government. It indicates the rate of dependency on foreign food including agricultural products and processed products, but may not have been calculated based on the official statistics of domestic agricultural production and imported goods.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·071 and Rural Extension System Implementation for Food Security in Gabon 1km2. Furthermore, most of the population resides in urban areas. Almost half of the total population is located in and around the capital, Libreville. Migration away from rural areas is increasing at a rapid pace for the young adult population. Mechanization and productivity increase are not taking place. Since the early 1970s, the Gabonese economy was restructured to be export oriented with natural resources such as oil. Then, the exodus of the young generation from the rural areas accelerated, but there was a lack of efforts to solve the shortage of labor in rural area through programs such as mechanization of agriculture.12)

The absence of a systematic foundation for training an agricultural workforce for the future is one of the most urgent problems. Gabon does not have high schools specializing in agriculture. Only recently did the educational policy shift to reflect the importance of vocational secondary education. In addition to high schools specializing in tourism, the government is considering the establishment of high schools specializing in agriculture. The Ministry of Agriculture is testing the possibility of long-term overseas education to acquire advanced agricultural skills from international organizations and donor countries. So far, training in Gabon’s agricultural sector is limited to a small number of farmers at agricultural technology dissemination centers. In addition to the task of applying developed technical skills locally, establishing a systematic education and training system for agricultural technology dissemination centers is urgent.13)

1.2.2.5. Need for an Integrated Approach to Develop Rural Areas

Most countries require an integrated approach when developing an area as multiple areas, including the function of education, medication, public facilities, SOC and power. Taking this into account, the Gabonese government has assigned the task of rural development to the MOA and enabled the Ministry to coordinate relevant policies amongst various agencies. However, it is widely known that such cooperation amongst agencies is not taking place.

12) Agricultural production in most rural areas relies on manual labor. Except for areas near cities, agriculture in Gabon consists of subsistence farming. Farmland is used extensively and productivity of farmland is maintained through non-cropping and slash and burn fields. Substituting labor with machines and increasing productivity through the use of fertilizers and pesticides are difficult in reality. 13) In March 2011, Gabon’s government announced its plan to establish six agricultural test sites and create modern villages with agricultural technologies and educational and medical facilities near urban areas. Prior to this, in 2010 the government had announced plans to establish five agricultural zones based on self-sufficiency plans and to disseminate advanced technologies in connection with overseas projects with Brazil, China, Israel, and Morocco. The creation of an agriculture guarantee fund worth 900 million CFAF and a special policy on land were also announced for promotion of the agricultural sector.

072·Moving to the Diversification of the Gabonese Economy The roles of the central and local governments in developing rural areas are differentiated in Gabon. Due to the long period of centralized administration in terms of policy decision making and implementation, local governments play a minor role in rural development. Currently, ‘Le projet de loi sur la décentralisation (the draft law on decentralization)’ by the legislative branch aims to transfer the central government’s authority to local governments, opening the door for an integrated approach towards rural development. In addition, joint projects with international organizations, such as FIDA (the International Fund for Agricultural Development), are also taking place.

1.2.2.6. Weak Foundations in Production within the Livestock Industry

With westernized food consumption patterns starting to prevail, consumption of meat and dairy products are increasing rapidly, especially in urban areas. However, the production capacity of Gabon’s livestock industry remains limited. Production of poultry, such as chicken, duck, and pork requires a relatively short time for breeding, and is taking place in rural areas near cities. Yet, technology and conditions for processing and distribution are insufficient to meet the demands of urban areas. Despite the increasing demand for beef, malaria and other local conditions make it difficult for demand to be met.

1.2.2.7. Low Level of Coordination among Producers

Generally, small-scale farms operated by families respond to the market by coordinating amongst themselves during the value-adding process, which includes production, processing, and distribution. So far, Gabon does not have an agricultural cooperative for the purpose of group purchases and sales. A few agricultural corporations exist but are based on a low level of cooperation. These agricultural corporations, legally called cooperatives, own and distribute land, and produce and sell agricultural products individually in selected areas. There are limited cases where water for agricultural use is jointly managed, but there are no cases of funds being accumulated for joint projects.

So far, Gabon lacks legislation for cooperatives. On December 15, 2010, the ‘Acte Uniforme OHADA, relatif aux droîts des sociétés coopératives (the OHADA Uniform Act relating to the rights of co-operative associations)’ was amended, requiring registration by agricultural corporations. The OHADA law designated the Ministry of Agriculture for registration, and the ‘Direction Générale du Développement Rural (Directorate General of Rural Development)’ within the Ministry manages the process. Since September 2012, all cooperatives are required to register.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·073 and Rural Extension System Implementation for Food Security in Gabon 1.2.2.8. Industries Related to the Agricultural Sector

Industries related to agriculture are also weak. In the past, a few companies who have roots to state-owned farms have processed sugar, palm oil, rubber, flour, and poultry. However, there is a lack of equipment, machines, fertilizers, pesticides, logistical infrastructure, and an overall weakness in the food processing industry to support the modernization of the agricultural industry.14)

Reference 2: Case Study for Agricultural Cooperative Corporation: GEMO*

1. Established in 1993 by approximately 30 farming households 2. Received European Union (EU) support on wells, irrigation, and storage facilities 3. No record of receiving support from the Gabonese government 4. Government policies had no practical impact or provision of support to farmers. 5. Farmers had difficulties in making demands to the government in written form. 6. Government policies to build a foundation for agricultural production is desperately needed; government investment must take place for import substitution. 7. Lack of agricultural education and schools 8. Consumers in close proximity are directly visiting farms to purchase vegetables. 9. Consumers are purchasing food and agricultural products in the market at a lower price. 10. Although called a cooperative, there is a lack of group purchases and sales 11. Certain cooperative activities are taking place; monthly fees are collected as mutual aid funds to operate common facilities. 12. Necessary to develop such corporations as cooperatives in addition to building a foundation for production

*For a better understanding of the reality of agriculture in Gabon, the case of operation of a cooperative association located nearby Libreville learned during the pilot study to Gabon will be briefly introduced. According to interviews with the head of the cooperative association, there were no actual policy measures by the government to encourage agricultural activities.

14) Société d’Investissement pour I’Agriculture Tropicale (SIAT) Gabon owns 16,000 ha of plantations. Approximately 9,100 ha are used to produce rubber plants and 6,500 ha are used to cultivate palm trees for palm oil production. In addition, SIAT Gabon owns a 100,000 ha farm, with the capacity for 7,000 cows. Société Meunière et Avicole du Gabon (SMAG) monopolizes grain imports and production of animal feed, and holds 60 % of market shares for eggs in the country.

074·Moving to the Diversification of the Gabonese Economy 2. Korea’s Agricultural Development Experience and Policies during the Modernization Process

2.1. Korea’s Economic Growth and Development of the Agricultural Sector

With limited natural resources and scarce accumulated capital, Korea followed an export-oriented economic growth model, emphasizing the development of human resources and exploring overseas markets. After the full-fledged government-led economic development in the late 1960s, Korea underwent industrialization, which focused on light industries in the 1960s and heavy industries in the 1970s. Since the 1980s, Korea’s economy has slowly transformed into an open economy. The agricultural sector played a very important role during Korea’s economic growth. Above all, an increase in productivity by the agricultural sector allowed the workforce to participate in industrialization. The agricultural sector also responded to the changing food consumption patterns and diversified production.

Korea’s Agricultural Sector Category 1970 1980 1990 2000 2010 Per capita income for all households 250 608 6,151 10,888 20,759 (current dollar rate) Percentage of the agricultural production in 29 16 9 5 2.2 GDP (%) Ratio of agricultural households among 42 27 15 9 6.3 total number of households (%) Agricultural population (%) 50 34 18 11 6.6 Food self-sufficiency (%) 80 56 43 29 25

Source: Ministry for Food, Agriculture, Forestry and Fishery; 2012 Food, Agriculture, Forestry and Fishery Statistical Yearbook

Land Use in Korea Category 1970 1980 1990 2000 2010 Total area (1,000 ha) 9,848 9,899 9,927 9,946 10,003 Forest (%) 67 66 65 64 64 Farmland (%) 23 22 21 19 17 - Rice paddy field (% of Farmland) 55 60 64 61 57 - Upland field (%) 45 40 36 39 43 Average farmland per agricultural 0.9 1.0 1.2 1.4 1.46 household (ha)

Source: Ministry for Food, Agriculture, Forestry and Fishery; 2012 Food, Agriculture, Forestry and Fishery Statistical Yearbook

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·075 and Rural Extension System Implementation for Food Security in Gabon [Figure 2-2] Korea’s Economic Development Process and Agricultural Development

[Figure 2-3] Agricultural Development in Korea and the Role of Major Organizations

When the majority of the population was working in the agricultural sector in the early 1960s, Korea introduced various policies to intervene in the agricultural sector

076·Moving to the Diversification of the Gabonese Economy through five-year economic development plans. In particular, the 1960s was a period when full-fledged economic development led by the government took place. Policies toward the agricultural sector were promoted simultaneously as they were within the industrial sector, covering loans, overseas markets, and the development of light industries. The agricultural bank merged with the National Agricultural Cooperative Federation (NACF) and local training institutions in rural areas, and the Korea Agricultural and Rural Infrastructure Corporation was established. The nationwide efforts to develop the agricultural sector took off with the establishment of such policy institutions, and resulted in the New Community Movement and self- sufficiency of rice in the 1970s.15)

Korea’s various experiences in agricultural development can contribute to Gabon in achieving the goals of sustainable agricultural development and self- sufficiency in grains in the medium-to long-term program of ’Gabon Vert’. In particular, this report will introduce Korea’s methods of reform to acquire farmland, projects to construct a production zone and training of the workforce, which will serve as most helpful. 2.2. Major Policies for Agricultural Modernization in Korea

2.2.1. Land Reform in the 1950s

Land reform in Korea was abruptly put to a stop prior to the Korean War. The purpose of land reform was to create a large class of independent farm owners. Korea’s land reform, which eliminated the landlord-tenant relationship formed under Japanese occupation and increased agricultural productivity by distributing land to families, has many lessons for the land reform currently discussed in Gabon. Gabon does not have an established land-ownership system. Except for private land in cities and suburbs, land is mostly owned by the state or villages. Hence, the focus of the current discussion on land reform revolves around how to allocate state- owned land to each industry. The Ministry of Agriculture plans to increase the portion of farmland to 25% of Gabon’s total area and is facing the task of how to distribute developed farmland.

2.2.1.1. Agricultural Sector before Farmland Reform

After Korea’s independence (from Japan) in 1945, the main challenges for the agricultural administration of Korea was land reform and the management of grains

15) For the role of the agricultural sector in Korea in different development stages, refer to Moving to the Diversification of the Gabonese Economy: Lessons Learned from Korea, 2011.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·077 and Rural Extension System Implementation for Food Security in Gabon in order to satisfy the food demand by refugees and repatriates.16) On the other hand, one of the important political and economic challenges in Korean rural society was the intensified relationship between landlord and tenant. Instability in the rural areas increased due to social instability from the emergence of new landlords, increase in absentee landlords, widespread tenancy disputes, and a sudden increase in the number of tenant farmers followed by the exodus of tenant farmers throughout the colonial period in Korea.

By the end of 1945, tenant farming accounted for 1.40 million hectares (ha), or approximately 64.8% of the total farmland (approximately 2.22 million ha). On the other hand, only 35.2% of the total farmland (0.82 million ha) was cultivated by independent farmers. Of the farming households, almost half of them (48.9%) relied on tenant farming while 13.7% farmed on their own land. Tenant farmers farmed their own land accounted for 34.6%. However, 2.8% of the households engaged in farming owned no land or were involved in tenant farming. At the time, as tenant farming costs would reach an average of 50% of the harvested revenue, riots against exploitation by tenant farmers were prevalent throughout Korea. Thus, the land system focused on securing farmers with their own land through farmland reform as an urgent and timely challenge.

2.2.1.2. Systematic Foundation for Farmland Reform

In 1948, after the end of rule by the United States Military Government in Korea, the foundations for land reform were established through the enactment of an act in the Constitution with the inauguration of President Lee Seungman. The 86th clause of the Constitution stated that ‘Farmland would be distributed to farmers and the method of distribution, limitations on ownership, and ownership rights would be decided in accordance with the law.’ This became the basis for the Farmland Reform Act which came into effect in June 1949. The issues of determining compensation amounts for land, limitations of ownership, classification of family-farming of owned land, and farming of owned land with a hired workforce emerged as a result of the enactment of the Farmland Reform Act.

Meanwhile, the Ministry of Agriculture and Forestry (MOAF) conducted a survey on all farming households before implementing farmland reform. This survey proceeded by each household reporting on their farming circumstances, including the sizes of actual farming areas and arable land, number of family members and workers, and status of equipment and livestock. Consequently, Korea could calculate

16) Korea Rural Economic Institute, 50 Years History of Korea’s Agricultural Administration, Chapter 3: Land System, vol.1,200p., 1999.

078·Moving to the Diversification of the Gabonese Economy the total area for reform as 601,000 ha, amounting to 29% of total arable land in Korea.17)

2.2.1.3. Method for Farmland Distribution

Land subject to reform was defined as land with records of Japanese or ambiguous ownership, used for non-subsistence farming or subsistence farming exceeding 3 ha. The Korean government purchased such land and distributed it to small-scale farmers.

The MOAF publicly announced the amount of compensation for farmers and owners of distributed farmland. The state issued exchange bonds to the farmers and land securities to the land owners. The state issued the bonds based on the price of land, promising to pay 150% of the annual harvest for five years to former owners. On the other hand, a committee was established to select standard mid-price farmland and determine compensation by the category and size of the land.

After the compensation and purchasing process was concluded, the government distributed the land up to 3 ha to all small-scale farmers. The price for the land was repaid at the cost of 30% of the harvest in grains or in money over the process of five annual installments.

2.2.1.4. Success of Land Reform

Such success in land reform can be seen as the establishment of a system for farm owners. The ratio of the land owned and farmed by the same individual was around 35% at the end of 1945 but rapidly increased to 61% by the end of 1948, and rose to 88% in April 1950. As a result of the reform, 1.02 million ha were distributed to small- scale farmers, consisting of land formerly owned by the Japanese and 755,000 ha of purchased land. However, forced sales of land to small-scale farmers by landowners prior to the reform decreased full potential effect of land reform. Extending the land reform scheme became impossible due to the Korean War in 1950. Also the five annual installments for payment of the land were extended, with 1964 as the new deadline. Farmland reform in Korea was enforced during the chaotic period of the Korean War when there was no political incentive for the government to protect the new land owning farming households. This resulted in deepening problems related to farmland leases.

Unlike Korea’s experience of purchasing land from landowners, Gabon’s land

17) Korea Rural Economic Institute, 50 years History of Korea‘s Agricultural Administration, Chapter 3: Land System, vol.1,200p., 1999.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·079 and Rural Extension System Implementation for Food Security in Gabon reform should involve the distribution of farmland to farmers after government- driven land development. Hence, methods to secure funds to develop farmland and the methods of distribution will be at the center of this discussion.

2.2.2. Development and Improvement of Farmland

Projects to improve farmland are usually led by the government in most countries. Reclamation projects and expansion of irrigation to develop farmland as well as assisting agricultural production through recovery from disasters and renovations are major roles of the government in the agricultural sector. One of the weakest aspects of Gabon’s agricultural sector is the development of farmland. With the exceptions of plantations formed during the colonial era to export coffee and cacao, most farmland for subsistence farming is acquired from burning forests and non-cropping. The goal to increase farmland to 25% of the total land seems unattainable, given the lack of a specialized government organization and budget. There are three possible approaches to develop farmland in Gabon. The first is to restore the colonial-era plantations near cities. Secondly, farmland can be acquired from forests, so that crops can be grown and imports can be substituted. As of 2008, Gabon imported 140,000 tons of grain. Areas convenient for irrigation should be selected for farmland and necessary irrigation systems can be built. Thirdly, areas suitable for distribution should be selected for export-oriented crops, such as coffee and cacao, and thus may attract foreign investment.

[Figure 2-4] Korea’s Farmland Development and Management System

080·Moving to the Diversification of the Gabonese Economy 2.2.2.1. Trends in Projects for Farmland Improvement

Until the 1960s, projects for farmland improvement were often called irrigation projects, focusing on irrigation and drainage. The projects were mostly implemented by private organizations called Irrigation Cooperatives. As the Land Improvement Project Act was enacted in 1961, projects Included not only irrigation but also cultivation, reclamation and reorganization of farmland. Then, Irrigation Cooperatives renewed their names to Land Improvement Cooperatives.

The agricultural infrastructure projects in Korea were first reform throughout the 1960s. Development in water for agricultural use which had formerly focused on the development of reservoirs and dams changed into the development of pumping stations and ground water. In addition, bench terraces for rice planting and readjustment projects of arable land were attempted while Irrigation Cooperatives merged and integrated.

Reform in the agricultural infrastructure in Korea continued for 20 years from the 1970s to the late 1980s. As foreign loans were introduced, the conventional way of doing business and the technical level were transformed. Moreover, promotion of agro-based and rural living environments was attempted for comprehensive and balanced development in Korea.

Once the Land Improvement Project Act was substituted with the Rural Modernization Act in 1970, the projects emphasized the concept of rural modernization and agricultural mechanization, as well as improvement of rural housing, and electrification. Additionally, Land Improvement Cooperatives changed their names once again to Farmland Improvement Cooperatives.18)

2.2.2.2. Establishment of Institutions Exclusively for Farmland Improvement

As the Rural Modernization Act was enacted in 1970, the Agricultural Development Corporation was newly established under the MOAF an implementing agency, merging the Land Improvement Cooperatives and Associations, as well as the Underground Water Development Corporation.

On January 1, 2000, the Farmland Improvement Cooperatives, Farmland Improvement Associations, and the Rural Development Corporation were merged into the Korea Agricultural and Rural Infrastructure Corporation. In December 2005,

18) Such cooperatives had a public characteristic, seeking to improve the welfare of cooperative members, i.e. farmers, and operated with cooperative fees as well as government subsidies. As of September 1997, Korea had 105 farmland improvement cooperatives and associations.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·081 and Rural Extension System Implementation for Food Security in Gabon its name was changed to the Korea Rural Community and Agriculture Corporation. The Korea Rural Community and Agriculture Corporation is a public institution responsible for the following tasks: 1) agricultural infrastructure development including irrigation, 2) maintenance of infrastructure and efficient management of irrigation, 3) determining the appropriate size of small-scale farms, and 4) improvement of living conditions in rural areas.19)

2.2.3. Development and Dissemination of Agricultural Technologies

Gabon’s rural training project does not link agricultural education with research and development (R&D) or training functions. Rural training activities take place with little relation to agricultural administration. Gabon lacks an agency specializing in developing modern agricultural technologies to diversify production. Agricultural research in universities is also not exclusively tied to a training function. There are no high schools specializing in agriculture to improve the skills of the workforce, nor are there institutional measures to absorb migration away from rural areas. While commercial farms producing fruit and vegetables near cities have formed small-scale agricultural associations to exchange information and secure markets, they have yet to become organized or to develop as agricultural cooperatives. In 2011, the Gabonese government announced that it will establish six pilot projects near cities as a part of a modern rural community development project with technology, education, and medical facilities. However, the setting of such projects was supported by Israel and other foreign countries, and the government’s stance on training projects remains uncertain.

2.2.3.1. Trends in Rural Training Projects

Korea’s rural training projects have played a pivotal role in the modernization of the agricultural sector. The Agricultural Improvement Institution in 1947, the Agricultural Technology Institution in 1949, and the Agricultural Institution in 1957 were established for the rural development at the national level. Currently, those institutions have changed into the Rural Development Administration (RDA), which was inaugurated on the basis of the ‘Agricultural Community Development Promotion Act’ in 1962. Korea’s rural training centers are categorized as three levels: the Rural Development Administration at the national level; provincial rural development administrations; and agricultural training offices at the city or county level. This structure enables the outcome of research and development at the national level to be transmitted to the village level.

19) Refer to www.ekr.or.kr for more details on the history and activities of Korean Rural Community and Agriculture Corporation.

082·Moving to the Diversification of the Gabonese Economy The Agricultural Extension Service was established after the Agricultural Institution was launched in 1957. After the armistice in the Korean peninsula, the United Nations’ affiliate organizations submitted a report addressing the issue that introduction of agricultural extension services was an important matter for Korean agriculture and rural development. The Korean government, Parliament, and the Economic Cooperation Administration signed an agreement on the Agricultural Extension Service Development based on the report. Furthermore, the Agricultural Institution was established at the same time as the enactment of the Agricultural Extension Service Act. The Agricultural Extension Service Act had contributed to the establishment of the current Korean agricultural training official system by strictly distinguishing those from administrative positions according to the article 6 of the Act.20)

The Agricultural Community Development Promotion Act addressed the establishment of the Rural Development Institution as an institution in charge of agricultural extension services in 1962. It unified the rural training system as national institutions in 1962 by establishing national rural development institutions which are now named ‘agricultural technology institutions’ at the county level, and rural training centers which as now named ‘agricultural technology centers’ at the township level.

Later in 1963, Agricultural Extension Offices were extended down to the township level. Technical officers were in charge of agricultural technologies, agricultural development plans, and technical training, as well as departments in charge of training, crops, producers, development, and improvement of living standards under every Agricultural Extension Office. Specialized trainers were also responsible for displaying, advertising, and training new agricultural technologies developed by research institutions. Agricultural Extension Offices not only had extended agricultural technology but also conducted activities to improve rural living conditions through developing and educating youths and women in rural areas. This had a remarkable role in rural modernization.

However, in 1998, with the introduction of the autonomous local government system, agricultural extension projects in Korea saw a great change. The provincial level and city or county level Agricultural Extension Offices fell under the authority and supervision of local governments from formerly being independent public organizations. Their names were also changed to Agricultural Technology Centers and Agricultural Research Services.

20) Korea Rural Economic Institute, 50 Years History of Korea’s Agricultural Administration, Chapter 9: Dissemination of Agricultural Technology, vol.1, 703p., 1999

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·083 and Rural Extension System Implementation for Food Security in Gabon [Figure 2-5] Korea’s Agricultural Technologies Development and Dissemination System

2.2.3.2. Laws on Agricultural Extension Projects

According to the Agricultural Community Development Promotion Act(Amended by Act No. 10939. Jul. 25. 2011), Article 2.2, the term ‘agricultural community guidance projects’ entails the following duties: 1) enhancement of the agricultural production capacity and promotion of farmer organizations aimed at improving the lives of farmers; 2) training of agricultural successors, such as adolescents living in the agricultural community and successors to agricultural managers; 3) distribution of high quality seeds and breeding stocks for sustainable and stable production or agricultural or livestock products; 4) distribution of technology developed in experimental research projects; 5) development of regional agriculture and the development and distribution of farmers’ technology to resolve troubles found on the spot; 6) scientific forecasting of diseases and pests harming crops, and the distribution of information on controlling pests or diseases and guidance on technology prepared for climate damage; 7) guidance for the improvement of the quality and grade of crops; 8) guidance on disease prevention technology to prevent animal diseases.21)

2.2.4. Agricultural Education and Development of the Labor Force

Other than agricultural research in national universities, Gabon lacks systematic training of the agricultural workforce. Without vocational training institutions in

21) http://elaw.klri.re.kr/kor_service/lawTotalSearch.do

084·Moving to the Diversification of the Gabonese Economy general, high schools specializing in agriculture do not exist in the country. Given the importance of vocational training, Gabon is planning to establish a vocational high school for each sector. However, even with a high school specializing in agriculture, securing a workforce in the future generation is uncertain as migration away from rural areas has already taken place, especially for young adults. Hence, in addition to high schools, operating educational institutions to absorb young adults earning low wages in slums near cities is a very urgent task.

2.2.4.1. Trends in Agricultural Education

Agricultural education has a long tradition in Korea. Systemic agricultural education already existed during the Chosun period, with agricultural officers at the township level responsible for promoting agricultural activities to the people. Modernized agricultural education started in 1904 with the proclamation of the ‘agricultural, commercial, and technical school system’ and the establishment of ‘Suwon Agricultural and Forestry School’ since 1907. Afterwards, agricultural education and training matured as many agricultural or vocational schools were established in Daegu, Pyongyang, Jeonju, Hamheung, Jinju, Gwangju, Chuncheon, Gunsan, Jungju and Jeju. It was a turning point of Korea’s modern agricultural education when Suwon Agricultural and Forestry School merged with the Agricultural College at Seoul National University.

From the point of independence to the 1950s, agricultural education expanded rapidly. In 1945, there were 30 agricultural high schools. By 1952, there were 97, and this further expanded to 135 in 1956. The number of students also increased to 49,000. The rapid increase was partly due to increased enthusiasm for education as students were given the privilege to postpone their military duties. In addition, Korea aimed to establish 40% of its high schools as vocational high schools as part of national policy.

In 1962, with the Agricultural Community Development Promotion Act, the RDA was launched with the reinforcement of training projects in rural areas. In 1963, the department of agricultural education was established as a public educational agency for fostering agricultural educators in order to cultivate more agricultural extension officers as well as teachers for agriculture high schools. After the 1990s, training put more emphasis on capacity building for own account workers for agriculture. Also, educational curriculums and policies for activating agriculture, forestry and fishery were reformed. Each province designated one to two agricultural high schools for training own account workers and subsidized automatized and modernized facilities and equipment, dormitories, etc. In 1995, the Korea National Agricultural College was established under the RDA in order to train youths into elite farmers in preparation for the future.22)

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·085 and Rural Extension System Implementation for Food Security in Gabon 2.2.4.2. Changes in the Agricultural Education Curriculum

Agricultural education has tremendously changed along with the transition and changes in Korean agriculture. In 1955, a comprehensive evaluation system for operating demonstration farms was introduced in agricultural high schools throughout the country, and agricultural education was strengthened to expand practical exercises into the curriculum. Since agricultural training institutions for teachers were established in 1963, new educational curriculum was adopted by redefining the objectives and direction of agricultural education. The goal of the curriculum was to enable agricultural high schools to educate mid-level managers in the sector. For this reason, regardless of their majors, students were required to take mandatory classes in nine subjects, including soil and fertilizer, crops in general, reforestation, poultry, small and medium size farm animals, silkworm farming, horticulture, agricultural management, and agricultural crafts. All classes were evenly distributed between theory and practice.

Since the 1970s, agricultural education faced new challenges because of industrialization and urbanization in Korea. As a number of agricultural high schools started changing into academic high schools due to a reduction in the farming population and the agricultural sector in the economy, 125 high schools, including 65 specializing in agricultural education, were in charge of agricultural education in Korea. The goal for vocational education in agriculture changed to nurture mid-level managers as well as technicians.

Agricultural education has drastically changed since policy for fostering a young agricultural workforce was adopted in the 1980s. To this end, self-sustained farming course was introduced in ten agricultural high schools nationwide. In addition, greater emphasis was placed on previous farming experience and the willingness to be engaged in farming in the future for students and their parents rather than academic grades when selecting students. Educational courses focused more on teaching practical farming skills instead of teaching only theoretical farming in order to motivate the farming sector.

Since the 1990s, content of agricultural education has undergone drastic reforms in order to account for the rapid changes of an industrialized society. The reforms aimed to produce a comprehensive agricultural education to students majoring in production. On the other hand, majors related to agriculture tried to maximize vocational skills of students. Thus, new subjects were added to the curriculum such as agricultural development, agricultural production environment, and agricultural

22) Korea Rural Economic Institute, 50 Years History of Korea‘s Agricultural Administration, Chapter 4: Agricultural Work-force and Building Management Community), vol.1, 337p., 1999

086·Moving to the Diversification of the Gabonese Economy production materials, etc. Practical exercises for basics and business administration were also put into separate classes. Through these reforms which reflect the changes of the society and the propensity of students, the names of schools have changed and large-scale reforms of departments and majors were carried out. As a result, the number of majors related to agriculture, forestry and live-stock has greatly decreased with numerous new majors such as food-processing and horticulture being introduced. 2.3. Implications of Korea’s Experience on Agricultural Modernization

The process of agricultural modernization in Korea is well-known for the accomplishments of the New Community Movement in the early 1970’s and the self- sufficiency in staple grains symbolized by the Green Revolution in the late 1970’s. These achievements in agriculture became an important foundation to Korean economic development and industrialization. Agriculture provided a food supply, jobs and a domestic market, which were required by industrialization, hence, promoting the modernization of the Korean economy.

The role of the government was very important in the modernization process of Korean agriculture. The government led private sectors in nearly every factor of agricultural production such as land, labor, capital and technology, including playing a remarkable role in the consumer’s market and produce distribution. The government played an important role in the agricultural modernization process partly because the socio-economic status of agriculture was already strong traditionally but also because the economic development perspective showed that industrialization was difficult to achieve without agricultural modernization. This perspective can be seen significantly during the five-year economic development plan promoted during the course of economic development in the 1960s through the implementation of various agricultural policy infrastructure. The agricultural administrations that function as major agricultural infrastructure were established during this period.

The next table explains important political measures that were taken in the process of modernization of Korean agriculture in the post-1950s era. The major recommendations were summarized based on the Korean experience. Among them, the contents related to expanding regional agricultural extension service agencies such as land organization, training of workforce and technological transfer will be explained more concretely in the part for recommendations.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·087 and Rural Extension System Implementation for Food Security in Gabon

Major Policy Recommendations for Gabon’s Agricultural Development Korea’s Agricultural Development Major Recommendations for Experience Gabon’s Agricultural Development - Land is mostly owned by the state or villages: lack of private land ownership Farmland Reform in the 1950s system - Created a large class of independent farm - Necessity to develop and distribute owners state-owned land - Need to have farmers settle by allowing repayment through harvests 5-Year Economic Development Plan and Agricultural Development since the 1960s: Introduced various policies to intervene in the agricultural sector - Establish local rural training ·Development and dissemination of institutions at the national - agricultural technologies provincial/city - city/county level - Establishment of the RDA and local rural - Disseminate modern agricultural training institutions in rural areas to develop technologies developed at the and disseminate agricultural technologies national level to villages

- Necessity for a national level ·Farmland development and improvement organization to develop, manage and - Establishment of Korea Agricultural and maintain farmland Rural Infrastructure Corporation for the - Most countries established such development, management, and institutions during the modernization maintenance of farmland of agricultural sector - Establish secondary educational institutions specializing in agriculture, ·Expansion of educational institutions to train which focus on training agricultural the workforce workforce during the modernization process - Connect with rural training institutions

·Established a comprehensive agricultural - Transform the current agricultural cooperative system corporations into an agricultural - Comprehensive agricultural cooperative cooperative structure to enable group system (merger between agricultural bank purchases and sales and the NACF) and expansion of agricultural - Necessity to link agricultural finance finance and organization of producers with credit projects

·Modernization of the agricultural market - Established Agricultural and Fishery - Necessity to modernize the market for Marketing Corporation to modernize the agricultural products market for agricultural products - Living conditions in rural areas and New Community Movement in the 1970s logistical infrastructure need to be - Self-sufficiency in major grains and improved improvement of living conditions in rural - Necessity to train new leadership for areas rural development

088·Moving to the Diversification of the Gabonese Economy The 1950s example of Korea creating farm owners through land reform with the purpose of promoting production may have considerable implications in connection with land reform in Gabon. The issue of Gabonese land reform, without the complete development of the private ownership system of agricultural land, could have been realistically resolved by opening the government owned land to create new agriculture schools and providing the land to the graduates who would become future farmers. In the case of developed countries including Korea, a special agency under the MOAF is in charge of problems related to land development, management and maintenance. In the case of Gabon, it is advisable to establish an exclusive organization for agricultural development as a prerequisite. One point hindering the feasibility of future Gabonese agriculture is the lack of an educational system for future farmers. It is hopeful that Gabon’s government is now revising the policy direction to implement agricultural high schools as a part of promoting a vocational school.

The political implication based on Korean agricultural modernization is that the government implemented the appropriate policy infra early and rapidly. Also the government led modernization in land, labor and technology sectors which are the major factors in agricultural production. Also, a significant budget and administration were inserted in the same sector. The Gabonese government, if planning to promote the agricultural sector as part of future national wealth, must seriously consider implementing policy infra in the action program ‘Gabon Vert’. The following table compares Korea’s agricultural development during the early stages of economic development in the 1960s and Gabon’s current condition.

Comparison of Korea’s and Gabon’s Conditions for Agricultural Development Korea (1960s) Gabon (Today) Comparison Deterioration of Lack of development of Irrigation, intensive plantations, extensive modern farmland as use of land, use of land, lack of well as an organization Farmland development of land development of land by responsible for by lots, irrigation lots, lack of irrigation development and facilities facilities maintenance of farmland Aging population due to migration of young adults, decreasing Abundant workforce, population in rural training through areas, lack of vocational agricultural Lack of agricultural Workforce training including the education, provided education agricultural sector, labor force for widespread industrialization unemployment and low-income population near cities

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·089 and Rural Extension System Implementation for Food Security in Gabon Korea (1960s) Gabon (Today) Comparison Established institutions lack of research and Technology for R&D and training development functions, Weak R&D and training development functions, systemic weak training and functions and training training from central educational functions to village level

Organization of Organization of producers through producers at a Low level of Organization agricultural cooperative level, lack organization among of producers cooperatives, research of group purchase/sale producers associations by crop or educational functions

Policy to simultaneously Agricultural budget of National Policy develop agricultural less than 1% and industrial sectors.

Lack of SOC, such as SOC in rural Expansion of SOC roads, electricity, and areas such as roads water

3. Policy Recommendations for Modernization of Gabon’s Agricultural Sector

In ‘Gabon Vert,’ a pillar of the country‘s national strategy, the agricultural sector plays an important role in creating national wealth in the future.23) The agricultural sector of Gabon is not only responsible for the sustainable and secure supply of food, but also facing the task of responding to changes in food consumption patterns due to the increased income. In addition, the possibility of contribution to solving Africa‘s food problem also needs to be considered with the given condition of Gabon‘s relatively favorable soil and climate.

‘Gabon Vert‘ has a medium to long-term goal of increasing agricultural production from the current 5% of the GDP to 20% by 2020. Specifically, the government plans to achieve an annual growth rate of 8% in the agricultural sector and is implementing five-year plans for import substitution. In addition, Gabon aims to increase the portion of farmland to 25% of the country‘s land, and is seeking

23) Refer to Moving to the Diversification of the Gabonese Economy: Lessons Learned from Korea, 2011, the Ministry of Strategy and Finance of Korea for the major strategies and details of ‘Gabon Vert’

090·Moving to the Diversification of the Gabonese Economy various policy measures to develop the agricultural sector, including an increase in budget. However, as previously mentioned, the limitations of budget and nature of policies constrain the country from developing the agricultural sector.

The increasing consumption of agricultural and food products that are not traditionally produced in Gabon is the main reason why self-sufficiency in food is declining. Solutions to this problem include forming an APZ, dissemination of agricultural production technologies for diversification, and training of the workforce. At the moment, for the modernization of Gabon‘s agricultural sector, political measures and efforts should be concentrated on the above mentioned solutions. Therefore, the policy recommendations from this study will focus on three sectors - farmland, labor capacity building, and agricultural extension service system - with a special reference to the experience of rural development in Korea, considering the difference in the situation and conditions of agriculture in Gabon.

[Figure 2-6] Summary of Policy Recommendations for Gabon’s Self-sufficiency in Food

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·091 and Rural Extension System Implementation for Food Security in Gabon 3.1. Establishing an APZ in Connection with Land Reforms

Significantly, increasing the production zone for grains is the most important aspect of Gabon’s agricultural development. In addition to food crops, such as rice, securing a supply of animal feed, including corn, is necessary to respond to increasing meat consumption and the conditions of the global grain market.24) Simply improving the existing land will not achieve the purpose of increasing grain production. The existing farmland in Gabon is in the form of small plots formed from burning forests which are greatly dispersed. They face difficulties when applying modern agricultural technologies or even when building irrigation facilities due to the narrow roads. Procedures in developing farmland, such as land ownership, and cost issues will likely cause very complicated problems. Hence, developing state-owned forests or a portion of savanna and into modern plots with irrigation facilities and roads will be effective. The farmland should be distributed to farmers and ownership can be transferred through payments from the harvest for a fixed period.25)

At present, Gabon imports 140,000 tons of grain each year. Each hectare of farmland produces approximately 6 tons in harvest. Taking this into account, the country would need approximately 24,000 ha to establish a production zone for grains. Estimating that each farmer would need 5 ha of farmland, although an accurate estimation would be needed taking grain prices and wages into consideration, the above-mentioned method could create at least around 5,000 farms. This will contribute to increasing the proportion of agricultural production from 5% to 20% of the GDP in the long term.

Focusing on the nine pilot farms currently promoted by the Gabonese government, the APZ can have educational and training facilities installed. If the farmland is distributed under the condition that portions of the harvest would be

24) Most agricultural activities in rural areas rely on labor. Subsistence farming is prevalent, except for areas near cities. Most of the farmland is used extensively, maintaining productivity through non-cropping and slash and burn fields. Substituting labor through mechanization is difficult in reality, as well as increasing productivity through the use of modern input, such as fertilizer and pesticides. Given such circumstances, productivity in the agricultural sector is continually declining and markets in the cities are filled with foreign products. Take rice as an example, in Libreville, imported rice is substituting traditional staples, such as manioc and bananas. Supplying such staples is increasingly difficult due to the worsening conditions for agricultural production. 25) Similar to other African countries, land reform and organization of farmland are major national tasks for Gabon. Transferring land ownership from the state or villages to producers should take priority. Land reform is necessary for agricultural modernization, such as developing commercial farms as well as establishing a financial system for agriculture and cooperatives. Except for plantation farms, most farmland in Gabon is obtained through burning forests. Such primitive methods and reliance on manual labor cannot structurally improve productivity. Hence, developing farmland for modern cultivation methods and inputs is an important task for the country.

092·Moving to the Diversification of the Gabonese Economy accepted as payments, the Zone would play a major role in addition to the training of a next generation workforce.

For this purpose, a public organization in charge of the APZ needs to be established under the MOA. A survey on soil conditions and reclamation projects should be conducted. Farmland should be divided into plots of appropriate sizes, so that modern production factors, such as fertilizer, pesticides, as well as agricultural equipment and machinery, can be used. Roads and irrigation facilities are also needed. In addition, a logistics system is also needed for harvest, storage, and processing. At the same time, a modern village for the residence of farmers should be built. 3.2. Establishment of an Agricultural Education & Training Institute to Nurture the Future Workforce

In terms of import substitution, a new workforce is needed in three sectors: grains, fruit and vegetables, and meat and dairy production. In addition, the workforce in cash crops for exports, such as plantations for cacao and coffee, need to be trained. As calculated previously, approximately 5,000 workers will be needed for grain production. For import substitution and exports, fruit and vegetables as well as meat and dairy production will also require approximately 10,000 workers each in the future.

Hence, half of the goal of training 10,000 future workers by 2020 should be achieved through agricultural high schools. The rest must be trained through vocational training schools, called the Young Farmers’ School, which will be designed for low income, unemployed young adults in urban areas. Agricultural high schools should have curriculums designed in five areas: grain, horticulture, meat and dairy, tropical crops, and food processing. Graduates with certain level of academic credentials can be designated as Gabon’s young next-generation farmers. Farmland should be distributed in connection with the national farmland development project previously mentioned. They can be trained as the agricultural workforce of the future generation. An agricultural high school should be established in each area, located where the nine pilot farms are. Each school should produce 100 farmers annually.

The vocational training school, Young Farmers’ School, should be located near major cities, such as Libreville and Franceville, where unemployment rate is high among young adults. Strategies are needed to have students with vocational training be employed in commercial farms producing fruit and vegetables as well as meat and dairy near cities.26) In addition, an agricultural education curriculum needs to be established within the national university’s agricultural college in order to systematically educate agriculture teachers for agricultural high schools.

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·093 and Rural Extension System Implementation for Food Security in Gabon 3.3. Expansion of Rural Training Functions in Connection with Agricultural Education

The consumption of fruit, vegetables, meat, dairy products, and grains, such as rice, is increasing rapidly in Gabon. However, the country has a very weak system to develop and disseminate agricultural technologies to domestically produce such products. While commercial farms near cities are somewhat responding to the demand for fruit and vegetables and are increasing production, meat and dairy product imports are continuing to increase. While IGAD under the MOA is providing technical training to agricultural corporations, the focus remains on fruit and vegetables. Although IGAD aims to promote agricultural education and entrepreneurs through developing commercial farms, there is a lack of facilities and equipment. Due to the high reliance on imports, meat and dairy prices are high compared to the country’s purchasing power. If imports can be substituted, profitability will be higher, serving as a new opportunity and challenge for Gabon’s agricultural sector.

There is a need to radically strengthen the technical and production training currently positioned around IGAD. Personnel, facilities, and budget for rural training functions need to increase significantly so that agricultural experts, technicians, and other experts can concentrate their support to agricultural corporations in the vicinity. In order to have agricultural advisors focus on rural development activities, Korea introduced major policies to improve their social status. As a result, the agricultural advisors played a decisive role in Korea’s agricultural and rural modernization.27)

Above all, there is a need to develop and disseminate agricultural technologies based on research. Innovating and integrating the system to train the workforce is also necessary. Gabon’s national university, and especially the agricultural college, can reorganize the R&D function to diversify agricultural production. As Korea did in the 1960s, Gabon needs to integrate and connect agricultural research functions with rural training functions and strengthen ties with agricultural education at the

26) While the country covers a total land area of 268,000 km2, the total population is at approximately 1.5 million, with the majority residing in urban areas. Therefore, only about 1% of the total land area is used for agriculture. The majority of the land, which has the potential for agricultural production, is not being utilized. On the other hand, the population of the capital Libreville has jumped from 27,000 in 1960 to 550,000 in 2000. Recently it has expanded to the point in which 750,000 people, or half of the country’s population, is residing in the city. The pace of migration away from agriculture has been accelerating, resulting in aging population in rural areas. Such migration has not been accompanied by mechanization or improvement in productivity in the agricultural sector. On the other hand, the urban areas cannot absorb the migrating population due to the lack of progress in industry diversification, resulting in low- wages and unemployment.

094·Moving to the Diversification of the Gabonese Economy secondary-education level. For this purpose, a so-called ‘National Agricultural Science Institute of Gabon’ needs to be established and should connect with local rural training functions. Agricultural high schools must be established and operated in order to diversify production and train the workforce that will be in charge of the nation’s wealth.

Gabon’s agricultural research and rural training functions need to be reorganized and integrated to maximize the agricultural production potential. Ultimately, Gabon needs a national agenda to promote the agricultural sector as ‘the future wealth’ after the demise of the petroleum sector. In addition, the current famine in the African region is a ‘demand with the inability to pay’, but also reflects the large potential market for Gabon’s agricultural sector. The favorable natural conditions, high prices for agricultural products due to imports, a market for import substitution, and Africa’s potential demand for food remain as positive aspects for Gabon’s agricultural sector in the future.

27) In the 1960s, the Rural Development Agency and the Agricultural Technology Center and Rural Training Office were established as national institutions at the provincial and city/county level, respectively. At the township level, branches of the Rural Training Offices have been set up so that new technologies developed at the national level could be disseminated at every corner of the rural areas systematically. On the other hand, by managing a research unit that oversees agricultural technology, the Rural Development Agency has built a top-notch biology-related research base at the central level. New agricultural technologies that were to be applied in various fields have been developed and were tested for local soil and climate by the Agricultural Technology Centers at the provincial levels. Then, the new agricultural technologies were disseminated to the farmers through city/county level rural advisory centers. The role of city/county level rural advisory center was not limited to disseminating new agricultural technologies, but also included improving rural living conditions. Associations for improvement in living conditions were formed for rural women and the 4H Movement was carried out in pace with the mindset of youth. Korea’s Rural Development Agency model for modernizing the agricultural sector and improving rural living conditions, which integrated agricultural science and advisory roles, had a very important place in the nation’s agenda for the early stage of economic development in the 1960s. As a result, Korea’s Rural Advisory Projects achieved the ‘Green Revolution,’ which implies grain self-sufficiency and the New Community Movement in the 1970s. In response to the diversified food consumption patterns, fruit and vegetable production became possible through the ‘White Revolution (greenhouse agriculture).’

Chapter 2 _ Agricultural Production Base Development, Agricultural Workforce Training,·095 and Rural Extension System Implementation for Food Security in Gabon References

Choi, Jung Seob and Huh, Sin Haeng, A Study on Fostering Viable Farm, Korea Rural Economic Institute, 1984. ‘Gabon vert’ Website http://www.gabon-vert.com/les-actions/agriculture/autosuffisance- alimentaire l’Institut Gabonais d’Appui au Développement(IGAD), “Les Statistiques Agricoles”, 2011. http://www.agriculture.gouv.ga/object.getObject.do?id=230. Korea Rural Community Corporation Website www.ekr.or.kr Korea Rural Economic Institute, 50 Years History of Korea s Agricultural Administration, Vol.1, 337p.,1999. Kuramochi, Kazuo, ”The Issue on Tenant Problems after Land Reform in the Republic of Korea”, Agricultural Economy, Issue 6, Vol. 1, March 1983. Ministère de l'agriculture, Le Gabon Emergent : Plan Op rationnel 2011-2016, Vol. 2: Plan Agriculture et Elevage. Ministry for Food, Agriculture, Forestry and Fishery, 2012 Food, Agriculture, Forestry and Fishery Statistical Yearbook, 2012. Oh, Hyun Seok, “A Study on the Function and Role of the Local Extension Service Institutions in Rural Korea”, Rural Development Administration, 2004. Oxford Business Group, The Report Gabon 2011, London, UK, Oxford Business Group, 2010. Rural Development Administration Website, www.rda.go.kr The Acadamy of Korean Studies, Encyclopedia for Korean Ethnicity and Culture, Portions on Land Reform, Agricultural Development Corporation, Rural Training Projects, and Agricultural Education, 1996.

096·Moving to the Diversification of the Gabonese Economy Moving to the Diversification of the Gabonese Economy Chapter 3

Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency

1. Current Economic Situation in Gabon 2. Industrialization of Gabon and SME Promotion Policy 3. Establishment of SME Promotion Agency (SMEPA) 4. Conclusions and Policy Recommendations ■ Chapter 03

Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency

Sungyoun Oh (P&J) Vivianne Nguema Ondo (Ministry of Small and Medium-sized Enterprises and the Small Business Craft)

Summary

In August 2009, Ali Ben BONGO Ondimba was elected as the President of Gabon, and the new President is developing the strategic programs and projects along with a periodical growth plan for up to 2020, to make Gabon one of the newly emerging economic nations.

This plan is comprised of three pillars to tow Gabon’s growth and secure national competitiveness, namely, industrial development, eco-friendly growth, and advancement in the service industry. These three pillars are based on expanding human resources and SOC facilities, creating appropriate and effective business surroundings, and access to markets through assistance to the private sector.

However, there exist several barriers in the course of promoting industrialization by the Gabonese government. First, economic growth is led by the development and sale of natural resources. Second, the on-going industrialization is driven by major overseas capital, rather than by domestic capital. Third, the domestic technology and technical manpower for industrialization are in shortage. Fourth, SMEs which are the foundations of a national economy and social security through poverty reduction and formation of the middle class, are in dire need. Thus, as a means of industrialization, the Gabonization of industry and promoting SMEs are absolute preconditions.

098·Moving to the Diversification of the Gabonese Economy Among the several conditions for the Gabonization of industry, in regard to promoting SMEs, the top priority is training and protecting skilled and technical manpower, and creating a climate where technical manpower is specially favored.

Second, it is necessary to make a favorable environment for entrepreneurs, who have innovative technology and creativity, so that they can run businesses well, along with improving entrepreneurship. Today, economic growth and technology innovation are inseparable. Skilled manpower is especially the best property of a nation and the main core of economic growth.

For the specialized timber industry, Gabon is planning to establish a technical high school. However, considering major imports like construction machinery, etc., the ripple effects of general industry and diversification of the industry, it is desirable to fix a strategic industry, like a root industry, and expand it to machinery, metal, chemical, and knowledge-based industries.

To promote the start-up of SMEs with good business ideas and technical competitiveness, the existing promotion policy for start-up SMEs is necessary; however, the promotion policy to support innovative new SMEs to grow is needed as well. Active starting up of SMEs’ movement has a great ripple effect not only on the regional economy but also on the national economy. But, new SMEs’ failure at the beginning stage of start-up can be a fatal loss to the local and national economy. Hence, the effective support of the government for start-up SMEs is very important for the national economy and job creation.

Gabon is in dire need of expanding SMEs and improving competitiveness to prepare for the Gabonization of industry and diversification, the establishment of social security nets, job creation for balanced income distribution, increased national competitiveness, and for industrial restructuring to prepare for long term natural resources depletion. Thus, it is high time to establish a promoting agency for SMEs.

We cannot promote SMEs only with loan support. Along with loan support, we need comprehensive government support in cultivating technology, management know-how, timely information on the market and general economic situations, and continuous education and training for SMEs employees and related persons. It is true that this is a rather more of the interventionist view than the laissez-faire view. But, it is unavoidable at this point of time, when Gabon needs the Gabonization of industry and job creation through promoting SMEs.

In the effort to promote SMEs, Gabonese government is trying to do its best, enacting relative laws and establishing a promoting agency, etc. However, the implementation of the law is unsatisfactory, and the promoting agency has been

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency·099 closed or exists in name only. Therefore, it is absolutely necessary to establish a new SME promoting agency.

The new SME promotion agency will be established by amending the existing law, or by enacting a new law, and it will be set up as a non-profit governmental organization which will exclusively carry out the government’s SME promotion policy. Also, the government will establish an SME promotion fund to assure professional effective implementation of the SME promotion policy. Utilizing this fund, the SME promotion agency will carry out comprehensive measures to support promoting SMEs, like loan support, consulting, training, information providing, etc.

1. Current Economic Situation in Gabon 1.1. ‘Le Gabon Emergent’ Strategy

After ex-president El Hadji Omar BONGO Ondimba, who ruled Gabon for 42 years since 1967, passed away in June, 2009, his son Ali Ben BONGO Ondimba was elected as the President in August, 2009.

The new President, since October, 2009, has been scrutinizing several detailed plans to enable Gabon to reach the status of a newly emerging economy. These plans include periodical plans until 2020, along with strategic programs and projects.

This plan is comprised of three pillars to tow Gabon’s growth and secure national competitiveness, namely, industrial development, eco-friendly growth, and advancement in the service sector. These three pillars are based on expanding human resources and social overhead facility, creating appropriate and effective business surroundings, and access to market through assistance to the private sector.

The government, acknowledging the fact that cultivating and expanding human resources is the foundation of national development, is striving to improve people’s education and to establish vocational training accessible to them. Additionally for better education, the government has prioritized the development of the education field as the 4th pillar of ‘Le Gabon Emergent’. 1.2. Gabon’s Industrial Foundation

According to World Bank statistics, as of the end of 2010, Gabon is a middle-income country, with per capita GDP of 7,680 USD. Gabon is one of the crude oil producing countries, 4th in Africa and 37th globally. Thus, its economy is heavily dependent on crude oil, which occupies 50% of GDP, 60% of government revenue, and 75% of

100·Moving to the Diversification of the Gabonese Economy [Figure 3-1] Three Pillars of ‘Le Gabon Emergent’

exports. The next important industry is the timber industry from tropical rainforest, occupying 85% of the Gabonese territory with 40% of rainforests being undeveloped. Another is manganese, boasting 200 million tons of reserves and ranking second in world-wide production.

With the present key industries of petroleum and the mining industry, the government is making finance sounder, through continuous development and optimization, while flying banners promoting and expanding SMEs as the another national industrial base. Thanks to these industrial diversification efforts, recently the growth rate of non-petroleum sector over-passed that of the petroleum sector,

Growth Rate by Sector in Gabon (Unit: %) 2008 2009 2010 GDP Growth 2.3 -1.4 6.6 Petroleum sector -2.6 0.1 5.1 Non-petroleum sector 3.5 -1.8 6.9

Source: Economic Dashboard 2011; Oxford Business Group, The Report Gabon 2011 leading national development.

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency·101 [Figure 3-2] Comparison of Gabon’s Growth Rate per Sector

2. Industrialization of Gabon and SME Promotion Policy 2.1. Constraints on the Gabonization of Industry

However, several barriers exist in the course of Gabonese government’s efforts for industrialization.

First, as aforementioned, the economic development is led by the exploitation and sale of natural resources. Second, the on-going industrialization is driven by major overseas capital, rather than by domestic capital. Examples include the establishment of free economy zones like Knok, Port-Gentil, Mayumba, etc. and promotion of the timber industry. Other examples are developing agriculture in suburban areas, intensification of grain production, palm oil of Olam, promoting agricultural exports by reproduction of rubber, coffee, and cocoa of SIAT (Société d’Investissement pour l’Agriculture Tropicale, Investment company for Tropical Agriculture). However, the enterprises moving into the free economy zone or investing in agricultural sectors are overseas large enterprises from countries such as China, India, etc. Third, the domestic technology and technical manpower for industrialization are in shortage. The only public technological university is Masuku University of Science and Technology in Franceville, established in 1985, and there is no technical high school, which could serve as the cornerstone of technician training. Fourth, there is a dire need for small and medium enterprises which are the foundations of a national economy, and social security nets through poverty reduction and formation of middle class.

As a means of industrialization, the Gabonization of industry and promoting SMEs

102·Moving to the Diversification of the Gabonese Economy are absolute preconditions. 2.2. Strategies of the Gabonization of Industry Among several conditions for the Gabonization of industry, the first conditions are cultivating the technical manpower through training and protecting skilled technical manpower, and creating a climate where the technical manpower is specially favored. The second condition is creating a favorable environment to promote SMEs. An example may be the entrepreneurship improvement policy which nurtures entrepreneurs who have innovative technology and creativity, so that they can run businesses well.

2.2.1. Cultivation of Technical Manpower

2.2.1.1. Profile of Gabonese Technical Manpower

In the point of view of manpower development, Gabon is holding a relatively superior position from among sub-Saharan African countries, but still has room for improvement compared countries with the same level of income. As of 2010, the literacy rate of Gabon reached 87.7%. However, according to the Human Development Index (HDI) by the UNDP, Korea ranked 15th with an index of 0.897, while Gabon ranked 106th with an index of 0.674, close to the world average.

[Figure 3-3] Trends in Gabon’s HDI

As shown above in [Figure 3-3], Gabon’s HDI increase tilt lags behind that of Korea. This may be due to several factors. Thus as shown in

, the education related indexes of Korea and Gabon are compared.

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency·103

Comparison of Education Related Index in HDI (2011) Korea Gabon Public expenditure on education (% of GDP) 4.2 3.8 Expected years of schooling of children (years) 16.9 13.1 Adult literacy rate (% aged 15 and above) na. 87.7 Mean years of schooling (of adults) (years) 11.6 7.5 Educational index 0.934 0.660 Combined gross enrollment in education (both genders) (%) 100.3 74.1

Source: Human Development Report 2012, UNDP, http://hdrstats.undp.org

The Gabonese government is trying its best for the development of manpower as shown in [Figure 3-3], and the situation is continuously improving, to the point of becoming similar to the world average in recent years.

However, compared to Korea, there are some noticeable gaps in the mean years of schooling and combined gross enrollment rate in education. This entails those dropping out or giving up on gaining higher education. The responsibility for the future of these dropouts will lie on the government. Thus, the government needs some preceding measures for these dropouts, and one of the measures is transferring and attracting them to the industry.

As a measure to shift this segment of the population into the industry, appropriate education for the industrial field and an institutional system for finding stable and preferable jobs after graduation must be provided. Through this institutional system, Gabon should expand the base for technical manpower creation, and lay the foundation for industrialization. For this institutional system, more technical high schools, students and teachers, and the government’s intensive support for schools are necessary as well as creating a vitalizing environment.

Today, economic growth has an inseparable relationship with technology innovation. For the specialized timber industry, Gabon is planning to establish a technical high school. However, considering major imports like construction machinery, the riffle effects of the general industry and diversification of the industry, it is desirable to fix the strategic industry, like root industries, and expand them to machinery, metal, chemical, and knowledge-based industries.

Hence, the Gabonese government needs to take the following actions to develop and enlarge human resources and technical manpower, and to substitute exports and imports through developing root industries.

104·Moving to the Diversification of the Gabonese Economy

Major Export and Import Items of Gabon (2010) Export Import Items Rate (%) Items Rate (%) Crude oil 73 Construction equipment 10 Manganese over 47% content 14 Medicine and medicals 5 Raw log and processed wood 9 Industrial machine & parts 15 Refined petroleum 1 Vehicle & parts 8 Natural rubber 1 Steel products 1

Source: The Observatory of Economic Complexity, http://atlas.media.mit.edu,

Establish technical high schools with intensive support, so that job-oriented education can be carried out in the field of export oriented timber industries and strategic industries which have ripple effects for import substitution and industrial diversification.

2.2.1.2. Strategies for the Cultivation of Technical Manpower

To protect domestic manpower, it is required to manage manpower that has appropriate qualifications of technologies, to train technical manpower, to reactivate the start-up of SMEs, the base of industries, and to create proper business surroundings. Failure in these areas will result in the fact that new jobs go to foreigners. Hence, this step is the foundation for Gabonization.

As of 2008, roughly 36% of the entire Gabonese population is under the age of 15. Also, 20% of the population is in the age group of 15-24 years old. Among public universities, the tertiary educational institution, Masuku University, founded in Franceville in 1985 is an engineering college. The government is planning to establish a technical high school for the specialized timber industry, plus an internal training institute to meet civil engineering demands. It is also planning to establish a graduate management school to meet private sector demands. Additionally, steps have been made to establish three new Technical Institutes, specialized in Bio, Environment and Tourist sectors. At the specialized public and private schools like the Technical Institute, the Technical University of Education, the National Management Science University, and the National Forest and Water Resources School.

The government is planning to establish a technical high school for the specialized timber industry. However, to reactivate the manufacturing industry for creating jobs, follow global trends, diversify industry, and invest for Gabonization, investing beyond the timber industry not only to basic industries, like machinery, metal processing and chemicals but also to state-of-the-art industries like Bio and IT has

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·105 great validity.

In OECD countries, the occupying ratios of high-tech and medium high-tech sectors are very high, and in Korea 70% of exports are from these sectors. Also, in the industrial development stage, the investment to machinery, metal and chemical industry has to be preceded as they are the basis of high tech and medium high tech sectors. As the industry develops, the manufacturing industry will advance to heavy industries, centered on fabricated metal and mechanical manufacturing industry than former light industries. The industrial structure will be reorganized to technology and knowledge intensive industries from former simple assembly lines.

[Figure 3-4] Occupying Ratios of High Tech and Medium-high Tech in Manufacturing Industry Exports

Note: (1) Including Luxembourg Source: OECD STAN Indicators database, June 2005

As stated above, Gabon has abundant young human resources. However, it is in shortage of skilled and technical manpower needed to reduce dependence on mineral resources including petroleum, for industrialization and Gabonization, and to develop into the industrialized economy. To increase the pool of manpower, the government is expanding its investment in education.

Also, the government needs to create an environment for technical manpower to stand on side to side from scientists to technician from mere technical resources. Motivation is needed to enter into the advanced industrial economy through industrialization.

106·Moving to the Diversification of the Gabonese Economy The government should try to create an institutional environment where the technician can take pride, and where the technician is given preference. Thus the government must consider the institutional measures below.

The government should effectively operate the national technology qualification system by establishing an appropriate qualification system which meets the needs of the industrial site. Also, it should prepare the legal framework like giving preference to hiring the qualification certificate holders through enacting legislation like the ‘National Technical Qualifications Act.’ Also, the government will have to appoint or establish an institution to implement the national technology qualification system, which manages domestic and foreign technicians who own or are qualified for appropriate technology.

2.2.1.3. An Example: Cultivation of Technical Manpower in Korea28)

At the early stage of industrialization, Korea experienced a drastic change in the quality of labor.

In the first stage, in 1960s, Korea exported mainly cotton, textile, wigs, sport shoes, and electronic products like radios and black and white TVs. Female simple skilled labor was a driving force. In the second stage, during the end of the 1960s through to the early 1970s, male simple skilled labor joined the market, achieving the development of light industries along with exportation of manpower to Vietnam and Middle East, etc. But as wages soared, Korea faced its limit. The third stage, in the mid-1970s opened an era of technicians with the promotion and development of heavy and chemical industries. Numerous factories were set up, and the government trained and supplied technicians. The technicians in the field of design, machine work, sheet metal processing, measurement, and electronics made it possible for Korea to export high value products like cars, ships, steel products, chemicals, and electronics. A nation where the technician plays a major role can be an industrial economy. In the industrialized economy, whether advanced or partially advanced, technicians play a leading part. The fourth stage moves to the advanced industrial economy, with high productivity, and by researching and developing high end products. Scientists and engineers play a key role, and exports are oriented towards high value products with high added value.

28) Oh Won Chul, Korea Model Economic Development - 2. The Coordinate of Korea(8), 2005. 11

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·107 [Figure 3-5] below shows the changing trends per each stage in the labor market.

[Figure 3-5] Changing Trends per Each Stage in the Labor Market

In 1973, Korea declared the proclamation to push ahead in heavy and chemical industry, and encouraged training of technical manpower by setting aside huge funds to technical high schools. The government strongly recommended national enterprises and private large enterprises to establish technical high schools, and in regions where this was infeasible, the government set up vocational training centers to train technical manpower. To boost the morale of technical high school students, the government assigned 10% of the university entrance quota to technical high school graduates, so that technical high school students could compete amongst themselves.

108·Moving to the Diversification of the Gabonese Economy Reference 1: The Strategic Industries of Korea (Classified by KSIC)29)

Ⅰ. Parts and Materials Industry: 13101 Cotton Spinning, 13102 wool spinning and 199 industry sectors. Ⅱ. Strategic Technology Industry: 10749 other food additives manufacturing, 10797 health/functional food manufacturing, and 26 industry sectors. Ⅲ. New Green Growth Industry: 01110 grain and other food crop production, 01121 vegetable crop production, and 428 industry sectors. Ⅳ. Root Industry: 22291 plastic laminating, coating, and other surface treatment, product manufacturing, 24121 hot rolled and pressed product manufacturing, and 37 industry sectors. Ⅴ. Bio Industry: 01123 seed and sapling production, 01140 other crop, production, and 32 industry sectors. Ⅵ. Culture Contents Industry: 58111 textbook and study book publishing business, 58112 cartoon publishing business, and 40 industry sectors. Ⅶ. Knowledge-based Service Industry: 58211 online mobile game software development and supplying business, 58221 system software development and supplying business, and 155 industry sectors.

below shows major labor demands and personal and national core competencies changes in Korea as the industrial structure changed. This may suggest a method for Gabon to prepare a training program to strengthen core competencies.

Core Competency Changes in Korea per Decade30) 1960s 1970s 1980s 1990s 2000s Agricultural Industriali- Society, Industrial High Knowledge Industrial zation, Heavy & Beginning Stage Development Industrialized Based Informa- Structure Chemical of Industriali- Stage Stage tion Society Industry zation Heavy & Heavy & Knowledge Chemical Chemical High tech, Major Based Industry, Light Industry, Industry, Industry, Planning Labor Information Simple Labor Production and Administrative Workers, Demands Industry, IT Control Workers, Service Workers Engineers Workers Salesmen

29) KSIC(Korean Standard Industrial Classification) is made to secure accuracy and comparability of industry related statistics, and it is based on ISIC(International Standard Industrial Classification), all industry classified into 1,145 sectors. 30) Kang Soon Hee, Shin Bum Seok, Knowledge Economy and Core Competencies, Korea Labor Institute, 2002. p103

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·109 1960s 1970s 1980s 1990s 2000s Strategic Positive, Thinking, Problem Solving Innovative Capacity, Autonomy,Crea Thinking, Bargaining tivity, Global Networking, Personal Speed, Power, Outlook, Endurance, Self- Core Responsibility, Challenging Professional Sincerity, Management Compe- Led by Example, Spirit, Foreign Service Mind, Team Work Capacity, tencies Driving Power Language Planning Power, Time Managing Command, Marketing Capacity, Sales Power, Power Communi- Personal cation Skills, Relations Multi Tech Home Bio Tech, Appliance, Environment, Automobile Electronic Semi- Aerospace National Useful Arts, Engineering, Engineering, conductor, Technology, Core Assembly Steel Making, Mechanical Computer, Nano Processing Compe- Technology, Shipbuilding Engineering, Communi- Technology, tencies Cheap Labor Engineering, Technology cations, Social IT solution & Technology Integration, Security IT Infra Technology

Korea enacted the「 National Technical Qualifications Act」in 1974, and the 「Human Resources Development Service Act」in December 1981, and established the institution of the Human Resources Development Service of Korea in 1982. The purpose31) of establishing this service was for training industrial manpower, promoting efficient labor demand and supply, and contributing to sound national economic development and welfare by supporting lifelong learning, execution of occupation ability development training and qualifying examinations, and skilled technique and employment promotion.

Reference 2: Major jobs of Human Resource Development Services of Korea32)

1. Manpower development - Promoting systemized learning and supporting workers’ vocational development. - Supporting vocational development training, i.e. criteria of vocational development training, training instrument, course development, loans for training installation equipment, etc.

31) Human Resources Development Service Act Article 1 (Purpose of establishment) 32) Refer to the website of Human Resources Development Service of Korea, www.hrdkorea.or.kr

110·Moving to the Diversification of the Gabonese Economy - Supporting remote control training, like e-learning, etc. - Publishing and propagating the teaching material and visual audio media. - Monitoring vocational training. - Supporting the training of middle class technicians in the growth engine industry.

2. Qualifying examination - Planning and improving systems for qualifying examination. - Setting examination questions and managing qualifying examination. - Supervising the qualification certificate holder.

3. Supporting employment for foreigners

4. International cooperation exchange / Supporting overseas employment - International cooperation exchange and operating international HRD Center (Seoul Institute for Vocational Training in Advanced Technology, SIVAT). - Nation-wide recognition services of qualifications. - Supporting advancing countries’ vocational training program.

5. Encouraging skilled techniques, apprentice competition - Selecting and supporting Korean crafts masters, bearers of skilled technique, and excellent skilled technicians. - Creating environment through giving preference to skilled technicians, like promotion campaigns for skilled technique, etc. - Hosting local apprentices competition, and hosting and participating at the International apprentices competition. - Supporting the private apprentices competition.

2.2.2. Promotion of SMEs

Today, a lot of major businesses are operated by foreigners. Gabon’s SMEs are insufficient. One of the reasons is the crude oil industry, which is operated in the manner of an isolated island with few links to domestic enterprises.

Petroleum gives financial revenue, but it is insufficient to reach the national long term social and economic targets. The government may levy higher tax on crude oil; however, it cannot create jobs from this sector. Hence, for secured growth, the diversification of the industry and economy, and creation of jobs, Gabon needs a long term SME promotion policy.

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·111 Mr. Hamidou Okaba, assistant secretary of the Ministry of Economy, has said, “the government of Gabon is putting national top priority on job creation and industrial structure change for comprehensive growth. The nation has been suffering from economic, social lack of redistribution, and we are trying to solve this problem.”

2.2.2.1. Profile of the SME sector

A. Doing Business Gabon’s SME accounts for 58% of its entire employment.

shows employment figures by sectors.

Employment Distribution per Sector Business Area Manpower (persons) Distribution (%) Public Service 85,030 21.6 Public Enterprise 18,742 4.8 Formal Private Sector 62,075 15.7 Informal Private Sector 185,032 46.9 Enterprise Association 4,086 1.0 Family Business 39,299 10.0 Total 394,264 100.0

Source: Direction Generale des Ressources Humaines (DGRH), ENEC 2010, et Direction Générale de la Statistique (DGS), traitement Direction Generale des PME, April 2012

Among sectors in employment figures the most notable is the informal private sector, occupying 46.9% of entire employment. In other words, the SME’s informal private sector is the sum of the informal private sector, enterprise association and family business, accounting for 57.9% of entire employment. This is a sign that urges Gabon to switch from the informal sector to the formal sector immediately.

One way for Gabon to switch from having a larger informal sector to formal sector, to achieve industry diversification and Gabonization of industry, is by reactivating business start-ups.

According to the World Bank report, ‘Doing Business (2009)’, Gabon’s business environment ranked at 151st among 181 countries worldwide. The report of year 2011 showed an increase of two steps up from 2010, to 156th among 183 countries. Among the 46 sub-Saharan African countries, Gabon ranked 27th, remaining at the same position as in 2012. In the start-up business sector, Gabon ranked 153rd. Finishing the nine necessary procedures took 53 days and the required expense was 21.9% of per capita income. Thus, it is very necessary to improve the business

112·Moving to the Diversification of the Gabonese Economy environment of Gabon.

B. Comparison of Industries As of 2010, Gabon’s industrial distribution shows 55.9% in the primary industry, 8.2% in the secondary industry, and 35.9 % in the tertiary industry and others. The primary industry portion is large due to heavy dependence on crude oil and mineral resources.

GDP Distribution by Industry in Gabon (2010) (Unit: million CFAF, %) Primary Industry Secondary Industry Tertiary Industry Total Amount Rate Amount Rate Amount Rate Amount Rate 3,672.4 55.9 535.8 8.2 2,356.9 35.9 6,565 100.0

Source: Direction Générale de l’Economie pour l’origine du PIB par secteur et traitement de la Direction Générale des PME pour la part des PME dans le PIB en 2009 et 2010 edited

The GDP distribution by industry of Korea in 1991 is shown in

.

GDP Distribution by Industry in Korea (1991) (Unit: %) Primary Industry Secondary Industry Tertiary Industry Total 9.4 30.6 60.0 100.0

Note: The tertiary industry includes construction, electricity, gas, and sewage.

Setting aside amounts, when we compare Gabon’s industrial distribution to that of Korea, Gabon’s secondary industry is very unsatisfactory. This means the vulnerability of the manufacturing industry. As

shows, the secondary industry portion of Korea in 1991 is over 30%.

It is true that with rapid increase in demand for the service sector there is a trend that the manufacturing industry has gradually slowed down in advanced or OECD countries, and it is likely to continue in the future. This is due to convergence and compounding of industry sectors. Classifying high and low technology is no longer meaningful and the manufacturing industry has shown a trend of becoming integrated into the high value-added service sector. However, innovation in OECD members’ manufacturing industry section is being actively and continuously pursued.33)

33) OECD, The Changing Nature of Manufacturing in OECD Economies, 2006

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·113 Despite the slowing down of the advanced countries’ secondary industry portion, Gabon’s primary industry portion can be viewed as too high compared to the secondary industry. A higher portion in crude oil and mineral resources signal a direct impact on national economy due to the exposure to inner or outer economic environment changes, like resource production changes or steep declines in export prices. Namely, a buffer zone is needed to minimize the structural impact on the domestic economy. This buffer zone is the job of the secondary industry, and the Gabonese government should restructure the industry centering on the secondary industry. Thus, the Gabonese government should gradually implement the secondary industry oriented industrial restructuring.

C. Numerical Comparison of SMEs with Korea According to World Bank data, as of the end of 2010, the Gabonese population is 1,501,266 and per capita income is 7,680 USD. The reason for mentioning this data is to make a comparison standard to that of Korea. It is meaningless to compare the present Korean situation to that of Gabon’s SMEs. From this point on, the standard year will be 1991, when Korean per capita income was similar to that of Gabon (Population was 43,390,000, per capita income was 7,105 USD).34) Gabon’s SME standard is different from that of Korea. However, if distribution by enterprise size could be compared at the moment, it would be as it is in

.

Comparison of Number of Enterprises of Korea and Gabon Korea (1991) Gabon (2011) Numbers Rate (%) Numbers Rate (%) SMEs 2,115,815 99.9 55,440 98.9 Large Enterprises 2,432 0.1 599 1.1 Total 2,118,247 100.0 56,039 100.0

Source: Korean National Statistical Office,『 Statistical Survey Report of Entire Enterprises』, 1992, Direction Générale de la CNSS35), Direction Générale des Impôts, traitement DG PME Avril 2011

According to

, the distribution rate of the SME sector and large enterprises is similar.

However, there is a big difference in the levels seen in regard to the population, i.e., the number of SMEs per 1,000 people. As can be seen in Table 3-9 below, the

34) National Statistical Office, National Statistics Portal, http://kosis.kr, Bank of Korea, Economic Statistics System, http://ecos.bok.or.kr 35) CNSS: Caisse Nationale de Sécurité Sociale(National Social Security Fund)

114·Moving to the Diversification of the Gabonese Economy number of Gabonese SME’s per 1,000 people in 2011 was 75.6% of the number of Korean SME’s per 1,000 people in 1991.

Comparison of SME Numbers per 1,000 People of Korea and Gabon Korea (1991) Gabon (2011) Numbers of Numbers of Number of Number of SME(s) per SME(s) per SME(s) SME(s) 1,000 people 1,000 people Total SMEs 2,115,815 48.8 55,440 36.9

Globally, the economic portion of the SME sector is increasing with emphasis on the importance of the SME sector in the aspect of promoting economic vitality. The high correlation between the numbers of SMEs and the income level implies that promoting excellent SMEs is playing an important role in achieving high GNI.

[Figure 3-6] International Correlation between Numbers of SMEs and GNI per capita

Note: High-income countries consist of 25 countries including Korea, USA and Japan, upper-middle income countries consist of 15 countries including Argentina and Hungary, and lower-middle income countries consist of 28 countries including Brazil and China. Low-income countries consist of 7 countries including Vietnam. Source: Kim Pil Hun, The assessment and implication of unequal distribution of small manufacturing enterprise, Korea Economy Research Institute, 2009, P20

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·115 Hence the accomplishment of industrial diversification in preparation for the depletion of crude oil and natural resource urgently requires job creation achievement of the ‘Industrial Gabon’ based on ‘Le Gabon Emergent’ strategy, and sorting out a policy measure to increase numbers of SME. For ‘Industrial Gabon’, and for enhancing national competitiveness to leap into becoming a high income economy, Gabon also needs measures to expand SMEs.

D. GDP portion of SME sector In Gabon, the portion of the SME sector is 17.7% of gross national product. In particular, the portion of the SME sector in the secondary industry is even smaller at a mere 1.03% of gross national product, and only 5.8% of the SME sector.36) On the other hand, in 1991, the occupancy ratio of small and medium manufacturing sectors among gross national product was 39.6% in Korea.37)

From the above figures it is possible to conclude that the portion of Gabon’s SME sector, especially that of the small and medium manufacturing sector is highly unsatisfactory, and most SMEs are unequally distributed to the primary or tertiary industries. This phenomenon signifies the absence of another buffer zone. Nowadays, most Gabonese manufacturing enterprises are established by major foreign capital.

Another problem to consider is the fact that the Gabonese economic environment can be vulnerable to change when foreign major capitals leave. In this case, the ripple effect to the local economy can be expected to be especially shocking. A small and medium manufacturing industry would act as a buffer zone to absorb the shock from exports and domestic demand, while creating jobs continuously. However, currently this industry is mostly absent. Hence, in the course of industrial restructuring, the Gabonese government must configure policies and measures to expand the small and medium manufacturing industry and to reactivate the start-up of small and medium manufacturing industries.

2.2.2.2. Strategies for the Promotion of SMEs

A. Reactivation of the Start-up Policy To promote SMEs with feasibility and advanced technology, supporting policies for new enterprises would be necessary for effective growth and development, as well as existing policies for new start-up promotions. Active start-up for new businesses have a ripple effect not only to the local economy but also to the entire national economy. However, the failure of start-up companies at the beginning stage

36) Direction Générale de la CNSS, Direction Générale des Impôts, traitement DG PME, Avril, 2011 37) Bank of Korea, Annual Index(2000 Reference), http://kosis.kr

116·Moving to the Diversification of the Gabonese Economy is very common and can be a big loss to both the local and national economy. Thus, efficient governmental support for new start-ups is very important for the national economy and job creation.

Entrepreneurship is ever highly appreciated at this time, when demand is increasing for open markets, industrial restructuring, and job creation as well as a greater formal sector and large enterprises. However, whether it is in advanced or in advancing countries, very few venture start-ups survive. This is the reason why a cost effective approach, which is somewhat different from the existing supporting policies, is needed considering the harsh competition environment of today. One way is the Business Incubator (B.I.) program.

The B.I. provides opportunities for starters in business, who have innovative ideas and technology but are short in cash, so that they can go forth with their creative activities. It also provides a secure business environment by assisting in office facilities and ancillary facilities. Through this, start-up enterprises can enjoy a higher rate of survival, grow to mature as a SME and contribute to the national economy by job creation, etc.

In addition, B.I. can play the intermediary role of technology transfer window, expediting commercialization and practical use by grafting high tech information and technology of universities and research laboratories onto enterprises. It will also contribute to the reactivation of the regional economy through excavating and promoting enterprises in the region.

B. Development of the B.I. program The B.I. program has the system and function of supporting general difficulties that new starters beginning enterprises may face, by assisting them to run the businesses effectively after start-up, and to mature accordingly. B.I. makes the immediate diagnosis and cures possible general problems of business management that may develop on site.

Basically, new start-ups can enjoy offices with cheaper rental costs, share expensive test equipment and facilities, and secure the merit of the scale by clustering and information sharing. Elementary management consulting and technology may be provided, plus professional and practical assistance like mediating funding by active operational strategies. As such, B.I. is the most direct and effective measure to assist venture or start-up enterprises by the government, regional government, and even the private sector.

Gabon already enacted the Law on Incubator and Industrial Complex (Law no. 2005-32, Loi n。32/2005 Relative aux pépinières et aux domains industriels), but the

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·117 real work has not yet been undertaken. Reactivation of the B.I. program is necessary to activate start-ups, and to accomplish industrial diversification and job creation through start-up enterprises.

In the operational strategic side, some problem may occur in deciding whether to pursue profit or to operate on a non-profit basis, and also in deciding the boundaries of assisting programs. However, considering Gabon’s present situation of uncertainty in the potential demand and of the necessity of nurturing professional mentors, it would be better to define its B.I. program as a non-profit B.I. at the demonstration stage. The B.I. may be established in the capital, Libreville, and in the new FEZ or industrial cluster or in its vicinity. In the future, if necessary, it is possible to consider expanding B.I. to become a profit enterprise by transferring it over to the private sector, and professionalize the supporting program gradually.

[Figure 3-7] B.I. Operation System

According to the Article 7 of the aforementioned act, the tenure of incoming enterprises expires in 3 years as a rule. However, most new enterprises need long term support. In this case, the government may establish a post B.I. program to continue supporting after termination of the B.I. tenure, and from a long term point of view, may consider establishing and operating a Start-up Academy.

[Figure 3-8] Government’s Supporting Direction for Start-up Enterprises

118·Moving to the Diversification of the Gabonese Economy In this case, it is appropriate to establish a public authority to lead this job, by entrusting it to an SME promotion agency. This will be stated later and executed by inclusion in the three-year plan for developing SMEs (Triennial Plan of Development of SMEs/SMIs Gabonese, PTDPME). The B.I. is classified into four types, public- initiated, university related, private sector initiated, and private public combined, by the establishment and operation body.

For Gabon, establishing a publically initiated B.I. in the capital Libreville, the FEZ or in its vicinity is recommended. Also feasibility may increase if it is established inside Masuku University of Science and Technology, located in Franceville as a university related type.

To perform this B.I. program, the followings are recommended.

The government promotes B.I. according to legislation for industrial diversification, start-up reactivation, and job creation. Also, the program may be implemented through inclusion in PTDPME for increased awareness. The demonstration stage can be led by a public authority as a non-profit business, and the operation and support for incoming SMEs can be carried out by an SME promotion agency. The B.I. will be established in the capital Libreville, or Free Economic Zone (FEZ), or in its vicinity, to increase the possibility for interrelationship of industries and accessibility to related information. Installing B.I. in universities can be positively reviewed, to relate it to university and for students’ early participation in society.

On the other hand, as a mid and long term policy to reactivate start-up enterprises by creating favorable environments, a better option would be to separate the start- up chapter from the currently existing chapter which is the Loi n。16 /2005 du 20 Septembre 2006 Portant promotion des Petites et Moyennes Entreprises et des Petites et Moyennes Industries (Law No. 16/2005 of 20 September 2006 Wearing promoting Small and Medium Enterprises and Small and Medium Industries). In addition, a new SME Start-up Promotion Act could be established to expedite transferring of informal sector to formal sector, to diversify industry and Gabonization, to create job employment and increase tax revenue, and to maximize incentives for start-ups.

For this purpose, the following measures are recommended.

As a mid and long term policy, separate the start-up sector from the existing law, the Law No.16/2005, Part II: The Special System of SME / SMI, and Part III: Incentives, or consider enacting a new law in the form of the ‘SME Start-up Promotion Act.’

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·119 In the law, simplify the administration process as much as possible. Lengthen the legally acknowledged start-up period, and extend the tax benefit period for start-up enterprises, while intensifying assistance through an SME promotion agency

B.I. Classification of Operating Bodies Type Setup Entity Establishing purpose Establishing region Central Government, Industrial Regional Diversification, Job Public Authority Government, Libreville, Creation, Promoting Initiated Government Free Economic Zone Regional Affiliated Development Organization Promoting R&D, Social participation of University students, Masuku Univ. of Related to University and Contributing to Science and University Laboratory regional community, Technology Expansion of industry -academy cooperation Pursue profit, Private Sector Expansion of Private Enterprise Initiated investment opportunity Associated Complex of Public Authority & Private, Public University, Private Enterprise Mixed Cooperation among Government- Academy-Industry

C. An Example: Business Incubators in Korea First established in the 1990s, the B.I. center in Korea has shown remarkable progress during a relatively short period of time, and has been supporting start-up founders and to-be founders in various ways. In January, 1994, the first B.I. program started in Ansan-city, established by the Small and medium Business Corporation (SBC) and the Korea Institute of Science and Technology (KIST) in June of the same year. Up to the late 1990s, SBC led the business, and from 1998, expanded rapidly under the leadership of the Small and Medium Business Administration (SMBA). Today, several central and regional governments are implementing B.I. programs. The current status of Korean B.I. center is shown below.38)

38) Kim Joo Mi,『 The status and improvement of B.I. center in Korea』, IE Magazine No 18-3, 2011

120·Moving to the Diversification of the Gabonese Economy

Current Status of Korean B.I. Center 2008 2009 2010 Average per B.I. Number of B.I. 269 279 286 - Budget Support (W100m) 189 306 353 1.23 Number of Occupants 4,532 4,770 4,818 16.8 Revenue (W100m) 23,204 25,382 24,807 86.7 Employment (Person) 22,982 22,017 21,113 73.8

Source: Kim Joo MI, The status and improvement of B.I. center in Korea, IE Magazine No 18-3, 2011.

B.I. Designation by Operator in Korea (2011.6) R&D Regional University SBC Others Total Institute government Number of B.I. 220 24 11 7 18 280

Source: Ibid

Area per B.I. in Korea (As of end, 2010) Below 1,000m2 1,000-2,000m2 2,500-5,000m2 Over 5,000m2 Number of B.I. 140 68 45 16

Source: Ibid

D. An Example: Vitalization of SMEs in Korea During the 1970s and early 1980s, Korea witnessed a steep growth of its large enterprise sector. However, SMEs which supply parts and materials to large enterprises in partnership, faced institutional difficulties when entering a new market. Hence, the Korean government acknowledged the necessity of auxiliary measures of promoting SME start-ups, for a virtuous cycle for structural improvement and for decreasing imports by supplying parts and materials domestically. The government developed and implemented several policies to promote SMEs. However, there were difficulties in solving financial and technical problems of SMEs, and the investments were unsatisfactory.

In 1986, the government announced the promoting policy for the machinery and parts industry, and cut loan interest rates. However, the benefits for newly established SMEs still proved to be unsatisfactory. Hence, the government enacted the SME Start-up Promotion Act, focusing on comprehensive assistance of start-up SMEs. The purpose of this Act was to prepare a system to support SME start-ups. Lodging, restaurants, and real estate businesses were excluded.

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·121 The SME Start-up Promotion Act has several policy measures as stated below.

First, the administrator of the SMBA should establish and announce the SME Start- up Promotion Plan, and the government may supply necessary financing programs like investments, grants, subsidization and loans, etc. Also, SMBA is to supply the necessary information for start-ups, growth, and development of SMEs for founders. Second, the administrator of SMBA, to expand the base for start-up, may educate youth, university students, and founders desiring to start-up businesses. Also, the administrator may render the necessary assistance within the budget for the graduate school by designating it as a training place for start-up professionals, and by contributing the required expenses for operation. Third, the administrator of the SME Promotion Fund may contribute to SME start-up investment companies or SME start-up investment cooperatives. Fourth, the administrator of the SMBA may establish and run the SME start-up investment company. Fifth, the administrator of the SMBA may establish and run the SME start-up investment cooperative. Sixth, the administrator of the SMBA, as established by presidential order, may expend partial payment for services in the case that an SME consulting company registers with the SMBA and renders service. Seventh, a defined start-up procedure will help SME start- ups in business plan approval, simplification of start-up procedure, prior consultation before start-up, and automatic approval in case of collision with other laws. Eighth, the government may establish the Public Service Center for SME start-ups in the regional government for the convenience of visitors for service, where one-stop comprehensive service for start-up may be acquired. Ninth, the administrator of the SMBA may establish the Start-up Promotion Agency, where full charge of promoting start-ups may be taken.

The legal structure shown above may be required in the long term for Gabon. However, as a short term measure, there is a greater need for activation of start-ups and efforts for boosting entrepreneurship through the B.I. program.

3. Establishment of SME Promotion Agency (SMEPA)

As already analyzed, the manufacturing sector must be prioritized in expanding SMEs in Gabon along with industrial restructuring. As such, the Gabonese government has shown urgency in its positive promotion.

However, to promote SMEs in Gabon, the establishment of a new SME Promotion Agency is necessary, with comprehensive supporting activities and as a non-profit governmental organization. This will be discussed in the following section.

122·Moving to the Diversification of the Gabonese Economy 3.1. Current SME-supporting Organizations in Gabon

3.1.1. Legal Framework

Gabon’s major legal frameworks regarding the SME sector are as shown in the table below.

Major Changes in Legal Frameworks Related to SME Development Year Major Changes in Legal Frameworks 1983 vice minister organization in charge of SMEs and empowerment. 1984 enacted legal foundation for establishing PromoGabon. enacted legal base for establishing the fund regarding support and 1985 guaranteeing SMEs. 1989 enacted legal foundation for specifying the SME Day. enlarged the SME development fund and fixed the object of support(Annual 1993 revenue under 100 Million CFAF). 2000 enacted legal foundation to establish APIP. 2001 enacted SME definition and grade. 2005 enacted the law on B.I. and industrial complex. enacted the law on promoting SMEs(set definitions on IT, BT (Bio Technology), 2006 and micro enterprise, small enterprise, and medium enterprise), enacted the foundation for designated SMEs special support. - set job definition of FODEX, a SME promotion fund. - enacted legal foundation for establishing ADE(Agency Enterprise Development), 2007 to support small enterprise start-up. - enacted legal foundation for establishing FOFEN, a fund to assist ADE.

- enacted legal foundation for establishing CDE(Center for Enterprise Development), a Business Development Center to provide information on 2011 investment, etc. - enacted legal foundation for establishing the Ministry of SMEs/SMIs and Artisans.

Major contents of ‘Triennial Plan for the development of SMEs/SMIs Gabon, PTDPME,’ a recently coded special regulation for assisting SMEs, is summarized in the figure below.

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·123 [Figure 3-9] Triennial Plan for the Development of SMEs/SMIs Gabon, PTDPME Planning period 2013~2015 Yearly investment 4 Billion CFAF (6,150 EUR) for three years. ●Training and competence enforcement for SMEs. ●Economic, legal, financial, organizational improvement for SMEs. ●Better accessibility to public and private market, and Usage subcontract for SMEs. ●Boosting communication and entrepreneurship for SMEs. ●Supporting development and start-up for SMEs through financial support mechanism.

As shown above, Gabon’s basic laws and regulations for SMEs are well prepared. They are comprised of six volumes and 39 units, including some revised parts which include the related framework, SME activity, investment, related commission, and SME day, etc.

Some of the laws and regulations overlap, despite the fact that they should be separated in preparation of economic environment and situational changes. This applies to the following sections; Gabonization and diversification of the industry, start-ups for job creation, SME definition, small and medium manufacturing sector and service industry, etc. Therefore, reviewing and rearranging the whole legal foundation and framework concerning the SME sector is recommended.

3.1.2. Organizational Framework39)

While the Industrialization of Gabon and SME Promotion Policy of the 2011 KSP has already been explored, the finer points regarding the organizational framework and assisting system for SME support will be briefly mentioned.

3.1.2.1. APIP (Private Investment Promotion Agency)

Established in 2000, APIP is the current affiliated organization of the Ministry of Finance. Its main jobs are finding domestic and overseas technological or financial investors, performing as a one-stop shop providing information on the market and economy, and performing research and tasks. Among the above three jobs, in reality, only the job of the one-stop shop is being pursued.

39) AfDB, Republic of Gabon, Economic and Sector Work - Private Sector Development, 2010

124·Moving to the Diversification of the Gabonese Economy 10,000 projects were submitted during 2004 through 2007, and in 2008, 4,318 projects were submitted. Only 25% of them are owned by incorporate while 75% of them are owned privately. Most applicants have scarce financial resources, and 68% of the projects were in service fields. According to the APIP, 60 to 80% of them go bankrupt within a year after start-up. In reality, main actors of economic activity have a negative view towards the APIP.

3.1.2.2. PromoGabon

Established in 1972, PromoGabon is the affiliated organization of the Ministry of SMEs, SMIs and Artisans. Its main tasks are project development for investors, development of financial resources and business plans and business feasibility studies, etc. PromoGabon can assist in the financing and guaranteeing of investors’ projects, which are to be submitted to the Ministry of SMEs/SMIs and Artisans’ Investment Approval Committee and Gabon Assistance and Guarantee Fund (FAGA). In 2008, 245 investment projects were submitted to the Investment Approval Committee; however, only 42 projects were successful in submitting their papers. As such, it is very difficult to get public financial assistance. PromoGabon is likely to end up in failure because of lack of expertise. Also if financial procurement by guarantee is terminated due to complications or a wind-up in the FAGA, the function of PromoGabon will be further weakened.

3.1.2.3. Winding-up of Public Funds, FODEX and FAGA in 2010

Two public agencies, FAGA (Gabon Assistance and Guarantee Fund) and FODEX (Development and Expansion Fund), were the financial support source for private sectors. FAGA, established in 1981, was responsible for supplying loans and bank guarantees to small and medium business owners. However, from 2003 through 2008, this function almost came to a halt, resulting in only six approvals from the Credit Committee in 2008. Because of the hypo functioning of FAGA, small and medium business owners are left to supplying their own funds.

FODEX, established with the AfDB (African Development Bank) loan funds in 1993, has been responsible for 50% of guarantee for bank loans and for assisting commercial banks that are starting up. As a result, FODEX failed in gaining its purpose, and loan repayment rate reached only 60%. As their functions weakened, FAGA and FODEX were dissolved in March 2010, and their roles, business and funds were transferred to the Gabonese Development Bank (BGD).

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·125 3.2. Establishment of SMEPA

3.2.1. Rationale for Establishing a New SMEPA

As seen above, the public sector’s role of assistance to private sectors has almost become obsolete, with the exception of the BDG and the Chamber of Commerce and Industry. The demands for Gabonization and diversification of industry, establishing social security nets, job creation for balanced income distribution, increased national competitiveness, and the expansion and competitiveness strengthening of SME sector which are necessary for industrial restructuring in case of long term natural resources depletion, have never been high before. Hence, it is high time to establish the promotion agency for SMEs to meet these demands. The government should establish a new SMEPA to expand the SME sector which is the base of industrial restructuring, establishing social security nets, and strengthening national competitiveness.

The Gabonese government decided to reinforce the BGD’s function, related to transferring the roles and functions of FAGA and FODEX to the BGD. This means setting up organizational mechanisms and restructuring financial interests. However, comprehensive organizational restructuring to induce start-up and development of private enterprises is required to give appropriate support.

Despite being a policy bank, the BGD was established by the government, and is required to turn out bank earnings. Thus it is likely that its purpose will tilt towards emergent assistance like creating infrastructure rather than supporting SMEs. Also, it is impossible to ignore the probability that it may lack a sense of duty and specialty in promoting SMEs.

Whether in advanced or advancing countries, businesses in the SME sector are always plagued by difficulties. These difficulties always work as limitations in the course of SME development. Classified into five areas, their limitations are as follows: first, accessibility to loans; second, accessibility to human and material resources; third, accessibility to technology; fourth, accessibility to the market; and, fifth, accessibility to information. There are also some legal and institutional limitations. However, as Gabon may be an exception, this issue will be dealt with in major parts related to the establishment of an SMEPA.

3.2.2. Characteristics of the SMEPA

SMEs cannot be promoted only with financial support; they require comprehensive government support in cultivating technology and management knowhow, provision of timely information on the market and the general economic situation, and

126·Moving to the Diversification of the Gabonese Economy continuous education and training for SME employees and related persons. It is true that this is a rather interventionist view than being a laissez-faire view. However, such an approach is unavoidable at this point of time, when Gabon urgently requires the Gabonization of industry and job creation through promoting SMEs.

The new SMEPA should have a legal framework. Without a legal framework stable project implementation cannot be guaranteed for SMEPA, and even its existence may become under threat as the policy changes. Also, difficulties can be expected when securing consistency and specialty. In this legal framework, SMEPA’s character, function, and roles and responsibilities will be included.

Taking the existing legal framework into consideration, the enacted Law on the Promotion of SMEs/SMIs (Loi N° 16/2005 portant promotion des petites et moyennes entreprises et des petites et moyennes industries) of 2006 may be amended, or a new law may be enacted. Amending the existing law or enacting a new law to establish a new SMEPA will be a necessary step to be followed sooner or later.

3.2.3. Relationship with the ‘SME Promotion Fund’

It is essential to establish the Small and Medium Enterprises Promotion Fund to improve the circumstances of the first SME’s limitation in regard to accessibility to financing. This fund’s purpose is to secure the financial sources for SME promotion, and it will be established with contributions, loans, or revenues from the government or other non-governmental economic bodies. SMEPA may be designated as the operating agency of this fund, and may disclose the details regarding use of funds.

[Figure 3-10] Creating SME Promotion Fund

Creation of SMEs/SMIs Promotion Fund

Government Long-Team Low-interest Government Contribution Policy Loan F National Public U Investment Fund Securing Capacity Building Institutions N Credit Guarantee of SMEs/SMIs D Fund, Banks - Financing - Consulting Enterprise Special Levies - Training - Information

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·127 Most of the funds will be used as financial loans to SMEs which correspond to policy purposes and as operational expenditures for other services. Regarding the establishment and usage of the fund, there may be different opinions among related economic actors. This matter is related to SMEPA’s character which will be dealt in the latter section: giving loans to SMEs from the SMEPA, namely the agency’s handling of banking business of loan credit.

However, this fund will be used as a tool to achieve the policy purpose of SME promotion, and the fund size will be operated within the boundaries that have minimal impact to national financial policy, i.e., causing inflation, etc.

The effectiveness of SME support will be noticeably lower if the SME is supported when excluding loans, rather than if the SME is going forth with a loaning system. Without the loan function in SMEPA, the synergy effect of policy purpose with other projects for SMEs will be reduced drastically. Establishing a SME promotion fund, and designating SMEPA as the operating and managing body are recommended to support financial loans to SMEs. 3.3. Role of SMEPA

3.3.1. Operation of the SME Promotion Fund

The following must be actively pursued to execute the SME Promotion Fund effectively: define the establishment of SMEPA under the Ministry of SMEs/SMIs and Artisans; specify details on articles of organization; organize an operating committee, board members and board organizations; appointment and dismissal of staff;, business and fund management; and accounting procedure and supervision of business.

One of the most important factors in establishing SMEPA is to specify SMEPA as a non-profit organization. This specification is significant in giving the agency responsibility and authority, and in guaranteeing the government’s continued assistance on several projects when carrying out SMEPA’s tasks.

As a comprehensive SME promotion agency, SMEPA’s main tasks will be comprised of the management and operation of the SME Promotion Fund, financial support, consulting and diagnosis, and training of the SME employees including representatives, executives, staffs and SME related parties, information provision, marketing support, and international cooperation.

128·Moving to the Diversification of the Gabonese Economy [Figure 3-11] Major Jobs of SMEPA

3.3.2. Financial Support to SMEs

As a way of providing financial support insufficient financial market environments must be considered in the following ways: sharing information for enterprises among financial institutes; recognition of ownership and security rights on real estate, etc. These take on the form of indirect loans, and can be considered for direct loans in the long term.

In taking the form of indirect loans, collaterals always emerge as a challenge to SMEs. A credit guarantee system may be considered for Gabon, as the general institutional framework on real estate private ownership and setting up security rights suffer from insufficiency.

Indirect loans are carried out under four conditions. SMEPA will reviewing business feasibility and decides on the amount to be loaned and the terms and conditions for providing the loan. The loan will be financed by the SME promotion fund. The execution of the loan will be done through the banks which are under contract with SMEPA. The bank then becomes responsible for setting up the collateral for the loan, executing the loan, and managing loan principals and interest repayment. SMEPA in turn may provide handling charge to the bank that result from the loan.

Interest rates for these loans are set at a lower rate, and the loan repayment period can be set over a longer period of time than that of commercial banks. SMEPA’s main tasks are financial support, consulting and training, providing information, marketing support, and international cooperation support for SMEs. The conditions for providing loans are set over the long-term and at a lower interest

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·129 rate than what is offered by commercial banks, when executed in the form of an indirect loan.

References 3: Designating Primary Fostering Businesses for Government Assistance

While the number or capacity of Gabonese SMEs may yet be quite low, it is recommended that the government limit the scope of SMEs to Primary Fostering Business qualified to apply for loans strictly to companies that meets the conditions outlined by the purpose of the policy.

This is foremost because there will always be a limit to the available government budget and human resources. In this case, SMEs are more likely to take advantage of and go beyond the principals set out by the bank, especially when the assistance loans have better conditions than those of commercial banks. Second, by clearly announcing the long term development plan and purpose of government support in advance, SMEs or start-up businesses can coordinate or design business plan to meet the policy purpose. Third, this can help the government formulate a long term vision for the future of the industries and SMEs.

Gabon has a legally codified industrial classification system, as well as special government support for SMEs being defined by law. However, ISIC Code defined by the UN may be more feasible to use than the industrial classification of Gabon.40)

Also, problems may occur regarding which companies qualify as SMEs. According to the current laws in Gabon, in the process of classifying companies, the list of qualifying SMEs should be updated every two years. While Gabon currently classifies SMEs according to revenue, SMEs may be defined by the number of employees as a yardstick, which is the common practice of international standards. Also, the government can encourage more companies to officially register into the formal private sector, by only allowing registered SMEs to apply for loan assistance.

3.3.3. Consulting Services for SMEs

Consulting services can help to solve managerial and technological problems and transfer technology by providing managerial and technological extension services

40) UN’s International Standard Industrial Classification (ISIC)

130·Moving to the Diversification of the Gabonese Economy and information. SMEs’ international competence may also be strengthened through consulting services that can help companies achieve greater productivity and quality improvement, cost reduction, and capacity building.

This service is to be headed by SMEPA, and to be supported by financial institutions, the Chamber of Commerce, and selected research institutes or organizations, based on the specific standards of each sector.

However, to ensure the operation of an accountable and effective service, SMEPA will implement direct consulting services through its own personnel. The consulting group may also carry out feasibility surveys of enterprises who wish to apply for financial support.

3.3.4. Training of SME Personnel

Training programs for SMEs can be utilized as a method of fostering the necessary human resources to adequately combat internal and external changes in the economic environment. This program can contribute to the independent growth and development of SMEs.

In the earlier stages, training services may be carried out in SMEPA offices or in renting lecture rooms. And training services that require experiments and practical training with enterprises can be carried out directly on site. In the long run, lecture rooms, and experimental and practical training facilities may be installed at SMEPA’s own training center.

As a consulting service, for a training service to be accountable and effective, SMEPA may conduct a direct service through its own administrative organization. Furthermore, it may hire capable teachers to be in charge of lectures.

3.3.5. Provision of Information

SMEs suffer from a lack of resources when acquiring outside information. Hence, SMEPA has to take on the role as a surveyor to assist SMEs. SMEPA may adopt the following measures when providing information to SMEs and when participating in projects requiring surveys and research. First, SMEPA can primarily provide information through periodical publications or on-line. Second, for individually requested information by SMEs, SMEPA may respond through domestic or overseas networks. Third, SMEPA can set up a reference room or library open to all who require information.

Highly competent researchers may be deployed by SMEPA in researching and

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·131 developing SME policy, and developed SME policies may be recommended to the government.

3.3.6. Marketing Support and International Cooperation

SMEPA comprehensively supports SMEs by overseas cooperation, business cooperation between individual SMEs, technical cooperation and joint ventures among nations. Its consulting service also assists companies in finding overseas partners, arbitrating negotiation and advises local companies about businesses overseas.

Also, SMEPA hosts international seminars, business cooperation events with foreign agencies, and dispatches domestic SMEs and local SME delegations to international exhibitions and foreign countries. 3.4. Organizational Structure of SMEPA

The organizational chart of SMEPA is as shown in [Figure 3-12], based on tasks.

[Figure 3-12] SMEPA’s Organizational Chart

132·Moving to the Diversification of the Gabonese Economy 3.5. Korean Model

3.5.1. The SME Promotion Act in Korea

Korea has enacted the ‘SME Framework Act’ in 1966, which has the characteristic of the constitutional law for SMEs. The enactment of the SME Promotion Act in 1978 stipulated the specific details for promotion of the SME sector. This led to the joint establishment of the SME Promotion Fund and the SMEPA, (i.e. SBC to manage the fund) as non-profit organizations under the auspices of the Ministry of Commerce and Industry in the following year of 1979. The SME Promotion Act declared policies that were integral to foster the SME industry such as SME specific measures regarding provision of loans, establishment and conversion of businesses, and training and education.

Below are the tasks stated in the ‘SME Promotion Act’ when the SMEPA was established.

Reference 4: The main tasks of SBC stated in the ‘SME Promotion Act.’

Programs for modernization and cooperation Services for the extension, introduction, and dissemination of technology. Operation and management of the ‘SME Promotion Fund’. Training of SME employees, executives and staff of related parties. Acquisition of land, buildings and facilities, or the creation, establishment, rent, or transfer of complex and common facilities for cooperative programs. Management of SME shares or corporate bonds. Other supplementary projects. Other projects selected by the Minister of Commerce and Industry.

3.5.2. Implementation of the SME Promotion Fund in Korea

Funding is imperative for the successful fostering of the SME sector. The SME Promotion Fund is stipulated in the ‘SME Promotion Act’ as follow; the fund may be formed by the contributions from governmental and non-governmental parties, loans from home and abroad countries below the pre-approval from the administrator of SMBA, revenues of carrying out of the projects related with the fund or the contributions defined under the Presidential Decree.

The SME Promotion Fund was created with contributions from the government and the private sectors and later on, loaned capital from international financial

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·133 institutions like the International Bank for Reconstraction and Development (IBRD), Asian Development Bank (ADB), etc.

Hence, it is circulating as assisted loaned funds through commercial banks. This fund is used as organizational costs for projects like consulting, training, and information providing services and also as the operational costs of the SBC which operates and manages the SME Promotion Fund.

shows the composition of the Korean SME Promotion Fund in its first decade after being established by the SMEPA (SBC) from 1979 to 1988.

Composition of SME Promotion Fund in Korea (1979-1988) (Unit: million USD)

Contribution Revenue & Expenses Debit Total Govern- Sub Sub payable Private Revenue Expense (1+2+3) ment Total(1) Total(2) (3) 256 16 268 184 193 -9 286 545

The SME Promotion Fund was first created in 1979, and amounted to a total sum of 545 million USD in the decade up to 1988, including 286 million USD of debt. Contributions from the private sector composed only for the first two years. Afterwards most contributions came from the government. Government contribution was mainly used for operational expenditures excluding financial support. Funding for loans were made from debts borrowed by the government. While the fund for financing loans can be seen as debt, it has been a source of revenue for the fund as is loaned to companies at a higher interest rate than the rate is procured by the government. The operational expenditures were mainly used for service expenses for consulting, training, information providing, and operation costs for the corporation.

shows the breakdown ratio for each service.

Spending Breakdown (1979-1988) (Unit: %) Consulting Administ- Financing Training Information Others Total Services ration 10.5 26.1 17.1 8.5 25.6 12.2 100.0

134·Moving to the Diversification of the Gabonese Economy Meanwhile, the table below shows the achievements of the SMEPA during its first decade.

Agency Service Achievement (1979-1988) (Unit: No. of Company) Information Financing Extension Service Training Providing 4,034 9,922 7,542(63,772 persons) 37,353(case)

As of the end of 2010, Korea’s ‘SME Promotion Fund’ operates at a scale of 3.58 % of total corporate loans. The figure below can serve as a good proportion when planning the volume of funding that may be needed.

[Figure 3-13] Proportion of「 SME Promotion Fund」(2010)

Source: SBC,『 SME Supporting Policy of Korea』, 2011

4. Conclusions and Policy Recommendations 4.1. Summary and Conclusion

With the election of Ali Ben BONGO Ondimbain August 2009, the new president announced plans to develop strategic programs and projects to match a periodical growth plan until 2020, to establish Gabon as one of the newly emerging economic nations.

This plan is comprised of three pillars to tow Gabon’s growth and secure national competitive edge, namely, industrial development, eco-friendly growth, and

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·135 advancement in the service sector. These three pillars are based on expanding human resources and social overhead facility, creating appropriate and effective business surroundings, and gaining access to markets through assistance to private sector.

With the per capita GDP of 7,680 USD, Gabon is classed as an upper-middle income country. Its economy heavily depends on crude oil, which occupies 50% of GDP, 60% of government revenue, and 75% of exports. With the present key industries of petroleum and mining, the government is making finance sounder through continuous development and optimization, while flying banners of promoting and expanding SMEs as the another national industrial foundation. Thanks to these industrial diversification efforts, the growth rate of the non-petroleum sector recently over-passed that of the petroleum sector, leading to national development. However, several barriers existed during the course of promoting industrialization by the Gabonese government.

First, economic growth is led by the development and sales of natural resources. Second, current industrialization is driven by major overseas capital rather than by domestic capital. Third, the country suffers from a shortage in domestic technology and technical manpower for industrialization. Fourth, small and medium enterprises, which are the backbone of a national economy, are in dire need of support, and social security must be stabilized through poverty reduction and formation of a middle class. Thus, the Gabonization of industry and the promotionof SMEs are absolute preconditions to achieve industrialization. 4.2. Policy Recommendations

Policies and measures to achieve the Gabonization of the industry and the promotion of SMEs as a means of industrialization are as follows:

First, the government needs to establish technical high schools and to support them intensively, so that job-oriented education can be carried out in the field of export oriented timber industries and strategic industries. These industries have a great ripple effect for import substitution and industrial diversification.

Second, the government needs to effectively operate a national technology qualification system by establishing an appropriate qualification system which meets the needs of industrial sites. Also preparations must be made for a legal framework to give preference to qualification certificate holders when employing workers. For the stable implementation of these policies, it is necessary for the government to enact the National Technical Qualifications Act. Also, the government should appoint or establish an institution to implement national technology qualification system. This institution could also manage domestic and foreign technicians who own or are

136·Moving to the Diversification of the Gabonese Economy qualified for the appropriate technology.

Third, the government should promote the B.I. project for industrial diversification and reactivation of start-up companies. In other words, the government should promote the B.I. project in accordance with the law regarding industrial diversification, reactivation of start-ups, and job creation. Also, it is necessary for the government to implement the project by including it in PTDPME to improve awareness. The trial case will be led by the public authority as a non-profit business and the operation, and support for tenant SMEs will be carried out by the SME promotion agency. It is preferable to establish the B.I. in the capital Libreville, or FEZ or in its vicinity to increase communication within the industry and increased accessibility towards related information. To induce firm bonds with universities and early social participation by university students, establishing B.I. in universities can be positively reviewed.

Fourth, the government should figure out mid and long term measures to reactivate start-ups and to improve entrepreneurship. As a mid and long term policy related with SME start-ups, it is essential to separate the start-up sector from being regulated under the existing law, the Law No.16/2005, Part II: The Special System of SME / SMI or Part III: Incentives, or to consider enacting a new law, such as the ‘SME Start-up Promotion Act.’ The aim of this Act will be to streamline the administration process as much as possible. Also, it is necessary to lengthen the legally acknowledged start-up period and extend the tax benefit period for start-up enterprises, while intensifying assistance through SME promotion agencies.

Fifth, it is necessary for the Gabonese government to gradually implement restructuring of the secondary industry. For the industrialization and the enhancement of national competence in Gabon, there is a need for measures that will help increase the number of SMEs, which will eventually help Gabon jump into a new status as a high income economy. Also, the government, in the course of industrial restructuring, should establish long term policies to expand small and medium manufacturing industries. In addition, it is necessary to review and rearrange the whole legal foundation and framework concerning SMEs.

Sixth, in order to increase the number of SMEs, it is essential for the government to establish a new SME Promotion Agency. Doing so will expand the SME sector as the base of industrial restructuring, establishing social security nets, and strengthening national competence. To establish a new SMEPA, it is recommended that the government amends the existing law or enacts a new law.

Finally, to support SMEs with comprehensive tools including financial loans, it is recommended that the government establishes an SME Promotion Fund and

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·137 designates SMEPA as the operating and managing body. The main role of SMEPA is defined as financial support, extension service and training, provision of information, marketing support, and international cooperation for SMEs. Also, the conditions for providing loans from SMEPA are established to be in the long-term and at a low- interest rate when compared to other loans from commercial banks. Also, SMEPA executes these loans in the form of indirect loan through a bank. In the mean time, an appropriate industrial classification code should be established to provide optimal funding for SMEs. In order to establish an appropriate industrial classification code, the UN-defined industrial classification code is recommended. Through this, SME businesses will be specifically defined. Consequently, SMEs will be defined according to a combination of two methods of classification: first, with the number of employees, and second with the total revenue of the firm. As a result, only registered enterprises will be eligible for loans through the SMEPA.

138·Moving to the Diversification of the Gabonese Economy References

AfDB, “Republic of Gabon, Country Strategy Paper 2006-2010”, 2006. ______, “Republic of Gabon, Economic and Sector Work - Private Sector Development”, 2010. ______, ”Republic of Gabon, Country Strategy Paper 2011-2015”, 2011. ______, “Gabon, Country Assistance Evaluation 1996-2008”, 2011. African Economic Outlook Website www.africaneconomicoutlook.org Bank of Korea Annual Index http://kosis.kr Bank of Korea Economic Statistics System http://ecos.bok.or.kr Bae, Kyung Hwa, “Research on Efficient Operation Strategy and Supporting Program for Korean B.I.”, Small and Medium Business Corporation, 1999. Cho, Jung Yoon, “Research on Improving the National Qualification Certificate System for 21st Century”, Korea Research Institute for Vocational Education and Training, 1998. DGPME, "Fichier des Petites et Moyennes Enterprises", 2011. Direction Generale des Ressources Humaines, ENEC 2010, et Direction Generale de la Statistique, DGPME, April 2012. Fontaine, Marcel, “OHADA Uniform Act on Contract Law”, 2004. Kang, Soon Hee and Shin, Bum Seok, “Knowledge Economy and Core Competencies”, Korea Labor Institute, 2002. Kim, Joo Mi, “IE SME Forum-The Status and Improvement of B.I. Center in Korea”, Korea Small Business Institute, IE Magazine No 18-3, 2011. Kim, Pil Hun, The Assessment and Implication of Unequal Distribution of Small Manufacturing Enterprise, Korea Economy Research Institute, 2009. Korean National Statistical Office, Statistical Survey Report of Entire Enterprises, 1992. Korean Statistical Information Service Website http://kosis.kr Lalkaka, Rustan, “Lessons from International Experience for the Promotion of BI system in Emerging Economies”, UNIDO, 1997. Netherlands African Business Council, “Gabon Business Mission Fact Sheet 2010-2011”, 2010. Pilat, Dirk et al., “The changing Nature of Manufacturing in OECD Economies”, OECD, 2006. OECD STAN Indicators database Website www.oecd.org/sti/stan/indicators Oh, Won Chul, Korea Model Economic Development, Kia Institute of Economy, 2005. Oxford Business Group, The Report Gabon 2011, London, UK, Oxford Business Group, 2010. Republic of Gabon, Direction Générale de l’Economie pour l’origine du PIB par secteur et traitement de la Direction Générale des PME pour la part des PME dans le PIB en 2009 et 2010, 2010.

Chapter 3 _ Developing SMEs in Gabon and the Establishment of Small and Medium Enterprise Promotion Agency ·139 References

Republic of Gabon, Le Gabon Emergent: Plan Op rationnel Sectoriel 2011-2016, Vol. 2: Plan Op rationnel Sectoriel Cadre des Affaires et Appui au Secteur Priv e. Small and Medium Business Administration SMINFO Website http://sminfo.smba.go.kr/ Small and Medium Business Corporation, 10 Years History of SBC, 1989. ______, “SME Economy and Management Index”, 2009. ______, “SME Supporting Policy of Korea”, 2011. The Observatory of Economic Complexity Website http://atlas.media.mit.edu UNDP, Human Development Report 2012, 2012. http://hdrstats.undp.org. World Bank, Doing Business 2012, Washington DC, USA: World Bank Publications, 2012. World Bank International Finance Corporation, “Why Support SMEs?”, 2010. Moving to the Diversification of the Gabonese Economy Chapter 4

Establishment of IT Parks for the Innovation of Gabonese Economy

1. Preface 2. Gabon’s IT Park Development Plan and Major Challenges 3. Case Study on Korea’s IT Park Experience 4. Recommendations for Establishing IT Parks in Gabon ■ Chapter 04

Establishment of IT Parks for the Innovation of Gabonese Economy

Hongmin Chun (Korea Institute for Development Strategy) Simon Pierre Ndombi (National Agency for Digital Infrastructures and Frequencies)

Summary

The Gabonese government is currently driving the nation-wide transition into an information society based on its ‘Digital Gabon’ strategy. Especially with the ACE undersea cable and a nation-wide fiber-optic network project, Gabon is accelerating the flow of investment to provide the top communication environment in the region. In addition, Gabon is planning to build the biggest Cyber City in the region to become an ICT Hub in Central Africa, and to create IT Parks in major cities.

This plan is quite meaningful in the sense that it will spark the growth of the premature Gabonese ICT industry, while bringing added value and efficiency to existing industries like energy, timber, minerals, and tourism, etc. This plan also may be efficient for improving the quality and delivery system of the public services like education, health care, etc.

In this sense, detailed benchmarking of Korean experiences of research complexes and Techno Parks (TPs) will present a lot of hints and help the present Gabonese government’s effort in establishing the IT Parks. In particular, the Korean experience of laying out innovative foundation of national science technology through Innopolis, and invigorating the local economy through creating TP, can be directly connected to the Gabonese government’s ICT development task.

142·Moving to the Diversification of the Gabonese Economy In this project, the Gabonese government expects the basic concept for IT Parks in six major cities, and this report will focus on providing policy advice for a number of critical factors in establishing IT Parks, plus a guide in formulating the specialization strategy for each IT Parks. As already laid out in the ‘Digital Gabon’ strategy, the policy recommendations have been derived focusing on the function of ICT as an enabler.

Based on a detailed review of the ‘Digital Gabon’ strategy, IT Park concept plan, and ICT sector analysis, the Government of Gabon should resolve the following challenges in order to successfully materialize IT Parks in Gabon.

- Definition of clear policy objectives of IT Parks - Selection of target industries of IT Parks based on local advantage - Preparation of an industry clustering strategy to activate IT Parks - Arrangement of legal/institutional frameworks for establishment of IT Parks and for private sector participation - Securing of the management entity and cooperation of supporting agencies for establishment of IT Parks - Preparing IT Park operational program - Securing development fund for establishment and operation of IT Parks

With regards to the Korean experience in IT Parks, this report focused on two distinctive models: central government-led ‘R&D Special Zone’ (also called ‘Innopolis’) which aims to establish a national innovation system and local government-led ‘Techno Park’ which aims to foster local economy and create local jobs.

The first lesson from the Korean experience is introduction of a competitive selection process. Also, there was strong participation from the local government and private sector. Lastly, customized support was provided for the enterprise according to the development phase.

Focusing on the task of establishing IT Parks in Gabon, based on Korean examples, the following recommendations have been derived. Below is the summary of basic policy direction by subjects.

● Establishing a clear policy direction for developing IT Parks - Considering the present Gabon ICT sector development level, and supplementing weaknesses in relevant sectors

● Preparing a specialization strategy for each of the IT Parks - Considering local products, R&D capability, SEZ strategy, etc.

● Creating an industrial cluster strategy for the activation of the IT Parks

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·143 - Connecting various supporting agencies on the value chain, front/back enterprises, R&D labs, universities, financial institutions, etc.

● Laying out an institutional foundation for IT Parks - Enacting special laws, and creating a one-stop service center to support tenant enterprises

● Preparing IT Park operational programs - Preparing operational programs in cooperation with the government, supporting agencies, R&D labs, universities, tenant firms, etc.

● Securing the development funds for IT Parks - The central government should play the leading role, and the local government as well as the private sector should actively participate

● Monitoring and evaluating the IT Parks - Conducting annual evaluations focusing on self-sufficiency, with tenant firms supporting performance

1. Preface

The Gabonese government is currently driving the nation-wide transition into an information society based on its ‘Digital Gabon’ strategy. Especially with the African Coast to Europe (ACE) undersea cable and a nation-wide fiber-optic network project, Gabon is accelerating the flow of investment to provide the top communication environment in the region. In addition, Gabon is planning to build the biggest Cyber City in the region to become an ICT Hub in Central Africa, and to create IT Parks in major cities.

This plan is quite meaningful in the sense that it will spark the growth of the premature Gabonese ICT industry, while bringing added value and efficiency to existing industries like energy, timber, minerals, tourism, etc. This plan also may be efficient for improving the quality and delivery system of the public services like education, health care, etc.

However, it is noteworthy that establishing and operating an IT Park is a very complicated and difficult project, and only very few successful cases in the world exist out of numerous attempts. IT Park requires a clustering strategy based on potentials for national and regional ICT development, selection of locations with comparative advantage, inter-linked operation plan among R&D-HRD-Incubation, infra-structure building in self-sufficient electricity, water, road, etc., land development, and huge

144·Moving to the Diversification of the Gabonese Economy amounts of financing. Especially when considering a PPP-based development, it requires a lot of preparation such as enactment of relevant laws, etc.

Also, as seen in the preceding research in 2011, while the Gabonese ICT sector currently has some strength in wireless communication, it shows a number of areas of improvement in other fields such as wired communication, price of telecommunication, ICT devices and internet accessibility, ICT skill levels, internal R&D capacity, and maturity of the ICT industry, etc. To back up this weakness, the plan for creating IT Park is in dire need.41)

In this sense, detailed benchmarking of Korean experience of research complexes and TPs will present a lot of hints and help the present Gabonese government’s effort in establishing the IT Park. In particular, the Korean experience of laying out innovative foundation of national science technology through Innopolis, and invigorating the local economy through creating TP, can be directly connected to the Gabonese government’s ICT development task.

In this project, the Gabonese government expects the basic concept for IT Parks in six major cities, and this report will focus on providing policy advice for a number of critical factors in establishing IT Parks, plus a guide in formulating the specialization strategy for each IT Parks. As already laid out in the ‘Digital Gabon’ Strategy, the policy recommendations have been derived focusing on the function of ICT as an enabler.

This report is comprised of the following 3 chapters. Chapter 2 deals with IT Park related policies and plans of the government of Gabon. Chapter 3 takes a detailed look on the Korean experience focusing on the R&D Special Zone and TPs. Finally in Chapter 4, detailed policy recommendations by major factors in establishing IT Parks in Gabon will be provided, based on Korean cases.

2. Gabon’s IT Park Development Plan and Major Challenges 2.1. ‘Digital Gabon’ Strategy and Institutional Framework

2.1.1. ‘Digital Gabon’ Strategy

The Gabonese government, among the three axes of ‘Le Gabon Emergent (Emerging Gabon)’ strategy aiming to become an emerging country by 2025, namely

41) For detailed report on Gabon’s ICT sector, please refer to ‘Moving to the Diversification of Gabonese Economy: Lessons Learned from Korea (MOSF, 2012)’.

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·145 ‘Green Gabon’, ‘Industry Gabon’, and ‘Service Gabon’, has announced the ‘Digital Gabon’ strategy as one of the core sectors of service in Gabon. The vision of ‘Digital Gabon’ is to ‘facilitate the development of e-services that supports ‘Le Gabon Emergent’ through establishment of the nation-wide digital infrastructure by the year 2016’. The framework shown below is suggested in ensuring its successful implementation.

[Figure 4-1] Framework for Implementing ‘Digital Gabon’

Source: Ministry of Digital Economy, Communication & Post, Gabon

‘Digital Gabon’ is designed to support regionally-balanced development and establishment of regional economic centers by building modern infrastructure. In this direction, the development principles of Digital Gabon are put forward as below.

- Providing a trustworthy digital technology environment employable to all interested parties - Providing modern public administrative services for citizens and enterprises - Strengthening access to information in all regions - Fostering human resource development through provision of easy access to knowledge - Developing innovation and initiatives to produce localized content - Attention to social development services to achieve the Millennium Development Goals

Based on these principles, the Gabonese government is promoting major projects based on the following six strategic axes of ‘Digital Gabon.’

146·Moving to the Diversification of the Gabonese Economy - Building consistent and stable institutional infrastructures - Preparing legal infrastructures for information society - Building and managing the digital infrastructure from the perspective of sharing - Standardizing and computerizing government records - Realizing e-government - Connecting with production and social sectors

Based on this strategy, the key programs of the Gabonese government in the ICT sector are as stated below.

● Building a legal and structural system - Enacting laws related to the digital economy - Establishing a ministry and supervisory and implementing institutions

● Building infrastructure - Connecting with ACE submarine cable - Building an inland optical fiber network - Building WiMax for the nine major cities’ administrative network - Building wireless communication network based on Long-term Evolution (LTE) technology - Building Digital Center

● e-Government/health, and education ICT - Building an e-government system - Providing e-learning to all schools through establishing internet multi-media rooms - Building remote pharmaceutical and mobile health systems

● Establishing IT Parks - Establishing the largest Techno Park in Central Africa. (Cyber City of Mandji Island) - Creating small and medium sized IT Parks in six major cities, centering on universities

2.1.2. Institutional Framework of ‘Digital Gabon’

The institutional framework of ‘Digital Gabon’ is shown in [Figure 4-2]. The Ministry of Digital Economy, Communication & Post is in charge of setting up the policy. Also, ARCEP (Former ARTEL), the telecommunications regulatory authority of Gabon, is in charge of regulating and supervising the entire industry such as allocation of broadcasting and telecommunication frequencies, collection and management of license fees, etc. Major implementing agencies are ANINF, in charge of national digital infrastructure and frequency control related to infrastructure build-up, and Gabon Multimedia Development Company (GMDC), in charge of ‘Cloud Gabon’ and IT Park management.

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·147 [Figure 4-2] Institutional Framework of ‘Digital Gabon’

Source: Ministry of Digital Economy, Communication & Post, Gabon , 2012. 8.

For the moment, GMDC is still in its planning stage in the Ministry. Once established, it will be in charge of establishing and managing the Cyber City including six IT Parks, constructing the ‘Cloud Gabon’ environment like G2C, G2B, B2B, B2C, etc., PR for promoting the digital economy, and soliciting international investors, international cooperation, and managing convention center for the Cyber City.

[Figure 4-3] Major Role of GMDC

Source: Ministry of Digital Economy, Communication & Post, Gabon, 2012. 8.

148·Moving to the Diversification of the Gabonese Economy 2.2. Gabon’s IT Park Establishment Plan and its Status

2.2.1.Gabon’s IT Park Establishment Plan

According to the government of Gabon, the IT park establishment plan starts from the concept of ‘Cloud Gabon’. ‘Cloud Gabon’, as shown in [Figure 4-4], is the environment where infrastructure, platform and application are combined to provide ICT services for ‘Digital Gabon’.

[Figure 4-4] Idea of ‘Cloud Gabon’

Source: Ministry of Digital Economy, Communication & Post, Gabon, 2012. 8

The government of Gabon is planning to realize ‘Cloud Gabon’ in the government and in each major industry. In the governmental sector, the government is aiming to provide G2C, G2B, G2G services by building up e-government and m-government environments. And in industry fields such as the health sector, it is targeting to provide B2C, B2B, B2G services by building up e-health and m-health environment.

For this purpose, Gabonese government is planning the Cyber City of Mandji Island (CIM) project, to set up the largest Cyber City in Central Africa in the Port

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·149 Gentil SEZ. It is also planning to create small and medium sized IT Parks in six major cities of Libreville, Franceville, Lambarene, Oyem, Mouila, Boue (refer to Figure 4-5).

Presently, the master plan for the Cyber City has been completed, and the government is soliciting strategic private investors to create and develop the complex in the form of a PPP. For the IT Park in Libreville, which is to be created in the Nkok SEZ the government is preparing detailed implementation plans with the basic master plan already set up.

[Figure 4-5] Gabon’s IT Park Establishment Plan

Source: Ministry of Digital Economy, Communication & Post, Gabon, 2012. 8

2.2.2. Detailed Plans and Status for Establishing a Cyber City

The government of Gabon is promoting a grand project of establishing a Central African ICT Hub in Mandji peninsula near Port Gentil, by establishing a Cyber City. With the target of attracting multinational enterprises in the ICT sector, this project aims to develop the complex of 410 ha inside the Port Gentil Free Trade Zone (FTZ), providing the best regional communication infrastructure connected to submarine optical cable (refer to Figure 4-6).

For ICT enterprises moving into this City, tax will be exempted for the first 10

150·Moving to the Diversification of the Gabonese Economy years, and from the 11th year and on, the corporate tax is expected to be levied at a level of 10%. Wiring funds outside the country will be 100% free, and the one-stop service will be provided for corporate registration and all administrative affairs. The target enterprises to move in are IT outsourcing companies, Cloud Computing companies, call centers, S/W publishers, web agencies, web hosting enterprises, and media production companies, etc. After the complex creation is complete, more than 50,000 new direct and indirect jobs are expected to be created.

[Figure 4-6] Master Plan of the Cyber City

Source: Ministry of Digital Economy, Communication & Post, Gabon, 2012. 8

The Government of Gabon is trying to promote its ICT industry by attracting not only overseas distinguished ICT enterprises but also electronic and communication parts assembly factories. It is also planning to make an incubation center of professional ICT manpower by inviting international level university to move in. For power generation, new and renewable energy such as solar energy will be used, and it is planned to be operated as a low-carbon green complex by applying energy efficient technologies (refer to Figure 4-7).

This project is grand in scale, requiring 5 billion Euros of investment, and now, it is inviting investors from international land development groups and international IT enterprises. It will be developed in the form of PPP. At the moment, the basic plan for establishing the Cyber City is already finished; however, the detailed plan is yet to be

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·151 fixed. The government is planning to promote service contracts for detailed plans once the special purpose company, comprised of the multinational master developer and the government of Gabon (limited to less than 20% of shares), is launched.

[Figure 4-7] Major Components of the Cyber City

Source: Ministry of Digital Economy, Communication & Post, Gabon, 2012. 8

2.2.3. Detailed Plans and Status of Establishing an IT Park in Libreville

The Government of Gabon is also planning to establish a 2 ha IT Park in Nkok SEZ, 27km away from a population of 600,000 in the capital Libreville. The purpose of creating this IT Park is to train skilled manpower by linking it to the regional university, and to create better jobs by nurturing new enterprises. Specifically, two IT towers and one studio will be newly constructed, where ‘Cloud Gabon’ service related enterprises will move in (Refer to Figure 4-8, Figure 4-9).

At Nkok SEZ, one of several of Gabon’s SEZs, Olam International Ltd., a Singaporean enterprise is finalizing the development process, and local and international enterprises related to the timber industry, the major industry of Gabon, are planning to move in. University and research centers in the vicinity are Omar

152·Moving to the Diversification of the Gabonese Economy Bongo National University, National Science Research Institute (CENAREST), and other training institutes in the ICT sector (IAI, ENSET, IST, etc.).

[Figure 4-8] Location of Libreville IT Park

Source: Ministry of Digital Economy, Communication & Post, Gabon, 2012. 8

[Figure 4-9] Libreville IT Park Outline

Source: Ministry of Digital Economy, Communication & Post, Gabon, 2012. 8

The Nkok IT Park plan also has the idea for the basic framework, and detailed plans will be set up following a bidding process. Total estimated construction cost is 30 million USD, and the government is currently preparing the fund through various channels.

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·153 2.2.4. Plans and Status for Establishing IT Parks in Other Regions

The IT Park in Franceville is also one of the major IT Parks planned in Gabon. As the third largest city in Gabon with a population of 60,000, Franceville is a typical site for manganese production, and the government is currently creating a SEZ focusing on manganese processing, and it is planning to establish the IT Park inside the SEZ. In the vicinity, there is Masuku Science Technology University; the Mining Industry University will be established in the Moanda area later on, and CIRMF, a medical research lab is also located nearby. Also, The Government of Gabon is planning to establish a green education city in central Booue, where another IT Park will be created in the future. 2.3. Major Challenges of Establishing IT Parks in Gabon

As a platform to realize the Digital Economy, the government of Gabon is planning to create a Cyber City as a Central African ICT Hub, and six IT Parks. To successfully materialize the establishment of IT Parks, the challenges outlined below need to be resolved.

Definition of the clear policy objectives of the IT Park Selection of target industries of IT Parks based on local advantage Preparation of industry clustering strategy to activate IT Parks Arrangement of legal and institutional frameworks for establishment of IT Parks and for private sector participation Securing of the management entity and cooperation of supporting agencies for establishment of IT Parks Preparing the IT Park operational program Securing a development fund for establishment and operation of IT Parks

Most of all, the government of Gabon has to define the clear policy objectives. The functions and target industry of the IT Park will vary depending on its focus between import substitution and exports. Also, the boundary of participating and supporting agencies will be fixed by the scope of coverage such as R&D, BI, HRD or all of above.

Formulation of a specialization strategy is also important. Six IT Parks must be specialized without any major overlapping duplications, and this requires keen consideration of the base industry and the future strategy of the region. Formation of industry clusters based on a specialization strategy is also required, and legal and institutional frameworks for establishment and operation of IT Parks are to be successfully set up.

154·Moving to the Diversification of the Gabonese Economy Diverse operational programs must also be prepared in cooperation with related and supporting agencies, and step-by-step funding and budget execution plans must be secured to support the successful establishment and sound operation of the IT Parks.

[Figure 4-10] Major Challenges for Establishing IT Parks in Gabon

3. Case Study on Korea’s IT Park Experience 3.1. Overview of Various IT Park Models

There exist various models of IT Parks in the world, yet they can be broadly classified into three major models based on their concentration on either research activity or business activity: Research Parks focusing on R&D activity, Industrial Zones focusing on business activity, and Science & Technology Park (STP) which is a combination of the two aforementioned functions (refer to Figure 4-11).

Science & Technology Park (STP) can be classified again into Incubation Centers, Research Parks, Science Parks, TPs, or Techno-polis based on the scope of functions STP provides, which ranges from HRD to R&D, to facility and infomation support, to business incubation, to production, and, finally, to housing.

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·155 [Figure 4-11] Spectrum of IT Parks

Source: Artemis Saitakis (2011)

[Figure 4-12] Coverage of IT Park Functions by Model

Source: JK Kim (2011)

[Figure 4-13] shows orientation, main mission, main actors, size and type of IT Park for each model. The smallest form of the IT Park can be a single building such as the Sang-Am Digital Media Center (DMC) in Korea.

156·Moving to the Diversification of the Gabonese Economy [Figure 4-13] Models of IT Park

Source: SH Chang (1998)

As mentioned above, various models of IT Park exist in Korea, and this report will focus on two distinctive models: central government-led ‘R&D Special Zone’ (also called as ‘Innopolis’) which aims to establish a national innovation system, and the local government-led “Techno Park” which aims to foster the local economy and create local jobs (Refer to Figure 4-14).

[Figure 4-14] Outlines of R&D Special Zone and Techno Park

Source: Released by the Ministry of Knowledge and Economy, Korea

Henceforth, characteristics and representative cases of each model will be described in detail.

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·157 3.2. Case Study on R&D Special Zone

3.2.1. Outline of R&D Special Zone

The R&D Special Zone refers to the policy promoted in Korea from 2005, to create an ecological environment of knowledge expansion and technology development- enterprise promotion for establishing a national system for innovation. Daedeok Innopolis, the first Korean Science & Technology Complex established in 1979, is the origin of the R&D Special Zone in Korea.

The existing research complex centered on R&D was reborn as the R&D Special Zone, with the objective of creating innovative clusters through the commercialization of technology. The government laid out the legal foundation by enacting a special law. For this purpose, the R&D Special Zone Promotion Foundation was established, which is in charge of development and operation of nationwide R&D Special Zones. The foundation is operated on a performance basis, with the quantitative target for revenue, number of R&D centers, and number of venture companies set until 2015.

3.2.2. Current Status of R&D Special Zone

As of the end of 2011, there are three R&D Special Zones in Korea. After Daedeok in 2005, Gwangju and Daegu were designated as special zones in 2011. To be designated as an R&D Special Zone, the area must suffice in highly competitive criteria, such as the presence of a relevant number of public and private R&D institutions and active base industrial complex, high regional R&D investment rate, and favorable environment for Foreign Direct Investment (FDI), etc.

[Figure 4-15] Designation Status of R&D Special Zone

Source: Released by Ministry of Knowledge and Economy, Korea, Homepage of R&D Special Zone Promotion Foundation.

158·Moving to the Diversification of the Gabonese Economy 3.2.3. Daedeok Innopolis: a Major Example of the R&D Special Zone

Daedeok Innopolis, originating from the Daedeok R&D Complex created in 1979, is the first Korean STP. From the R&D center at the early stage, it is transforming itself to the technology commercialization center. Various R&D and commercialization projects, specialized in IT convergence technology, Nano technology, and new & renewable energy, are under progress, and presently, around 30 national research institutes, 400 private research labs, five universities, and 1,100 enterprises have moved in. Out of a R&D workforce of 45,000 in the Zone, 9,000 have Doctoral degrees. Such a figure is among those at the top of the list by comparison with any other STPs around the world, and the Zone is proud of its approximately 67,000 patents from tenant R&D labs and enterprises.

Daedeok Innopolis provides multiple supporting programs and tax benefits to tenant labs and enterprises, also employing venture capital fund. (Refer to Figure 4-17)

[Figure 4-16] Industry-University-R&D Network in Daedeok Innopolis

Source: Daedeok Innoplis

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·159 [Figure 4-17] Supporting Programs and Tax Benefits to Tenant Labs and Enterprises in Daedeok Innopolis

Source: Daedeok Innoplis

3.3. Case Study on Techno Parks

3.3.1. Outline of Techno Parks

Techno Parks were established in Korea from 1998, and, there are currently 18 Techno Parks nation-wide in operation. The Techno Park (TP) is a special zone created to meet local industrial characteristics with the purpose of aiding in the growth and development of the local economy. Thus the participation of local government and enterprises is very important.

3.3.2. Current Status of TPs

Established in 1998, Korean TPs have been selectively promoted from the start. At the initial selection, out of 13 regional applications submitted, only six highly competitive regions were selected. Additional TPs were selected later based on the progress and performances of TPs established in the 1st round.

160·Moving to the Diversification of the Gabonese Economy [Figure 4-18] Status of Designating Techno Parks in Korea

Source: Released by Ministry of Knowledge and Economy, Korea

3.3.3. Major Examples of TP: Gyeonggi TP and Chungnam TP

Gyeonggi TP, located in ERICA, Hanyang University Ansan Campus, has formed a cluster with large assembly factories in Gyeonggi province, based on the cooperation of various electronics related SMEs in Banweol-Shihwa Complex. It has been successful in attracting enterprise labs, like LG Innotech, etc., and it is training a large number of ICT professionals in the Capital area through customized university programs.

Chungnam TP, created in 1999, specializes in multimedia, display, and automobile parts, etc., and it is also proud of 150 tenant firms and 1,500 full time workers. Major factors for its success are solid industrial environment of the Samsung Display factory, the Hyundai Motor assembly factory, and the Yangsoo-ri movie studio, and close connectivity to five universities in the vicinity which operate TP in turns, etc. [Figure 4-20] shows various supports for tenant firms in R&D, Start-up, and HRD.

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·161 [Figure 4-19] Industrial Environment of Chungnam TP

Source: Chungnam TP

[Figure 4-20] Supporting Programs for Tenant Firms in Chungnam TP

Source: Chungnam TP , KDS

162·Moving to the Diversification of the Gabonese Economy 3.3.4. Implications of Korea’s IT Park Experience

First of all, Korean IT Parks were created through a step-by-step and competitive process. In 1998, when Korean IT Parks began development, the commanding authority approached with a very selective and prudent manner, and only six highly competitive regions were selected at the initial selection out of the 13 applications submitted. Then the second selection was carried out 3 years later.

During the development phase of TPs, local government, local enterprises and universities took the lead in participation, and they played an important role in creating fund sources and operations. The central government, to boost the sense of self-sufficiency, gave financial support only for the term of 5 years, and fixed the governmental supporting scales every year after achievement evaluations.

The keynote is the customized support tailored to the enterprises’ phase of growth. For tenant firms, support was provided for start-up R&D, technology commercialization, prototype development, design, and recently, overseas marketing as well.

[Figure 4-21] Implications from Korea’s IT Park Experience

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·163 4. Recommendations for Establishing IT Parks in Gabon 4.1. Basic Policy Direction

Focusing on the task of establishing IT Parks in Gabon, as defined in clause 2.3., and based on Korean examples, the following recommendations have been derived. Below is the summary of basic policy direction by subjects.

● Policy direction for developing IT Parks - Consider the present Gabon ICT sector development level, and supplement weaknesses in the relevant sector

● Preparing specialization strategies for each IT Park - Consider the local product, R&D capability, SEZ strategy, etc.

● Creating industrial clusters in the IT Park - Connect various supporting agencies on the value chain, front/back enterprises, R&D lab, university, financial institution, etc.

● Laying out an institutional foundation for IT Parks - Enact the special law, and create a one-stop service center to support tenant enterprises

● Preparing IT Park operational programs - Prepare operational programs in cooperation with the government, supporting agencies, R&D labs, universities, tenant firms, etc.

● Securing the development fund for IT Parks - The central government should play the leading role, and the local government as well as the private sector should actively participate

● Monitoring and evaluation of IT Parks - Annual evaluation should be conducted focusing on self-sufficiency and supporting performance of tenant firms 4.2. Detailed Policy Suggestions for Each Subject

4.2.1. Policy Direction for Developing IT Parks

Gabon’s IT Park can be developed in three phased models. Phase-1 is the ‘Local ICT Access Hub’ model to promote information society, phase-2 is the ‘Local Innovation

164·Moving to the Diversification of the Gabonese Economy Hub’ model to focus on ICT as an enabler to support local industrial development, and the last phase-3 is the ‘Regional ICT Industry Platform’ model to promote development of high value-added ICT hardware, software, and the service industry.

Considering the current level of the ICT sector development in Gabon, the country is likely to need a sufficient amount of time to create production capacity in all sectors of ICT hardware, software, and service industry, etc. Gabon already has solid industries like timber, minerals, oil, etc., and the demand for various ICT services and solutions to enhance and to add value to those industries is expected to be very high. Thus this paper suggests the adoption of the phase-2 model of the ‘Local Innovation Hub’ including the ‘Local ICT Access Hub’ model. (refer to Figure 4-22)

The development of IT Park as the ‘Local Innovation Hub’ is to promote sustainable industrial clusters, customized assistance to local enterprises, and to train local human resources. Key recommendations for the strategy include development of physical infrastructure, creation of new engines of growth, customized assistance to enterprises, and HRD. (refer to Figure 4-23)

In the case of physical infrastructure, IT Parks need common facilities such as high- speed internet network and a data center, information access center, business incubation center, R&D center, multi-purpose training center, TP headquarters and business support facilities, while specific facilities are also required for each of the specialization strategies of each IT Park.

[Figure 4-22] Phased Approach for Establishing IT Park in Gabon

Source: KDS

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·165 However, each of the six IT Parks can take different forms as Special Economic Zones, Local Industrial Clusters, or ICT Access Hub depending on the level of industrial development and availability of a professional workforce in the region.

[Figure 4-23] Vision and Strategy for Establishing IT Parks in Gabon

Source: KDS

4.2.2. Preparation of Specialization Strategy for Each IT Park

To select the target industry for specializing each IT Park, a detailed analysis on local production and its R&D capacity is required. Also, it is important to consider the fact that the government of Gabon is promoting the development of SEZs in major cities with distinctive specialization strategies based on the current status of the local industry and the consequent potential.

Based on local output, universities and labs in the vicinity with specialties, information of invited industries of regional SEZs described in detail in Chapter 2.2., and after consulting with Gabonese researchers, the following industries have been suggested for each IT Park as below (refer to Figure 4-24).

Libreville: Timber processing, Mineral (Manganese) processing, ICT (Web service, Cloud solution, etc.) Port-Gentil: Timber, Petrochemicals, Fertilizers, ICT (Electric communication parts, Web service, etc.)

166·Moving to the Diversification of the Gabonese Economy Franceville: Pharmaceutical, Agro-business Oyem: Agro-processing (Cocoa, Coffee)

[Figure 4-24] Specialization Strategy of IT Parks in Gabon Criteria Specialization

Liberville Local Production Timber processing Mineral processing Oyem ICT Agro-processing (Cocoa, Coffee) Local R&D Capacity

Target Market Franceville Port-Gentil Pharmaceutical Timber Agro-business Petrochemicals SEZ Strategy Fertilizers ICT

Source: KDS

4.2.3. Creating Industrial Clusters in IT Parks

To ensure sustainable growth of IT Parks, creation of industrial cluster is recommended to reinforce backward-forward synergy. In Korea, as shown in [Figure 4-25], the industrial cluster is comprised of enterprise, backward/forward enterprises in its value chain, public/private research centers, education and training institutions, financial institutions, and supporting agencies, so that self-reliant production capacity in the cluster complex can be provided.

Thus, creation of industrial cluster comprised of the following agencies geared toward each specialization area is recommended for Gabon.

Intermediary product (service) and finished product (service) producers Enterprise service agency: marketing, printing, web hosting and service enterprises Public and private research centers Education and training institutions, universities, etc. Financial institutions and start-up supporting agencies, etc.

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·167 However, it is noteworthy that a relocation issue could occur if companies producing intermediary or finished products are also included in the IT Park. This may also require including the incumbent production sites to the IT Park zone.

[Figure 4-25] Creation of Industrial Clusters for IT Parks in Gabon

Source: KDS

[Figure 4-26] Linkage of Cooperation Agencies for IT Parks in Gabon

Source: KDS

168·Moving to the Diversification of the Gabonese Economy 4.2.4. Laying out an Institutional Foundation for IT Parks

Laying out legal and institutional foundations and connecting cooperation agencies are also important in developing IT Parks. In the case of Korea, a special law was enacted to develop the R&D Special Zone and TPs, and various cooperation agencies were linked to maximize a synergy effect.

For Gabon, instead of having a one-to-one relationship with individual enterprises, various agencies related to setting up and supporting enterprises are better to carry out the role of one-stop service, with overall coordination conducted through the IT Park. This is closely linked to the recommendations in Chapter 3 regarding the support policies for SMEs in Gabon (refer to Figure 4-26).

[Figure 4-27] Operational Programs for IT Parks in Gabon

Source: KDS

4.2.5. Preparing IT Park Operational Programs

To ensure the successful operation of IT Parks, various programs for tenant firms are required, in cooperation with the government, industries, research centers, universities, and supporting agencies. The suggested programs from IT Parks through cooperation of connected agencies are as listed below:

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·169 Government cooperation program: Land space provision and policy funding support Industry/university cooperation program: Business start-ups, R&D, support for technology commercialization University cooperation programs: Tailored education & training, re-education, technology consultation, etc. Supporting agency cooperation programs: Direct and indirect funding support, business assistance service, advisory on law, patents, accounting and tax, marketing and PR support

4.2.6. Establishment of an IT Park Management Agency

A separate management body needs to be established for effective development and operation of IT Parks, and to support tenant firms. In Korea, every TP has a dedicated management entity in the form of a foundation jointly set-up by the government and the private sector. It is suggested that Gabon also establishes a management agency for IT Parks with an organization structure outlined as in [Figure 4-28], with detailed roles and responsibilities of the agency as below:

Preparing a business plan for operation of the IT Park Attracting, managing and supporting tenant firms Managing regional networks and industrial clusters Studying on policy for activating the local economy Reporting performance results to the central and local government Managing the organization, budget, facility of the agency, etc.

[Figure 4-28] Organization Chart of IT Park Management Agency in Gabon

Source: KDS

170·Moving to the Diversification of the Gabonese Economy 4.2.7. Securing the Development Fund for IT Parks

To develop and operate IT Parks, securing the fund is a top priority. Korea also created the first Daedeok R&D Complex with funding from the central government plus contributions from several countries such as the USA. In the case of TPs, the local government, universities, enterprises and other participating agencies in the region contributed the development fund together. In this way, local ownership and accountability were increased, leading to high sustainability.

For Gabon, as the local government and agencies are still financially insecure, strong support and commitment from the central government is crucial. In the mid and long run, increase of local ownership is advisable through joint contribution and operation among local government, universities and enterprises. For this purpose, local government may issue government bonds.

[Figure 4-29] Funding Source for Developing IT Parks and Revenue/Expense Structure

Source: KDS

4.2.8. Monitoring and Performance Evaluation of IT Parks

It is also important to monitor and evaluate IT Parks constantly to follow up whether they are effective and efficient and operated as aimed in the policy. For Korea, one of the most successful measures was introducing an organized performance evaluation system, such as financial support being commensurate with

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·171 annual performance evaluation results. Major evaluation criteria are supportive of tenant firms, site development progress, business plan feasibility, site sustainability, connected activity and support performance for technology innovation. The evaluation criteria for IT Parks in Gabon is suggested in [Figure 4-30] below based on the Korean model, with scores of each evaluation factor signaling the varied importance of each factor.

[Figure 4-30] Monitoring and Evaluation Criteria of IT Parks in Gabon

Source: KDS

172·Moving to the Diversification of the Gabonese Economy References

AfDB, “Republic of Gabon, Economic and Sector Work-Private Sector Development”, 2010. African Economic Outlook Website www.africaneconomicoutlook.org AT Kearney, “Next Generation Economic Clusters”, 2011. Booz and Co, “Next-Generation ICT Parks: Bridging the GCC Technology Gap”, 2009. http://www.booz.com/global/home/what-we-think/reports-white-papers/article- display/next-generation-parks-bridging-technology Chang, Se Hoon, “Current Status and Forecast on High-Tech Industrial Zone Development Policy”, 1998. Chungnam Techno Park www.ctp.or.kr European Investment Bank, Plan and Manage a Science Park in the Mediterranean, 2010. Kim, Jae Keun, “Study on Evaluation of the Results of Techno Park Development Project”, SungKyunKwan University, 2011. Ministry of Digital Economy of Gabon, “Digital Gabon Strategy”, 2012. ______, “Concept of Nkok IT Park”, 2012. ______, “Cloud Gabon Strategy”, 2012. ______, “Cybercity of Mandji Island Project”, 2012. Ministry of Knowledge Economy, “The 2nd Comprehensive Plan for Promoting R&D Special Zone (2011~2015)”, 2011. ______, Press Release (2011.6.28) Oxford Business Group, The Report Gabon 2011, London, UK, Oxford Business Group, 2010. R&D Special Zone Promotion Foundation Website www.innopolis.or.kr Saitakis, Artemis, “Science & Technology Parks & Technology Incubators”, Presentation file, 27 Sept 2011. UNECA, “Technology Parks, Incubation Centers, Centers of Excellence: Best Practices and Business Model Development in North and Southern Africa”, 2009.

Chapter 4 _ Establishment of IT Parks for the Innovation of Gabonese Economy·173 2013 gabonaise of the Gabonese Economy/ of the Gabonese Moving to the Diversification the Diversification to Moving Vers la diversification de l’économie de l’économie la diversification Vers

Moving to the Diversification of the Gabonese Economy / Vers la diversification de l’économie gabonaise2013

.go.kr www. ksp www.kdi.re.kr Tel. 82-2-958-4114 Tel. www.facebook.com/cidkdi Ɣ cid.kdi.re.kr cid.kdi.re.kr Knowledge Sharing Program Sharing Program Knowledge KDI Development, International for Center Seoul, 130-740 47, Dongdaemun-gu, 113 Hoegiro Box ƔP.O. 82-2-958-4224 ƔTel. Ɣ www.mosf.go.kr www.kds.re.kr 30-740, P.O.Box 113 Hoegiro 47, Dongdaemun-gu, Seoul 47, Dongdaemun-gu, 113 Hoegiro 30-740, P.O.Box Korea Development Institute Development Korea 1 Strategy Development for Institute Korea Gangnam-Gu, Seoul, Korea 135-867, WIZ Building 5F, 429, Bongeunsa-ro, 82-2-539-0072 Tel. Ministry of Strategy and Finance and Finance of Strategy Ministry City 339-012, Korea Sejong Special Self-Governing 477, Galmae-ro, Complex-Sejong, Government 82-44-215-7732 Tel.