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Second/First/Annual Session Of COUNTRY PROGRAMMING FRAMEWORK FOR INCLUSIVE AND SUSTAINABLE INDUSTRIAL DEVELOPMENT 2016 - 2020 This Country Programming Framework (CP) is designed to enhance UNIDO’s support to the Government of El Salvador (GOES) in the creation of a road-map towards Inclusive and Sustainable Industrial Development (ISID) as stated in the Lima Declaration adopted on the 2 December 2013 during the 15th session of the UNIDO General Conference. In doing this, UNIDO has aligned the El Salvador government’s priorities in accordance with the United Nations Development Assistance Framework 2016-2020 (UNDAF), building on the achievements of previous developed projects. Taking into consideration that industrialization is a long-term endeavor which involves many stakeholders, efforts will be made to strengthen synergies and to minimize duplication of work by collaborating with development cooperation partners, state and non-state actors, and the private sector in the country. Given that the framework is based on established national priorities, particularly the Productive Promotion, Diversification and Transformation Policy (PFDTP), the CP will be a useful guide for UNIDO’s interventions in El Salvador over the upcoming years. The CP builds on the UN reform programme in El Salvador, Delivering as One. The programme seeks to achieve greater linkages and better communication between the UN agencies in the country to streamline the technical cooperation assistance as well as to promote the Government leading position in development. LIST OF ABBREVIATIONS ADA Austrian Development Agency ALFA Salvadorian Association of Pharmaceutical Laboratories ASI Salvadorian Industrial Association ASIPLASTIC Salvadorian Association of Plastic Industries BANDESAL Development Bank of El Salvador CAFTA-DR Central America-Dominican Republic Free Trade Agreement CAMARASAL Chamber of Commerce and Industry of El Salvador CAMTEX Chamber of Textile and Apparel Industry and Free Trade Zones of El Salvador CDMYPE Micro and Small Enterprises Development Centre CNC National Quality Council of El Salvador CNE National Energy Council of El Salvador COEXPORT Corporation for Exporters of El Salvador CONAMYPE National Commission for SMEs of El Salvador CP Country Programming Framework/ Country Programme CTA Chief Technical Advisor DICOPP Productive Policies Coordination Department of Ministry of Economy of El Salvador EFR/RPF/LAC UNIDO LAC Division of the Regional Programmes and Field Representation Department EU European Union FDTP Productive Promotion, Diversification and Transformation Policy of El Salvador GDP Gross Domestic Product GEF Global Environment Facility GOES Government of El Salvador INJUVE National Youth Institute of El Salvador INQUIFAR Salvadorian Association of Chemical-pharmaceutical Industries ISID Inclusive and Sustainable Industrial Development ITPO UNIDO Investment and Technology Promotion Office KMP Knowledge Management Platform KOICA Korea International Cooperation Agency LAC Latin American and Caribbean MAG Ministry of Agriculture and Livestock of El Salvador MCREEE Mesoamerican Centre for Renewable Energy and Energy Efficiency MdeH Ministry of Finance of El Salvador MDGs Millennium Development Goals MEAs Multilateral Environment Agreements MINEC Ministry of Economy of El Salvador MIP Multiannual Indicative Programme MTPF UNIDO Medium-Term Programme Framework, 2016-2019 MTPS Ministry of Labor and Social Prevision of El Salvador MVA Manufacturing Value Added OFID OPEC Fund for International Development PA UNIDO Preparatory Assistance PPS/PRS UNIDO Policy, Research and Statistics Department PROESA Export Promotion Agency of El Salvador PTC/AGR/RJH UNIDO Rural Entrepreneurship, Job Creation and Human Security Division of Agro-Business Development Dept. PTC/ENE/CPN UNIDO Climate Policy and Networks Division of Energy Department PTC/ENV/IRE UNIDO Industrial Resource Efficiency Division of Environment Department PTC/TII/BCI UNIDO Cluster and Innovation Division of Trade, Investment and Innovation Department PTC/TII/STF UNIDO Standards and Trade Facilitation Division of Trade, Investment and Innovation Department ROMEX UNIDO Regional Office in Mexico RREE Ministry of Foreign Affairs of El Salvador SCT Vice-ministry of Science & Technology - Ministry of Education of El Salvador SG-SICA General Secretariat of the Central American Integration System SME Small and Medium Size Enterprises STPP Presidency Technical Secretariat of El Salvador SWOT Strength, Weaknesses, Opportunities and Threats 2 UN United Nations UNCT United Nations Country Team UNDAF United Nations Development Assistance Framework UNIDO United Nations Industrial Development Organization TABLE OF CONTENTS Executive summary ....................................................................................................................................................4 1.0 Country situation analysis ...............................................................................................................................5 1.1 The National Context ..................................................................................................................................5 1.2 Challenges to be addressed .................................................................................................................... 10 1.3 Alignment with the Sustainable Development Goals ............................................................................... 14 2.0 UN Coordination Framework ....................................................................................................................... 14 3.0 Past Cooperation and Lessons Learned ..................................................................................................... 15 4.0 Country Programme Components ............................................................................................................... 16 5.0 Management framework .............................................................................................................................. 21 5.1 Responsibility and accountability: Internal division of labor in the preparation process ......................... 21 5.2 Programme implementation..................................................................................................................... 22 5.3 Coordination ............................................................................................................................................ 22 5.4 Monitoring and Evaluation ....................................................................................................................... 24 5.5 Risks and mitigation measures ................................................................................................................ 24 6.0. Indicative budget and Fund mobilization Strategy ....................................................................................... 25 6.1 Resource mobilization strategy ............................................................................................................... 25 ANNEX I. RESULTS FRAMEWORK FOR THE COUNTRY PROGRAMME .......................................................... 26 ANNEX II. Total budget breakdown per year of CP. Detailed budget breakdown and work plan to ensure an efficient CP Coordination, Monitoring and Evaluation (Outcome 3). ....................................................................... 28 Timeline of activities for implementation of Country Programme for El Salvador (2016-2020) ........................... 29 3 Executive summary On September 2014 the Director of Productive Policies Coordination of the Ministry of Economy (DICOPP-MINEC) of El Salvador visited the UNIDO HQ’s to present El Salvador’s Productive Promotion, Diversification and Transformation Policy (FTDP). During his visit, potential UNIDO technical assistance for the policies’ effective implementation was discussed. Subsequently, various UNIDO technical branches prepared, under the overall coordination of the UNIDO Latin-American and Caribbean (LAC) Division, a general technical cooperation proposal which was submitted to El Salvador’s authorities for their analysis. Several video-conferences with national stakeholders have been held in order to discuss specific thematic issues such as; industrial policy assessment, sector strategic prioritization, investment promotion methodologies and tools. On February 2015 the Director General received an official request from El Salvador Government (GOES) asking for UNIDO’s technical assistance on the implementation of the FTDP policy. Since then, several exchanges with the parties involved have denoted a favourable scenario for the engagement of UNIDO’s services. The Permanent Mission Representative (PMR) of El Salvador met the UNIDO Director General (DG) on 26 August 2015 to express the GOES request for initiating a Country Programme (CP) for El Salvador and kindly requested a UNIDO’s Preparatory Assistance (PA) in this sense. The DG expressed UNIDO supports to undertake the PA, which include support for an official mission of key GOES officials from El Salvador to Vienna by beginning of 2016. This mission took place on 11-14 January with the participation of six officials representing the Ministry of Economy (MINEC), the Export Promotion Agency (PROESA), the National Commission for SMEs (CONAMYPE) and the Ministry of Foreign Affairs (RREE). Likewise, a UNIDO technical staff mission to El Salvador took place on 25-29 April to meet with involved Government counterparts and
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