The awareness-creation role of the project has been particularly important, and achieved considerable successes.  In particular, it has generated considerable interest among various institutions in Pakistan to expand the programme rapidly beyond the five pilot clusters covered in the original UNIDO Project.  Based on the experience of similar UNIDO programmes elsewhere, this expansion may be undertaken in partnership with, or under the sponsorship of, a number of other SME support agencies.  A ripple effect has already been created from the original five pilot clusters, and is spreading rapidly with the Pakistani counterparts themselves becoming increasingly more willing to contribute to the funding of the projects in order to overcome the constraints arising from the paucity of donor funding.

Trade Development Authority of Pakistan – TDAP (formerly EBP)

Set up in 1963, as an attached department of the Ministry of Commerce, the Export Promotion Bureau (EPB) facilitated exporters across the country, helping them overcome challenges by leveraging opportunities on the supply and demand side. It funded initiatives, and assisted in establishing common facilities with stakeholders. For 43 years, the erstwhile organization was the primary agency of the Government of Pakistan that played a vital role in promoting Pakistan’s goods and services internationally.

Over the 43 year period EPB played a critical role in helping exporters to participate in 30 to 80 exhibitions abroad each year. Regularly sent and received between 20 and 40 business delegations each year to and from export destinations to explore new markets and enhance market share through sustainable growth and diversification. Over the years EPB has supported the development of equal number of trade policies, implementing the consequential initiatives it was assigned. Its role in Textile Quota management is especially significant. It has issued millions of GSP Certificates and management of gold and jewelry export regulations. More than 20,000 exporters have been facilitated and part-funded to exhibit and grow their exports; over 2,000 delegates have been sent or hosted in Pakistan.

TDAP is a body corporate established on 8 November, 2006, under a Presidential Ordinance. The Ordinance will be tabled in the Parliament as an Act for approval. The TDAP is the successor organization to the Export Promotion Bureau (EPB) and is mandated to become a dedicated, effective and empowered organization that is professionally managed. TDAP, as part of its trade ‘development’ mandate, as opposed to ‘export promotion’ only, will be dedicated to the ‘holistic’ development and promotion of goods and services for exports globally. TDAP in this enhanced responsibility and role will create direct linkages with stakeholders, local and abroad, aiming for a ‘Quantum Leap’ in exports. The administrative ministry of the TDAP will be the Ministry of Commerce.

Keeping in view the importance and impacts of CND in other countries of the World, TDAP become the one of the major partners of this programme in Pakistan in mid 2001.

In 2003 the Government of Pakistan announced its decision to adopt SME cluster development as a principal element of its trade policy, and in the following months the EPB declared its willingness to provide substantial sums to use UNIDO’s services for the development of export-oriented SME clusters throughout Pakistan.  Subsequent discussions with senior officials of the EPB have led to the formulation of the following phased approach for EPB’s support to the UNIDO cluster development programme in Pakistan:

• The EPB will contribute US$ 211,000 in cash towards the implementation of the follow-up sub-projects in the five pilot clusters covered by the ongoing project US/PAK/01/099 as identified by the action plans drawn up for those clusters, and towards the establishment of a national training programme for CDAs to expand the cluster development programme beyond the existing five pilot clusters.  These funds have already been authorized by the EPB and their transfer to UNIDO is awaiting the approval of the present project document and related trust fund agreement.
• The EPB will make a further contribution, in cash or in kind, the further modalities of which are to be decided, to finance the medium-term costs of maintaining the CDAs in, and recruiting one or more POs for, the existing five pilot clusters selected under project no. US/PAK/01/099, as well as any further clusters to which the programme may subsequently be expanded in partnership with the EPB.
• Subject to the satisfactory implementation of this project, the EPB will consider a further contribution towards the expansion of the programme to several new clusters.

The total funding was divided in to three tranches out of which two tranches have been transferred to UNIDO and spent on joint activities defined in project document singed between the two agencies.

For more details please visit www.tdap.gov.pk

Small and Medium Enterprise Development Authority of Pakistan (SMEDA)
Premier institution of the Govt. of Pakistan under Ministry of Industries, Production & Special initiative, SMEDA was established in October 1998 to take on the challenge of developing Small & Medium Enterprises (SMEs) in Pakistan. With a futuristic approach and professional management structure it has focus on providing an enabling environment and business development services to small and medium enterprises. SMEDA is not only an SME policy-advisory body for the government of Pakistan but also facilitates other stakeholders in addressing their SME development agendas.
Based on an agreement reached in 2001 between the then UNIDO Representative in Pakistan and the then CEO SMEDA, the UNIDO project team had been hosted by SMEDA at the agency’s headquarters in Lahore for five years with all the infrastructural and office support.

SMEDA Punjab
SMEDA in collaboration with PSIC and UNIDO has started “Cluster Development Program for SMEs in Punjab”. The objective of this program is to help in developing seven different SME clusters of Punjab. The Diagnostic Study of these seven clusters has been completed. In the next year action plan would be implemented. Besides these clusters, SMEDA is also working exclusively with UNIDO in four clusters i.e.

• Sports Wear                                             Sialkot,
• Auto Part                                                   Lahore
• PVC Pipes & Plastic Products                  Lahore
• Marble & Granite                                      Rawalpindi/Islamabad.

Profiling of following clusters have been developed 

• Cotton Ginning Cluster                             Rahim Yar Khan
• Electrical Fittings Cluster                          Sargodha
• Wooden Furniture Cluster                         Gujrat
• Ceramic Sanity Ware                               Gujranwala
• Light Engineering Cluster              Faisalabad  

Worldwide, one of the most widely used practices to support industrial clusters is provision of Common Facility Centers (CFC). The establishment of CFCs is an integral part of SMEDA’s Cluster Development activities. So far SMEDA has been able to establish following CFCs with Chambers of commerce and industry and industry/trade associations:

• Computer Pattern Designing in Sialkot: This CFC has facilitated 300 SMEs to get their patterns developed, 122  participants trained & 28 are under training and 95 employments generated.
• Light Engineering Sector in Gujranwala:  The center has provided testing services to 206 SMEs 130 students have  completed Auto Cad training.
• Artificial Insemination Training Center in Burj Attari:  More than 1100 technicians have been trained and 900 self employments  generated under this program.

Credit is life line for any running business including SMEs and realizing the potential in SME sector and its importance, SMEDA has successfully launched following financing schemes in Punjab:

• Power Loom Up-gradation, Faisalabad (Rs.226 million to 150 entrepreneurs)
• Support Services for Agri Credit (SSAC) (Rs.77.45 million to 252 farmers)
• Lending Scheme for Cutlery Manufacturers, Wazirabad (Rs.5 million to 10 SMEs)

SMEDA Sindh
After the successful running of CND programme in Punjab, the scope of the project expanded to SMEDA Sindh under which 7 CDA have been trained and 5 diagnostic studies have been developed as follows:

• Knitwear Cluster Karachi
• Dairy Cluster Sukker
• Rice Cluster Larkana
• Horticulture Cluster Nawabshah
• Cut Flower Cluster Hyderabad

UNIDO is extending technical support to SMEDA Sindh and first review meeting is scheduled to be in mid-May 2008.
Interactions with SMEDA NWFP and SMEDA Balochistan are under way to have national outreach of the programme.  
For more details please visit www.smeda.org.pk
Government of Punjab Cluster Development Programme  

In August 2004 the provincial government of Punjab has also adopted the UNIDO SME cluster development approach to promote the development of the following seven clusters:

• Ceramics and pottery in Gujrat.
• Domestic electrical appliances in Gujrat/Gujranwala.
• Leather and leather products (including sports goods) in Sialkot.
• Woodworking in Chiniot (Jhang district).
• Cotton ginning in Rahim Yar Khan.
• Handloom weaving in Multan.
• Textile machinery spare parts and components in Faisalabad.

The programme have been implemented primarily by the Punjab Small Industries Corporation (PSIC) with funding for the first phase to the tune of PRs 10.98 million (approximately US$ 200,000) obtained from the Government of the Punjab.  SMEDA have provided support in cash and kind, and UNIDO has provided assistance in specific fields of the Organization’s expertise including TOT training and CDA training.

A Cluster development team was hired (1 project manager and 8 cluster development agents) after which TOT and CDA training programmes were conducted. Seven diagnostic studies have been developed under this project and some sub projects have been completed and others are in process of completion.

A formal request has been received from PSIC to start another project keeping in view the success of the previous one.  

For more details please visit http://psic.gov.pk
Aik Hunar Aik Nagar (AHAN)
The project envisages to study, indigenize and emulate OTOP (One Tambon, One Product) of Thailand and OVOP (One Village One Product) of Japan and other similar programs for income generation of rural and per-urban population with a view to identifying the best practices and adopt the same for design and implementation of Rural Enterprise Modernization initiative of the Government of Pakistan (AHAN) program keeping in perspective the overall policy to use the private sector as the engine for rural enterprise development.
OBJECTIVES
The primary objective of Aik Hunar Aik Nagar (AHAN) / Rural Enterprise Modernization Project is to reduce poverty by:-

• Supporting employment generation activities
• Economic Growth and
• Enhancing competitiveness of the micro and small business in rural areas.  

The project envisages enabling the rural business to access a range of business development services, including appropriate technologies and financial capital. The direct benefits are expected to flow from increased employment and income earning opportunities in the rural areas, particularly for wage earners, women and poor producer groups with potential to engage in a higher level of commercial activity. It is expected that through these measures there will be increased value-addition in the products sold, improved commercial linkages between rural MSEs and the larger urban business. Increased demand for goods and services will add to overall benefits
Whole AHAN team has passed through the CDA training and has developed four diagnostic studies. The details are as follows:

• Lacquer Work Cluster Sillanwali
• Balochi Chapal Cluster Qeutta
• Handmade Items Cluster Karachi
• Hand and Power Loom Cluster Matha Mughal Khel  

For more details please visit www.ahan.org.pk
Furthermore, it is pertinent to mention that UNIDO CND methodology was projected to and is customized & adopted by a number of national counterparts including the Ministries of Industry, Commerce, Textiles and Science & Technology; the Planning Commission, the Technology Upgradation & Skill Development Company (TUSDEC), the provincial industrial development departments specially PSIC , the LUMS , the UOG , the EDB , the PCSIR , the CSF , the BSF , and other cluster stakeholders. Tabulated below are series of collaborative/matchmaking initiatives by cluster actors to undertake cluster development approach in their concerned projects and areas-of-interest: