OVOP Guidelines

ASEAN COOPERATION PROJECT NO.
IND/SME/11/003/REG
Improvement Rural Living Condition Through One Village One Product (OVOP) Movement 1
ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG
2 Improvement Rural Living Condition Through One Village One Product (OVOP) Movement
Foreword
Majority of the poor people in the ASEAN Member States resides in rural
areas and most of them are depending on agriculture activities. Due to their
living conditions, in most case, are not sufficient to fulfill their basic needs,
therefore, most people tend to move to the city. Urbanization will create
significant demographic challenges, not only for the urban areas, but also
for the rural areas.
The governor of Oita, Morihiko Hiramatsu, Ph.D, in 1979, introduced the

“One Village, One Product” Movement to alleviate poor people and reduce urbanization in which
Oita was the poorest prefecture as that time. Through this program, slow but sure; Oita has
becoming the third rich prefecture in Japan. In addition, Mr. Hiramatsu also selected to be the Oita
governor for six periods.
The success of OVOP in Japan has inspired other countries in the world, both developing and
developed countries. In ASEAN itself, the OVOP movement has been adopted and implemented
in all countries, except for Singapore. In order to access the OVOP development in all ASEAN
countries.
This study led by Indonesia’s SMEWG focal point was aimed to improve the rural living condition
by doing fact findings, comparative study and workshop. This study will provide guidelines on
how to implement OVOP program based on the experience best practices in ASEAN and Japan. The
study has been held since 20 – 23 January 2013, and the results of this study have been presented,
and discussed at a workshop in Yogyakarta, 13-15 March 2014.
I would like to express my gratitude to all parties who have contributed a lot to this study, among
of them are the ASEAN Secretariat, the ASEAN SME WG Focal Points. The OVOP Focal Points, the
OVOP Focal Points and OVOP stakeholder institution respondents all over AMS. As the project
manager, my sincere thanks go to JAIF who has funded this project, without its support the project
could not be successful. I am grateful to the invaluable contribution made by Mr. Tadashi UCHIDA
of Oita OVOP, Japan and Mr. Tatsuya YANAGI, Deputy Director Private Sector Development Division
1, Private Sector Development Group, Industrial Development and Public Policy Department, JICA,
Japan, both resource persons from Japan, Mr. Haruyuki Yada, the First Secretary of Mission of Japan
to ASEAN, and also all resource persons from AMS and other networks. My deep appreciation is
for the hard work and commitment of Dr. Bagus Santoso and Dr. Agung Nur Fajar and all team
members to make this study become real.

Improvement Rural Living Condition Through One Village One Product (OVOP) Movement i
In conclusion, I hope that this study including the guidelines of OVOP would be utilized to
strengthen the development of OVOP in the ASEAN Member States for better living condition of
the people in ASEAN in the future.
Thank you,
Jakarta, 11 January 2014
I Wayan Dipta
Project Manager

ii Improvement Rural Living Condition Through One Village One Product (OVOP) Movement
ASEAN
Project Team
IMPROVEMENT RURAL LIVING CONDITION THROUGH ONE VILLAGE ONE PRODUCT (OVOP)
MOVEMENT
I Wayan Dipta, Deputy Minister of Production,

Ministry of Cooperatives and SMEs, Republic of Indonesia – Project Manager
wayan_dipta@yahoo.com
Dr. Bagus Santoso, DEFINIT – Project Coordinator

BagusSantoso@DEFINIT.Asia,
bagussantoso@yahoo.co.uk
Dr. Agung Nur Fajar, Arah Cipta Guna – Local Researcher

acg1@indosat.net.id,
agungnurfajar01@gmail.com
Gunawan Sumodiningrat, DEFINIT – Local Researcher
Astrid Maulida, DEFINIT – Local Researcher
Vica Sakti Mantong Tendenan, DEFINIT – Local Researcher
Anitha Marlius, Arah Cipta Guna – Local Researcher

Improvement Rural Living Condition Through One Village One Product (OVOP) Movement iii
iv Improvement Rural Living Condition Through One Village One Product (OVOP) Movement
Table of
Content
FOREWORD ................................................................................................................................................................... i
ASEAN PROJECT TEAM ............................................................................................................................................ iii
TABEL OF CONTENT . ................................................................................................................................................. v
1. INTRODUCTION …………………………………….............................……………………………………………… 1
1.1. OVOP Basic Principles …………………….......................………………………………………………… 2
1.2. OVOP Principles in ASEAN …….............................................………………………………………….. 3
1.3. Report Outline ……………………………...........................………………………………………………… 4
2. SELECTION CRITERIA AND OVOP STRENGTHENING SUPPORT PROGRAM ............................ 5

2.1. Selection Criteria for OVOP Recipient Program ……………………...................................…… 5
2.2. Support Program for OVOP Development ……………………….…………………....................... 7
3. CONCEPT AND IMPLEMENTATION OF OVOP PROGRAM IN JAPAN AND ASEAN .................. 9

3.1. Japan ……………………………………………………………………………………………............................ 9
3.2. Brunei Darussalam ………………………………………………………...................................………….. 10
3.3. Cambodia ………………………………………..............................................……………............................ 11
3.4. Indonesia ………………………………………....................................................…………………………… 14
3.5. Lao PDR ……………………………………………………………...............................................…………… 16
3.6. Malaysia ………………………………............................................………………...………………………… 17
3.7. Myanmar ………………………………………………....................................................……………………. 18
3.8. Philippines …………………………………………..........................................................………………….. 20
3.9. Thailand …………………………………........................................………………………………….......…… 21
3.10. Vietnam …………………………………………………………………………….......................................…. 24
4. OVOP DEVELOPMENT STRATEGY IN ASEAN ……………………………............................................…. 27
5. THE IMPLEMENTATION OF ONE VILLAGE ONE PRODUCT ………........................…….........…….. 31

5.1. Institutional Coordination and Arrangements …………………….........…..…………………... 31
5.2. Leadership …………………………………..…………….............…….....................................……………. 36
5.3. Clear Mechanism and Strengthening Supports f or OVOP …………...................………............ 37
5.4. Data Collection, Rating, Monitoring and Evaluation ………....................………….....………. 44

Improvement Rural Living Condition Through One Village One Product (OVOP) Movement v
6. APPENDICES …………………………………………………………………………................................................. 47
Appendix 1. Application Form of OVOP Program …………………………………..…............................ 48
Appendix 2. Form of OVOP Program Selection ……………………………............................................. 54
Appendix 3. Letter of Endorsement Focal Point of ASEAN SME Working Group …................ 61
Appendix 4. Letter of Endorsement Focal Point of OVOP …………….........................……...……… 70
7. REFERENCES ……………................................................................................………………………………………… 75
8. FIGURES ……………………………………………………………………………………………...………................... 11
Figure 3.1 The SWOT Analysis of OVOP Development in Brunei Darussalam ……........…….. 11
Figure 3.2 OVOP Structure in Cambodia …………………………………………………………............….. 12
Figure 3.3 OTOP Movement in Thailand …………………………………........................................……… 22
Figure 4.1 OVOP Development Strategy in ASEAN ................................................................................ 27
Figure 4.2 Urban Population (% of Total Population) …………...........................................…………. 29
Figure 5.1 OVOP Institutional Framework …………………………………….............................……….. 32
Figure 5.2 OVOP Movement Development ………………...............................................………………… 38
Figure 5.3 OVOP Program Implementation Steps …………………..........................................………. 40
9. TABLES ........................................................................................................................................................………. 15
Table 3.1 Strength Weakness Opportunities and Threat (SWOT) ................................................. 15

vi Improvement Rural Living Condition Through One Village One Product (OVOP) Movement
1 Introduction
One Village One Product (OVOP) Movement is a regional economic revitalization program that
started in Japan since 1979. This movement was initiated by Dr. Morihiko Hiramatsu, when he
was Governor of Oita Prefecture. The OVOP movement became one of successful regional
economic programs due to its approaches in transforming local products into competitive
products in local, national, as well as global market. The OVOP movement put emphasis on the
product uniqueness as well as local culture and resources. In addition, the OVOP movement has
been proven effective in improving the welfare of Oita’s local people, through improved village
economic dynamism, local income, and social solidarity. It also improves the proudness of local
community in their village.
The success of OVOP movement in Oita Prefecture has motivated several countries to adopt
and adapt the OVOP movement into their own models of economic development, particularly in
village areas. Currently, the OVOP movement has been spreading to other countries across the
globe with different names according to the target group of the movement, among others are as
follows:
1. Brunei: One Kampung One Product (IK1P)
2. China: One Factory and One Product, One City One Product, One District One Product
(Shanghai‐China); One Town One Product and One Capital One Product (Jiangsu‐China); One
Village One Treasure (Wuhan‐China); and One Village One Product (Shanxi and Jiangzi,
China);
3. Indonesia: One Village One Product, Balik Desa (Back to Village), Agropolitan, Minapolitan,
and Prukab;
4. Korea: Seamoul Undong Movement;
5. Lao PDR: Neung Muang Neung Phalittaphan Movement;
6. Malaysia: Satu Kampung Satu Produk (Malaysian and Brunei), One District One Product,
Satu Daerah Satu Industri;
7. Mongolia: Neg Bag Neg Shildeg Buteegdekhuun; and
8. Philippines: One Town One Product;
9. Thailand and Cambodia: One Tambon One Product Movement;
10. United States of America (USA): One Village One Product Day and One Parish One Product
Movement.

Based on the fact that OVOP is gaining some supports from policy makers in ASEAN countries,
the ASEAN Member States (AMSs) and JAIF decided to develop ASEAN OVOP guideline. The
guideline is expected to provide guidance for local and central governments in ASEAN in
adopting and adapting OVOP approach as a model for local economic developments. The use of
this guideline should be adjusted to the government administration structure, social and
economic condition, and the development phase of micro, small, and medium enterprises
(MSMEs) in each country.
1.1. OVOP Basic Principles

The OVOP model was initiated by generating local community spirit to improve household
welfare and local economy, through creating unique products that have high added value,
producing goods and services using local resources, and improving competitiveness both in
national and global markets. This spirit is realized by creating social and economic network in
the society to form local vision through local business unit developments that could optimize
local potential resources.
OVOP development aims to improve the added values of the local product/services and
resources in order to improve the welfare of the local community. Therefore, creativity,
productivity and togetherness of community member are of most important for OVOP
development. The implementation of OVOP movement requires optimum use of local
resources, including: human resources, raw materials, commodity, technology, and local
culture. OVOP products are expected to be an excellent product (product icon) in their
respective village/district area, thus all the citizen can be proud to promote the products.
The adaptation of OVOP movement as a regional economic development model that based on
community empowerment has three main principles (Hiramatsu, 2004), those are:
1. Locally but Global
The development of OVOP movement aims to increase, develop, and promote one product
that local people can be proud of, especially a product that can be marketed both
domestically and internationally. This means that the product of goods and services that
can reflect local touch and pride, but at the same time could meet global demand.
2.
Self Reliance and Creativity
The driving force of OVOP movement is the local people’s initiatives. By using their own
potential and their local wisdom, the local community is expected to be able to identify
their competitive advantage in order to produce a creative product independently by using
their own available resources.
3. Human Resource Development
Visionary local leadership and community empowerment are crucial for OVOP movement.
Therefore, it is important to create and empower local leaders who can motivate and
encourage the local community to cultivate their potentials and creative thinking. This also
includes establishing networks and the transfer of knowledge and skills.

1.2. OVOP Principles in ASEAN
Main principles of OVOP Movement in Japan could be adapted and developed by other ASEAN
Member States (AMSs). The adaptation of this guideline can be done by making some
necessary adjustments to suit local contexts in each AMSs. This guideline is intended to provide a
general OVOP guideline to AMSs.
1.2.1. Vision
To achieve overall improvements in local economic activities and people’s welfare through
sustainable community empowerment in AMSs.
1.2.2. Mission
To develop local community empowerment activities in AMSs that based on local resources, to
improve local economic activities, social solidarity, and local community’s welfare in ASEAN.
1.2.3. Core Values of OVOP Programme

The core values of adapting OVOP movement in ASEAN are as follows:
1. Effective leadership
2. Accountability and transparency
3. Creativity and innovation through sustainable human resource development
4. Self-reliance
5. Team work, partnership, and networking
6. Maintain and develop local cultures
7. Community participation
1.2.4. General Objectives

Empower local communities in AMSs for sustainable social and economic welfare development.
1.2.5. Specific Objectives

The objectives of OVOP development in ASEAN are as follows:
1. To promote OVOP approach as a regional economic development model in ASEAN
2. To develop social entrepreneurship, employment opportunities, and reduce the level of
poverty in AMSs, particularly in local area
3. To support the improvement of added value and competitiveness of rural products in ASEAN
based on local resources

4. To develop Small Medium Enterprises (SMEs) capacity and competitiveness in ASEAN
countries through a sustainable transfer of skills and technology
5. To promote and improve the market access for OVOP products (SMEs) in international market
6. To support income and local prosperity improvement in ASEAN
7. To improve the empowerment of local community in a sustainable manner in order that the
local community can take more role in their local economic development
1.3. Report Outline

This OVOP guideline comprises the following chapters:
I. Introduction
II. Selection criteria of OVOP Program
III. Concept and Implementation of OVOP Program in ASEAN
IV. OVOP development strategy in ASEAN
V. OVOP Implementation
The guideline is also complemented with several examples of suggested forms related to the
implementation of OVOP Program. The forms could be adjusted based on the need of each
ASEAN country member and OVOP condition in each country.
The structure of this guideline adopts similar structure to OVOP guideline for Kenya (2010),
especially for part 1, 2, and 5 of this guideline. The final version of this guideline might have
different structure from the present version.

Selection Criteria and
2 OVOP Strengthening
Support Program
2.1. Selection Criteria for OVOP Recipient Program
The development of OVOP movements in ASEAN countries are mostly initiated by their central
governments. In most cases, these central governments’ initiatives are accompanied by various
forms of government supports. However, the supports are less adequate to fulfill the
comparatively high public demand of OVOP supports. Therefore, it is important to select the
most potential groups to be selected as the recipients of the supports.
OVOP program selection mechanism should be carried out in an accountable and objectives
manner in order to maintain fair competition among groups. Therefore, it is necessary to
establish clear criteria and selection mechanism for OVOP groups.
2.1.1. Region Selection Criteria

The selection of regions that will receive OVOP support program should take into account the
following factors:
1. Regional equality
OVOP program initiated by the government should have a nature as a stimulant and/or
pilot project of regional economic development that is based on local community
empowerment. Therefore, the OVOP support program should not be concentrated in
certain areas, but well distributed across regions. There is a tendency that a successful
OVOP program in one area will be duplicated by other OVOP groups in other regions
(demonstration effects). A more distributed OVOP support among areas in a country would
germinate the other adjacent areas to promote OVOP movements
2. Infrastructure Availability
The OVOP program should set successful example, thus the availability of infrastructure
and the flow of goods and people should be taken into account. It must be ensured that the
support program recipient groups have sufficient access to transportation, electricity, and
markets.

3. Service Providers Availability
OVOP program should consider the availability of business development service providers
and financial access providers in the area of supported recipients. These aspects will
determine the type, intensity, and quality of the supports for the recipients. If developed
service providers are not available in the area, the government could consider the
possibility to hire other service providers nearby the area, by considering the distance,
travel time, and other additional costs.
4. Products Diversity and Uniqueness
The OVOP support program should give priority to the OVOP products that have strong
local uniqueness with large market potential. The OVOP program should consider the
variety of products/services that will be developed in order to come up with successful
show cases of OVOP program. This will make easier the adoption and adaptation of the
OVOP program by local governments or other OVOP groups.
5. Institutional and Best Practice of OVOP Group
Successful implementation of OVOP program requires support from Mentoring Institution
and Recipient Group Institution. The institutional mentoring process could be evaluated
from the existence and the management effectivity of district/local OVOP committee.
Meanwhile, OVOP group institution could be evaluated from the existence and the
management effectivity of the OVOP group and the presence of successful OVOP group in the
area. The successful OVOP groups could be referred as best practices by other OVOP groups.
6. Local Government Support
Local government support could be evaluated from several criteria, such as whether: the
vision of regional head is in line with OVOP program, his/her understanding and support
towards OVOP program, leadership effectiveness, and local government willingness to
form OVOP committee and provide financial assistances for OVOP development in their
areas.
2.1.2. Selection Criteria for OVOP Group

The selected OVOP Group should have the following criteria:
1. The products/services should have local wisdom and uniqueness;
2. The production process of business group or SMEs have been running continuously and
consistently, which reflects their business management capacity, competency, marketing,
production technology, and business financing access;
3. Business groups or SMEs and their respective products have potential, quality, standard,
and business capacity;
4. Products/services have market potential in local, national and international market;
5. Business groups or SME have contributions to community empowerment, including an
acknowledgement and strong support from local people to the development of OVOP
program.

2.1.3. The Establishment Mechanism for OVOP Program Recipient
Business groups or SMEs that meet the prescribed requirements and after field verification
process is carried out, as well as pass the selection process will be appointed by the National
Secretariat as a participant of OVOP program (see Chapter 4). The national secretariat will
produce a certificate that suits with the classification ratings/stars. The original certificate will
be sent to the OVOP product producer companies and the copy of the certificate will be sent to the
provincial committee, regional committee and service providers.
The awardees of OVOP certificate will entitle to use the OVOP logo and classification
ratings/stars in their product. The OVOP logo could be placed in their products, packaging, and
as promotion tools. The recipients of OVOP certificate will have to go through rating process
periodically to ensure that they could maintain the quality of their products.
2.2. Support Program for OVOP Development

Support program for OVOP participants could be in the form of:
1. Assistance in education and training;
2. Provide experts for mentoring process in marketing, branding, packaging, production
technology, information technology, standard management system, etc;
3. Assistance in production tools;
4. Assistance in access to capital;
5. Assistance in marketing access and promotion, such as: fair/exhibition, OVOP gallery,
website, electronic and mass media, and other publication;
6. Assistance in improving business legal status and business license
7. Facilitate intellectual property rights
The type and number of OVOP support program can be adjusted with the real needs of OVOP
business groups/SMEs, and the produce star rating.
OVOP Business groups / SMEs with the star rating of 4 and 5 could be provided with supports by
the central government, coordinated by National Secretariat. OVOP Business groups / SMEs with
the star rating of 3 (partially 4) could received support provided by the provincial government
(Provincial OVOP Committee), and OVOP business groups/SMEs with star rating of level 1 and 2
could get supports from the district/city government.

Concept and Implementation
3 of OVOP Program in Japan
and ASEAN
This part will very briefly touch the OVOP experience in Japan and nine ASEAN Countries.
3.1. Japan
In 1960, Japan started to switch their economy from
agriculture to industries. This policy has changed
the structure of Japan’s economy, particularly in
rural area. The economy in rural was left behind;
urbanization rate increased, cheaper product in
urban areas started to damage the competitiveness
of rural products and decrease the income in rural
areas. Facing those issues, villagers started to think
how to develop their villages. In 1970s, people in
rural area started to utilize their potential natural
resources to improve their own economy.
OVOP movement is one of revitalization programs for local economy in Japan that focuses on
social value and creates powerful motivation to be more confident and do not give up due to
economic condition, as well as encourage village population to keep staying in their village. The
key success of OVOP movement in Japan is keep improving the human resources capability and
maintaining the social value among the citizen. It focuses more on social values than economic
values, thus preventing the society to act as individualist. Seminars and workshop that discuss
the development of their village were also conducted regularly.
Although an increase in the income of the rural population is an added value, the priority of the
OVOP movement is to improve life satisfaction of the rural citizen, which means happiness. One
of the success indicator of OVOP movement is by measuring the happiness, for example afford to
have health, education, and non‐food expenditure.
Nevertheless, OVOP in Japan also faces several challenges, such as language barrier. A large
number of visitors from foreign countries but some of communities in Japan were not ready to
serve foreign visitors since they cannot speak foreign languages. There were several programs
to improve the capacity of the local communities to speak foreign languages, such as building
schools and libraries and carrying out student exchange programs. Another challenge was the
disagreement between leaders and the society in the process of developing the tourist villages.

In order to minimize their dependency from external
factors, some communities were quite reluctant to receive
financial assistances from government, due to their concern
in managing the funds. In addition, accessing funds from
external party also requires them to prepare the planning for
budget allocation.
In order to maintain the sustainability of the OVOP movement
in Japan, some programs to improve human resource
capability and product quality were carried out. Some of the examples of the programs
comprise assistance sessions in quality control, management theory, saving and loan program,
health insurance, and pension funds.
OVOP movement in Japan has successfully empowered women. One of the key success factors
of the women activities in OVOP was that they separated their household finance from the
business finance. Overall, they work for the society and for a better live. They put social value
more than economic value.
3.2. Brunei Darussalam
Brunei Darussalam’s initiative to adapt OVOP started in 1993 and the adaptation is called Satu
Kampung Satu Produk (1K1P). Ministry of Home Affairs (MOHA) is in charge of coordinating
OVOP program in Brunei Darussalam.
The OVOP project has been a decade‐long initiative aimed to develop and encourage economic
projects and local businesses within the villages. Since 2009, the project has progressed rapidly,
and has encouraged villages to come up with their own products. (The Brunei Times, Al – Haadi
Abu Bakar).The 1K1P project was first implemented in Temburong District.

1K1P project must be initiated by ‘Majlis Perundingan Mukim dan Kampung’ through any of
these three methods:
a. Majlis Perundingan Mukim dan Kampung themselves are producing the product; or
b. Taking the initiative of collecting the products from producers and do the packaging before
marketing the products; or
c. Forming a joint venture with any party who has capital to initiate the 1K1P project.
The Figure 3.1 below will explain the SWOT analysis of the 1K1P in Brunei Darussalam.
Figure 3.1
The SWOT Analysis of OVOP Development in Brunei Darussalam
• Having ‘Majlis • No specific project • To increase job • Foreign products

oppor tunities
Opportunities
Perundingan Mukim management for flood the local
Weaknesses
dan Kampung’ all over each product • To create wealth market
Threats
category and sustainable
Strength
Brunei Darussalam • Local culture and

• Lack of an exper t income togetherness spirit
• Strong in spirit of • Bond of culture
and skillful becomes extinct
togetherness workforce still strong among • Bigger income gap
• Abundance of local • Technology the citizen between city and
workforce and application is low • To promote the suburb citizen
materials • Production and uniqueness of • Dependent on
• People of Brunei have product market still Brunei Darussalam government
localized subsidies and
high purchasing power
incentive
3.3. Cambodia
The Government of Cambodia started to adopt One Village One Product (OVOP) movement to
promote rural economic growth in 2006. The “One Village One Product National Committee”
was established by Royal Decree No. NS/RKT/0106/043 dated January 27, 2006, and the Sub‐
decree No. 436 dated June 26, 2006 on the organization and functioning of the “One Village
One Product National Committee”. The OVOP movement in Cambodia could be characterized as
a Top‐Down approach.
Historically, Cambodia has a development model similar to OVOP movement in the past where
some villages specialized in producing particular products that the village population was good
at. Since officially adapted, OVOP movement in Cambodia has been gaining importance as a
tool for development and the future development prospect is quite promising, especially due to a
strong political support from the Prime Minister.
The Figure 3.2 shows the OVOP structure in Cambodia. Generally, the OVOP structure in
Cambodia is divided into three main components, i.e. policy, technical and local level.

Figure 3.2
OVOP Structure in Cambodia
OVOP National
Committee - Prime
Minister (Chairman)
Deputy
Prime Minister
Senior Member
From Line
Agency
Advisor and General secretariat Experts and Line

Assistance Secretary General Ministries
OVOP Model
Center
Administration R&D Marketing and Public Relation

and Finance Department Standard Dept Department
Provincial/
Local OVOP
Level
Source: Sok (2008)
The vision of OVOP movement in Cambodia is improving the living standard of the people
through improvement of local products. The program focuses on preventing urban job hunting
and produce product that can be exported to global markets.
The development of OVOP movement in Cambodia could harvest from several opportunities.
First, SMEs are the backbone of Cambodian economy, from which OVOP model could be
developed. Second, the decentralization process empowers local governments and local
community to be able to formulate local development plan based on the available local
resources, which in line with the spirit of OVOP development. Third, Cambodia is a member of
ASEAN that will face the implementation of ASEAN Economic Community (AEC) in 2015.

In term of challenges, there are some issues facing the OVOP development in Cambodia include
the following aspects:
a. There is only small number of research and development as well as credible training
institutions and centers in boosting the production and improving the value added of the
SME products at the whole cycle of the production processes;
b. Copy right issues;
c. Competition is getting tougher, especially for entering the AEC;
d. The young generation does not seem to be interested in becoming entrepreneurs in rural
areas and do not master handicraft skills like their previous generations;
e. The logistic and infrastructure system is quite difficult, which might also contribute to the
rather high production costs.
The study visits to two SMEs in Cambodia suggest that those SMEs use available resources in
their local area and take advantage of the fact that their region is famous for the product they
are producing. They also master the skills that were passed from their parents or they learned
from their friends and family in the surrounding area. The SMEs are often invited by the OVOP
National Committee and provincial government to fairs and exhibitions. Both SMEs also once
received assistances from international donor.
Despite the fact that those SMEs could produce products that they sell not only in the domestic
market but also in the international one, they seem to have limited knowledge regarding the
international market and how to expand their markets. Another important issue is related to
the access to finance. Both SMEs experienced the lack of internal finance to expand their
business. The production process of both SMEs tends to be labor‐intensive and relies most on
handmade process, which results in a rather long and costly production process.

3.4. Indonesia
Indonesia officially began adapting OVOP model since 2007, through Presidential Instruction
No.6 Year 2007. The OVOP program implementation in Indonesia is based on top‐down
approach. The program is coordinated by Ministry for Cooperative and SME. Based on the
program implementation since 2007, OVOP program in Indonesia has several key successes, as
follows: strong commitment from central, local governments, and other stakeholders (such
universities), large market share (both domestic and international), abundant raw materials,
large quantities of human resources, information technology growth, and promising economic
growth.

Table 3.1 shows the Strength Weakness Opportunities and Threat (SWOT) analysis of OVOP
movement development in Indonesia.
Table 3.1
Table 3.1
Strength
Strength Weakness
Weakness Opportunities
Opportunities and Threat
and Threat (SWOT)
(SWOT)
Strengths Weaknesses
 Support from both central and local  Limited scope and effective methods for
government related to the OVOP product marketing
development  The quality control of the product is not
 Collaboration with several institutions sufficient
such as universities and local  Minimum regeneration process
government agencies regarding  The low capacity of human resource,
management of cooperatives, such as: foreign language skills,
production technology, and quality bookkeeping, and business negotiation
control  Emphasize more on the economic value
 Abundance of raw materials rather than social value.
 Large quantities of human resources  Lack seriousness, commitment, and focus
(high number of population) to develop SMEs business.
 Difficulty to change the mindset, for
example, OVOP farmers refuse to change
the way they plant due to tradition from
their ancestors
 Business professionalism does not exist
yet
Opportunities Threats
 Some of the products have relatively  High dependency on government
large market shares, for example: supports/assistances
agricultural products and tourism  Limited coordination between the
sectors. central and local government in
 Good prospect of Indonesia's economic developing the OVOP program
growth  External markets (AEC 2015)
 Information technology
 Increase in public awareness to do
business in a more professional way

3.5. Lao PDR
The Government of Lao has been assisted by Japan
in implementing One District One Product (ODOP)
program in Lao PDR. ODOP program has been a key
community development program in Lao PDR since
2003 (Ministry of Industry and Commerce Foreign
Trade Policy Department, 2011). ODOP program
has been implemented by cooperation between the
Ministry of Industry and Commerce of Lao PDR and
Japan International Cooperation Agency (JICA).
There are several challenges in adapting ODOP in Lao since it was first initiated in 2003. The
challenges are (Asian Productivity Organization, 2010):
1. ODOP program was only implemented in two provinces.
2. It is difficult to improve the level of competitiveness of ODOP products in international
market since there are no comparable ODOP products among provinces in Lao.
3. The lack of human resources that can support the sustainability of ODOP program in Lao.
One of the key success factors of Lao government
in conducting ODOP program is that they involved
the product selection in the production approach
(Uchikawa and Keola, 2010). This means that Lao
government has a full control in the ODOP production
in each province. The role of Lao government is to
control what kinds of products to be produce and
applies the specific way of how to produce the ODOP
products. The other key success factors in promoting
the ODOP program are limiting the government
support funds in order that the ODOP program could be more sustainable in the future and
the use machinery in the production process. The government also encourages producers to
improve their knowledge and collect the relevant information regarding the production process.
There are several weaknesses in ODOP operation in Lao PDR, among others are:
1. Many ODOP producers still highly depends on the support from the government, making
them less independent and less self‐reliant.
2. Export promotion is the main target of ODOP. Meanwhile, most ODOP producers have
limited knowledge and language skills to access international market.
3. Some ODOP producers have a potential to grow but they lack the access to finance. Some
ODOP producers even choose not to access any loans, because the bank loan interest rate is
also too high for them (around 13 – 15 % per year).
4. Limited capacity production and raw materials.

The Government of Lao PDR provides an access for community products to domestic and
international markets by providing the free facilities to join several international exhibitions.
The Government of Lao PDR is also successful in creating an image of ODOP as
quality benchmark. Another important aspect of ODOP development is the collaboration
between various stakeholders to enhance capability of OTOP producers and entrepreneurs. The
Lao government is promoting a new national ODOP logo, which has been recently set up. In order
to use this new logo, producers have to get the government’s authorization on their products.
3.6. Malaysia
OVOP movement in Malaysia generally known as
Satu Daerah Satu Industri (SDSI) or in English
term named as One District One Industry (ODOI).
The OVOP movement was first introduced in 1992
as Satu Kampung Satu Produk (SKSP) under the
Sixth Malaysian Plan (RMKe‐6). Afterward in 2003,
the program developed to become Satu Daerah Satu
Industri (SDSI).
SDSI program involves several ministries and
government institutions, those are: Ministry of Agriculture and Agro Based Industry, Ministry
of Rural and Regional Development, Ministry of Tourism and Culture, the Malaysian
Handicraft Development Corporation and Ministry of International Trade and Industry. In
general, Malaysian government offers several types of assistances to promote SDSI program,
such as: trainings, financial assistance (loans), exhibitions or fairs, and technical assistances.
In 2011, Implementation Coordination Unit (ICU)
of the Prime Minister’s Department reported that
SDSI has successfully created 6,247 entrepreneurs
from 141 districts across the nation or 23 percent
increase since 2010. The program also has
generated 12,428 employment opportunities that
widely dispersed in four different sectors, such
as food and beverage, homestay, craft products, and
health services/products. It can be seen that during
2013, the cash and contract sales value of RM16.2
Millions has been generated by government after
facilitating local entrepreneurs in national showcase
or exhibitions (MITI, 2013).
SDSI key success factors of small entrepreneurs in
Malaysia are as follows (Kader et al, 2009):
- Provide government assistances in training
and extension services, such as training in
entrepreneurship, marketing, quality management,
basic accounting, and technical skills.

- Entrepreneurial quality, such as: good behavior and attitude, innovative, hardworking, self‐
confidence, and self-reliance.
- Market support by government, such as: infrastructure, communications, power supply, and
other favorable environment for small medium enterprises.
- Market accessibility and networking, such as: fairs and exhibitions organized by government
in the state and national level, with patented logo for national identity.
- Consistent monitoring through information system of the entrepreneurs for evaluation and
ranking purposes
In order to have more effective program, other than providing entrepreneurship training
and promotion, Ministry of International Trade and Industry (MITI) Malaysia carries out
evaluation system to enhance the SDSI brand. In future, selected products produced under the
SDSI program will be registered in Geographical Indication with the Intellectual Property
Corporation of Malaysia (MyIPO). This program will ensure that the products will meet the
quality standard both in domestic and international market.
3.7. Myanmar
The development of small and medium enterprises in Myanmar was started at early 1960s,
when the government welcomed private sectors. The OVOP development in Myanmar is top‐
down approach. There were other community development programs similar to OVOP
movement in Myanmar before OVOP movement was introduced in 2000. The implementation
of OVOP movement in Myanmar was still an on‐going process. Related ministries assigned to
implement the OVOP project in Myanmar are Ministry of Commerce, Ministry of Cooperatives
and Ministry of Industry.
The new enacted government that organizes and supervises the role of SMEs are still working
on formulating the law and enacting new laws. For example, Myanmar SMEs Development
Center has just been established in April, 2012 or around 17 months. The role of the Center is
to develop Myanmar’s SMEs.
In terms of financial assistances, the government, especially Ministry of Cooperatives did not
provide certain funds or subsides to promote OVOP development. Nevertheless, they provide
loans schemes and assistances for those who needed. The types of those assistances are as

follows: technical knowledge and transfer of skills and technology to promote product quality.
During the study visit, the team found out that the Government of Myanmar’s challenges
related to the implementation of OVOP movement are the uncertainty in local administrators,
low awareness in OVOP movement, lack of marketing technique such as access to information to
promote the OVOP products and exposure to modern market trends.
Nevertheless, OVOP development in Myanmar can also benefit from several opportunities to
develop the SMEs in Myanmar, those are:
1. Some of handicraft industries, such as wood craft, rattan and slipper that team visited, still
produce their product in a very high cost production compared to the other countries.
Therefore there are still rooms for improvement for SMEs in Myanmar, such as improving
the efficiency in the handicraft industries will significantly improve the competitiveness of
the handicraft products.
2. Demand for SME products from other countries such as Europe and United States is still
high.
However, there are some threats facing SMEs in Myanmar, such as competitors from other
countries. The ASEAN Economic Community (AEC) in 2015 might lead to strong competition. In
addition, based on study visit observation, most of the SMEs in Myanmar that the team has
visited have difficulties in accessing financial services from formal financial institutions. For
example, there are limited financial institutions that offer low interest rates for loans or simple
procedures to borrow money. Moreover, there are also limited subsidies or financial
assistances for SMEs to expand their business.
Another important issue of OVOP development in Myanmar is related to Information
Communication Technology (ICT) protection. The development of telecommunication in
Myanmar were relative less developed compared to other developing countries, particularly
AMSs. Only a small percentage of population has access to a fixed telephone line, and internet and
mobile phone penetration are equally low. Ericsson world telecommunication provider states

that in 2012, only one million people out of 60 million of the Myanmar population can access
mobile phone, and around 400,000 have internet access. A problem such as blocking on SMS text
messaging may sometime encounter by some people. Myanmar has rather low exposure
to development in telecommunication technology and this condition will give a significant
impact on the SMEs development in their country.
3.8. Philippines
The Government of Philippines has prepared the
Medium Term Philippines Development Plan as a
detailed roadmap towards achieving the common
goal of reducing poverty through job creation and
enterprise (Rana, 2008). The Medium Term Philippines
Development Plan also aims to create micro‐enterprises
and provide them with credit, technology and marketing
supports, as embodied in the One Town One Product
(OTOP) programs. The Government of Philippines has
implemented the OTOP program since 2004.
OTOP‐Philippines offers a comprehensive
assistance package through a convergence of
services from local government units (LGUs),
national government agencies (NGAs), and
the private sector, which includes business
counseling, skills and entrepreneurial training,
product design and development, appropriate
technologies, and marketing. These agencies
work hand in hand with other government
offices and the private sector to sustain the
program. The success key of OTOP Philippines
includes seven factors as follows: Dedicated LGUs, Reliable Raw Material Supply, Rich Local
Culture and Tradition, Local Talents and Skills, Ready Market for Products/Services,
Aggressive Core of Producers, and Convergence of Government Services (Rana, 2008).
To acknowledge the contribution of each stakeholder in the successful implementation of the
program, recognition and awards were given to the following: best OTOP Implementer,
outstanding OTOP MSME, and most Supportive Partner Organization.
Most Supportive OTOP Partner Organization:
• Resources provided to the project
• Projects initiated/ implemented
• MSMEs assisted
• Participation in OTOP activities (visibility)
• Support of the organization to other partners (number of other partners assisted or
linkages).

Department of Trade and Industry DTI has aligned the OTOP with the various industry
clusters:
• To develop innovative and globally competitive enterprises
• Make the MSMEs contribute significantly to employment generation and inclusive growth.
Mass media also has a critical role in the promotion of OTOP program in the Philippines.
Consumers became aware of OTOP products and would like to purchase products which have
OTOP brands. They flock the OTOP Trade Fairs compared to other trade fairs organized by the
Department of Trade and Industry. Potential entrepreneurs became interested and joined in
producing OTOP products in their locality.
3.9. Thailand
OVOP Program is also developed
in Thailand. Compared to the
origin of the OVOP movement,
OTOP (One Tambon One
Program), a Thailand version
of OVOP, is a top‐down
initiative program. It was first
announced in 2001. The Thai
government declared OTOP
policy to overcome the poverty
rates as one of the key economic
policy. The OTOP program was first initiated by Thai’s former Prime Minister Thanksin
Shinawattra. The development of OTOP program was developed under two main pillars, which
are to attract more foreign capital by improving the national competitiveness and local economy
revitalization and alleviate poverty rates, particularly in rural area through improving domestic
demand (Secretariat of the Cabinet, 2004).
The development and promotion of One Tambon One Product (OTOP) is coordinated by
National One Tambon One Product (OTOP) Management Committee (Kor Aor Nor Tor
Por). OTOP Management Committee is responsible for directing the policy with administrative
functions and linking the committee with local areas. To support the execution of OTOP
Management Committee, the Prime Minister’s Office issued a regulation concerning One
Tambon One Product (OTOP) Management Committee (2nd Issue) in 2002 (B.E. 2545) with the
following administrative functions (See Figure 3.3):


Figure 3.3
Figure 3.3
OTOP Movement in Thailand
OTOP Movement in Thailand

Pursue
uniqueness
Sourcing for
Excellent
OTOP
In Search - Business
of Excellent Matching
OTOP - Trade fairs
(domestic &
Marketing - Provincial international)
Star Product - Product
- OTOP development
Standard - OTOP
Village
Grand Sale - OTOP City
Champion
Product - Community - OTOP
- Advanced
Champion Product Mega Sale
Smart OTOP
Standard - OTOP to
- OTOP to the
- OTOP - Smart the World
Ministerial World
Product OTOP - OTOP City
Integration Champion - OTOP City
- OTOP City (CLMV)
(Intl Expo)
- OTOP City
2002 2003 2004 2005 2007- 2009-

2006
2008 2012
Source: Department of Industrial Promotion, Thailand Ministry of Industry (2003) and Office of SME
Source: Department of Industrial Promotion, Thailand Ministry of Industry (2003) and Office of SME
Promotion (2008).
Promotion (2008).
Both SMEs and OTOP are major drivers of the economic growth of Thailand. The combined
Both SMEs and OTOP are major drivers of the economic growth of Thailand. The combined value
value of SMEs and OTOP reaches 3.9 trillion baht, accounting for 37 percent of GDP. They
of SMEs
employand OTOP
around 11 reaches 3.9 trillion
million people or about baht, accounting
84 percent of thefor 37 percent
Thailand’s labor of GDP.
force. TheThey
valueemploy
of
around 11 million people or about 84 percent of the Thailand’s labor force. The value of exports
exports of the SMEs and OTOP producers is worth 2.2 trillion baht, accounting for of
SMEs and OTOP
the approximately producers
30 percent is worth
of Thailand’s total export value1. baht, accounting for approximately 30
2.2 trillion
1
percent of Thailand’s total export value .
The top-down approach in OTOP development in
top‐down
The Thailand approach
is without in OTOP
a doubt development
the key in Thailand
success factor of is without a doubt the key success
factor
OTOPof OTOP
in thein the country.
country. Thailand
Thailand government
government provides serious attention to the operation of
provides
OTOP project
serious to solve
attention to the poverty,
operation create
of OTOPjob opportunity,
project to and increase the income for the
community and local area. The government support ranges from improving the knowledge,
solve poverty, create job opportunity, and increase
the income
technology, for themanagement,
capital, community and local
and area. The
linkage for community products to domestic and
government support ranges from improving the
international markets.
knowledge, technology, capital, management, and
linkage for community products to domestic and
international markets.

1
http://thailand.prd.go.th/view_news.php?id=6687&a=2
1
http://thailand.prd.go.th/view_news.php?id=6687&a=2

In addition to very strong policy support from the
government, the very clear coordination and strategy
is also one of the success keys of OTOP program in
Thailand. Thai government is also successful in creating
an image of OTOP as quality benchmark. Another
important aspect is the collaboration between various
stakeholders to enhance capability of OTOP producers
and entrepreneurs, including with the private sector.
The establishment of OTOP clusters covering all
products and all levels has also provide a sustainable driving force for OTOP operation in
Thailand. Most OTOP producers are skillful in producing handicraft and hand‐made products by
incorporating cultural and artistic aspect into the products.
Despite the successfulness, there are several inherent weaknesses in OTOP operation in
Thailand as follows:
1. The operation of OTOP network still lacks legal support to become a clearly‐identified legal
entity.
2. Many OTOP producers produce similar products due to similarities in local resources and
cultural value embedded in the products.
3. Many OTOP producers still highly depends on the support from the government, making
them less independent and less self‐reliant.
4 Most of OTOP producers have limited knowledge and language skills to access international
market.
5. Some OTOP producers have a potential to grow but they lack the access to finance.
In the future, OTOP could gain benefits from several
opportunities. First, Thailand is well‐ known
for its tourism and linking the OTOP program with
tourism activities will offer well‐linked productive
activities. Second, there is an increasing trend that
consumers tend to value the hand‐made products
higher than factory‐made products, especially if the
products are linked with culture, arts, tradition,
and environmentally friendly. Third, the arrival of
the ASEAN Economic Community (AEC) will bring a
market of about 600 million people.
However, the AEC will also certainly bring about a tougher competition for OTOP products to
compete with cheaper foreign products from abroad. This could lead to difficulties in OTOP
product sales. The lack of understanding on how to create new products might also threaten
the sustainability of the OTOP products, especially since the market is quickly changing and
could demands new products. The main challenge for OTOP operation is the development of
support system for OTOP with holistic support from all stakeholders at national, regional, and
local levels to help improve OTOP efficiency and to increase sales of OTOP products according to
the goals set up by the government.

3.10. Vietnam
Vietnam started introducing OVOP concept as
a tool for development in 2006. It is linked
to Decree No 66/2006 on development
of rural trades. The early phase of OVOP
development in Vietnam tends to focus
on developing villages that producing
handicrafts. The Ministry of Agriculture and
Rural Development particularly developed
the project “Development of One Village-
One Craft (OVOC) Program for the 2006‐2015
Period.
OVOP development in Vietnam is characterized
by top-down approach and developing the
existing SME centers or villages that produce
special and famous products. The villages and SME centers in Vietnam are not generally
aware of OVOP concept but they benefit, to some extent, from the government supports
in developing their villages as OVOP program. Additionally, OVOP development in Vietnam
also tends to have strong correlation with tourism development that is expected to attract more
tourists to boost their sales.
The OVOP development in Vietnam has several
strengths. First, the OVOP development has a
very clear and specific area. Second, villages
that are promoted through the OVOP program
generally produce unique products and have
been specializing in producing their current
product for a long time and they even already
have special brand name. Third, the villages
already have established reputation. Fourth,
villagers in Vietnam are hard‐working and they
conduct their business for strong purpose that is
for the future of their children.
OVOP development in Vietnam also has several weaknesses. First, the
less integrated planning and coordination between ministries and
agencies, especially related to supports for OVOP movement and SME
development. Second, some villages are less independent in providing
raw materials. Third, some handicraft villages have limited access
to the market and the cooperation between the villages with the
distribution agencies is somewhat poor. Fourth, some villages could
not maintain their competitiveness and lose their customers. Fifth,
the variety of OVOP products in Vietnam is very limited since the OVOP
development only focuses on craft sector. Sixth, the villages find it
hard to reach international market due to language constraint.

Nevertheless, OVOP development in Vietnam could take
advantage from several opportunities. First, there is a high
demand for handicraft products from European market,
especially from Germany and French, and from USA. Second,
there is a strong tie between Vietnamese abroad with those
in Vietnam that could help them to expand their marketing
to the international market. Third, the implementation of
decentralization offers an opportunity for OVOP to work
more effectively under the management of local government.
Fourth, Vietnam is a member of ASEAN Economic Community
(AEC) that presents a larger market share.
Despite those opportunities, OVOP development in Vietnam
faces several threats. First, many craft customers have very
high demand of product quality and they might turn to other
countries if the craft villages could not meet the expectation.
Second, there has been a fall in the craft product demand since 2007 due to the global economic
slowdown. Third, there is a massive intrusion of cheap factory-produced products in Vietnam that
could threaten the market for hand-made products and craft products. Fourth, AEC will present a
tough market competition for not only Vietnam but for all members.

OVOP Development
4
Strategy in ASEAN
OVOP Development Strategy in ASEAN
OVOP in Japan is initiated from local people (bottom-up approach) and also has a motive in
social value. Countries in ASEAN tend to embrace different approaches when they initiate
OVOP
OVOPinpolicy.
Japan Different
is initiatedstrategies
from localarepeople
taken(bottom‐up
by differentapproach)
countriesand to also
suit has a motive
to their local-in
social value. Countries in ASEAN tend to embrace different approaches
realities. Each country of ASEAN member states has their own characteristics that can bewhen they initiate
OVOP policy. Different strategies are taken by different countries to suit to their local‐realities.
categorized into four matrix arrangements that consist of motives and approach
Each country of ASEAN member states has their own characteristics that can be categorized
combination
into four matrix in initiating OVOPthat
arrangements movement
consist of(See Figureand
motives 4.1). This classification
approach combination is carried out
in initiating
based movement
OVOP on researchers' perspective
(See Figure after classification
4.1). This carrying out isstudy visitsout
carried to based
nine ASEAN member
on researchers’
states and in
perspective Japan.
after carrying out study visits to nine ASEAN member states and in Japan.
Figure 4.1
Figure 4.1
Motives/Approaches Top-Down Bottom-up
2 Thailand, Malaysia, 1 Myanmar, Cambodia,

Economic Motives
Indonesia, Philippines Vietnam, Laos
Social Motives 3 Brunei Japan

4
Countries that belong to the first quadrant in the matrix combination in Figure 4.1 are those that
Countries
take that mix
a strategy belong to the firstapproach
of bottom‐up quadranandin the matrix motives.
economic combination in Figure
Countries that4.1
fall are
intothose
these
that take a strategy
characteristics mix of bottom-up
are Myanmar, Cambodia,approach
Vietnam,andandeconomic motives. the
Laos. Previously, Countries that fallin
government
into countries
these these characteristics are Myanmar,
also play significant Cambodia, Vietnam,
role in implementing and Laos.
OVOP program, Previously,
such as the
in formulizing
policies that support OVOP development. However, the later OVOP development
government in these countries also play significant role in implementing OVOP program, in those
countries
such as inisformulizing
more dominated bythat
policies the support
role of the
OVOPlocal community due
development. to the the
However, lacklater
of financial
OVOP
assistances, commitment, and leadership from the government side to support the
development in those countries is more dominated by the role of the local community due
development of OVOP program in those countries.
to the lack of financial assistances, commitment, and leadership from the government side
Meanwhile, in the second quadrant of the matrix combination, the government plays a
to support the development of OVOP program in those countries.
significant role in OVOP adaptation and focus in economic motives. Those belong to this
Meanwhile,
quadrant in the second
are Thailand, quadran
Malaysia, of theand
Indonesia, matrix combination,
Philippines. the government
Brunei Darussalam plays ain
is classified
the third quadrant
significant of the adaptation
role in OVOP matrix where
andit focus
combines top‐downmotives.
in economic approach with belong
Those social motives.
to this
Japan,
quadran are Thailand, Malaysia, Indonesia, and Philippines. Brunei Darussalam is classifiedit
the country where OVOP originated, is the only country in the fourth quadrant where
combines the bottom‐up process and social motives in its OVOP movement.
in the third quadran of the matrix where it combines top-down approach with social
Based on the
motives. classification,
Japan, the countryeachwhere
combination
OVOP has their own
originated, is pros and cons.
the only The in
country weaknesses
the fourthof
program
quadran where it combines the bottom-up process and social motives in its OVOPto
that is initiated by the government is that it is relatively less sustainable compared
movement.
Based on the classification, each combination has their own pros and cons. The weaknesses
of program that is initiated by the government is that it is relatively less sustainable
compared to that initiated by local people. This is due to the fact that this type of program is
that initiated by local people. This is due to the fact that this type of program is usually in the
form of government project which is followed by financial or technical supports. If the local
people cannot manage their dependency from government assistants and supports, as soon as the
project timeline is completed, the development of the program could not be continued any longer.
These factors also can affect local people in developing the program. However, bottom up process
could face challenges when the local people could not optimize their creativities and innovative,
motivation, and responsibilities.
In order to have a sustainable OVOP program, it is recommended that the initiative to
implement OVOP program from the local people rather than from the government. This
initiative shall set necessary supports from local government and donors to strengthen their
ability and skills.
The next recommendation is to prioritize more on social motives rather than economic motives.
One of the success indicators of OVOP movement is by evaluating the Gross National
Satisfaction (GNS), instead of Gross National Production (Hiramatsu, 2008). One of the
examples to ensure the improved level of satisfaction is that people have more quality time
with their family. In Japan, after switching from rice plantation to products with higher added
value, Nuts, Plum and Chestnut, the income of Oyama’s farmers increased and they were finally
able to save money for a trip to Hawaii (Fujita, 2006). Program that emphasizes on social
motives would encourage local people to have more sense of belonging, trust, understanding
with other people, and appreciation. Therefore, any types of program that is implemented
under this motive could be more effective and sustainable.
Success Keys of OVOP Movement Implementation Strategy

In summary, in order to have successful OVOP implementation, the following are several
success keys to follow:
1. OVOP program implementation should be followed by strong leadership. Local leaders
could play a role as motivator and lead the local people to achieve success.
2. Strong commitment both from local people and the government. This could be in the form of
financial supports or technical assistances from the central government.
3. The program should be initiated by local people. This will ensure the sustainability of the
movement, although it takes relatively a longer period for the results to appear.
4. If the program implementation is initiated by central government, there should be several
requirements to guarantee the sustainability of the movements. Those requirements are as
follows:
a. A program that is supported by the government should have targeted achievements and
should not be provided for long period of time. The support shall be temporary.
b. A program that is initiated by the government should acts as a stimulant only. Partial
contribution from awardees beneficiaries are highly recommended to increase their
ownership.
c. A program that is supported by the government should be replicable or adapted to other
regions or countries.

d. A program that is initiated by the government is aimed to help solving market failure.
e. The program that is implemented by the government should be able to encourage local
initiative to be more creative and innovative in discovering their local potentials within
the period of the program
f. Central government should disseminate their program in the form of developing a
paradigm of community‐based development.
Challenges OVOP Program Implementation in the Future

There are a number of challenges and issues that could affect the success rate of OVOP program
implementation in the future that the AMSs could encounter as follows:
a. Nowadays, in the era of post modern technology, the social structures in society is shifting.
People are relatively more individualist compared to those in the past. Moreover, people are
more market‐based oriented. There are values that the present generation does not preserve
anymore, such as community sharing to resolve problem, sharing responsibility to take
care the community, trust, appreciation and responsibility. There are various factors that
affect this phenomenon of social condition; one of them is massive progress in information
technology. This progress is unavoidable and it can bring good benefit to the community when
it is properly managed.
b. Based on Figure 4.2 it can be seen that more and more people move and live in urban area.
In 1960, around 61% of people in Japan living in urban areas. This number has significantly
increased to 91% in 2012. The condition in the AMSs tends to show a similar pattern. The
total percentage of urban population in Brunei, Malaysia and Indonesia was more than 50%
in 2012. Lao PDR has 35% of its total population living in cities in 2012, while it was only 7%
in 1960.
Figure 4.2
Urban Population (% of total population)
100
90
80
70 Year
60 1960
50 1970
40
1980
30
20 1990
10 2000
0
2010
am i
an
R
ia
ar
es
nd
am
al ne
si
si
PD
d
in
m
p
la
ay
ne
tn
ss ru
bo
Ja
pp
ai
O
al
e
do
ya
2012
ru B
LA
Th
Vi
ili
M
Ca
M
In
Ph
Da
Source: data.worldbank.org

The World Health Organization (WHO) predicted that by the 2030, 6 out of every 10 people
will live in a city, and in 2050, the proportion will increase to 7 out of every 10 people. This
pattern indicates a switching in rural culture and lifestyle. This condition is contrary to the
main concept of OVOP movement which emphasizes community based development.
c. The next challenge of OVOP program implementation is the access to finance.
Tambunan (2008) mentions that in developing countries, SMEs have a crucial role in income
distribution, creating job opportunities, poverty reduction, and export growth. However,
most of the SMEs in developing countries have difficulties in expanding their business since
they lack access to finance. SMEs and OVOP actors cannot develop their business due to lack
of access in formal credit to finance needed working capital.

The Implementation of
5
One Village One Product
V. The Implementation of One Village One Product
Successful implementation of OVOP movement requires some prerequisites. Those are (1)
effective institutional coordination and arrangements, (2) strong leadership, (3) clear
implementation mechanism and support system, and (4) continuous data collection and
monitoring and evaluation (monev) process. Those four factors will change OVOP
movements that are implemented as project-based activities to be the ones that involve
active participation of the community and business sectors.
5.1. Institutional Coordination and Arrangements

OVOP adaptation and implementation requires an effective institutionalized coordination
both at the central level and the local level. The success factor also lies in the high and
consistent commitment to implement the OVOP movement. At the national level, the
institutional coordination should be at the national office, such as Presidential Office or
Office of Prime Minister. This will make easier coordination process across ministries or
national departments regarding OVOP implementation. The institutional coordination will
require a strong vision of the national leader to develop OVOP as a paradigm and approach
in developing rural/local areas.
At the local level, the vision to develop OVOP movement should be embraced by the heads
of regions and local leaders in order to be effective OVOP motivators and movers in their
respective regions. The involvement of the main actors in business sector could also be an
effective motor for fostering OVOP movement at the grass-root level. Therefore,
establishing an institutionalized coordination and implementation of OVOP program from
the national level to community level in an integrated manner is of high importance (Please
see Figure 5.1).

Figure 5.1
OVOP Institutional Framework
LEVE
LEVEL COORDINATION IMPLEMENTATION
Figure 5.1
L OVOP Institutional Framework
Figure 5.1
LEVE
LEVEL COORDINATION
OVOP Institutional
NATIONAL OVOP FrameworkIMPLEMENTATION
Chairman:
National
L
LEVE
LEVEL COMMITTEE Minister/Director General
COORDINATION IMPLEMENTATION
Chairman: President/
L NATIONAL OVOP
Prime Minister/ Chairman:
National COMMITTEE
Senior Minister
Minister/Director General
NATIONAL OVOP Chairman:
NATIONAL OVOP SECRETARIAT
National Prime Minister/
COMMITTEE Minister/Director General
Senior Minister
Prime Minister/ NATIONAL OVOP SECRETARIAT
Head: Director General under President/ PM Office
Senior Minister Head: Director General under President/ PM Office
NATIONAL OVOP SECRETARIAT
Head: Director General under President/ PM Office
OVOP
OVOP PROVINCE
Province
Province
PROVINCE
COMMITTEE
COMMITTEE
Chairman: Governor
PROVINCE
PROVINCE OVOP OVOP SECRETARIAT
SECRETARIAT
Head: Director under Governor Office
OVOP PROVINCE Head: Director under Governor Office
Province Chairman: Governor
COMMITTEE PROVINCE OVOP SECRETARIAT
Chairman: Governor Head: Director under Governor Office
District OVOP DISTRICT DISTRICT OVOP SECRETARIAT

DISTRICT OVOP SECRETARIAT
Head of Department under Mayor/Regent Office
COMMITTEE
District
District OVOP
OVOP DISTRICT
DISTRICT
Chariman: Mayor/ DISTRICT OVOP SECRETARIAT
Regent
COMMITTEE Head
Head of of Department
Department under Mayor/Regent
under Mayor/Regent Office Office
COMMITTEE
Chariman: Mayor/ FASILITATOR OVOP OVOP
Chariman: Mayor/
Regent / GROUP SERVICE
Regent EXTENTION
FASILITATOR PROJECT
OVOP PROVIDER
OVOP
WORKERS
/ S
GROUP S
SERVICE
FASILITATOR
EXTENTION PROJECT OVOP PROVIDER OVOP
WORKERS/ S GROUP S SERVICE
Communities
LOCAL COMMUNITIES
EXTENTION AT THE
PROJECT PROVIDER
Communities VILLAGE/DISTRICT
WORKERS S S
LOCAL COMMUNITIES AT THE
VILLAGE/DISTRICT
Communities
5.1.1. Institutionalization of National OVOP LOCAL COMMUNITIES AT THE
5.1.1. Institutionalization
The institutionalization ofof National
OVOP OVOP
at the
VILLAGE/DISTRICT
central level could take form as National Committee
or
TheOVOP Secretariat. The
institutionalization of National
OVOP at Committee should
the central level be led
could byform
take the President
as NationalorCommittee
the Prime
Minister, or Coordinating Minister that coordinates ministers
or OVOP Secretariat. The National Committee should be led by the President or the and heads of national
Prime
departments that are responsible for developing micro, small, and
Minister, or Coordinating Minister that coordinates ministers and heads of national medium enterprises
5.1.1. Institutionalization
(MSMEs), trade, of agriculture,
National OVOP
departments thatindustries,
are responsible tourism, labor
for developing andsmall,
micro, employment, finance,
and medium national
enterprises
standard, export
(MSMEs), promotion,agriculture,
trade, industries, ministry of tourism,
home affair,
laborchamber of commerce,
and employment, etc. national
finance, Another
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is the
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institution.
or possible However,
OVOP Secretariat. in
alternative isThe this case,
theNational there should
National Committee be
Committee isshoulda strong
to be be political
led led support
by the
by the from
President
appointed the head
or the
ministry or Prime
of government
institution. to the appointed
However, ministry
in this case, or institution
there should to carry
be a strong out itssupport
political mission.from the head
Minister, or Coordinating Minister that coordinates ministers and heads of national
of government
The to the appointed
National Committee ministry
could take or institution
several to carry(1)
roles as follows: outto
itsdevelop
mission.a guidance on
departments
OVOP
that are responsible
implementation, (2) to
for developing
coordinate OVOP
micro, small,
development
and
policies
medium enterprises
and astrengthening
The National Committee could take several roles as follows: (1) to develop guidance on
(MSMEs),
supports trade, industries,
OVOP implementation,
agriculture,
from various ministries tourism,
and national
(2) to coordinate bodies,
OVOP
labor and employment,
(3) to mobilize
development resources
policies
finance,
and establish
and strengthening
national
work plan
standard, and
supports export budget for OVOP
promotion,
from various projects,
ministry
ministries (4) to
of home
and national promote
affair,
bodies, OVOP development
chamber
(3) to nationally
of commerce,
mobilize resources and
etc. Another
and establish
to
workdevelop
plan projects
and budgetasfor
excellent
OVOP examples(4)
projects, ofto
OVOP movement
promote OVOP at the national
development level, (5)and
nationally to
possible alternative is the National Committee is to be led by the appointed ministry or
to develop projects as excellent examples of OVOP movement at the national level, 27 (5) to59
institution. However, in this case, there should be a strong political supportPage from ofthe head
Page 27 of 59
of government to the appointed ministry or institution to carry out its mission.
The National Committee could take several roles as follows: (1) to develop a guidance on
OVOP implementation, (2) to coordinate OVOP development policies and strengthening
supports from various ministries and national bodies, (3) to mobilize resources and establish
work plan and budget for OVOP projects, (4) to promote OVOP development nationally and
to develop projects as excellent examples of OVOP movement at the national level, (5) to
Page 27 of 59
coordinate and provide technical assistances to provincial and district governments to
develop OVOP at the local level, and (6) to coordinate the monitoring and evaluation
activities of the OVOP implementation at the national level.
The National Committee should arrange coordination meetings at least twice a year, or as
many as necessary. The first meeting should address planning, budgeting, and resource
mobilization. The second meeting should discuss how to coordinate OVOP policies and
strengthening supports for OVOP implementation, as well as discuss how to solve existing
issues based on the result of the monitoring and evaluation processes.
The National Committee may establish OVOP working groups whose role is to formulate
integrated policies and strengthening support to certain sectors or business areas, for
example: handicraft, tourism and others. This working group could be headed by a minister
or general director of relevant ministries, for example: handicraft industry development
working group could be headed by the Minister/General Director of the Ministry of Industry,
while tourism development working group could be headed by the Minister/General
Director of the Ministry of Tourism. The OVOP working groups could consist of senior
officials of relevant ministries/ national agencies and business associations related to
sectors/areas being developed.
OVOP Secretariat is an implementing unit that is responsible for carrying out the policies
established by the National Committee. The Secretariat should be headed by a General
Director who is under control of the Presidential Office or the Office of the Prime Minister,
or the Coordinating Minister, or Senior Minister related to MSMEs and industry or Minister
of Home Affair. The Secretariat could hold meetings or coordination with other related
ministries or government bodies and provincial office.
The OVOP Secretariat should play several functions as follows: (1) to act as the secretariat of
the National Committee, (2) to make detail planning regarding OVOP development at the
national level, including synchronizing OVOP budgeting activities across ministries, (3) to
coordinate the implementation of policies set by the National Committee, (4) to coordinate
the implementation of strengthening supports across ministries/government bodies for
OVOP program, (5) to disseminate and promote the implementation of OVOP nationally, (6)
to manage the administration of OVOP implementation at the national level, ranging from
selection phase, establishment of the types and the extent of strengthening supports to
OVOP, the mapping of OVOP performance, and reporting activities of OVOP program, (7) to
provide technical assistances to OVOP Secretariat Committee at provincial and district level,
and (8) to develop national OVOP database, and (9) to carry out monitoring and evaluation
of OVOP program at the national scale.
5.1.2. Institutionalization of OVOP at Provincial Level

The OVOP Development Committee at the provincial level should be under coordination 33
Improvement Rural Living Condition Through One Village One Product (OVOP) Movement of
the Governor and play several roles as follows: (1) to develop OVOP movement at the
provide technical assistances to OVOP Secretariat Committee at provincial and district level,
and (8) to develop national OVOP database, and (9) to carry out monitoring and evaluation
of OVOP program at the national scale.
5.1.2. Institutionalization of OVOP at Provincial Level
The OVOP Development Committee at the provincial level should be under coordination of
the Governor and play several roles as follows: (1) to develop OVOP movement at the
provincial level, (2) to provide technical assistances to district governments in order to be
Page 28 of 59
able to effectively develop OVOP in their respective districts, (3) to mobilize resources for
OVOP project, synchronize the planning and budgeting for OVOP development in their
province, (4) to coordinate monitoring, evaluation, and reporting activities regarding the
progress of OVOP development in their province, (5) to promote OVOP implementation and
develop models for successful OVOP implementation at the provincial level, and (6) to
coordinate the monitoring and evaluation of OVOP program in their province.
The provincial OVOP Committee could be assisted by Province OVOP Secretariat, especially
if the the OVOP development is massive and becomes the development program priority of
the province government. Therefore, the Province OVOP Secretariat, ideally, should be
under the Governor's Office or assigned to agency coordinate the SME development or
other relevant institutions, complemented by strong political support from the Governor.
The Provincial OVOP Secretariat has several functions as follows: (1) as the secretariat of
Provincial OVOP Committee, (2) to plan the details of OVOP development at province level,
including in synchronizing the budgeting of OVOP activities across local governmet agencies,
(3) to implement the policies established by the National/Province OVOP Committee, (4) to
serve as a bridge between National OVOP Secretariat and District OVOP Secretariat, (5) to
coordinate strengthening supports from across local government agencies, (6) to socialize
and promote the implementation of OVOP in their region, (7) to manage the administration
of OVOP iplementation in their region, from selection process, proposal on the types and
the extent of strengthening supports at the province level, and the performance reporting
to the Province OVOP Committee and the National OVOP Secretariat, (8) to provide
technical assistances to District OVOP Secretariat and OVOP Management, (9) to carry out
OVOP performance ranking in their region, and (10) to carry out the monitoring and
evaluation process of OVOP implementation in their region.
5.1.3. Institutionalization of OVOP at District Level
The OVOP Implementing Committee at the district level should be under coordination of the
Head of District/Mayor. The following are the roles of the OVOP Committee at the district
level: (1) to coordinate the implementation of data collection and the mapping of the
potential of MSMEs in the district, as well as identify necessary supports that are needed to
develop OVOP in the district, (2) to promote and provide stimulus for OVOP movement in
the district, (3) to mobilize resources for OVOP project and set the the plan and budget for
OVOP implementation in the district, (4) to coordinate strengthening supports and technical
assistants for OVOP enterpreneurs in the district, (5) to coordinate the process of providing
technical assistants to those managing OVOP implementation in the district in order to be
able to obtain cross-institutional supports, such as supports from the provincial and central
level: (1) to coordinate the implementation of data collection and the mapping of the
potential of MSMEs in the district, as well as identify necessary supports that are needed to
develop OVOP in the district, (2) to promote and provide stimulus for OVOP movement in
the district, (3) to mobilize resources for OVOP project and set the the plan and budget for
OVOP implementation in the district, (4) to coordinate strengthening supports and technical
assistants for OVOP enterpreneurs in the district, (5) to coordinate the process of providing
technical assistants to those managing OVOP implementation in the district in order to be
able to obtain cross-institutional supports, such as supports from the provincial and central
government as well as from the business sector, (6) to develop models for successful OVOP
implementation at village/district/province level and formulate clear action plans, (7) to
promote the successful of OVOP movement in the district in order to make the movement
more sustainable, (8) to carry out monitoring, evaluation, and reporting activities in terms of
Page 29 of 59
an integrated OVOP database, and (9) to develop the institution and the capacity of
community business groups and MSMEs in the district in order to be able to access the
strenghthening supports from the province or the national level.
The District OVOP Committee could be assisted by Provincial OVOP Secretariat, especially if
the the OVOP development becomes the development program priority of the district
government in massive and sustainable manner. Therefore, the District OVOP Secretariat
should ideally be under the Head of District's Office or assigned to agency that coordinates
the SME development or other relevant institutions, complemented by strong political
support from the Governor.
The roles of the District OVOP Secretariat are as follows: (1) as the secretariat of District
OVOP Committee, (2) to make detailed planning regarding OVOP development in their
respective region, including synchronizing OVOP budgeting activities across local
government institutions, (3) to implement the policies established by the
National/Province/District OVOP Committee, (4) to carry out data collection and the
mapping of the local potential that could be developed by using OVOP approach, (5) to
provide and deliver the strengthening supports and technical assistances from various
institutions in their respective region, (6) to socialize/communicate and promote the OVOP
implementation in their respective region, (7) to manage the administration of OVOP
implementation at their respective region, ranging from selection phase, the proposal
regarding the types and the extent of strengthening supports to OVOP in their respective
region, and to report the OVOP performance in the region to the District OVOP Committee
and Province OVOP Secretariat, (8) to provide technical assistances to OVOP Implementing
Committee and OVOP management at the district level, (9) to assess and rank the OVOP
performances in their respective region, and (10) monitoring and evaluation of OVOP
program.
5.1.4. OVOP Management
OVOP Management plays the following roles: (1) to develop MSMEs or the business of its
group member, (2) to identify the needs for business capacity improvements of its
members, (3) to prepare proposals for business capacity improvements of its members to
the COOPERATION
ASEAN relevantPROJECT and qualified institutions, (4) to carry out business capacity improvements of its
NO. IND/SME/11/003/REG
members by optimizing the supports for OVOP program, (5) to manage the funds or
strengthening supports for OVOP from various institutions, (6) to develop OVOP group
5.1.4. OVOP Management
OVOP Management plays the following roles: (1) to develop MSMEs or the business of its
group member, (2) to identify the needs for business capacity improvements of its
members, (3) to prepare proposals for business capacity improvements of its members to
the relevant and qualified institutions, (4) to carry out business capacity improvements of its
members by optimizing the supports for OVOP program, (5) to manage the funds or
strengthening supports for OVOP from various institutions, (6) to develop OVOP group
institution in order to be a legal and formal institution, and (7) to prepare reports on its
members’ business progresses and submit them to the OVOP Implementing Committee at
the district level.
The OVOP Management should consist of the Chair, Secretary, Treasurer, and several units
depending on the needs for developing OVOP business groups. The OVOP Management
could form a cooperative or other types of institutional bodies that could support the
development
Page 30 of 59 of its members’ business activities in a more sustainable manner. The
cooperative or other types of institutional bodies to be formed could be owned by one
OVOP group or more, depending on the optimal business scale.
In order to support the implementation of OVOP program in a sustainable manner, we could

consider to give roles to the head of village or the head of subdistrict or local community
leaders or successful local entrepreneur as mentors or advisors in OVOP management. The
involvement of these leaders is expected to be able to integrate the development of OVOP
groups through rural development revitalization. However, there should be a mechanism to
minimize the adverse impact of these leaders involvement on the creativity, innovation and
speed of OVOP group development.
5.2. Leadership
A strong local leadership combined with a community-based development paradigm is the
key success factor of OVOP movement in general. Socialization and dissemination of OVOP
to local government and local stakeholders are of most important. This can be done by
showing them various successful local economic development using OVOP approach. The
examples of successful OVOP programs and comparative study could motivate the local
government to adapt and develop OVOP in their region.
Local leadership that has a commitment to develop OVOP can be nurtured through: (1)
examples set by the national leader who has a commitment to develop rural local areas
through OVOP approach, (2) intensive and sustainable socialization on the successful local
socio-economic development based on OVOP movement, (3) further development of
various successful OVOP projects initiated by the government, business sector, and
community, (4) providing necessary strengthening supports and technical assistances for
local governments who have commitment to carry out OVOP movement, and (5) providing
awards and publication incentives for local leaders who are successful in developing OVOP
36
in their regions. Improvement Rural Living Condition Through One Village One Product (OVOP) Movement
The role of the national leader is to empower local leaders and business sectors to embrace
through OVOP approach, (2) intensive and sustainable socialization on the successful local
socio-economic development based on OVOP movement, (3) further development of
various successful OVOP projects initiated by the government, business sector, and
community, (4) providing necessary strengthening supports and technical assistances for
local governments who have commitment to carry out OVOP movement, and (5) providing
awards and publication incentives for local leaders who are successful in developing OVOP
in their regions.
The role of the national leader is to empower local leaders and business sectors to embrace
the vision of OVOP development as an approach in local community empowerment and
economic revitalization. Meanwhile, the role of the local leaders is to create and nurture
new leaders that embrace the vision of village economic development and local community
economic empowerment by using OVOP approach. The head of village, local community
leaders, young activists, women activists, and local enterpreneurs at village and subdistrict
level could be encouraged to be committed local leaders to improve and develop OVOP in
their regions.
The commitment of the local leaders that share the vision of OVOP development will make
easier the community empowerment processes that will be integrated into the local
Page 31 of 59
economic development and village development in a sustainable manner. These local
leaders will accelerate the efforts in transforming OVOP to be community’s social and
economic movement and to reduce the dependencies of the OVOP program on the
supports from the government.
5.3. Clear Mechanism and Strengthening Supports for OVOP

5.3.1. OVOP Development Pattern
OVOP development could be initiated by the central or local government either in the form
of OVOP development projects with competitive strengthening supports (top-down
approach), or OVOP movement which are based on community initiative (bottom-up
approach). Both approaches could be synergized each other and complementary to each
other. The bottom-up approach should be carried out by the local government to develop
community businesses which are based on local specialty. The central government then
improve the capacity of the community business through OVOP project in order that the
community product could be more competitive in national and global market. The
development of OVOP movement from incubation phase to OVOP Champion is presented in
Figure 5.2.

Figure 5.2. OVOP Movement Development

Explanation on Figure 5.2:
A – The central government shows a strong commitment to develop OVOP by establishing guideline and
policies on OVOP development and strengthened by the commitment of the province government that uses
OVOP approach as the priority of local economic development together with the district government (B).
The phase of OVOP development is started from the business group incubation phase by the district
government together with the local community by developing the enterpreneurship spirit of the local
community in order to be able to transform into MSMEs that could meet the OVOP program criteria. The
incubation phase could be continued by carrying out the OVOP project phase through providing strengthening
supports to community business groups or MSMEs (OVOP producers) in order to be able to be OVOP champion
(I). The increase in the number of OVOP champhion will encourage the local government, business sectors, and
wider community to adopt and adapt OVOP Movement (II).
In order to develop OVOP, there are several necessary activites needed to be done: (1) data collection of local
economic potential; (2) incubation of local community enterpreneurship spirit, (3) to improve the capacity of
the community business groups and MSMEs in order to be able to fulfill the pre-OVOP product criteria; or (4) to
develop pre-OVOP groups; (5) to provide technical assistances in order to help the pre-OVOP groups could
fulfill the OVOP criteria or access OVOP program; (6) District, Province, and Central Government establish the
types and the amount of strengthening supports that will be provided for OVOP groups; (7) Strengthening
supports from the government to targeted OVOP groups will be conducted by service providers in order to
maintain the sustainability of the services and to develop Business Development Services (BDS) market; (8) to
facilitate the follow-up supports and monitor the supports in order that the OVOP groups could transform into
OVOP Champion Groups; (9) the government promotes the successful implementation of OVOP development
and provide guidance on adoption and adaptation of OVOP development; (10) to encourage local government,
business sector, and local community in developing OVOP Champion Groups that could set examples for a
wider community. Therefore the OVOP development could become OVOP movement for the community.
OVOP movement is considered to have a strong root in the community and have long-term
prospect, due to the basis of the OVOP movement that is based on community initiative and
the support from the business sectors as OVOP business partner. OVOP movement requires
strong supports from the local leaders in order to be able to empower local community in
optimizing economic potentials of a village or a group of villanges. OVOP movement is directed
toward the improvement of social solidarity and induce community interests to produce high
quality and unique products based on the potential of their region.
The development of OVOP movement should follows several steps as follows: (1) collecting
data on rural/local economic potentials and products that can be developed as the
community’s common business, (2) raising the interests of the community to become
entrepreneurs by forming business groups, (3) improving the entrepreneurship capacity of the
community in the form of common business groups, (4) providing strengthening supports to
the community business groups such as capital, access to market, technology, packaging, and
quality management, (5) improving the capacity to become independent business with

prospects of producing special products of the village, (6) developing MSMEs through assigning
ranks and providing integrated supports, (7) developing synergy between business groups and
MSMEs to develop product brands of the village or the groups of villages which are well known
by wider community, and (8) preparing OVOP management groups in order to be able to access
competitive government program or OVOP projects.
OVOP projects which are initiated by the government tend to choose the special local products
that are highly potential to be developed to compete in local, national, as well as global market.
Therefore, local government should motivate and provide stimulus for OVOP movement in
their regions, in order to form sufficient amount of business groups in various villages covered
in the OVOP movement.
OVOP project is highly effective to introduce and motivate a wider OVOP development in a
relatively shorter time. Therefore, this approach is frequently adopted and adapted by national
government and implemented nationally (top down approach). The success of this approach
requires high commitment and strong development vision of the national government, as well
as the sustainability of the policy supports and budget for adequate period, e.g. 10 years or
more. Considering the limited government budget, the project-based approach is suitable for
developing existing business groups or MSMEs that have potential to be developed to produce
local main products and could penetrate global market.
5.3.2. OVOP Implementation Steps

Successful OVOP implementation needs to follow several steps (Figure 5.3). These steps can be
adjusted to the real condition of the community and government administration and
governance in each country.
Figure 5.3. OVOP Program Implementation Steps
Page 35 of 59
These steps are as follows:

40 Step 1. Establish OVOP National Committee and National
ImprovementSecretariat
Rural Living Condition Through One Village One Product (OVOP) Movement
Establishing OVOP National Committee and National Secretariat shows a strong political
support from the national leader to carry out local economic development by using OVOP
These steps are as follows:
Step 1. Establish OVOP National Committee and National Secretariat
Establishing OVOP National Committee and National Secretariat shows a strong political
support from the national leader to carry out local economic development by using OVOP
approach. This will also disseminate the concept and implementation of OVOP to wider
stakeholders. OVOP National Secretariat should establish criteria and mechanisms for the
provision of OVOP strengthening supports, as well as types and the amount of OVOP supports
to be budgeted every year.
Step 2. Promotion of OVOP to Province and District Stakeholders by OVOP National

Secretariat
OVOP National Secretariat should disseminate the concept and implementation of OVOP to
stakeholders and to encourage the establishment of Provincial OVOP Committee by governor
and District OVOP Committee by the head of district/mayor, as well as assign a special working
unit to act as the OVOP Implementing Secretariat.
Step 3. OVOP Promotion to Community by District OVOP Committee

Page 36 of 59
District OVOP Committee should disseminate OVOP concept to community leaders and
business sectors in their region to encourage the community to propose OVOP activities and
raise the interest of the community to develop business groups based on local resource
potential.
Step 4. Business Incubator and Improvement of MSME Capacity by District Government
District Government should develop business incubator to grow and expand community
business groups and MSMEs based on local resources. Business incubator could be carried out
through trainings and capacity building, mentoring, and providing capital for business start-ups.
For regions that already have enough MSMEs and community business groups, they could
improve the capacity of MSMEs and community business groups in the region in order to be
able to fulfill the criteria to access OVOP program.
Step 5. OVOP Proposal
Community business groups that are interested in accessing OVOP program should prepare a
proposal. The proposal will be submitted to OVOP Committee Secretariat at district level. One
of the factors of consideration in approving the proposal is the uniqueness of products and
services, market potential, and the contribution towards community.
Step 6. First Selection at District Level
Preliminary selection of the proposal will be carried out by OVOP Committee at district level,
based on the result of field verification conducted by Committee Secretariat at the district level.
The selection will take into account the following factors: (1) how far the proposal could meet
OVOP criteria, (2) assess the uniqueness of the product or service, market potential, and the
contribution
Improvement toward
Rural Living Condition Throughcommunity,
One Village One Product(3)
(OVOP)provide
Movement 41
assessment regarding the strengths and
weaknesses of the proposal, and (4) determine the follow up regarding the proposal, whether
the proposal is (i) eligible to be submitted to OVOP National Secretariat, (ii) eligible to be
Step 6. First Selection at District Level
Preliminary selection of the proposal will be carried out by OVOP Committee at district level,
based on the result of field verification conducted by Committee Secretariat at the district level.
The selection will take into account the following factors: (1) how far the proposal could meet
OVOP criteria, (2) assess the uniqueness of the product or service, market potential, and the
contribution toward community, (3) provide assessment regarding the strengths and
weaknesses of the proposal, and (4) determine the follow up regarding the proposal, whether
the proposal is (i) eligible to be submitted to OVOP National Secretariat, (ii) eligible to be
submitted to OVOP Secretariat at provincial level to obtain strengthening support from the
OVOP Committee at the provincial level, (iii) eligible to obtain strengthening support from the
district government, and (iv) ineligible, and need to have mentoring processes in order to be
able to access OVOP program in the future.
Step 7. Processing the Proposal, Eligible
Eligible proposals will be passed through to the National Committee Secretariat and/or
Provincial Committee, depending on the level of its eligibility. Proposals that are eligible for
strenghthening supports by the district government will be take care by local government
working units that have support programs that are relevant to the needs of the OVOP groups.
Proposals that are eligible for further selection process will be passed through to national
Secretariat. Ineligible proposals will be returned to OVOP groups with accompanying
Page 37 of 59
explanations and further mentoring process.
Step 8. Second Selection by National Secretariat and/or Provincial Committee
The second selection process will be carried out by the National Committee. The OVOP National
Secretariat Committee could also assign Provincial Committee to carry out the proposal
selection process in their respective region. Provincial committee should also carry out the
selection process (see Screening Form of OVOP Program in Appendix 2).
The selection process should consider the following aspects: (1) The equalization and
distribution project area, (2) the availability of supporting infrastructure for the success of
OVOP business, such as: roads, transportation, connectivity, (3) the availability of services
providers Business Development Service - Providers (BDS-P), financial institutions, educational
and research institutions), (4) the uniqueness of the products/services that could be developed
as a strong product differentiation, (5) The presence of existing OVOP institutions, and (6)
support from the district government.
Step 9. Selection of OVOP Program Recipients
National Secretariat decide the OVOP program participants who have passed the selection
processes, and determine the types of supports that could be awarded for the development of
OVOP business groups/SMEs, as well as alternative service providers that could improve the
capacity of the OVOP program recipients. The National Secretariat will announce the result of
OVOP participant selection to the OVOP business groups/SMEs, through provincial and district
committee, in the form Certificate of OVOP Participants.
Participants who have a Certificate of OVOP Participants could request for OVOP ranking
assessment to the National Secretariat in order to obtain further ASEANsupports and use
COOPERATION PROJECT the OVOP
logo with stars rating and registration number.
Step 10. Alliance With Service Provider (Service Providers)

capacity of the OVOP program recipients. The National Secretariat will announce the result of
OVOP participant selection to the OVOP business groups/SMEs, through provincial and district
committee, in the form Certificate of OVOP Participants.
Participants who have a Certificate of OVOP Participants could request for OVOP ranking
assessment to the National Secretariat in order to obtain further supports and use the OVOP
logo with stars rating and registration number.
Step 10. Alliance With Service Provider (Service Providers)
The National Secretariat Committee will determine the criteria of service providers that suits
the OVOP program and select the qualified service providers. The National Secretariat
committee could set the tariff range of the service providers to facilitate better budgeting
process and the assignments of the service providers in assisting the OVOP groups.
The selected service providers will provide the services to OVOP groups according to their
competencies, for example: (i) marketing consultant, (ii) branding and packaging, (iii) technical
training, (iv) business management training, (v) information technology, (vi) production
technology, (vii) quality management, (viii) financial support, and (ix) facilitate intellectual
property right, (x) others.
Page 38 of 59
The Provincial Committee and District Committee could select the service providers for OVOP
development and finance it using the regional budget, according to the guidelines from the
National Secretariat. All BDS for OVOP program should be registered in the National Secretariat
or the Provincial and District Committee (See Figure 6.1 in Appendix).
To support the OVOP program, BDS market and micro financial market development are
necessary. Therefore, the supports will not be given directly provided by provincial/district
governments, but through a competent and qualified service provider. Districts that do not
have a competent service provider should encourage the development of BDSs or attract more
BDS to provide service to their areas, as well as develop BDS markets in the area.
Step 11. Provision of Business Development Services
Service providers should properly assess the demand for business development services of the
OVOP Project and determine the type and quantity of services that is needed to be submitted
to the National Secretariat Committee through the Provincial or District Committee.
District Committee shall approve and order the commencement of the service provision. Then
the service providers could provide services according to the needs of OVOP. After the
completion of service OVOP development, the service provider should make a report and
submit invoice for the services that it has provided.
District Committee will check the accuracy of the implementation of the services and then
process the payment of the services to the District Committee or Provincial Committee or
National Secretariat, in accordance with the sources of financing.
Step 12. Monitoring and Follow-up
District Committee should carry out data collection and registration of OVOP groups in their
43
area on a regular basis, and submit it to the Committee on Provincial and National Secretariat
Improvement Rural Living Condition Through One Village One Product (OVOP) Movement
committee. The OVOP groups that have been registered will receive the membership number.
The registration process should be carried out for both OVOP groups that already received
District Committee will check the accuracy of the implementation of the services and then
process the payment of the services to the District Committee or Provincial Committee or
National Secretariat, in accordance with the sources of financing.
Step 12. Monitoring and Follow-up
District Committee should carry out data collection and registration of OVOP groups in their
area on a regular basis, and submit it to the Committee on Provincial and National Secretariat
committee. The OVOP groups that have been registered will receive the membership number.
The registration process should be carried out for both OVOP groups that already received
supports from the government and those that have not received any supports from the
government (See the Registration Form in Appendix 1).
District Committee together with Provincial Committee and the National Secretariat will carry
out a monitoring for OVOP groups (especially OVOP project) to determine the progress of its
development and necessary further assistances. The monitoring results will be submitted to the
National Secretariat annually as the basis for policy formulation and OVOP planning
development in the next financial year.
Page 39 of 59
5.4. Data Collection, Rating, Monitoring and Evaluation

5.4.1. Data Collection and Registration
Ideally, the District/City Government registers OVOP and SME groups that are located in their
regions. The database should make records on name, address, products, and SWOT that enable
for OVOP development planning in their region, and determining the type of needed supports.
The National Secretariat needs to develop data collection system as an integrated OVOP
database.
OVOP data collection should be followed up by OVOP registration process. OVOP registration is
a starting point towards business legality in accordance with applicable laws in each country.
The developed SMEs or OVOP groups should be encouraged to meet the legality according to
applicable legal entity and represent the interests of OVOP entrepreneurs, such as:
cooperatives, corporations, etc. The legality is needed enable them to access global market and
access needed resources for their business development, such as banking (See Figure 6.2 in the
Appendix).
OVOP registration can be carried out by following two procedures as follows:
1. OVOP supported by government project.
These OVOP groups are automatically registered along with proposal submission process
submitted to the National Secretariat.
2. Community-Initiated OVOP (OVOP that is not supported by government project).
Non-supported OVOP groups that are interested to register their products as 'OVOP product'
should follow the following steps: (i) business groups or SMEs fill out the registration form
and submit it to the National Secretariat or through the District Committee, (ii) the National
Secretariat assigns the District Committee to assess its business groups' products and
activities, and their compliance with OVOP criteria, (iii) products that comply
ASEAN COOPERATION with OVOP
PROJECT NO. IND/SME/11/003/REG
criteria will be given a registered status by the National Secretariat, and (iv) products which
is not in accordance with OVOP criteria are stated 'can not be registered' and notes for their
products improvement will be provided.
2. Community-Initiated OVOP (OVOP that is not supported by government project).
Non-supported OVOP groups that are interested to register their products as 'OVOP product'
should follow the following steps: (i) business groups or SMEs fill out the registration form
and submit it to the National Secretariat or through the District Committee, (ii) the National
Secretariat assigns the District Committee to assess its business groups' products and
activities, and their compliance with OVOP criteria, (iii) products that comply with OVOP
criteria will be given a registered status by the National Secretariat, and (iv) products which
is not in accordance with OVOP criteria are stated 'can not be registered' and notes for their
products improvement will be provided.
5.4.2. OVOP Rating

OVOP or SME business groups whose products have been listed as OVOP products will be
awarded OVOP certificate by the National Secretariat. OVOP certificate can serve as a basis for
carrying out OVOP business group rating that is conducted regularly by OVOP rating institution
Page 40 of 59
appointed by the National Secretariat. Screening Form in the Appendix 2 could be used as a
starting point for developing OVOP rating.
OVOP products are classified based on the evaluation rankings symbolized by 'star' as follows:
1. 5-star OVOP products have excellent quality and should be able to penetrate the export
market.
2. 4-star OVOP products have very good quality and are suitable for national market. With
some improvements, they are expected to achieve 5-star rating for export market.
3. 3-star OVOP products have good quality and are suitable for local market. With some
improvements, they are expected to achieve 4-star rating for national market.
4. 2-star OVOP products have quite good quality, but still need guidance to improve their
product quality, and with some improvements they are expected to achieve 3-star rating.
5. 1-star OVOP products are those that still need significant improvements to be able to
achieve 2-star rating.
6. Non-star OVOP products are those that still need a lot of improvements and guidance to
achieve 1- or 2- star rating.
The rating results can be used by central and local government and business sector for further
fostering business groups or OVOP SMEs. It also could be used by OVOP business groups to
access resources for their business development, such as business financing from banking, etc.
5.4.3. Monitoring and Evaluation

OVOP performance monitoring and evaluation should be carried out regularly, at least twice a
year, by District/City Committee. OVOP performance monitoring by the National Secretariat
through Province Committee should be carried out at least once a year. The monitoring results
will be used as a basis to evaluate OVOP performance and established OVOP development
policies in the future.
The District OVOP Secretariat will organize OVOP performance monitoring and evaluation
meetings at least twice a year. The result of the meetings will be discussed with the District
OVOP Committee and Province/National OVOP Secretariat. The Province OVOP Secretariat will
arrange OVOP performance evaluation meeting with District OVOP Secretariat and other
year, by District/City Committee. OVOP performance monitoring by the National Secretariat
through Province Committee should be carried out at least once a year. The monitoring results
will be used as a basis to evaluate OVOP performance and established OVOP development
policies in the future.
The District OVOP Secretariat will organize OVOP performance monitoring and evaluation
meetings at least twice a year. The result of the meetings will be discussed with the District
OVOP Committee and Province/National OVOP Secretariat. The Province OVOP Secretariat will
arrange OVOP performance evaluation meeting with District OVOP Secretariat and other
related stakeholders at the province level at least once a year. The result of the meeting will be
communicated with Province OVOP Committee and the National OVOP Secretariat. The
Page 41 of 59
National OVOP Secretariat will organize OVOP performance evaluation meeting with Province
OVOP Secretriat and other related stakeholders at the national level at least once a year.
The National OVOP Secretariat will hold OVOP stakeholders forum and OVOP festival at least
twice a year, as a forum for giving awards and publication incentives for OVOP participants and
local leader that are successful in developing OVOP in their community.
The District/Province/National OVOP Committee should carry out follow-up activities on the
OVOP performance evaluation and report the result to the Implementing Secretariat in order to
formulate suitable policies and strengthening supports and to foster the OVOP development in
a sustainable manner. The result of the committee meetings will produce guidance and action
plan for the OVOP Secretariat that will implement and syncronize OVOP development in their
respective region.

Page 42 of 59
6 Appendices

VI. Appendix
Appendix 1. Application Form of OVOP Program
Appendix 1. Application Form of OVOP Program
Application Form of OVOP Program

Group / SME Company/ OVOP Product Producer Identity
1. Group Name/ SME Company Name : ________________________________________________
2. Business Address : ________________________________________________
3. District/ Province : _______________________ / _______________________
4. Total Membership/ Employee : _________ person/s; in details:
_____ Men _____ Women ______ Youth _____ Disabled
5. Place and Date of Formation : _________________________________________________
6. Name of Contact Person : _________________________________________________
7. Phone/ Fax/ E-mail : _________________/ ________________/ ______________
8. Registration Certificate No* : __________________________________________________
9. Bank Name/ Account Number : _______________________ / _________________________
Type of Product
1. Type of Product/ Service ** : ____________________________/ ____________________
2. Experience : [ ] New Product [ ] Existing Product, since ______ (year)
3. Product Brand : __________________________________________________
4. Uniqueness and Strength of Product: __________________________________________________
5. Packaging Form : __________________________________________________
6. Main Product Use : __________________________________________________
7. Certificates/Licensed of Product * : ________________________ Publisher Institution: _________
Business Capacity
1. Production Capacity : ________________________________________unit/ month
2. Number of Products : ________________________________________unit/ month
3. Period of Production Time : ________________________________________ month/year
4. Production Process : __________________________________________________
5. Production Technology : [ ] Manual [ ] Semi-Automatic Machine [ ] Modern Tools
6. Availability of Local Raw Materials : _________________________________________ ______%
7. Availability of Local Labor : _________________________________________ ______%
Page 43 of 59
8. Market Share : __________________________________________________

___% Local ___% RegionalASEAN
___% National
COOPERATION ___%
PROJECT Export
9. Promotion and Marketing : __________________________________________________
10. Rates of Growth of Sales per Year : __________________________________________________
8. Market Share : __________________________________________________

___% Local ___% Regional ___% National ___% Export

9. Promotion and Marketing : __________________________________________________

10. Rates of Growth of Sales per Year : __________________________________________________

11. Infrastructures

a. Land and Building : ____ M2 Location: ____________ Status: Rent/Own Property

b. Power Supply : [ ] Installed [ ] Under Construction, ready year ____ [ ]None

c. Water Supply : [ ] Tap Water [ ] Borehole [ ] None

d. Transportation : [ ] Own Vehicle [ ] Public Transport [ ] Bicycle [ ] None

e. Communication Tools : [ ] Fixed Line [ ] Mobile Phone [ ] Fax [ ] E‐mail [ ] Postal

f. Market Access : Land Transportation/Sea Transportation/Air Transportation

Business Performance

1. Please explain the key success and challenge ‐ marketing problems

a. Target market for your product: _____________________________________________

b. Who are your Customers: _____________________________________________

c. Why do they buy from you: _____________________________________________

d. Who is your main competitor: _____________________________________________

e. Sales Growth Potential: _____________________________________________

f. Issues/Problems: _____________________________________________
2. Profit and loss account in the 12 months

a. Sales

Product Quantity Unit Price Sales
Total

b. Expenditure
Items Quantity Unit Price Total Cost
Total
c. Profit and Loss
Product Sales Total Cost Profit (Loss)
Total
3. Assets
a. Cash balance as of ____ : ______________________________________Local Currency
b. Account Receivables : ______________________________________Local Currency
c. Product Inventory : ______________________________________Local Currency
d. Fixed Asset : ______________________________________Local Currency
e. Total Asset : ______________________________________Local Currency
4. Liabilities
a. Amount : ______________________________________Local Currency
b. Main Sources : [ ] Family/Friend [ ] Supplier [ ] Government Fund/ Grant
[ ] Non-Bank Financial Institutions [ ] Bank
5. Capital : ______________________________________Local Currency
OVOP Project Information (Specifically for Group/ SME who needs OVOP program's support)
1. Describe the condition and business development plan of the project, that needs OVOP program
support
a. Background of the project/ business (describe briefly why and how you started the project/
business) ____________________________________________________________________
Page 45 of 59

b. Justification of the project/ business (describe briefly why the project is needed and how the
project/ business fit to the concept OVOP) ___________________________________________
c. Target Beneficiaries (Describe your target beneficiaries) _______________________________
d. Project/ Business Objective (Describe objective which the project/ business is expected to
achieve in the project) ___________________________________________________________
e. Project/ Business Activities (Describe your current main activity) ________________________
f. Business Plan (describe your future business plan which could be achieved with the support)
2. Type of Needed Support
No Type/ Item of Supports Estimated Cost Owner’s Benefit

Contribution
Total
3. Justification of Support (describe why you need support from OVOP)

__________________________________________________________________________________
4. OVOP support is expected to be able to increase your business performance:
a. Sales and Profit in the Next 12 Months
(i) Sales Information
Product Quantity Unit Price Sales
Total
(ii) Expenditure Information
Items Quantity Unit Price Total Cost
Total
Page 46 of 59
(iii) Profit and Loss Information

Product Sales Total Cost Profit (Loss)
Total
b. Increase in the number of labor force : ________________________________________________

c. Expansion of product market : ____________________________________________________

d. Production efficiency : ____________________________________________________
Signature of Representation of the Group/ SME Company

Name Signature

____________________ ____________________
Comments of District OVOP Committee

Product Category: _________________________________ Industry Code: _______________________

Compliance with OVOP Concept: [ ] Comply [ ] Need adjustments ______________ [ ] Non‐compliance

Strong Points : _______________________________________________________________________

Weak Points : _______________________________________________________________________

Adjustments of Type and Amount of Needed OVOP Assistance: _________________________________

Recommendation : [ ] Feasible to be supported by OVOP program

[ ] Not yet feasible to be supported by OVOP program

[ ] Registered as OVOP participant, do not ask for support from OVOP program

Name of Officer: _______________________________________________________________________

Signature : _______________________________________________________________________

Comments of OVOP National Secretariat

Company Register Number: ________________________________ Date: ______________________

Product Register Number : ________________________________ Date: ______________________


Rating Score : _________________ Category: ____ star Date: ______________________

Follow Up Notes : ______________________________________________________________

Name of Officer : ______________________________________________________________

Signature : _______________________________________________________________________

Notes:

* Please attach the copy of certificate or license of your company

** Please attach photos or videos of your products and services

Appendix 2. Form of OVOP Program Selection
Appendix 2. Form of OVOP Program Selection
Screening Form of OVOP Program

Form Number: Date of Receive: Officer Name:
I Evaluation Process
I.1 Product Name
I.2 Product Code
I.3 Product Category
Date of Field
I.4
Observation
I.5 Name of Inspector
II Group / SME Company / OVOP Producer Identity
Group Name/ SME
II.1
Company Name
II.2 Business Address
II.3 Village: Sub-District:
II.4 District: Province:
Person/s; in details:
Total Membership /
II.5
Employee (for SME) Disability
Men Woman Youth
Name of Contact
II.6
Person
II.7 Phone: Fax: E-mail:
II.8 Registration Certificate Kind & Certificate Number Issued Agency:
III Evaluation Aspects
A THE UNIQUENESS AND LOCAL WISDOM OF A PRODUCT
A.1 PRODUCT HISTORY 10 points
The History of the Product / Service 3 points
□ Posses product history, but not documented 1 point
A.1.1
□ Posses product history and documented 2 points
□ Posses product history and documented and published 3 points
Local Wisdom 4 points
□ Adopting from others and not developed further (imitate) 1 point
A.1.2
□ Adopting from others and developed further (modified) 2 points
□ Original local wisdom and developed further innovatively 4 points
Product Design 3 points
□ Product design, characteristic,and component are simple and still need
1 point
improvement
□ Product design and characteristic are quite good, and still need
A.1.3 2 points
improvement in some parts
Page 49 of 59
□ Product design and characteristic are correct and complete, the
components are matched as a whole, and refer to local/national cultural 3 points
wealth
A.2 PRODUCT QUALITY AND SPECIFICATION 10 points
Product Standard 3 points
□ Have company standard and comply with company standard 1 points
A.2.1 □ Have company standard and comply with national standard 2 points
□ Product design and characteristic are quite good, and still need
A.1.3 2 points
improvement in some parts
□ Product design and characteristic are correct and complete, the
components are matched as a whole, and refer to local/national cultural 3 points
wealth
A.2 PRODUCT QUALITY AND SPECIFICATION 10 points
Product Standard 3 points
□ Have company standard and comply with company standard 1 points
A.2.1 □ Have company standard and comply with national standard 2 points
□ Have company standard and comply with international standard 3 points
Product Specification in Accordance with the Function and Easy to Use 2 points
□ Not yet meet the qualified product specification requirements 0 point
A.2.2 □ Meet the qualified product specification requirements,but still modest 1 point
□ Meet the qualified product specification requirements completely and u
2 points
ser friendly
Products Packaging and Labelling 3 points
□ Does not have label 0 point
□ Modest or simple packaging and labeling 1 point
A.2.3 □ Interesting packaging and labeling, in accordance to the label provision 2 point
□ Interesting packaging and labeling, in accordance to the label provision
completed with information: how to use or contents or product 3 point
specifications
Quality Management System Certification 2 points
A.2.4 □ None 0 point
□ Certified (such as: HACCP, ISO‐9000, 14.000, 22.000) 2 points
A.3 SAFETY AND HEALTH STANDARD 10 points
Safety Standard Fulfilment 10 points
□ Does not meet the safety and health standard 0 point
□ Meet
A.3.1 the safety and health standard according to product categories 5 points
in local Market
□ Meet the safety and health standard according to test results from
10 points
legal institutions
TOTAL POINTS A Points
B CONTINUOUS AND CONSISTENT PRODUCTION

Page 50 of 59
B.1 BUSINESS MANAGEMENT 15 points
Organization 3 points
□ No organization structure 0 point
B.1.1 □ Has organization structure without clear division of tasks 1 point
□ Has organization structure with clear division of tasks 2 points
□ Has an effective organization structure with clear division of tasks 3 points
Business Plan 3 points
□ Has simple written business plan 1 point
B.1.2 □ Has good business plan (specific, measurement, attainable, realistic, tim
2 points
e line)
□ Has good business plan and effective team to implement 3 points
Professional Availability 3 points
□ Fully managed by The Owner, with assistance of professionals in the
ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG 1 point
Improvement Rural Living Managerial
B.1.3
/ Village
Condition Through One administration
One Product (OVOP) aspects
Movement 55
□ Managed by professionals and the owner simultaneously 2 point
□ Effectively managed by professionals, and the owner only acts as the
3 points
Business Plan 3 points
□ Has simple written business plan 1 point
B.1.2 □ Has good business plan (specific, measurement, attainable, realistic, tim
2 points
e line)
□ Has good business plan and effective team to implement 3 points
Professional Availability 3 points
□ Fully managed by The Owner, with assistance of professionals in the
1 point
Managerial / administration aspects
B.1.3
□ Managed by professionals and the owner simultaneously 2 point
□ Effectively managed by professionals, and the owner only acts as the
3 points
supervisor
Governance System 3 points
□ Does not have written SOP, but staffs understand their job and task
1 point
procedures
B.1.4
□ Has written SOP and staffs carry it out effectively 2 points
□ Has written SOP, carried out effectively, and applying performance‐
3 points
based evaluation
Bookkeeping 3 points
□ Does not have business bookkeeping 0 point
□ Has simple bookkeeping 1 point
B.1.5
□ Has bookkeeping that meets accounting standard 2 points
□ Has bookkeeping that meet accounting standard and audited by public
3 points
accountant with unqualified opinion
B.2 PRODUCTION PROCESS 15 points

Production / Technology and Equipments 3 points
□ Manual production tools / equipment 1 point
B.2.1
□ Production tools using semi‐automatic machines 2 points
□ Modern production tools / equipment 3 points
Production Added Value Ratio (Production Value/Raw Materials Value) 3 points
□ Production added value ratio between 100% ‐ 125% 1 Point
B.2.2
□ Production added value ratio between 126% ‐ 200% 2 points
□ Production added value ratio is above 200% 3 points
Production Stability 3 points
□ Production is only carried out based on order (not continuous) 1 point
Page 51 of 59
□ Production is carried out to fulfill the market, the amount of production
B.2.3 2 points
sharply fluctuate between seasons
□ Production is carried out to fulfill the market with stable monthly
3 points
production pattern
Production Capacity 3 points
□ no improvement in production capacity, with the amount of production more
1 point
B.2.4 than 60% of attached capacity
□ Increase in annual production capacity is under 25% 2 points
□ Increase in annual production capacity is over 25% 3 points
Environmental Impact 3 points
□ Production pollutes environment and has no effort to reduce the
0 Point
pollution
B.2.5
□ Production affects the environment, but under control 1 point
□ Production has no effect to the environment, and waste management is
3 points
managed well
B.3 MARKETING 15 points
Costumers 2 points
56 B.3.1 □ Has regular costumers, with irregular Improvement
purchasing pattern 1 points
Rural Living Condition Through One Village One Product (OVOP) Movement
□ Has regular and new costumers, with increasing purchasing pattern 2 points
Marketing Area 4 points
□ Production pollutes environment and has no effort to reduce the
0 Point
pollution
B.2.5
□ Production affects the environment, but under control 1 point
□ Production has no effect to the environment, and waste management is
3 points
managed well
B.3 MARKETING 15 points
Costumers 2 points
B.3.1 □ Has regular costumers, with irregular purchasing pattern 1 points
□ Has regular and new costumers, with increasing purchasing pattern 2 points
Marketing Area 4 points
□ Main marketing area is only in one district/city 1 point
B.3.2 □ Main marketing area is cross‐district/city in one province 2 points
□ Main marketing area is cross‐province (national) 3 points
□ Main marketing area is international market (export) 4 points
Brand 2 point
□ Has strong brand in the local level, but not yet known by the surrounding
B.3.3 1 points
areas
□ Has strong brand in the province level and registered officially 2 points
Product Distribution 2 points
□ Marketing through agent/distributor and promotion using conventional
1 points
method
B.3.4
□ Marketing is done with various distribution
channels and promotion is carried out effectively and massively, 2 points
Page 52 of 59 including utilizing virtual and mass media
Increase in Sales Rate Compared to Sales at Previous Year 2 points

B.3.5 □ Sales increasing is under 25% 1 point
□ Sales increasing is over 25% 2 points
Ability to Compete in the Market 3 points
□ Able to compete in the local market 1 point
B.3.6
□ Able to compete and penetrate new market in another region 2 points
□ Able to compete in the national and export market 3 points
B.4 FINANCIAL CAPABILITY 15 points
Ability to Generate Profit (Ratio Profit to Sales) 3 points
□ Profit margin is less than 25% 1 point
B.4.1
□ Profit margin is between 25% ‐ 50% 2 points
□ Profit margin is more than 50% 3 points
Business Liquidity 3 points
□ The amount of current assets (treasury +trust + inventory)> business
1 point
B.4.2 debt
□ The amount of treasury and trust > business debt 2 points
□ The amount of treasury > business debt 3 points
Financial Performance
Financial performance can be measured with:
1. The Ratio Profit to Asset Increased in The Past Two Years
2. The Ratio Cash Flow from Profit to Current Liability Increased in the 3 points
Past Two Years
B.4.3
3. Capital Ratio to Asset Increased in the Past Two Years
4. Sales Ratio to Total Assets Increased in the Past Two Years
□ Fulfil performance 1 ratio above 1 Point
□ Fulfil performance two-three ratio above 2 points
□ Fulfil performance 4 ratio above 3 points
Ability to Finance Business Development 3 points
□ Has business asset growth funded by owner's capital 1 point
B.4.4
□ Has business asset growth funded by owner's capital and loans 2 points
ASEAN COOPERATION□PROJECTHas business asset growth funded by business profit and loans
NO. IND/SME/11/003/REG 3 points
Access to Finance Institutions 3 points
□ Main source of loans is supplier/individual/government's grant 1 point
B.4.5
□ Main source of loans is non‐bank financial institutions 2 points
3. Capital Ratio to Asset Increased in the Past Two Years
4. Sales Ratio to Total Assets Increased in the Past Two Years
□ Fulfil performance 1 ratio above 1 Point
□ Fulfil performance two-three ratio above 2 points
□ Fulfil performance 4 ratio above 3 points
Ability to Finance Business Development 3 points
□ Has business asset growth funded by owner's capital 1 point
B.4.4
□ Has business asset growth funded by owner's capital and loans 2 points
□ Has business asset growth funded by business profit and loans 3 points
Access to Finance Institutions 3 points
□ Main source of loans is supplier/individual/government's grant 1 point
B.4.5
□ Main source of loans is non‐bank financial institutions 2 points
□ Main source of loans is banking 3 points
TOTAL POINTS B Points
Page 53 of 59
C COMMUNITY EMPOWERMENT
C.1 COMMUNITY DEVELOPMENT 10 points
Role in the Entrepreneur Groups/Associations 2 points
□ Not a member of entrepreneur groups/associations 0 point
C.1.1
□ Member of entrepreneur groups/associations 1 points
C COMMUNITY EMPOWERMENT
□ Manager of entrepreneur groups/associations 2 points
C.1 COMMUNITY DEVELOPMENT
Community Activity Role 10 points
Role in the Entrepreneur Groups/Associations
Community's participation can be measured with: 2 points
□ Not a member of entrepreneur groups/associations
a. Absorbing labor force from local community 0 point
C.1.1 3 points
□ Member of entrepreneur
b. Distributing some of the groups/associations
profit for the local community activities 1 points
C.1.2 □ Manager
(CSR) of entrepreneur groups/associations 2 points
Community Activity
c. Receiving inputRole
from community
Community's
□ Participate participation can be
in 1 of the factors measured with:
above 1 point
a. Absorbing
□ Participate in 2labor
of theforce from
factors local community
above 23 points
points
b. Distributing
□ Participate some
in 3 of of the profit
the factors abovefor the local community activities 3 points
C.1.2 Main Raw(CSR)Material Sources 2 points
C.2.1 c. Receiving input from community
□ Local raw materials are less than 50% 1 point
□
□ Participate in 1 of the
Local raw materials arefactors
more above
than 50% 1
2 point
points
□ Participate
Main in 2 of the factors above
Labor Sources 23 points
points
□ Participate
□ The source in
of 3local
of the factors
labor is lessabove
than 50% 3
1 points
point
C.2.2 Main
□ TheRaw Material
source of localSources
labor is between 50% ‐ 80% 22 points
points
C.2.1 □ Local raw materials are less than
□ The source of local labor is more than 80% 50% 1 point
3 points
□ LocalPOINTS
TOTAL raw materials
C are more than 50% 2 points
Points
Main Labor FOR
POTENTIAL Sources
IMPROVED QUALITY, STANDARD AND BUSINESS CAPACITY FROM 3 points
D □ The SUPPORT
source of local labor is less than 50% 1 point
OVOP PROGRAM
C.2.2
D.1 □ The source
STANDARD of local IMPROVEMENT
QUALITY labor is between 50% ‐ 80% 27 points
points
□ TheProgram
OVOP source ofhaslocal labor to
potential is more
createthan
more80%products innovation and creativity 3 2 points
points
TOTAL POINTS C
□ Increase in standard quality of the product Points
1 point
D.1.1 POTENTIAL FOR IMPROVED QUALITY, STANDARD
□ Increase in standard quality of the product differentiation AND BUSINESS CAPACITY FROM
2 points
D
OVOP SUPPORT
□ Increase PROGRAM
in standard quality of the product and new product
D.1 STANDARD QUALITY IMPROVEMENT 37 points
points
diversification
OVOP Program has potential to create more products
OVOP Program has potential to improve the standard quality innovation and creativity 2 points
□ Increase insystem
management standard quality of the product 12 point
points
D.1.1
D.1.2 □ Increase
Increaseentrepreneur
in standard quality of the competency
/ employee product differentiation 2
1 points
point
□ Increase
Increaseentrepreneur and employee
in standard quality competency,
of the product and new business
product
2 points
3
management and quality management
diversification
OVOP
OVOPProgram
Programhashaspotential
potential to improve
to improvethe their
standard quality
business
management system 2 points
efficiency and appropriate technology
D.1.3 □
58 D.1.2 □ Increase
The ratioentrepreneur / employee competency 1
1 point
of operational cost to sales decrease less
Improvement Rural than
Living ≤ 20%
Condition Through One Village One Productpoint
(OVOP) Movement
□ Increase entrepreneur and employee
□ The ratio of operational cost to sales above 20%competency, business 2 points
points
2
OVOP Program has potential to improve their business
OVOP Program has potential to create more products innovation and creativity 2 points
□ Increase in standard quality of the product 1 point
D.1.1 □ Increase in standard quality of the product differentiation 2 points
□ Increase in standard quality of the product and new product
3 points
diversification
OVOP Program has potential to improve the standard quality
2 points
management system
D.1.2 □ Increase entrepreneur / employee competency 1 point
□ Increase entrepreneur and employee competency, business
2 points
OVOP Program has potential to improve their business
2 points
efficiency and appropriate technology
D.1.3
□ The ratio of operational cost to sales decrease less than ≤ 20% 1 point
□ The ratio of operational cost to sales above 20% 2 points
D.2 BUSINESS CAPACITY IMPROVEMENT 6 points
OVOP Program has potential to increase local source process 2 points
□ Increase number of local labors 1 point
D.2.1
□ Increase number of entrepreneurs, local labor, and local raw
Page 54 of 59 2 points
materials
OVOP Program has potential to increase the production
2 points
capacity
D.2.2
□ Increase in product on capacity less than 25% 1 point
□ Increase in production capacity above 25% 2 points
OVOP Program has potential to improve the financial performance 2 points
□ Improve the liquidity level and business profit less than 25% 1 points
D.2.3
□ Improve the profit above 25%, business liquidity and receive financial
2 points
access
D.3 MARKET IMPROVEMENT 6 points
OVOP Program has potential to improve their product brand image 3 points
□ Branding and product packaging 1 point
D.3.1
□ Branding, packaging, and product labeling based on criteria 2 points
□ Registered brand, packaging, and labeling based on industrial standard 3 points
OVOP Program has potential market share 3 points
□ Improve market share in existing market 1 point
D.3.2
□ Improve in sales in existing and new market area 2 points
□ Improve in sales on export market 3 points
D.4 COMMUNITY EMPOWERMENT 6 points
Participation to Work in Community / Association 3 points
□ OVOP strengthening encourage the participants to be a member of
1 point
business community / cooperative
D.4.1 □ OVOP strengthening encourage the participants to be the committee of
2 points
business community / cooperative
□ OVOP strengthening encourage the participants to form a joint
3 points
community Business
Participation in rural development 3 points
□ Improving village economy, local raw material, economy activity, etc 1 point
□ Give contribution to develop the village, such as: village funding, road
D.4.2 2 points
reparation and village facilities and village economy.
□ Become a patron of the village and as a show case of success to
3 points
encourage the development of similar business in the village
TOTAL POINTS D Points

Total
Evaluation Aspects
Points
I BUSINESS CAPABILITY
A. The Uniqueness And Local Wisdom Of A Product
B. The Continuous And Consistent Production
C. Community Empowerment
TOTAL POINTS
II IMPROVE BUSINESS CAPABILITY FROM OVOP PROGRAM
TOTAL POINTS
Summary of feedback from OVOP District:

______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Signature Name Head of OVOP District Secretariat
OVOP PROVINCE / NATIONAL SECRETARIAT REVIEW
Summary of feedback and recommendation from Province / National Secretariat:

______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Signature Name Head of OVOP Secretariat
Page 56 of 59

Appendix 3. Letter of Endorsement Focal Point ASEAN SME Working Group
Misle Bin Haji Abd. Karim

(Assistant District Officer, Brunei & Muara District Office, Brunei Darussalam)

Layhy Chhea
(Chief of Office, Ministry of Industry and Handicraft, Cambodia)

Meliadi Sembiring
(Deputy Minister of Research and Development,
Ministry of Cooperative and SME, Republic of Indonesia)

I Wayan Dipta
(Deputy Minister of Production,
Ministry of Cooperative and SME, Republic of Indonesia)

Sengphachanh Simangkhala
(Director of Division, Ministry of Industry and Commerce, Lao PDR)

Hon. Dato’ Seri Ab. Ghani bin Ariffin
(Deputy Director General, Implementation Coordination Unit (ICU), Malaysia)

Ei Shwesin Htun
(Assistant Director, Ministry of Industries, Myanmar)

Elvira Tan
(Division Chief, Bureau of Micro Small and Medium Enterprise Development, Philippines)

Vu Xuan Thuyen
(Deputy Director General, Ministry of Planning and Investment of Vietnam)

Appendix 4. Letter of Endorsement Focal Point of OVOP
Haji Mohd. Aziman Haji Tengah

(Special Duties Officer Grade II, Ministry of Home Affairs, Brunei Darussalam)

Kao Muy Thang
(Deputy Secretary General, Council of Ministers, Cambodia)

Hon. Dato’ Seri Ab. Ghani bin Ariffin
(Deputy Director General, Implementation Coordination Unit (ICU), Malaysia)

Aung Naing Oo
(Monitoring Committee Department, Mon State Parliament, Myanmar)

Ton Gia Hoa
(Vice President, Vietnam Association of crafts villages, Vietnam)

7 References
Asian Productivity Organization (APO), 2010

Department of Industrial Promotion, Thailand Ministry of Industry, 2003
Direktorat Jenderal Industri Kecil dan Menengah Kementerian Perindustrian Republik Indonesia,
2012, “Buku Petunjuk Teknis Penilaian, Klasifikasi dan Pembinaan Produk OVOP”
Fujita, Masahisa, 2006, “Economic Development Capitalizing on Brand Agriculture: Turning
Development Strategy on Its Head”, November 2006, Institute of Developing Economics, Japan
Hiramatsu, 2004, “Principle of OVOP Movement”
Hiramatsu, M., 2008, “One Village, One Product Spreading throughout the World”, Oita OVOP
International Exchange Promotion Committee, Japan
http://data.worldbank.org/ http://www.who.int/en/
Kader Radiah Abdul et al, 2009, “Success Factors for Small Rural Entrepreneurs under the One‐
District‐One‐Industry Programme in Malaysia” Contemporary Management Research, Pages
147‐162, Vol. 5, No. 2
Ministry of Industrialization of Kenya, 2010, One Village One Product (OVOP) in Kenya ‐ Operational
Guidelines Ver 2
Ministry of Industry and Commerce Foreign Trade Policy Department, 2011, “ Lao trade Magazine”,
issue: 4 January 2011, Ministry of Industry and Commerce Foreign Trade Policy Department
Rana, Erec Cutaran, 2008, “Sustainable Local Development through One Town One Product
(OTOP): The Case of Mindanao, Philippines”, School of Policy Science, Ritsumeikan University
SME Annual Report, 2011, “SME Development Programmes in 2011”, Chapter 4, National SME
Development Council
Sopheaktra, Sok, 2008, “A Comparative Study between Japanese (Oita) and Cambodian OVOP
Organizational Charts and the Three Elements of Sustainable Development”, School of Policy
Science, Ritsumeikan University
Tambunan, 2008 “Development of SME in ASEAN with Reference to Indonesia and Thailand”,
Chulalongkorn Journal of Economics 20(1), p. 53‐83.
Thailand Secretariat of the Cabinet, 2004
Uchikawa and Keola, 2010, “ Small and Medium Enterprises in Cambodia, Laos, and Vietnam”,
Ch. 10, Research on Development Strategies for CLMV Countries. ERIA Research Project Report
2008‐5, pp.237‐273. Jakarta


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ASEAN COOPERATION PROJECT NO.

The governor of Oita, Morihiko Hiramatsu, Ph.D, in 1979, introduced the

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

I Wayan Dipta, Deputy Minister of Production,

Dr. Bagus Santoso, DEFINIT – Project Coordinator

Dr. Agung Nur Fajar, Arah Cipta Guna – Local Researcher

Gunawan Sumodiningrat, DEFINIT – Local Researcher

Astrid Maulida, DEFINIT – Local Researcher

Vica Sakti Mantong Tendenan, DEFINIT – Local Researcher

Anitha Marlius, Arah Cipta Guna – Local Researcher

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN PROJECT TEAM ............................................................................................................................................ iii

TABEL OF CONTENT . ................................................................................................................................................. v

2. SELECTION CRITERIA AND OVOP STRENGTHENING SUPPORT PROGRAM ............................ 5

3. CONCEPT AND IMPLEMENTATION OF OVOP PROGRAM IN JAPAN AND ASEAN .................. 9

4. OVOP DEVELOPMENT STRATEGY IN ASEAN ……………………………............................................…. 27

5. THE IMPLEMENTATION OF ONE VILLAGE ONE PRODUCT ………........................…….........…….. 31

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

1.1. OVOP Basic Principles

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

1.2.3. Core Values of OVOP Programme

1.2.4. General Objectives

1.2.5. Specific Objectives

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

1.3. Report Outline

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

2.1. Selection Criteria for OVOP Recipient Program

2.1.1. Region Selection Criteria

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

2.1.2. Selection Criteria for OVOP Group

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

2.2. Support Program for OVOP Development

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

3.2. Brunei Darussalam

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

• Having ‘Majlis • No specific project • To increase job • Foreign products

dan Kampung’ all over each product • To create wealth market

Brunei Darussalam • Local culture and

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

Advisor and General secretariat Experts and Line

Administration R&D Marketing and Public Relation

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

b. Copy right issues;

c. Competition is getting tougher, especially for entering the AEC;

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

4. Limited capacity production and raw materials.

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

ASEAN COOPERATION PROJECT NO. IND/SME/11/003/REG

2002 2003 2004 2005 2007- 2009-