This case study will enable you to try out some of the techniques and approaches for identifying and preparing a project in country X. It will take you through the key steps in the project identification and preparation process and provide you with information on the following topics.

1. Background information and key facts about Country X;

2. Identification of the main problems facing the country;

3. Identifying possible solutions to these problems;

4. Drawing up a list of possible projects;

5. Defining the objectives of the projects and the desired outputs;

6. Developing log frames for selected projects;

7. Deciding who are the key project stakeholders/ actors;

8. Developing a work plan for selected projects;

9. Considering appropriate funding sources.

An Introduction to Country X

Country X is very rich in natural resources. Its forests are of international interest because of their biodiversity and pristine condition. In the north-east of Country X an enormous mountain area - over 20,000 hectares in extent - is the pride of the country. This forest-covered area is the richest in Europe in terms of plant and animal species. From the park small mountain streams flow, coalescing into the river Arbo that eventually becomes a tributary of the Danube.

The Ministry of Environment in Country X has made the protection of its national heritage, including this valuable forest area, a high priority in its latest National Environmental Programme. Much of the forested mountain area has been designated as a national park, and there is a desire to maintain its quality by controlling access and exploitation.

Tourism is also a growing concern. As the forest area has not had protected status, access has not been controlled and the number of tourists and visitors has grown enormously. Country X has been discovered as an international tourist destination. Travel agencies from all over the world have identified the tourism potential of the mountains and forests, and are seeking to promote package holidays.

Until now the tourist industry has comprised a number of small hotels, and tourists have been brought to the area almost exclusively by bus. Plans have recently submitted a plan to the national government of Country X to extend the infrastructure to enable tourists to reach the area by car. The plans include the construction of more hotels and restaurants, as well as a swimming pool and a golf course. They also propose the construction of a small civil airport.

Just outside the national park boundary, to the north, lies the small town of Arbor. The traditional source of employment for the people of the town has been forestry, with some small farm holdings providing feed for dairy cattle as well as fruit and vegetables. Based on the surrounding forest, a small timber processing plant was established. This is finding it very hard to compete in the more open market, and many workers have been laid off.

Two years ago a foreign company invested in a joint venture with a Country X company for the production of wood. The company is situated on the northwest edge of the forest. Its main activity is logging. Several roads have been constructed for the trucks that transport the wood. The joint venture has used 75 hectares of forest for its activities to date.

A further small plant processes milk for transport to the nearest large city but, again, the operation is limited and the plant is operating at well under capacity.

The management and workers at the two factories also have ideas for expansion and diversification. However, they do not have the required business skills.

Some people from Arbor supplement their income by picking fruit and mushrooms, and by hunting in the park area, though this is now illegal and damages the ecology.

Unemployment in the town has risen and there are limited job prospects for its young people. The municipality and townspeople are keen to diversify their economy and improve employment prospects, but it seems that all the possibilities have important environmental costs and benefits. In particular, any development is constrained by the need to control waste products entering the local streams. This problem is made worse by the fact that the town has no waste treatment works.

Arbor is connected to the main national road system, but this is by a small, winding country road that is in poor repair. If the road remains in its present state the potential for new tourism development is limited, and the factories cannot easily export their products. Skiing could be a possibility in the mountains, and this could provide the basis for an all-year tourist season.

Key Facts about Country X

Town population: 3,200, increasing to 6-7,000 in the summer

Houses: 1,200 plus 400 seasonal holiday homes

Height of town above sea level: 600 metres

Hotel development: 3 small hotels, 2 with swimming pools and sports facilities

Industry and commerce: (a) timber works - used to employ 700 people (40% of the town's work

force) with 90% exported to the former Soviet Union; now employs only 300 and is working at

30% of capacity (b) a milk processing plant - also working at below capacity (c) a small tourism

sector (d) forestry and agriculture - unprocessed products

Sewerage: pipes were laid to the dairy but not to the houses; sewage goes into septic tanks

Waste water: the construction of a waste water treatment plant was halted by lack of money and the

waste is discharged into the river

1. What projects could be implemented?

2. Which of these projects appear feasible and promising? Why?