USAID Business Enabling Project
USAID-SEIO Consultative Monitoring under
USAID Assistance Agreement: 169-AA-10-EG/001
Susan Kutor, USAID/Serbia Economic Growth Office Director
February 28, 2012
USAID Business Enabling Project
SEIO Aid coordination sector: Private Sector Development; Public Administration
Budget and
Duration
Total Life of Project funding: $16.7 million
January 2011 – December 2015
Implementing
Partner
Cardno Emerging Markets
Chief of Party Joe Lowther
Objective
A More Competitive Market Economy
Agreement
169-AA-10-EG/001
Components
Business Regulation and Economic Governance
Macroeconomic Policy and Public Financial Management
Financial Market Development
USAID Business Enabling Project
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CONSULATIVE PROCESS TO DATE
• Spring 2011 - Consultations with GoS counterparts
helped to develop and reach agreement on Year One
work plan priorities
• February 2012 –BEP held two-day retreat with GoS
counterparts to discuss Year Two work plan in depth
• Date of USAID-GoS work plan reviews:
Last review: May 2011
Next review: February 2012
USAID Business Enabling Project
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STATE OF IMPLEMENTATION
• Inspections Reform – A series of roundtables and outreach led
to the establishment of a GoS inter-ministerial Inspections
Reform Coordination Body, and development of an inspections
reform strategy is underway.
• Access to Finance – A series of roundtables and outreach has
been completed; compilation into detailed issues paper and
recommendations for reforms to be completed in Spring 2012
• Quasi-fiscal Charges – USAID is conducting a study of quasifiscal charges that will quantify the quasi fiscal charges imposed
on business, and will provide recommendations and guidelines
for reform.
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STATE OF IMPLEMENTATION (continued)
• Construction Permits – A study and stakeholders dialogue on
the main constraints is ongoing, with the study to be completed
in March 2012. This study will provide guidelines and an action
plan for reform.
• Enforcement of Judgments – Out of 19 bylaws need to
implement new law, 4 were developed and adopted; 7 were
developed and are ready to be adopted; 8 need to be
developed.
• Data Gathering: A representative Business Survey of 1000
Serbian-owned businesses identified issues, established
baseline and dialogue.
• A Standard Cost Model quantified the cost of inefficient
administrative procedures, helping to establish reform priorities
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KEY CONTRIBUTIONS FROM GOS PARTNERS FOR
YEAR ONE
• The GoS Coordination Body for Inspections Reform was
formed.
• 11 Bylaws for the new Law on Enforcement were developed; 4
adopted.
• A GoS Decree on conversion of usage rights to ownership rights
was enacted, positively affecting the construction business.
• All of the bylaws for the Capital Markets Law were adopted.
• The Fiscal Council was established and operating in accordance
with the law; has informed budget decisions.
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INDICATORS –
BUSINESS ENABLING ENVIRONMENT IMPROVED
• Decrease in the “Burden of Government Regulations”
– World Economic Forum - May
 Number of Commerce Laws and Regulations Simplified and
Implemented in Accordance with International Standards - 24 bylaws/amendments adopted in Year One
 Decrease in costs for businesses to comply with the
regulatory framework – baseline established through
Standard Cost Model
USAID Business Enabling Project
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INDICATORS –
MACROECONOMIC ENVIRONMENT IMPROVED
 Increase in Foreign Direct Investment
 Improvements in the Open Budget Index (“OBI”) Score as
reported by the International Budget Partnership – Every 3
years - 2013
 Improved score in WEF GCI Financial Market Development
indicator – September
 Improved Government Budget Balance as percentage of
GDP – April
 Increased credit to private sector as a percentage of GDP –
end of project
USAID Business Enabling Project
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OBSTACLES AND PROPOSED SOLUTIONS
• Issue 1: The Ministry of Justice is insufficiently focused
on proper implementation of the Law on Enforcement
of Judgments. Bylaws and system still not in place.
• Risk: The Ministry is not ready for implementation of
the law by May 2012, particularly fielding and
supervising the new Professional Enforcement
Officers, and the law is not successfully implemented.
• Solution: Ministry of Justice needs to appoints a
project leader with the authority and time to manage
implementation. USAID will transition work on
enforcement of judgments to the upcoming GIZ
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project.
OBSTACLES AND PROPOSED SOLUTIONS
• Issue 2: USAID has not been able to provide critical
assistance in performance-based budgeting as
envisioned due to lack of receptivity on the part of the
Budget Department of the Ministry of Finance.
• Risk: The lack of performance-based budgeting
perpetuates the current practice of basing the budget
on short-term considerations and political
expediencies.
• Solution: The GoS provides direction to the Budget
Department of the Ministry of Finance to implement
performance-based budgeting.
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Discussion
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