USAID Business Enabling Project

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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

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USAID Business Enabling ProjectSEIO 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
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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

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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 quasi-fiscal 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

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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

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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 project.

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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