usaid business enabling project usaid-seio consultative monitoring under usaid assistance agreement:...
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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
USAID Business Enabling ProjectSEIO Aid coordination sector: Private Sector Development; Public Administration
Budget and Duration
Total Life of Project funding: $16.7 millionJanuary 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 GovernanceMacroeconomic Policy and Public Financial ManagementFinancial Market Development
USAID Business Enabling Project 2
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 3
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
USAID Business Enabling Project 7
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 8
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
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