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USAID Business Enabling Project

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 Project

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  1. 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

  2. USAID Business Enabling ProjectSEIO Aid coordination sector: Private Sector Development; Public Administration

  3. 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

  4. 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.

  5. 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

  6. 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.

  7. 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

  8. 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

  9. 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.

  10. 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.

  11. Discussion

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