Evaluation of the USAID/Uruguay private sector development program

No time-frame is specified. In general, the project achieved its objectives. It was particularly successful in raising the Uruguayan business community"s consciousness of the need to enhance company performance and reform economic policies to improve competitiveness. In addition, there were changes made in production and management as a result of concepts acquired through the project, leading to increased sales, profits, and employment. But the project"s most enduring achievement was in the area of human resource development, through support for DESEM (the local Junior Achievement Program) which introduces high school students to business concepts and practices, and especially through faculty training at the Catholic University of Uruguay (UCUDAL). The fact that UCUDAL now has a U.S.-trained cadre of business school professors with professional ties to U.S. colleagues provides Uruguay an educational base for preparing young people for careers in business. By contrast, the project"s impact on legal, regulatory, and judicial (LRJ) reforms was minimal, although the new government continues to make significant efforts to improve the policy and LRJ climate for competitiveness. The most positive result in this area was the grant to the Camara National de Comercio to produce a Blue Book which represents the private sector consensus on economic policy. Preparation of the second Blue Book for the 1995 elections was accompanied by a more sophisticated and effective lobbying effort, although the private sector needs to be more aggressive and systematic in its efforts to influence public policy. Also, the Centro de Estudios de la Realidad Economic y Social (CERES) was instrumental in producing a series of studies on leading economic reform issues such as labor law flexibility, internal debt forgiveness, and bankruptcy. The findings of these studies are being considered by lawmakers. However, few linkages can be established between USAID interventions and specific LRJ reforms. Lessons learned are as follows. (1) The decision to fund several small projects instead of one large intervention proved effective and enabled the project to reach a broader spectrum of the public and private sectors than would otherwise have been the case. Also, the decision to focus on improving the competitiveness of Uruguayan businesses proved a judicious and productive use of limited resources. (2) The fact that USAID/Uruguay gave grantees significant discretion, within clear general guidelines and specifically defined objectives, to shape their own programs, contributed to project success. (3) Leaving behind a skilled human resource base represents the kind of permanence required for effective development. (4) Success of the business development seminars hosted by Federacion Uruguaya de Centros Regionales de Experimentacion Agropecuaria (FUCREA) stemmed from its practice of working with organizations that stand the best chance of achieving success. (5) In a related area, the provision of TA by the Union Creadores de Empresa (UCRE) was successful because of the intensity of the interventions, even though only 10 of 50 planned consultations were provided. The lesson is that it is more effective to enhance a few companies well than to provide mediocre or limited assistance to many. (6) Without sound empirical analysis, it is difficult to make cogent arguments for specific policy positions. (7) Results of the LRJ activity were meager for two reasons -- the allocation of relatively few resources to this activity and the lack of a private sector umbrella organization to interact with the government. (8) Final, cumulative reports from grantees (not provided in this project) are an important tool in measuring impact and performance. In a related area, the inability of the local contractor to design an adequate monitoring methodology indicates that the Mission, if unqualified for the task itself, should contract a U.S. expert to do the job.