USAID Kosovo Private Enterprise Program (KPEP) Quarterly Report for the Quarter Ending June 30, 2009

The program's primary objective is to promote economic growth and stability in Kosovo by supporting the development of key sectors, including agriculture, construction, forestry, and information and communication technology. Agriculture is a key sector for KPEP, with a focus on improving the competitiveness of local dairy products and developing the vegetable sector. In the dairy sector, KPEP has modified its strategy to focus on improving raw milk quality and developing selected interventions at processing plants. Progress has been made in improving product quality and achieving production efficiency, with excellent results in supporting the Ministry of Agriculture, Forestry, and Rural Development (MAFRD) in developing and implementing policy measures to improve the competitiveness of local dairy products. In the vegetable sector, KPEP's strategy focuses on infrastructure development and penetrating regional markets. Progress has been made in penetrating regional markets for peppers and potatoes, with a favorable growing season contributing to increased sales and incomes. Additionally, activities are on track to develop vegetable infrastructure through collection centers, with a business model and investment profile to be completed in the fourth quarter. The non-wood forest product sector has been able to add value by grading, freezing, drying, cutting, and storing. KPEP has completed all work plan activities in this sector and will continue to identify new markets and assist processors to acquire HACCP and organic certification. Construction is a transformational sector for KPEP, with a focus on developing a sustainable, professional design, procurement, and execution capability in Kosovo. In the road construction industry, KPEP's goal is to improve local road design capability and upgrade the skills of construction workers. Progress has been made in improving local road design capability, but progress in upgrading the skills of construction workers has been slower than expected. In the construction materials sector, KPEP's strategy is to develop a more efficient concrete production industry through training and the application of European Union standards. Progress has been made in improving architectural design and engineering services, but progress in developing workforce skills in the improved manufacture of concrete has been partly behind schedule due to difficulties with identifying the right training providers and affordable training materials. Forestry and wood products are also a key sector for KPEP, with a long-term goal of improving forestry management practices leading to certified forests in Kosovo. In the forestry sector, progress has been made in the certification process, but the strategy to achieve this objective requires reconsideration due to cost and the timetable for certification. Overall, KPEP has made progress in most objective areas, but some new concerns and issues have been highlighted, particularly in the construction and forestry sectors. Strategies have been developed to address these issues, and significant positive results have been recorded in terms of sales and investments, despite the impact of the global economic downturn.