USAID MACEDONIA SMALL BUSINESS EXPANSION PROJECT Quarterly Report January 1 – March 31, 2013

The project identifies opportunities and facilitates MSME linkages to promising market opportunities, financing, and technology. In parallel, the project fosters critical public-private dialogue and partnerships at the regional and local levels to support MSMEs and regional economic growth. SBEP has proactively engaged with firms, municipal governments, and existing programs at the regional and local levels to identify opportunities and test approaches. The project quickly recognized that the most promising opportunities for MSME growth lie in the food and agriculture industry, which comprises 16% of GDP and employs over 20% of the national population. The Grow More Corn campaign and similar initiatives in various value chains present a model of wide-ranging transformational impact based on the introduction of new technologies and enhanced market linkages. The key issue to address in all sectors is poorly integrated supply chains, a reflection of weak or non-existent linkages among MSME suppliers, aggregators, and end-buyers. These linkages were well-established in the former Yugoslavia, but the void left behind in Macedonia has led to informality, massive inefficiencies, and declining competitiveness across sectors. SBEP comes at the problem from both ends, by fostering dialogue among disparate stakeholders and working directly with lead firms and MSMEs to identify needs, facilitate market linkages, implement proof-of-concept initiatives, and take these initiatives to scale. SBEP prioritizes two mutually-reinforcing categories of local economic development initiatives: supply chain integration and strengthening to benefit MSMEs and link them to markets, finance, technology, and support services; and public-private dialogue leading to strategic priorities, funding proposals, partnerships, and implementable economic programs. Access to finance and workforce development initiatives are cross-cutting components that SBEP utilizes to operationalize its SC and PPD initiatives. The Grow More Corn campaign is one of the ongoing SBEP activities, aiming to increase the volume and quality of corn yields through the introduction of new technology and training/monitoring on modern protocols. The campaign also aims to establish new collection centers, collector training and certification, and matchmaking for import substitution. Other ongoing initiatives include the Industrial Tomatoes, Wheat Production, Wild-Gathered Products, Light Manufacturing, Energy Efficiency & Waste Management, and Artisans initiatives, all of which aim to promote MSME growth, leveraged investment, market linkages/import substitution, and catalytic effects along multiple value chains. The Public-Private Dialogue component of SBEP focuses on establishing regional and local development strategies through stakeholders' education and motivation for participation in the framework. This includes development financing accessed, worker training and certification, market-driven curriculum development, business leaders and aspiring businesswomen brought together for support and action, diaspora informed about investment possibilities, and improved policy environment for encouraging diaspora investment.