USAID's Business Enabling Project Quarterly Report: First Quarter 2012

The purpose of the Project is to help the Government of Serbia (GoS) improve the competitiveness of the Serbian economy and its private sector businesses. The Project provides technical assistance, training, and other support to improve the business enabling environment, maintain macroeconomic stability, and further develop financial markets. The Project is demand driven, with all activities based on the priorities of the private sector and GoS. The Business Enabling Project consists of three major components: Component 1, Business Regulation and Economic Governance, will streamline laws, regulations, and institutions; improve regulators' capacity to implement laws; and improve analysis and public-private dialogue. Component 2, Macroeconomic Policy and Public Financial Management, will help the Government implement new budget and fiscal responsibility laws, improve budgeting, increase public disclosure and transparency, strengthen public debt management, and improve economic analysis and forecasting. Component 3, Financial Market Development, will improve regulatory frameworks for non-bank institutions, develop capacity to strengthen and expand capital markets, and improve conditions for debt market development. During the first quarter of 2012, notable activities included the continuation of comprehensive inspections reform. BEP prepared the Inspections Reform Strategy and a pilot project to coordinate three inspections. A high-level GoS working group failed to complete the Strategy by March 31, 2012, but BEP and the GoS Office for Regulatory Reform have drafted the strategy and are drafting a Law on Inspections. The pilot project will set up a coordination body and an IT system to coordinate three chemicals and biocides inspections within three different ministries. BEP also completed a study on para-fiscal charges, which demonstrates the need to streamline more than 200 quasi-fiscal charges on businesses and to review both the legitimacy of the charges and the way they are being spent. The study contains a set of recommendations to reduce the charges and will be released at an event on April 19. Additionally, BEP prepared a draft Assessment of Constraints to Construction Permits in Serbia, which will be publicized in May and will include a list of recommended reforms in the permits process. BEP assisted in the development of the GoS Strategy on Regulatory Reform 2012-2014, which sets forth the schedule for regulatory reforms and will improve the inclusiveness of legal reforms, increase the level of legal certainty, and institutionalize best international legislative practices. BEP also helped develop the Fiscal Council's capacity to facilitate good fiscal planning, accountability, and credibility regarding public finances in Serbia. BEP trained the Ministry of Finance Budget Department on effective use of performance indicators in planning and budgeting and program budget implementation. BEP continued to assist the Public Debt Authority on its debt management system and operations, providing training on the IT system and on risk management. BEP helped the Securities Commission develop 17 bylaws to implement the Law on Capital Markets and provided the Commission with training on supervision. This assistance will help improve the indicator for Sub-IR 1.4.2 "Financial Market Sophistication." BEP is also preparing a ground-breaking White Paper on Access to Finance for Small and Medium Enterprises, which will be released and publicized in May. The Project's Second Year Work Plan was approved by USAID on March 27, 2012. BEP is accomplishing all aspects of its Work Plan, with PMP indicators being met and all activities being accomplished. Component 4 of the Project was eliminated pursuant to BEP's recommendations and USAID's agreement, and new tasks and activities have been added under the three components of the project.