USAID’s Business Enabling Project Quarterly Report: Second Quarter 2012

The purpose of the Project is to help the Government of Serbia 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 the Government of Serbia. The Business Enabling Project consists of three major components. Component 1, Business Regulation and Economic Governance, aims to streamline laws, regulations, and institutions; improve regulators' capacity to implement laws; and enhance analysis and public-private dialogue. Component 2, Macroeconomic Policy and Public Financial Management, focuses on helping 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, seeks to improve regulatory frameworks for non-bank institutions, develop capacity to strengthen and expand capital markets, and enhance conditions for debt market development. During the second quarter of 2012, the Project released the Assessment of Impact of Quasi-Fiscal Charges on Businesses in Serbia, which was completed under the Project's grant to NALED. The Assessment provided a detailed overview of non-tax burdens payable by businesses in the Republic of Serbia, identifying a total of 370 non-tax charges payable by businesses. The Study generated substantial media coverage, with more than 50 media reports in broadcast and print media, and over 27 media representatives. The event and study had a significant impact, as several policymakers pledged to reduce the burden on businesses of these charges, and at least one charge has already been reduced. The Project also organized an Inspections Leadership Group to develop a Strategy for Inspection Reform and a Draft Law on Inspections. The Leadership Group is comprised of high-level representatives of the inspectorates and key national business associations, plus the two major trade union confederations. Leadership Group participants agreed to work together toward joint goals to reduce the burden of regulatory compliance on businesses and increase the effectiveness of inspection oversight. The Project also prepared an outline of a law on inspections that will serve as a basis for the new Government's efforts in the field of inspection reform. In addition, the Project provided substantial assistance to the Ministry of Finance to develop program budgeting. The Project delivered five full-day seminars on program budgeting to staff of the Serbian Ministry of Finance Budget Department and representatives of Government of Serbia institutions. The interactive training was conducted by the Head of the Budget Department of the Croatian Ministry of Finance and Deputy Head of the Budget Department of the Slovenian Ministry of Finance. The Project also organized a Study Tour to the Croatian Ministry of Finance and Ministry of Maritime Affairs, Transport and Infrastructure for the Budget Department of the Serbian Ministry of Finance. The Project also provided assistance to the Securities Commission to implement the new capital markets legislation, including support for a Conference entitled "Capital Market – Institutions, Investments, Shareholder Protection." The conference introduced the set of new capital markets laws - the Law on Capital Market, the Law on Companies, and the Law on Takeover. It was opened by the Prime Minister Mirko Cvetković and the U.S. Embassy's Chargé d'Affaires Lee Litzenberger. The conference provided an opportunity for broad public discussion of important issues to define the direction and procedures necessary to create a more efficient, deeper, and more liquid market, as well as on new opportunities to attract investment.