USAID’s Business Enabling Project Quarterly Report: Third Quarter 2011

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 four 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. Component 4, Business-Education Partnerships, is currently on hold pending further instructions from USAID. The project's approach to achieving reforms is to help the GoS work closely with the private sector and outside experts to make reforms that improve business competitiveness. The reforms will reduce the time and money spent by Serbian businesses to comply with laws and regulations and will help the GoS to be more efficient. The reforms will also enable businesses to attract necessary investment at an appropriate cost. As a result, Serbian businesses will have a better chance to be competitive in the global economy, leading to export-led economic growth and increased employment. During the third quarter of 2011, several notable activities took place. The Business Enabling Project (BEP) held the fifth and final regional Roundtable "Reform of Inspections - Framework for Better Business" in Krusevac on July 5. On September 27, BEP organized a National Roundtable on Inspections Reform and Informal Economy in Belgrade. As a result of these activities, stakeholders developed a list of issues to be resolved, and Deputy Prime Minister Verica Kalanovic asked Prime Minister Mirko Cvetković to appoint a GoS inspections coordination body. BEP also assisted in the progress of streamlining construction permits. BEP organized two roundtables on the Decree on the Conversion of the Usage Right on the Construction Land into Ownership Right. After the roundtables, BEP synthesized the comments from private sector representatives and provided the comments to the Ministry of Environment, Mining and Spatial Planning. The Ministry adopted the Decree on September 1, incorporating much of businesses' input. In addition, BEP is helping the Republic Geodetic Authority (RGA) to create an Internet-based register that would make all spatial plans publicly accessible and monitor progress of different public authorities with adoption of necessary planning documents. BEP also assisted in drafting bylaws for the implementation of the Law on Enforcement of Judgments. The first bylaws for implementation of the law on enforcement and security were adopted with USAID/BEP technical assistance. The bylaws were developed by the Law on Enforcement of Judgments implementation working group, which BEP is co-organizing with the Ministry of Justice. The bylaws are the Amendment of the Regulation on Compensation of Costs in Judicial Proceedings, and the Amendments of the Courts' Rules of Procedure (which includes changes to internal court procedures). BEP has also completed the field work and analysis for the first Standard Cost Model (SCM) study done in Serbia. The SCM study will demonstrate which laws and regulations are most burdensome on businesses. The study will be presented to GoS, business, donor, and media partners in early October. BEP continued to provide technical assistance to develop human and institutional capacity of the Fiscal Council (FC) to facilitate good fiscal planning, accountability, and credibility of public finances in Serbia. BEP experts provided the FC with quantitative and financial analysis and assisted the FC in assessing the fiscal impact of several proposals.