Central and Eastern Europe
Center for International Private Enterprise
1155 15th Street NW, Suite 700
Washington, DC 20005
ph: (202) 721-9200
fax: (202) 721-9250
cipe@cipe.org
2009 CENTRAL AND EASTERN EUROPE PARTNERS AND PROJECTS
KOSOVO
Riinvest Institute for Development Research
Improving Corporate Governance and Transparency
MOLDOVA
Institute for Development and Social Initiatives
Advocacy for the National Business Agenda
Building Effective Public-Private Dialogue through a National Business Agenda
MONTENEGRO
Center for Entrepreneurship and Economic Development
Strengthening Montenegro’s Economy through Public-Private Dialogue
SERBIA
Center for Liberal-Democratic Studies
Improving Corporate Governance: Five Years Later
Serbian Association of Managers
Strengthening the Voice of Small Business
REGIONAL
Training of Trainers in the Balkans-Caucasus
Strategic Overview
CIPE’s work in 2009 helped Central and Eastern European countries improve their democratic and economic record in pursuit of EU integration. CIPE support helped the business community focus on key issues for economic reform in Serbia, including improved region-wide integration. In Kosovo, CIPE partners brought good governance and transparency into the policy agenda and launched the re-organization and privatization of key state-owned enterprises. CIPE helped the business sector in Montenegro work with the government on a longer term strategy for the country’s economic development. In Moldova, CIPE supported a coalition of business associations and chambers in leading a constructive public-private dialogue to improve the business climate.
From left, Serbian Association of Managers (SAM) President Slobodan Vucicevic, Serbia Prime Minister Mirko Cvetkovic, and Center for Liberal-Democratic Studies President Boris Begovic at a CIPE-supported SAM roundtable, “Illiquidity – Actual Problem or a Good Excuse?”
KOSOVO | PRIORITIZING GOOD GOVERNANCE
By providing and publicizing credible information, the Riinvest Institute for Development Research ensures that corporate governance and transparency remain key items on Kosovo’s policy agenda as the national government assumes responsibility over the newly independent country’s political and economic institutions. In 2009, Riinvest provided key analysis of governance practices among Kosovo’s banks and insurance companies through a study that measured these practices against the Organisation for Economic Co-operation and Development’s Principles of Corporate Governance. As a key resource for public and private leaders, the analysis sheds light on financial sector regulation and how to improve the implementation of corporate governance principles. In addition, Riinvest has provided training sessions on the analysis for bank and insurance managers, heightening awareness and commitment to improving corporate governance and transparency.
Riinvest’s recommendations resulted in the following:
- The Publicly Owned Enterprises (POEs) Policy and Monitoring Unit was established to monitor implementation of all POEs’ codes of ethics, ownership policies, remuneration, board member responsibilities, and board statutes.
- Two new draft laws that establish key corporate governance standards for banks and deposit insurance have been drafted by the government and are moving through the legislative process. As an active partner in the draft process, Riinvest successfully provided key recommendations for both laws – such as ensuring minority shareholder rights in internal governance processes and decision-making.
Riinvest President Muhamet Mustafa (right) gives an interview to Voice of America in Washington, DC on the state of reforms in Kosovo and Riinvest’s role in moving the reform process forward.
MONTENEGRO | SPEARHEADING THE WAY TO
ECONOMIC GROWTH
In the face of the global financial crisis, the Center for Entrepreneurship and Economic Development (CEED) and the Montenegro Business Alliance (MBA) are helping the business community focus on increasing the competitiveness of domestic companies and attracting foreign investment. Their advocacy work has positioned MBA as a leading advocate for the private sector in Montenegro. MBA now includes 518 member organizations, representing 22 percent of the country’s labor force and 43 percent of Montenegrin gross domestic product. In 2009, CEED and MBA launched the National Development Agenda (NDA), which prioritizes private sector recommendations concerning Montenegro’s economic development over the next three years. Working to refine and strengthen the agenda, CEED and MBA met with over 400 government and business leaders at the local, national, and regional levels for direct and transparent discussions on the direction of Montenegro’s business and economic policy. In total, MBA and CEED held 14 public events in 2009 to discuss and promote the NDA. MBA and CEED have demonstrated to the government that partnership with the business community is an effective tool for enhancing economic development and overcoming the challenges of the global economic crisis.
CEED and MBA advocated for and achieved amendments to 15 Montenegrin laws and 7 regulations, removing barriers to business. Highlights include the following:
- The law on concessions, which establishes the rights of companies to use natural resources, was amended to reduce the number of procedures required to claim concession rights and to increase the concession period from 30 years to 60 years with a renewal option for 30 years.
- A new law on domestic trade changed the requirements to obtain a business license. The number of steps in the process were reduced from 15 to 1. This lowers barriers to doing business for 80 percent of Montenegrin companies.
- The personal income tax rate was reduced from 15 to 12 percent, decreasing the total burden on net wages from 72 to 63 percent and lessening the impact of the financial crisis on available funds for business, especially for small and medium-sized enterprises.
From left to right, Miroslav Prokopijevi from the Center for Free Market in Belgrade, Serbia; Petar Ivanovic, Vice President of the MBA; Jovan Lukovac of the Ilirka Asset Management in Ljubljana, Slovenia; Nikola Fabric, Chief Economist of the Montenegro Central Bank; and Ante Babic of the Center for International Development in Zagreb, Croatia meet at a CEED, MBA, and Union of Economists of Montenegro event, “Crisis and Development.”
MOLDOVA | RESPONDING TO CRISIS WITH PRIVATE
SECTOR PRIORITIES
“For private sector interests to be truly supported by the letter and the spirit of the law, legislative processes must be administered by people who understand, who have lived, or who are living through this kind of activity... There is a need for the business representatives to participate in governance.”
– VLAD FILAT (left)
PRIME MINISTER OF MOLDOVA
Leaders of the three main opposition political parties in Moldova, Vlad Filat (left), Liberal-Democratic Party (current Prime Minister); Oazu Nantoi (center), Democratic Party; and Mariana Ambros (right), Liberal Party discuss the business community’s priorities ahead of the April 2009 parliamentary elections.
At the forefront of private sector leadership, the Institute for Development and Social Initiatives (IDSI) has helped guide the Moldovan business community in maintaining momentum towards greater participation and transparency in the policymaking process. In 2009, IDSI conducted an intensive advocacy campaign based on the previously developed National Business Agenda (NBA), uniting a coalition of 32 business associations representing key economic sectors. As part of the advocacy process, the coalition worked with the business community to gather up-to-date information and ensure that the agenda reflected the most pertinent policy issues. Issues and recommendations from the NBA were presented to high-ranking government officials including the Acting President and the Ministers of Economy and Finance. As the global economic crisis began to have an effect on the Moldovan economy, the coalition responded quickly by presenting 14 of the most urgent policy measures in the NBA to the Moldovan Government. The ongoing efforts of the coalition support the development of a better business environment, enhancing transparency in the policymaking process by creating more open and robust lines of communication between the government and the business community.
IDSI’s advocacy work based on the NBA brought about these results:
- The Moldovan government adopted all 14 of the coalition’s recommendations to address the global financial crisis. These measures, which reduce administrative barriers to doing business, constitute one-third of the government’s economic stabilization plan.
- The NBA was used by three reformist parties during the April 2009 election campaign as the source for their economic platforms.
- IDSI’s publication the Business Monitor – an increasingly key resource for the moldovan business community – almost doubled its subscribers from 80 organizations to 147 in six months.
Partner Spotlight
SERBIA | SERBIAN ASSOCIATION OF MANAGERS
FUTURE OF REFORM
In 2010, CIPE will work to enhance the role of business communities as strong advocates for pro- business reform across the region. CIPE and its partners in Moldova will focus on strengthening the capacity of business associations to advocate for priorities in the National Business Agenda. In Serbia, CIPE will strengthen the business community’s advocacy capacity to engage in a productive policy dialogue to improve the business environment. CIPE programs in Kosovo will improve the quality of governance, accountability, and transparency in the public and private sectors by engaging with think tanks and business associations. In Albania, CIPE will re-engage the business community to strengthen its capacity for leadership and advocacy for pro-business policy reform.
Through training workshops and roundtables in 2009, the Serbian Association of Managers (SAM) developed and expanded both its internal and external strategies and activities. Its rapid growth has pushed SAM to address – with technical support from CIPE – questions of identity and organizational management. SAM has grown by over 50 percent since 2008, reaching 230 members in 2009. The growth and evolution of the organization has positioned SAM as a crucial voice in business policy discussions. In 2009, SAM participated in the Ministry of Economy Business Council and SAM leadership was invited by the Minister of Economy to represent Serbia’s private sector in an official government delegation to Slovenia and Croatia. SAM President Slobodan Vucicevic represented the business community at a meeting with the Prime Minister and the Governor of the National Bank on volatile fluctuations of national currency.
Over the past three years, SAM has grown from a small group of managers striving to improve the business environment in Serbia to the leading business association at the forefront of dialogue with the government. SAM is Serbia’s only domestic business association directly engaged with high-level government officials. Using its increased size and visibility, SAM has developed a positive image as a strong advocate for the business community. It has also positioned itself as a skilled partner in public policy dialogue, providing a model for good association governance and advocacy for other fledging Serbian business associations.
From left, SAM board member and Hypo Alpe Adria Bank President Vladimir Cupic, SAM President Slobodan Vucicevic, Serbia Prime Minister Mirko Cvetkovic, Center for Liberal-Democratic Studies President Boris Begovic, and the Governor of the National Bank of Serbia Radovan Jelasic listen to audience feedback at a CIPE-supported SAM roundtable, “Illiquidity – Actual Problem or a Good Excuse?”
