2010 EUROPE & EURASIA PARTNERS AND PROJECTS
Improving Access to Information
Twenty Years after the Fall of the Berlin Wall – Lessons Learned and the Future of Reform
Training of Trainers in the Balkans-Caucasus
Strengthening Business Support Organizations
The Association for Foreign Investment and Cooperation
Strengthening the Network of Business Associations
Entrepreneurship Development Foundation
Implementing the National Business Agenda through an Advocacy Campaign
Analytical Center “Strategy,” Institute for Privatization Management, and Minsk Union of Entrepreneurs and Employers
Business Advocacy in Belarus
Reducing the Informal Sector and Strengthening Property Rights
Bishkek Business Club
Business Leadership for Constitutional and Economic Reform
Strengthening Coalition-Led Business Advocacy
Kyrgyz Stock Exchange Press Club
Strengthening Understanding of Market Concepts
Institute for Development and Social Initiatives
Advocating for the National Business Agenda
Strengthening Moldova’s Reform Network
Center for Entrepreneurship and Economic Development
Strengthening Montenegro’s Economy through a Public-Private Dialogue
Building Capacities and Professional Skills of Business Associations
Building Public Dialogue on Administrative Barriers to Business Development
Small and Medium-sized Enterprise Policy Advocacy
Promoting Entrepreneurship in the North Caucasus
Vladikavkaz Institute of Management
Developing the Entrepreneurial and Leadership Skills of Youth in the North Caucasus
Serbian Association of Managers
Strengthening the Voice of Small Business
Fighting Corruption in Ukraine, Phase One: Building the Capacity of Business Associations
Property and Freedom Institute
Strengthening Business Associations’ Capacity as a Watchdog over International Commitments
International Institute of Business
Improving Governance in the Small and Medium-Sized Enterprise Sector
Union of Economists
Re-creating the Middle Class
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Throughout Europe and Eurasia, CIPE helped business organizations to develop important skills in advocacy and build networks to promote crucial reforms. CIPE continued to partner with several regional coalitions in Russia to enable businesses to resist extortion and create a legislative framework to reduce opportunities for corruption. CIPE worked with local think tanks to increase citizens’ understanding of issues such as rule of law, transparency, and corporate governance and to counter authoritarian trends in Eurasia by empowering the business community to lead economic and political reform efforts. CIPE also developed a core group of local experts in the Balkans and Caucasus who support business organizations in improving their ability to participate in the policy process.
In 2011, CIPE will support private sector participation in strengthening democratic processes in Europe and Eurasia by partnering with business organizations and think tanks to promote economic reform, strengthen the business environment, and fight corruption. CIPE will work with regional partners to strengthen the advocacy and organizational capacities of local business support organizations, improve the quality of debate and build stronger consensus among civil society groups, and promote democratic ideals and entrepreneurship among youth.
BELARUS | ADVOCACY EFFORTS IN A CHALLENGING ENVIRONMENT
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In 2010 the Belarusian business community galvanized quickly in a challenging business environment to advocate for market-oriented economic reform and improvement in the entrepreneurial climate. One of the main drivers of advocacy in the country, the Belarusian Confederation of Entrepreneurship, which was founded as a coalition of pro-reform business organizations, expanded its membership by nearly 70 percent in 2010. Additionally, more than 20,000 owners of small and medium-sized enterprises (SMEs) united for the fifth consecutive year to adopt a National Business Platform (NBP) representing the business community’s unified vision for reform. The NBP-2010 outlined 117 concrete recommendations in five key areas: strengthening property rights, reducing red tape for entrepreneurship, simplifying taxation and licensing procedures, improving competitiveness, and increasing transparency in governance. These areas reflect the priorities of the independent business community in steering Belarus toward economic reform and democratic governance.
Advocacy efforts in 2010 resulted in these legislative changes:
- Presidential Decree #450 (September 2010), “On Licensing Economic Activities,” simplifies licensing in areas that affect 48 percent of SMEs and 88 percent of individual entrepreneurs in Belarus. This change is estimated to save businesses approximately $70 million annually in costs associated with the government’s licensing requirements.
- Law of the Republic of Belarus #148-3 (July 2010), “On SME and Entrepreneurship Support,” clarifies the category of small and medium-sized businesses. This will improve transparency for SME operations and enhance dialogue between government and business.
- In April 2010 the Ministry of Economy passed an amendment to the regulations on “Instructions for Shaping Prices and Tariffs for Vehicle Technical Services and Repairs,” which liberalizes pricing and reduces taxes in the automobile services industry. The amendment creates incentives for working in the official economy, which will help formalize the work of 8,000 informal entrepreneurs operating in the automotive industry.
- Presidential Decree #49 (September 2010), “On Some Issues of Expenditures for Representation Purposes,” eases restrictions on service industries such as hotel and hospitality services, food services, and transportation. This decree is expected to reduce corporate income tax for SMEs by up to $20 million and encourage informal SMEs to enter the official economy.
RUSSIA | INNOVATIVE ANTI-CORRUPTION APPROACH
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Preventing corruption begins with improving legislation. Poorly drafted or inconsistent laws are subject to interpretation by officials; such bureaucratic discretion often gives rise to corruption. This issue is particularly important in Russia, with overlapping layers of federal, regional, and local laws. In 2010, the Saratov Chamber of Commerce and Industry (CCI) and CIPE developed an innovative approach to anti-corruption by improving implementation of Russian federal law at the local and regional levels. This approach reinforces the private sector’s importance in reducing corruption. The effort is part of the eight-year “Small and Medium-sized Enterprise (SME) Policy Advocacy” project funded by the U.S. Agency for International Development, which has helped build 17 regional coalitions consisting of 230 business associations and other professional organizations, representing more than 20,000 firms throughout Russia.
The Saratov CCI taught seven other regional coalitions to use this approach and CIPE supported the analysis of laws and development of recommendations to reduce corruption. The coalitions unveiled the results of their work in September 2010 at a Russian Federation Chamber of Commerce and Industry conference in Moscow, attended by 65 government officials, academics, and legal experts. The Saratov CCI built this methodology on the basis of its previous efforts, endorsed by the Russian Federation Chamber, to evaluate individual draft laws for their “corruption potential.” Sixteen local chambers have already been officially accredited to use that earlier approach to conduct such expert examinations.
The Saratov Chamber of Commerce And Industry’s efforts resulted in the following:
- The methodology contains a number of innovative features, such as a rigorous legal analysis with an in-depth survey of lawyers and entrepreneurs; concrete, actionable recommendations to improve local and regional laws; and a roadmap for advocacy by business associations.
- Saratov CCI published findings, including survey results and flow charts that show, step-by-step, the stages at which applicants for government permits interact with the approval process. By identifying the steps in the process where corruption is most likely, business associations can advocate for effective legal and regulatory reform.
- Authorities in both the Smolensk and Saratov regions pledged to adopt the methodology, working with local chambers of commerce to review laws in search of contradictions.