Programs in Southeast Europe & the Caucasus

Throughout Southeast Europe and the Caucasus, the Center for International Private Enterprise (CIPE) works with business organizations to develop important skills for engaging successfully in the policymaking process and building sustainable networks to promote crucial reforms. CIPE supports local networks of think tanks, civil society organizations, and business associations to engage in an open and transparent public-private dialogue to improve the business climate for small and medium enterprises (SMEs). A core group of local experts in the region has been nurtured by CIPE to support business organizations and networks in improving the ability of the private sector to participate in the policy process. In 2011, CIPE is supporting private sector participation in strengthening democratic processes in Southeast Europe and the Caucasus by partnering with business organizations and think tanks to promote economic reform, improve the business environment, and fight corruption. Regional partners will work with CIPE to strengthen the advocacy practices and technical capacities of local business support organizations and improve the quality of debate by building stronger consensus among business and civil society groups.

Strengthening Business Support Organizations

Through its Regional Office in Romania, CIPE organized a specialized training program for chamber and association professionals from the Balkans and Caucasus. The program enabled organizations to develop skills needed for effective advocacy, participation in policymaking, and successful communication with governments and public authorities. CIPE trained professionals from business organizations in Armenia, Azerbaijan, Moldova, and Serbia. The participants engaged in an intensive mentoring and training program covering key management areas such as the role of business support organizations, governance, public policy advocacy, membership, and coalition building. Those who completed the program are now working in their home countries to assist networks and individual organizations to expand and deepen their participation in the public-private dialogue.

Program Results & Impact

  • 16 local professionals from Moldova, Serbia, Armenia, and Azerbaijan were trained in association management and public policy advocacy.
  • Training program graduates became presenters and facilitators in international conferences and study tours, sharing the knowledge with organizations from different countries. At the local level, their knowledge and expertise has become a resource available for other support organizations. This expertise has been used within their own organizations and by engaging in CIPE-supported projects in their countries.

Moldova: Advocating for the National Business Agenda

Since 2007, CIPE and the Institute for Development and Social Initiatives (IDSI), a leading Moldovan think tank and reform advocate, have supported the establishment of a grassroots network of business organizations. The network comprises 32 chambers of commerce and business associations that united to represent the interests of small- and medium-sized businesses in a policy dialogue with government. The network members are engaged in the National Business Agenda process, where they prioritize key policy issues, define proposals for reform, advocate the government for the proposed changes, and monitor the adoption and implementation process. In 2010, the NBA focused on reforming tax and customs administrations and improving access to finance for SMEs. The network gained support for their proposals by advocating directly with the acting President of Moldova, the Minister of Finance, the Governor of the National Bank, the Deputy Minister of Economy, and the Chair of the Parliamentary Budget and Finance Committee.

Program Results & Impact

The Moldovan economy rebounded swiftly from the global economic crisis after National Business Agenda proposals were adopted. Results included:

  • liberalizing import and export procedures to support free market competition
  • abolishing the mandatory capital requirement of USD $540 for start-up firms, making it much easier to start a business
  • simplifying business registration procedures by creating a “one-stop-shop”
  • simplifying the procedure for restitution of Value-Added Tax

Armenia: Strengthening the Network of Business Associations

Since 2008, CIPE and its partner the Association for Foreign Investment and Cooperation (AFIC) have supported the development of the Business Advocacy Network, which brings together 22 diverse business organizations including business associations, chambers of commerce, and business support NGOs. In 2010, CIPE and AFIC helped formalize the network’s structure by creating a democratic governing body based on best practices of CIPE partners in the region. One major advocacy success was the passage of a new law in Armenia on state support to SMEs in October 2010. The government also passed taxation reforms that incorporate the network’s proposals, which simplify and streamline tax procedures for SMEs by reducing the frequency of filing deadlines and audits, simplifying calculation procedures, and reducing documentation requirements.

Program Results & Impact

  • Redefinition of SMEs under the new law is expected to boost registration of firms by increasing resources available to new businesses, such as loan guarantees and subsidized credit of new SMEs, by eight to 10 percent, creating over 10,000 new jobs in 2011 and 2012.
  • The network estimates that the new tax procedures will decrease the number of man-hours spent dealing with tax-reporting procedures by about one-third and reduce the time needed to prepare tax reports by more than 30 percent, and will further cut expenses related to tax preparation by at least 10 percent of the current cost.

Azerbaijan: Advocacy for a National Business Agenda (NBA)

In Azerbaijan, a highly restrictive environment has emerged in which the government continues to consolidate power in an authoritarian presidency while political space for policy debate shrinks considerably. In 2009-10, an alliance of business associations worked with the Entrepreneurship Development Foundation (EDF) and other civil society experts to engage in advocacy activities based on the 2008 National Business Agenda. These efforts brought many of the business community’s concerns to the attention of the government and the general public.

Program Results & Impact

  • Through the NBA process, EDF and the alliance brought 52 policy proposals to the attention of the government. They were able to successfully advocate the government to adopt proposals reducing the tax burden on small and medium enterprises and simplifying tax reporting procedures. The new legislation increased the maximum income a company could report by nearly 50% under simplified tax procedures. It also introduced electronic tax invoices and electronic correspondence with tax officials, reducing the time needed for filing and curbing opportunities for corruption.
  • EDF and the alliance hold a weekly TV program titled “Economic Forum” where business leaders, experts from civil society, and government officials discuss key economic issues. The program has become very popular as it provides a rare opportunity for business people and regular citizens to receive information and listen to expert debates on business and economic development issues. No other TV channel airs programs where civil society and the business community have a chance to debate directly with parliamentarians and government officials on issues such as institutional reform, economic competitiveness, and property rights.
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Center for International Private Enterprise
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