economic crisis: impacts and responses by the business community kiev, june, 2009
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ECONOMIC CRISIS:
IMPACTS AND RESPONSES BY THE BUSINESS COMMUNITY
Kiev, June, 2009
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NALED was established in March 2006 at the initiative of USAID/MEGA program as a unique body that blends the influences of public, private and civil sector in Serbia.
President Tadic and Michael Polt signing NALED declaration
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MISSION
The primary mission of NALED is to facilitate dialogue between local and central government, institutions and the private sector and thus create enabling environment for the growth of business community in Serbia, increased investments and enhanced economic development.
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STRATEGIC GOALS OF THE ALLIANCE
IPromote legal reforms that support local economic development
IICreate an enabling environment for investments and business development
IIIEstablish dialogue between private, public and NGO sector
IVStrengthen municipal capacities through training and consulting services
VPublic private partnerships
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MYTH # 1: DONOR-DRIVEN ORGANIZATIONS CANNOT BECOME SUSTAINABLE
90 MEMBERS
INDEPENDENT OPERATIONS
MEMBERSHIP FEES = OPERATIONAL COSTS
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MYTH # 2: THERE IS NO CRISIS
OVERLY OPTIMISTIC BUDGET PROJECTIONS
NO PREPARATORY ACTIVITIES
LACK OF INSTITUTIONAL RESPONSE
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GlobaleconomyCrisis detectionAnalyses & discussionof adequate measuresFirst reactions & mitigation measuresReview of effectsResponses and reactions to global financial crisisIV Q 07IV Q 08I Q 08II Q 08I Q 09III Q 08Serbian economyFollowing global trends and interpreting crisis as an investmentopportunity for Serbian economyDetection of crisis in SerbiaDelivery of initial assistance measuresSerbianagricultureSeeing a chance for Serbian AgricultureLack of interest to analyze and prevent effects of the crisis, followed by overlyoptimistic projections for Ag sector
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MYTH # 3: CRISIS WILL AVOID SERBIA
CRISIS AS MODUS OPERANDI
CRISIS AS A WINDOW OF OPPORTUNITY
SERBIA TO EMERGE VICTORIOUS
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MYTH # 4: CRISIS EFFECTS GLOBAL EFFECTS vs. LOCAL CONSEQUENCES Unemployment Less FDI Lack of financing
CRISIS good excuse top priority
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CROSS-CUTTING EFFECTS
Favoritism in policy responseLower demandDrop in production Decreased buyer financingTightened credit for producers Growing unemployment Falling asset pricesDelayed reforms and EU integrationProtectionism
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Lower credit capacityDrop in available inputsLess profitDrop in productionDrop inconsumptionDecreased financingIncreased pricesDrop in pricesDecreased competitiveness
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NALED-REPORTED EFFECTS
NEGATIVE :
Increased taxes on deed contractsIncreased local fees and taxes imposed on businessesCut in intergovernmental transfersDrop in project activities (donor and business driven)Default clients and deferred payments
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NALED-REPORTED EFFECTS
POSITIVE:
New mechanisms of financingLess local and central government employeesResponsible and cost-saving behavior Regional alliancesPublic private partnership
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MYTH # 5: CRISIS IS RESPONSIBILITY OF THE GOVERNMENT
TRUE! But no government can do it alone
LOCAL AND REGIONAL STRATEGIES
SUPPORT FROM PRIVATE AND CIVIL SECTOR
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PROPOSED GOVERNMENT MEASURES Deliver information about the depth of the crisis and its effects, Offer exit and mitigation strategiesFollow consistent and foreseeable policy approachStimulate borrowing for productionProvide budget subsidies and investment supportDelay the drop in FDIFacilitate access to donor fundsDevelop capacity for IPA funding
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NALED RESPONSE TO THE CRISIS
DIRECT
Partnership with the governmentSupport in delivery of mitigation measures
2. INDIRECT
Business-government encountersBusiness Friendly CertificationOut of the Maze
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Certification of Business Friendly Municipalities
Partners:USAID, Ministry of economy, SIEPA,Provincial Secretariat for local government
Municipalities in evaluation process:Vranje, Subotica, Prokuplje,Uzice, Leskovac
Status:Three holders of certificates: Loznica, Kragujevac, Indjija
Detailed analysisof local governmentsInput by the business community
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COUNTER THE CRISIS!
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Out of the Maze
Partners
GoalCut red tape in Serbia
NALEDs GREY BOOK as a guide with proposed recommendations for removal of administrative barriers for business development in Serbia.
ResultsOne-stop shop for business registration
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OUT OF THE CRISIS MAZE
Dialogue between public and private sector. Regulatory reform.Good governance.
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NALEDZetska 4a/2, 11000 BelgradeT: +381 11 334 7634F: +381 11 334 7614naled@naled-serbia.org
***Goals of the Program (include but are not limited to):
- strengthening the capacities of local communities toward attracting investments- ensuring the stable and measurable business environment- identification of best practices - "step by step" guide for future improvements- business awareness of the opportunities and potentials of local communities - innovation of the approach in promoting opportunities- finding concrete solutions for an improved business environment.
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