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Regional Competitiveness Initiative: 4th Annual Regional Conference on

Competitiveness and Economic Growth

Prepared by: David Cowles, Chief of Party, Kosovo Private Enterprise Program16 June 2009

Panel Session (Topic A): World Economic Forum Competitiveness Indicators and Policy Actions

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Current Situation in Kosovo

• New Country, no WEF ranking

• Huge needs in policy arena

• Lots of laws, little ownership, understanding, or implementation

• New government appears overwhelmed with competing demands for time and resources

• Little to no involvement from private sector in policy development and implementation

• No actionable, prioritized reform agenda

Pictures from Kosovo Private Enterprise Program

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Kosovo Private Enterprise Program (KPEP) Overview

Four Year Project 2008 – 2012

$17.8 Million

4 Components

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Robust Business Services and Associations

Robust Business Services and Associations

Improved Business Enabling

Environment

Improved Business Enabling

Environment

Workforce Development

Workforce Development

Support to Targeted Target SectorsSupport to Targeted Target Sectors11

22 33 44

Cross Linkage of KPEP’s 4 Primary Components

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Selected Sectors Grouped In “Informational”, “Transactional” and “Transformational” - based on Approach Project will Take on Sectors

Fishing and Aquaculture Information and Communication Technology

Apparel and Leather

Printing and Media

Tourism

Decorative Stones

Forestry and Wood products

Recycling

Fabricated Metals and Auto Parts

Energy Efficiency

Sectors Selected

Informational Transactional Transformational

Agriculture

Construction

Pre-Selected

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The Value of Indexes and Indicators

• Builds awareness and understanding of drivers of competitiveness

• Allows comparisons across countries and tracks progress of a single country over time

• Supports informed dialog on policy agenda

• Helps policy makers establish and communicate clear priorities

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World Economic Forum: 12 Pillars of Competitiveness

Framework

Framework

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12 Pillars - Basic Requirements

• Institutions• Infrastructure• Macroeconomic stability• Health and primary education

PillarsPillars

• Institutions are new and extremely weak• Huge needs particularly in power and transport• Large and unsustainable fiscal and current

account deficits• Weak by regional standards but not regarded as a

major constraint

SituationSituation

Relevance to KPEPRelevance to KPEP

• KPEP is not designed to address Basic Requirements. Some support to institutional strengthening is provided when a specific need is identified in a target sector or component

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12 Pillars - Efficiency Enhancers

• Higher education and training• Goods market efficiency• Labor market efficiency• Financial market sophistication• Technological readiness• Market size

PillarsPillars

• Employers highly critical of present state of education and training

• Few formal barriers in goods market• Unemployment est. at 40%: huge informal sector• Access to credit is continually sited as a major

impediment to growth • Awareness and adoption of new technologies is

very low• Tiny local market with limited regional integration

SituationSituation

Relevance to KPEPRelevance to KPEP

• Work force development is a major component. KPEP addresses sector specific training needs while trying to improve overall delivery of training services

• No direct work in the labor market or financial markets• The project does seek to improve adoption of modern production techniques and use of proven technologies• Trade issues are a major impediment to growth; while not a major focus of the project by design, KPEP has by

necessity become more and more involved in addressing and resolving trade related issues

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12 Pillars - Innovation and Sophistication Factors

• Business sophistication• Innovation

PillarsPillars

• Rudimentary• Little or none

SituationSituation

Relevance to KPEPRelevance to KPEP

• The focus of the project is to help firms and sectors improve business operations and adopt proven technologies

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Can the WEF Indicators Help a Nation Establish an Actionable and Prioritized Reform Agenda?• For a country like Kosovo the challenge can appear overwhelming

• The needs are great - capacity and resources are limited

• Knowing where you fall short is important

• But a coherent plan of action must also consider reforms under each pillar with respect to:

– Potential impact

– Difficulty

– Cost

– Time lag

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Contact Information

Booz | Allen | Hamilton

David Cowles Senior Associate

Booz Allen Hamilton, Inc.8283 Greensboro Drive

McLean, VA 22102, USAWork 381 38 233 006

Mobile 386 49 236 465Cowles_David@bah.com