FINAL REPORT - USAID Macedonia

The Project’s management was structured to facilitate effective planning and implementation across vertical and
horizontal components. While activities were managed by specific component teams, significant crossfertilization
increased cost-effectiveness and overall impact. Many beneficiaries benefited from both vertical
(e.g. participation in trade shows) and horizontal (e.g. finance, training, and certification) activities. MCP’s
organizational structure, including key staff and implementing partners, is presented in Figure 3.
Economic Crisis and Long-term View
The Macedonia Competitiveness Project (MCP) took place during
the global financial crisis and the tepid economic recovery. Between
2008 and 2009, demand fell sharply in most markets, including
sectors covered by MCP, like apparel and light manufacturing. For a
time, flat sales and job retention was considered a success, as many
Macedonian companies faced work stoppages and lay-offs. At the
same time, tight credit conditions made it difficult for companies to
access the finance required for working capital or investments in
upgrades. This market uncertainty, combined with global credit
challenges caused many potential investors to put plans on hold. As
the impact of the economic crisis waned and demand returned
(albeit slowly) in 2010 and 2011, factories saw orders return and
were able to start hiring orders again. That said, orders remained
smaller than prior to the crisis, and prices remain depressed, making
it hard for companies to be profitable and improve their financial
position. In the last year of the project, the economic recovery
continued, although the debt crisis in neighboring Greece and fear
of a double-dip recession in Europe resulted in uncertainty and
ongoing demand, pricing, and credit pressures.
The economic crisis presented challenges that impacted MCP
programming decisions, priorities, and results. During the first half
of the project, when the effects of the economic crisis were
particularly severe, it became clear that transactional outcomes (e.g.
sales, exports, investment) would be negatively impacted over the
near term. In this context, the MCP team took a long-term perspective on the way it approached project
implementation and focused on activities likely to have transformational, or systemic, impacts that will outlast
the recession—and help Macedonia and its companies surge as the economy recovers. Examples include:
� Helping companies make the financial and human resources to become more productive, develop new
products, and build the capacity to reposition themselves within value chains;
� Addressing systemic workforce development issues;
� Investing in long-term market relationships to result in fruitful orders when economic recovery takes hold;
� Engaging investors and strategic partners to find lower-cost locations as part of their long-term strategy; and
� Encouraging a logistics park investment as a platform for new investment and industries.
This long-term view availed MCP the opportunity to focus on developing, piloting, and implementing high
impact and scalable initiatives (e.g. financial platform and MyCareer) that produced accelerated results in
investment, job creation and exports.
Building platforms
Within the context of its transformational perspective to enhancing competitiveness, MCP piloted and—when
successful—rolled-out effective service packages to support Macedonian companies and supply chains as they
responded to opportunities and challenges in global markets. These platforms were designed to be sustainable
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Transactional vs. Transformational
MCP designed activities to be either
transactional or transformational in nature
and impact. Transactional activities focused
on helping a company or supply chain
realize a short‐to‐medium term objective,
most often related to pursuing a specific
market opportunity, whereas
transformational activities were designed
to have a longer‐term impact horizon.
Transformational activities can take many
forms, including using a market opportunity
to drive change and upgrades within a
company or sector, providing sustainable
solutions to a critical market failure, or
supporting investments and strategic
partnerships that raise companies and
supply chains to a new level of market
engagement.
While transformational activities often
required longer implementation periods,
their impact on future export growth and
competitiveness is more significant.