Evaluation of the USAID-Kosovo SME and Agriculture - Economic ...

Development Associates, Inc.made adjustments in late 2002 in ongoing and newly-generated projects. As the oldprogramming cycle was ending—the new Strategic Objectives were due for 2004--many of theprojects did not have the time remaining in contracts, nor the resources, to bring new targets tofruition. But they did provide the groundwork necessary to save years of organizational effort inthe establishment of cooperative working groups and associations dedicated to improvingstandards, creating certification programs and changing the economic dynamics of theirproducers.2. What are the main strengths and weaknesses of the program?The StrengthsUSAID combined three elements necessary for success: a) business development services toSMEs; b) credit for both larger SMEs (American Bank of Kosovo/Raiffeisen) and smaller(FINCA); and c) agricultural production to supply the SMEs that were receiving businessdevelopment services and credit. Immediately after the crisis ended, USAID began mobilizingresources which were quickly on the ground. USAID’s comparative advantage is working inprivate sector development, and this specialty was on display in Kosovo. There were few if anysimilar projects that began and continued throughout the period, or had the impact of theprograms funded by USAID.The WeaknessesThe model was more integrated in concept than in implementation. Ten projects, although notall were operating at the same time, are a very large coordination challenge. While there wasactive cooperation among particular projects, the effort was not a program, but a collection ofprojects working in related and complementary fields. They were not an integrated set ofactivities working for a common goal. USAID often tasked the projects to coordinate with otherongoing activities, but the accomplishment of each project’s objectives dominated their decisionprocess. There was greater resource impact to be gained from putting together the approachwithin a cluster of enterprises, producers and suppliers, as is being considered for the futureprogram.3. Major Constraints and Amelioration?ConstraintsEasy money reduced urban enterprise interest in improving their operations, marketing, andproduct early in the period while a lack of opportunity in rural areas constrained new investment,except in housing. Surveys showed that for every 1000 inhabitants in two rural municipalities,only 10% were working in the private sector, SOEs and the public sector, 50% were eitherunemployed, or working on subsistence farms. This low economic base is further hindered byland fragmentation and a subsistence mentality. The inability to make agricultural use of landheld under SOEs contributes to the lack of productivity increase even as urban enterprise hasprospered. Interestingly, the researchers from Lessons Learned found that a previous WorldBank project has consolidated fragmented land holdings and that where this happened, farmerscommercialized their production even though their plots were not any larger in toto than theirEvaluation of the USAID/Kosovo SME x May 2004and Agriculture/Agribusiness ProjectsVolume I