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

Development Associates, Inc.land-scattered neighbors. Agricultural producers universally protest the lack of formal credit forworking capital or expansion.The inability to privatize the SOEs or to put into production the larger SOEs even undergovernment management greatly decreases the economic opportunities for Kosovo’s growth inthe agricultural sector. Decisions by the World Bank on a single customs regime—10% acrossthe board for imports of raw material and farm inputs (except fertilizer), machinery andintermediate goods—with mainly finished goods and commodities coming essentially custom’sfree from Macedonia, Serbia and Montenegro, compounded by a 15% VAT that is rarely drawnback (customs and VAT are seen as border taxes and are responsible for the surplus in thetreasury) have raised the costs of domestic production. Frequent electricity outages makeproduction irregular, with added costs of an excise tax for diesel used in generators. Credit is notavailable, particularly longer-term credit, on conditions that are appropriate for the productionand sales capacities of most enterprises and producers.AmeliorationThe new economic conditions are changing the perspective of enterprise owners as competitionand a drop in donor funding and remittances reduced demand. Marketing training and servicesonce offered in 2001 as a free good were lightly subscribed, but in mid-2003 were generatingfilled classes even though fees were attached. The good times are coming to a close and manyenterprises see the need to improve performance. However, the other impediments (customduties, application of VAT, credit availability, energy) are mostly beyond the ability of theprivate sector to resolve on their own—being in the purview of UNMIK, the EU, UN, and theIFIs.4. Were Activities Coordinated?There was often information sharing, but the close coordination required to obtain synergies wasrarely seen. Each project had its own targets and responsibilities. USAID intended to encouragecoordination via an umbrella mechanism with SC providing the coordination function for theSFS grants. SFS also worked with KBS in the producer-marketing chain to facilitate increasedsales of output from the project. KBS and KBF had early close and mutually rewardingcooperation, and several of the agricultural projects work with KBS Agribusiness Specialists,sharing responsibility for the same sub-sectors. So far as we can tell, the Mission held no COPmeetings with all of the contractors present. With so many different projects, all operating ondifferent funding schedules, some contracts, some grants, with different CTOs and targets, itwas/is not easy for USAID or Save the Children to coordinate the activities of all. A bettersolution might be a program with fewer contractors/grantees operating with broader scope.IMPACT1. Assessing performance against targetsPerformance of the projects in the USAID portfolio was stronger than could be understood bymeasuring achievement against contract or task order targets. Many targets were arbitrary, oftenset impossibly high in modifications after the contractor had met earlier goals. There were toomany targets, too small in scope, poorly designed, and sometimes un-measurable in meaningfulEvaluation of the USAID/Kosovo SME xi May 2004and Agriculture/Agribusiness ProjectsVolume I