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

Development Associates, Inc.3. Perceptiveness of target beneficiaries of assistance3.1 Understanding of how markets function, understanding of competitivenessPrior to 2000 private businesspeople had little or no exposure to a functioning market economy.Therefore they had not had the chance to acquire a real understanding of how a modern economyfunctions, let alone sophisticated understanding of how to develop a competitive position. This isnot an easy barrier to overcome on the road to achieving a prospering private sector. - FordMotors also seems to be struggling with the notion of competitiveness too.3.2 Dependence of company, sector income on competitive production, marketing andserviceDuring the early days of the “Reconstruction economy”, building sophisticated competitive skillswith the private manufacturing sector hardly seemed a priority. What mattered was getting anNGO contract and importing whatever was required. Speed was of the essence, not quality. Mostcompanies made money from imports and reconstruction. The profits of the local entrepreneursdid not depend on their competitive position in the free market and as a result business planning,financial management, marketing skills and customer service were considered secondary.3.3 Readiness to embrace changeThe effectiveness of assistance depends also on the readiness of the target group to adapt to thenew market realities, to embrace change, absorb outside technical and managerial knowledge andimplement recommendations. Again the environment throughout most of the duration of thisprogram has hardly been conducive to the spreading of new managerial approach and businesspractices. From a local cultural point of view, the acceptance and implementation of outsideadvice and recommendations has often been equaled to admitting incompetence. The owner wasexpected to know it all and know best. All these factors, coupled with the limited capacity oflocal companies to absorb outside knowledge and implement changes was a serious impedimentto successful and widespread acceptance of new business models and management practices.4. Are activities properly targeted to achieve objectives?AccountingOne of the core, original activities of KBS has been the provision of access to new and betteraccounting practices, in line with the International Accounting Standards (IAS), accountingtraining, installation of accounting systems at client companies and professional advice. Theobjective was also to broaden the understanding of accounting, especially with regard to cost andmanagerial accounting and create a significant number of private companies with improvedfinancial and managerial systems. To date 496 accounting systems, with training for their relatedclient employees, were installed, out of 520 target indicator for the life of the project. This isgood progress to date, and the original indicator figure is likely to be exceeded. Out of the 20surveyed KBS clients 15 have used this service. Of this total 7 or approximately 46% judge itvery useful. The other users reported the assistance to be partially useful or not useful for theirEvaluation of the USAID/Kosovo SME 7 May 2004and Agriculture/Agribusiness ProgramsVolume I