1. US Agency for International Development
Mission for Kosovo
Kosovo Collective Reform Initiative
ADVOCACY MECHANISM
Final Report
By
SEGURA/IP3 Partners LLC
Contract No. AFP-I-00-03-00035
Task Order No. 801
August 16, 2004
2. TABLE of CONTENTS
I. Executive Summary……………………………………………….. p. 1
II. Advocacy Mechanism………………………………………………p. 4
III. Steering Committee………………………………………………... p. 6
IV. Working Groups……………………………………………………p. 8
V. Administrative Support …………………………………………...p. 12
VI. Advocacy Campaign Plan………………………………………….p. 13
VII. Concluding Observations…………………………………………..p. 16
Appendices
A. Members of PISG, UNMIK, NGO/Donor and Business Community
B. Challenges or Barriers Cited
C. What is Positive? Underexploited Aspects in Kosovo
i
3. I. EXECUTIVE SUMMARY
The Kosovo business community needs to improve its business environment by minimizing the
many challenges and barriers that presently hinder its success. The consultants met over sixty
people from the Albanian and Serb business community, PISG, Pillar IV, and internationals
donors. Based on these interviews, the consultants determined that in order to stimulate
economic development and job creation in Kosovo, a mechanism to minimize business
challenges for the Kosovo business community is essential. The mechanism is to help organize
the business community to take ownership of the problems that it can solve on its own and to
help it advocate before PISG and Pillar IV when necessary.
Need for Solution is Acute
The timing to create and launch a mechanism is fortuitous, because frustration in the business
community is very high. While some challenges and barriers may require business to lobby to
Pillar IV or PISG to implement, enforce, or remove laws, the business community itself can
resolve many issues. In fact, one of the major problems in Kosovo is that the business
community and relevant decision makers at UNMIK, PISG and the NGO/donor community need
to engage in constructive dialogue significantly more often than at present. A major purpose of
the mechanism is to create mutual understanding between relevant players.
Mechanism Composition
The mechanism needs to consist of a Steering Committee, Working Groups, and business
associations and relevant entities that want to participate in making their voices heard. The
Steering Committee should consist of the Prime Minister, President of the Parliament, the Head
of the Municipal Associations, Pillar IV, and have inclusive representation of the business
community.
In order for the advocacy mechanism to be successful, the Prime Minister should chair the
Steering Committee and relevant experts should be involved in the Steering Committee and
Working Groups. Most people, to whom the consultants spoke, believe that if the mechanism is
housed at the Prime Minister’s Office and if it has visible support from USAID, it will be
successful. It is very important that the business community commit well-qualified professionals
who will become the mechanism’s forceful engine. These professionals will be critical in
helping Working Groups write resolutions for the Steering Committee, organizing and
responding to businesses queries, working with the media and administering other important
aspects such as calling meetings, writing minutes, etc.
Advocacy Campaign Plan
At the initial stages of the mechanism implementation, international support is essential to enable
the business community to take ownership of this initiative. It is important that USAID and
1
4. EAR facilitate a few meetings between key business chambers and associations and then
between business and UNMIK, PISG, and NGO/donors. These meetings will be very useful for
relevant players to become used to working with each other constructively and will help a media
launch of the mechanism to be successful.
After these meetings and with election results, the first Steering Committee should meet to
discuss the priorities and the calendar for the next twelve months. A launch with the media
should follow shortly.
Other Options
Issue Driven
If in the initial meetings of the business community and the Steering Committee, the participants
felt that there are too many working groups, one option could be that they choose 3-5 major
issues that they can begin analyzing and solving. The most oft repeated pressing issues were:
• Trade reciprocity
• Customs are too high
• Interest rates are too high and grace periods are short
• People do not know how and where to start a business
• Training co-ordinated
However, due to the Consultants’ experience, the process of getting the various factions of the
business community to meet and start working constructively has to take place, before they can
decide whether the recommended mechanism or some variation thereof would be acceptable.
Sequential Working Groups
Another option worthy of consideration would be that if the business community is comfortable
with the number of recommended working groups, but feels that beginning all at once, is too
demanding, they could vote on the top two groups and add one new working group every
quarter. This would give the business community time to learn to work together and with the
mechanism. This would also provide the business community with a useful opportunity to
constantly have press announcements to keep the public informed about its activities.
2
5. Steering
Steering
Committee
Committee
Infra-
Infra- Access to
Access to One Stop
One Stop
Trade
Trade Training
Training Investment
Investment Integration
Integration
structure
structure Finance
Finance Shop
Shop
Business associations & entities affected by
barriers to
barriers to lack of
lack of integration to
integration to
trade to filter poor or lack of
trade to filter poor or lack of lack of
lack of access to
access to entrepreneur
entrepreneur investment
investment region &
region &
issues
issues infrastructure
infrastructure training
training finance
finance ship
ship promotion
promotion Europe
Europe
3
6. II. ADVOCACY MECHANISM
An advocacy mechanism is essential for the Kosovo business community in order to help it turns
its significant frustration into positive energy and results. The mechanism should help to train
the business community to unite itself in order to resolve problems within and by itself, and
when necessary, to lobby UNMIK or PSIG constructively and with positive results.
Important features of the mechanism are that it:
• Shows a united business community that
o knows its challenges and is well informed
o can communicate challenges to government and UNMIK and offer solutions,
o is realistic and talking about one or two issues, not a huge litany of complaints
• Requires the business community to be committed to this initiative
o the business community needs commitment from its members to dedicate
well-qualified personnel, resources and time to the initiative
o the mechanism needs to have co-coordinators for administrative support
• Be well positioned
o Housed in the right place to have credibility and has Prime Minister as the
Chair
• Be focused
o otherwise too broad
o and could turn into just another “talk show”
o could raise unrealistic expectations
o confuse the issues
• Produce immediate results
o go after “low hanging fruit,” otherwise business community will quickly
become disillusioned
o business community must learn to tackle issues that it can solve on its own
and which do not require advocating before Pillar IV or PISG
• Have enforcement
o Announce initiatives and results every quarter publicly1 through
• internal newsletter to business members
• radio/ television/ newspapers to inform all of Kosovo community
• Albanian
• Foreign media
1
Serves as a “name and shame’ if people do not co-operate and raises profile of mechanism and of business
community
4
7. • Have a facilitator/mediator in the Steering Committee and Working Groups
o Facilitator needs to have experience in the subject area
o Each task force/subcommittee needs someone who can be a mediator
o Mediator needs to keep group focused on key issues
o Mediator needs to help group keep from descending into “finger pointing”
The advocacy mechanism will consist of a Steering Committee and Working Groups. Business
associations and other relevant entities such as universities will be key in bringing issues to the
attention of working groups.
5
8. III. STEERING COMMITTEE
Composition
The Steering Committee should be composed of senior level individuals in the business
community, PISG, UNMIK, and NGO/donor community. The Steering Committee should have
voting members and non-voting expert observers. The Prime Minister should chair the
committee to enhance the mechanism’s credibility and influence.
The proposed voting members, on whom major business organizations have agreed, are:
PISG (Prime Minister, Parliament President, and Head of Municipalities), UNMIK (Pillar
IV), and from the Business Community AKB/KCC/American Chamber of Commerce and
two other businesses
Other suggested businesses are an organization that represents women, Agriculture Association,
or a senior professional in media.
The proposed non-voting members of the committee are to be known as the Expert Observers:
RIINVEST, World Bank, Lawyer (Arbiter)EAR, USAID, individuals who understand
Standards (one from UNMIK and one from PISG), and at least one person from the
business community
Purpose
The two main purposes of the Steering Committee are to:
• Link and co-ordinate the Business Community, PISG, UNMIK, & NGOs/Donors so that
communication improves, and
• To vote on the initiatives brought forth by the working groups.
The Steering Committee should meet quarterly or on a needs basis to vote on issues brought
forth by Working Groups. The voting outcome will be based on a majority basis. If the issues
chosen by the Steering Committee require the creation, removal or implementation of a law, the
Steering Committee will be responsible to lobby those requirements before the relevant body, i.e.
UNMIK or PISG, until resolved. In the event that the Steering Committee rules that a resolution
by a Working Group is without merit, it must give the Working Group an opportunity to analyze
the resolution again and to re-submit it, should the Working Group desire. If a conflict remains,
the non-voting experts should assist in adjudicating the dispute.
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9. The Steering Committee should evaluate on a quarterly basis whether new working groups are
needed and bi-annually it should evaluate whether existing groups are still necessary.
The non-voting expert observers should provide their expert opinion when needed. They can
also facilitate discussion if it starts to go of course. If too many issues come forth to the Steering
Committees simultaneously, the expert observers should help prioritize the issues before the
Steering Committee.
The Committee should also hold quarterly press conferences to announce the mechanism’s
initiatives, results, and remaining issues to be solved and should disseminate press releases at
least quarterly and on a needs basis.
RIINVEST
RIINVEST’s strong reputation as a think tank with high quality professionals will be invaluable
for the mechanism. Due to RIINVEST’s connection to USAID and to AKB, its neutrality has
been and will be called to question if it is a voting member. So that RIINVEST’s reputation is
not negatively affected and so that its usefulness does not decrease, the Consultants recommend
that it be a non-voting member in the Steering Committee. The Consultants have heard from all
potential business members of the Steering Committee that they believe RIINVEST would be
very useful to the mechanism.
Additionally, the Consultants believe that RIINVEST, especially Professor Mustafa, will be
invaluable to the mechanism’s aim of reducing business challenges, if it is in the role of
Secretariat. This would mean that RIINVEST would be the mechanism’s engine. RIINVEST
would be responsible for making sure that the working groups and steering committee have clear
agendas and are following them, organizing meetings, writing press releases, and undertaking
other important administrative task.
In order to be a successful Secretariat, RIINVEST will need resources. The Consultants believe
that those members of the business community that are chosen to be in the Steering Committee
should each commit at least one person to work on the mechanism. Administrative support is
also needed to read and categorize suggestions and complaints from businesses before they go to
the Working Groups.
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10. IV. WORKING GROUPS
Composition
Working Groups must consist of key people from the business community, PISG, UNMIK, and
NGOs/donors. Every effort should be made so that participants from these four areas are
qualified professionals in the relevant field of the working group.
Each working group will have a chair; the chair can be on a rotating basis. A major responsibility
of the Chair will be to maintain groups focused on the issues selected and to keep discussions
constructive. The NGO or donor in each working group can help facilitate meetings.
Given that there will be foreigners in each working group, it is important that each working
group have at least two professional interpreters that can interpret during working sessions. One
media person should be in each working group, preferably a media person with expertise in the
field of the working group. Business community leaders feel that the presence of media will
make the mechanism transparent to the public.
Responsibilities
The working groups should meet each month and choose the issues that it will analyze and bring
forth to the Steering Committee. After debating the issues given to them by business associations
or other relevant entities, the Working Group should choose two issues that it will be further
analyzing and presenting to the Steering Committee. One could be a longer-term issue that will
be worked on every month until ready to be presented to the Steering Committee.
It is important to pick an easily resolvable problem. An immediate result in each working group
would help build confidence in and credibility about the advocacy mechanism. While some
working groups may feel that all their problems are very long-term in nature, it is essential that
each group produce at least two positive results every six months.
The announcement of positive results would raise the profile of the business community. This is
very important, since many members of the business community are frustrated not only with
government entities but also with existing business associations and chambers.
If a problem requires legislative action or lobbying to PISG or UNMIK, the Working Group will
prepare a resolution for the Steering Committee with the analysis, recommendation, and specific
steps needed to resolve the problem.
Not all problems, however, may require any legislative or lobbying action. If the Working
Group finds a solution to the presented problem, it should resolve it on its own. There is no need
for resolved issues to be taken up to the Steering Committee. Also, once a problem is resolved,
the Working Group should consult with its media member to see if it is worth it to send out a
press release.
8
11. Working Group Priorities
The business committee should vote on initial working groups and the priorities within each
group. Based on the interviews with members from business, PISG, UNMIK, and NGO/Donors,
the consultants heard these principal challenges and barriers most often. The full list of
individuals met is in Appendix A and interview results are in Appendices B and C.
The main problem categories with summary issues are2:
– Trade Issues
o Trade reciprocity, customs, delayed VAT
– Access to Finance
o High interest rates, short or no grace period, untrained loan officers
– One Stop Shop for Businesses
o Lack of information on how to create a business, conduct research, or gather contacts;
business registration problems (having to go to Pristine)-this is especially a problem
for Serbs who do not feel safe coming to the Ministry of Trade
– Investment Promotion
o Lack of office to promote trade opportunities to foreigners or locals, no marketing on
Kosovo
– Training Co-ordination
o Not enough qualified professionals train business people, people do not know where
to get good training, no co-ordination amongst donors to provide training
– Infrastructure
o Lack of power, lack of transparency in local and international management of KEK
o Bad roads and railroads
o Expensive mobile
– Integration to the Region and Europe
o License plates
o Travel documents
Other problem areas mentioned were fiscal policy (high taxes or double taxation) and corruption.
2
These categories have been discussed several times with AKB, Kosovo Chamber of Commerce and American
Chamber of Commerce.
9
12. Business Associations and Relevant Parties
Business Associations, individual businesses and relevant parties such as universities, and
members of government entities should address business challenges or obstacles to the
appropriate working groups. In case a Working Group does not exist for a particular issue or
query, Administrative Support should catalog what type of issue is being addressed. Every
quarter Administrative Support should report to the voting and non-voting members of the
Steering Committee whether there is an increase or decrease in any type of issue/query brought
forth. Trends may be indicative that new working groups need to be created or that existing ones
are no longer needed.
The business or other entity should describe problem and action desired succinctly. Those
descriptions should be submitted electronically. A form for such a description could be the
following:
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13. Kosovo Advocacy Mechanism
Form for presenting a business barrier/challenge to a Working Group
Date: _______________________________________________
Submitted by
Name of the Person: _______________________________
Representing Company: ____________________________
Company’s Location: ____________________________
Company’s Business: ____________________________
Company’s Size (number of employees): _____________
Representing Association: ___________________________
Submitted to Working Group: __________________________________________________
Briefly describe the business barrier or problem: ____________________________________
Why the change is necessary: ___________________________________________________
What result would you like to see with the change: __________________________________
___________________________________________________________________________
It is essential Working Groups and Admin Support respond to every issue/query. The response
should say that the issue/query has been received, that it is being considered, and that if it is not
sent to a Working Group, that it should be re-submitted in 2 months time. While this process
may require more effort from the Working Groups and Admin Support, responses will help
people feel more inclined to be active at the grassroots level. Also, responses will help build
credibility.
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14. V. ADMINISTRATIVE SUPPORT
It is important that the business community commit well-qualified personnel, resources, and time
to this mechanism. Administrative support will be needed for such tasks as:
• organizing and responding to complaints/ queries from the public
• helping working groups write resolutions to be sent to the Steering Committee
• issuing invitations to meetings
• calling people to remind them of meetings
• writing minutes from the meetings
• writing position papers
• writing press releases before and after meetings
• organizing press conferences when needed etc.
An office with at least three personnel will be needed to provide these administrative services.
Initially, it would be very useful for international personnel to train local personnel to run this
mechanism. KBS, for example, described an initiative in Poland in 1992-93 where the EU
providing funding and training for personnel in the secretariat of that initiative.
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15. VI. ADVOCACY CAMPAIGN PLAN
Ownership
The consultants will have presented their final draft of the Advocacy Mechanism to the business
community, represented by Alliance of Kosovor Businesses, Kosovo Chamber of Commerce,
and American Chamber of Commerce, by August 6, 2004. The business community needs to
meet as soon as possible to start getting used to working together. Thereafter, key business
leaders need to decide what other organizations should be included in leading this mechanism.
Once all business leaders who will be in the Steering Committee are selected, they need to name
the mechanism. So far, only the local marketing firm, City Group, has suggested some names in
order of preference: Eureka, Horizont, and Keops.
Who should be in the Steering Committee needs to be agreed upon. The number of participants,
however, should be manageable because there is risk of trying to “satisfy too many”.
A team of key business leaders with representatives from RIINVEST, EAR and USAID needs to
make a round of visits with individuals, who were initially contacted by the consultants, and
other important officials, who have not yet been contacted. These individuals include
• Prime Minister
• President of Parliament
• Head of UNMIK’s Pillar IV
• Head of Municipal Association
• Head of the local office of the World Bank
These visits should ensure their interest, commitment, and participation in the Steering
Committee. In addition to these individuals the team needs to start making rounds of visits with
different participants in working groups. These will include:
• Ministry of Trade and Industry
• Ministry of Finance
• Ministry of Transportation and Telecom
• Ministry of Public Services
• UNMIK’s experts on customs and trade
• Trade Unions
• Local banks and KEP
• BPK
• Bankers’ Association
• KTA
• REA
• KEK and other utility companies
13
16. Process
The business community needs to gain the commitments of various participants in the Steering
Committee and the working groups. It is essential that RIINVEST, EAR and USAID facilitate
all of these meetings.
Moreover, the business community needs to be analyzing and strategizing its priorities. This
should be done through the business associations as they know best the relevant issues and can
advocate them on behalf of the businesses.
The preparation for the first Steering Committee meeting should be carefully planned. It is
probably a good idea not to have media involved in the first meeting so that the Steering
Committee Participants have an opportunity to determine their working dynamic. The agenda for
the meeting should be, amongst other things, introduction of participants, understanding of their
roles, frequency of the meetings, professional interpreters, taking minutes, voting procedures,
and implementation of recommended changes and decisions. The agenda should also include
approving the working groups and their focus.
14
17. Timetable
The following is a detailed schedule for the Advocacy Campaign Plan showing the dates and
activities that should happen within that time.
Dates Activities
AmCham and AKB have initial meeting to get to know each other’s activities;
Aug 9-13
AmCham and KCC have initial meeting to get to know each other’s activities
RIINVEST calls meeting with AKB, Kosovo Chamber, and AmCham, to
Aug 16-20 discuss mechanism and to discuss what other business organizations should
represent business community; USAID and EAR should be present
RIINVEST/USAID meets other potential members of the business community to
Aug 23-27
present the mechanism to them; new business members should be chosen
Aug 30-Sept 3 Business leaders who will be in Steering Committee meet to name the initiative
Leaders of business associations/chambers appointed to represent the business
Sep 6-10 community will meet with key municipal leaders, including Head of
Municipalities to explain initiative
A team of key business leaders with RIINVEST, EAR and USAID canvas the
Sep 13-17 Initiative to appropriate parties of PISG and Pillar IV to ensure their
participation in the Steering Committee
Business community with RIINVEST, EAR and USAID finalizes
Sept 20-24 the Steering Committee voting and non-voting members (only PM and Head of
Parliament have to be waited on until after election)
Business community with RIINVEST, EAR and USAID meet to discuss
Sept 27-Oct 1
working groups. This task may require several meetings
A team of key business leaders with RIINVEST, EAR and USAID canvas the
Oct 4-8 Initiative to appropriate parties of PISG, international community and businesses
to ensure their participation in the Working Groups
Oct 11-15 Canvassing for Working Groups continues
Business representatives work on prioritizing business issues through business
Oct 18-22
associations and commit administrative support and resources
Oct 23 Elections
Business representatives meet with UNMIK and relevant NGOs/international
Oct 25-29
donors
Post-Elections, Business community with RIINVEST, EAR and USAID canvas the Initiative to
November newly-elected Prime Minister and Head of Parliament
Post-Elections, First Steering Committee meeting takes place, approving the roles of
November participants, procedures, voting, and establishment of working groups
Post-Elections, First Working Group meeting takes place, approving its agenda and priority
November issues.
Post-Elections,
Media launch
November
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18. VI CONCLUDING OBSERVATIONS
In discussions with various parties, both international and local, it became clear that the Kosovo
Business Initiative as designed and presented is quite a new concept for the business community.
Kosovo business community is fragmented and not ready to work together. However, with the
initial lead, guidance, and mediation of a significant international party, the business community
is ready to work together on the same issues that hinder their business.
There are many challenges and barriers to conducting business in Kosovo, many related to
Kosovo status, but many can be solved by businesses themselves. The Kosovo Business
Initiative will definitely help businesses to approach business problems in an innovative way.
Initial meetings showed that the new Initiative has been well received and that it can serve as a
good foundation for business cooperation.
The resources that are needed to carry this new Initiative must include well-qualified personnel
that will become the engine of this undertaking. The business community must be inclusive and
speak with a united voice.
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19. APPENDICES
A. Members of PISG, UNMIK, NGO/Donor and Business
Community
B. Challenges or Barriers Cited
C. What is Positive? Underexploited Aspects in Kosovo:
20. A. Members of PISG, UNMIK, NGO/Donor and Business Community3
NGOs/
Government/Regulatory UNMIK Donors Business
Office of Prime Minister GovernLiason World Bank Chambers
Stability Pact Representative Head of Legal & Political USAID Kosovo Chamber of Commerce
Economic Advisor KBS Am Chamber of Commerce
Ministry of Trade KTA Business Assoc
Private Sector Development Privatization EAR AKB
REA Women's Business Assoc
Municipalities Kosovo Women's Bus Network
Head Munic Association UNDP RIINVEST Exporters Association, AKB
Agricultural Association, AKB
Kosovo Employers Assoc &
Women’s Assoc Serb run
Financial Institutions
Banks
Pro Credit
Raifeissen
Micro
KEP
Private Companies Sector
Nerakond Food
iPKO NET Tech
Bonita Beverages
Koni Poultry
Jaha Construction
Thai Restaurant
R21 Media
City Group Marketing
Serb owned
DTS Kondi Food
Minel-Enim Power Equip
Piramida Engineering
SOEs
Vreshtaria e Venës Wine
POEs
KEK Power
3
These are the players with whom we met. With some, we met several times.
A-1
21. B. Challenges or Barriers Cited4
ISSUES Who says prob? Who says no?
Trade
Trade agreements BusCom
Trademark protection BusCom
High Customs UNMIK,iPKO, Wine
Agents not trained BusCom
VAT BusCom
Not reimbursed/delay
Red tape
Access to Finance
Loan officers are too risk averse Banks, BusCom
Loan officers lack training Banks, BusCom
Rates are too high BusCom
Short or no grace period BusCom, Donors
Power
shortages Everyone
KTA KEK
Generators&Imported fuel BusCom
Non-payment KEK
Socio economic groups
Serb enclaves
Training
not enough Gov/BusCom/UNMIK
not demand driven MinTrad
no defined standards: MinTrad
wrong people are training
no strategy BusCom/MinTrad
no donor co-ordination BusCom/MinTradDonors
UNMIK
Not prepared, came as SWAT
Corrupt BusCom
Employees abuse privileges BusCom
Capacity Building
4
By people we interviewed listed on Appendix A
B-1
22. Government
UNMIK/BusCom/Don
No coherent Kosovo strategy ors
UNMIK/BusCom/Don
Between ministries ors
Lacking Competitive Analysis
UNMIK/BusCom/Don
Capacity ors
UNMIK/BusCom/Don
Low salaries ors
Red tape BusCom
Corrupt BusCom
KTA
Slow
Not answering municipalities or answering
late
Hindering industrial park development
Municipalities
Implementing laws without debate
Capacity issues Intl, PSIG
Laws
Implementation Intl/Don
Enforcement KEK/Intl
Taxes
double UNMIK,IPKO, NBI(wine)
no enforcement to collect Intl
Business Registrations UNMIK
Not enough registration inspectors World Bank Intl
Head of
Municipalities want registration locally Municipalities World Bank
Corruption
All levels BusCom Wine
Lack of Co-ordination
Between Gov, UNMIK Everyone
donors, and business
B-2
23. C. What is Positive?
Underexploited Aspects in Kosovo
Security
Low crime
Women/children are safe
International Focus on Kosovo
Political level
Untapped foreign residents' money
Size
Small
Easy to see several things in Kosovo in a day
Close to other interesting countries in the area
People
Entrepreneurial
Optimistic
Friendly(esp. to Americans)
Provide good service at shops & restaurants
Increasingly multilingual
Do not want extremism
Natural Resources
Good water
Lignite
Wood
Great Produce
Restaurants
Great coffee
Good food
Variety of restaurants is beginning
Weather
Sunny
Snow for skiing
Tourism Potential
Lakes, parks, hiking, agric
Wine/beer
Culture(churches, mosques, museums)
Picturesque
Shops
Clothes
Crafts
Shoes
Book shop
Jewelry shops
C-1
