CURRENT PROJECTS
Belarus Business Enabling Environment Project
Georgia Business Enabling Environment Project
Tajikistan Business Enabling Environment Project-SME Policy Project
Ukraine Business Enabling Environment Project
Uzbekistan Business Enabling Environment Project
THE CHALLENGE
One of the main constraints to private sector development in the CIS region – especially for the small and medium-sized enterprise (SME) sector – is extreme government regulation and interference into daily business operations. This is seen in multiple inspections and excessive permits, licensing, and registration requirements, leading to considerable costs for SMEs and ample opportunities for corruption. The low legal awareness of most SMEs exacerbates these issues.
THE IFC APPROACH
IFC’s business enabling environment projects focus on select regulatory procedures, such as streamlining inspections, that can be replicated effectively across the region. Projects work closely with government counterparts on a long-term basis to:
Monitor and analyze the business environment. IFC business enabling environment projects have conducted regular surveys of small and medium sized enterprises in 5 countries, to assess how SMEs themselves view the business environment. These surveys identify the main administrative and regulatory barriers for SME growth to provide a basis for detailed recommendations for improvements, and to monitor the effectiveness of reforms.
Work with government officials to reform the regulatory environment. By working closely with government officials at all levels, from national policymakers to field inspectors and the staff of municipal registration offices, IFC can help pass new legislation and ensure proper implementation on the ground. Between 2001-2006, our projects have provided more than 2,700 hours of trainings and consultations for over 4,000 government officials on streamlining and improving the regulatory process.
Improve the legal awareness of SMEs through public information. Information and education campaigns represent a strong component of IFC projects, as SMEs who are more aware of their legal rights can help to enforce regulatory improvements. Projects utilize all mass media channels and additionally work with NGOs, distributing easy-to-understand materials to SMEs about their rights.
ACHIEVEMENTS TO DATE as of July 1, 2007
$93 million in cost savings as a result of new legislation. IFC projects have helped governments amend or enact 10 major laws/regulations that have led to both direct and indirect cost savings for SMEs. As a result of the Permits Law in Ukraine, the total number of permits needed to conduct business fell from more than 1000 in 2004 to less than 200 in 2005. In Uzbekistan, the number of inspections per SME fell from an average of 6.2 per year in 2001 to 0.9 in 2005 as a result of properly implemented legislation. These measures have freed up both time and money for entrepreneurs.
Assisted in drafting or amending 81 laws or regulations that have been adopted by governments. IFC has worked with governments and stakeholders to successfully adopt or amend legislation that drastically improved permits in Ukraine, inspections in Tajikistan, registration in Belarus, and licensing and tax administration in Uzbekistan, among others. IFC has conducted in-depth training sessions for more than 5,000 inspections, registration, and licensing officials to ensure that new legislation is properly implemented.
Provided governments with specific recommendations to improve the business enabling environment. IFC’s surveys of small and medium businesses have provided policymakers with detailed, relevant recommendations for improvements. To date, 140 survey recommendations have been adopted by governments.
Increased awareness of SMEs about regulatory procedures. Through broad public information campaigns, IFC has reached nearly 190,000 SMEs to educate them about their legal rights. More than 5,400 media mentions have been generated in relation to IFC’s work. In Belarus, the project’s information portal BEL.BIZ attracts a daily audience of more than 2,500 users.
CONTACT INFO
IFC Advisory Services in Eastern Europe and Central Asia
Sanda Liepina
Senior Operations Manager,
Business Enabling Environment
36/1, Bolshaya Molchanovka Str., 3rd Fl.
Moscow 121069, Russia
Tel: +7 (495) 411-7555
Fax: +7 (495) 411-7556
International Finance Corporation
Small and Medium Enterprise Department
Andrei Mikhnev
Program Manager,
Business Enabling Environment
2121 Pennsylvania Avenue, NW
Washington, DC 20433, USA
Tel: + 1 (202) 458-1970
Fax: +1 (202) 614-0910
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