KOSOVO MID-TERM EVALUATION OF THE KOSOVO CLUSTER AND BUSINESS SUPPORT PROJECT JUNE 2006 This pub lication was produced f or review by the United States Agency for Internation al Development. It was pr epared by SEGURA/IP3 Partners LLC under the SEGIR Privatization II Indefinite Quantity Contract No. AFP-I-00-03-00035-00, Task Order No. 167-O-00-06-00046. Acknowledgments The Contractor and consulting team would like to express their appreciation to the individuals, agencies, senior management and staff, listed in Attachment D, for the valuable support during the preparation of this report. The following individuals comprised the professional team that participated in the preparation of this report: Michael Dan (Evaluation Team Leader), Richard L. Wellons (Senior Private Sector Specialist), and Jorge Segura (Partner-in-Charge) SEGURA / IP3 Partners LLC 10411 Motor City Drive, Suite 360 Bethesda, MD 20817 Tel: 301-469-4724 Fax: 301-469-4728 www.segura-co.net MID-TERM EVALUATION OF THE KOSOVO CLUSTER AND BUSINESS SUPPORT PROJECT DISCLAIMER The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. CONTENTS Executive Summary I Introduction ................................................................................................................. 1 II Context, Evaluation Issues and Methodology............................................................. 2 II.1 The Project and its Context ........................................................................................ 2 II.1.1 Description of the Project ........................................................................................ 2 II.1.2 Economic and Political Context in Kosovo .............................................................. 2 II.2 USAID/Kosovo Strategic Plan (Strategic Objective and Intermediate Results).......... 3 II.3 Evaluation Issues & Methodology............................................................................... 3 II.3.1 Evaluation Issues .................................................................................................... 3 II.3.2 Evaluation Methodology .......................................................................................... 4 III Performance at Mid-Term.............................................................................................. 5 III.1 Overall Results ........................................................................................................... 5 III.2 Performance Highlights .............................................................................................. 6 III.3 Project Design and Cluster Competitiveness Approaches ......................................... 7 IV Improving the Business Environment: Findings, Conclusions, Recommendations ....... 8 IV.1 Cluster Related Associations...................................................................................... 8 IV.1.1 Findings................................................................................................................... 8 IV.1.2 Conclusions........................................................................................................... 10 IV.1.3 Recommendations ................................................................................................ 12 IV.2 Non-Cluster Related Associations............................................................................ 13 IV.3 Public private dialogue and Interventions to Improve the Business Environment .... 13 IV.3.1 Findings................................................................................................................. 13 IV.3.2 Conclusions........................................................................................................... 14 IV.3.3 Recommendations ................................................................................................ 14 V Improving the Economic Performance of Clusters: Findings, Conclusions, Recommendations....................................................................................................... 15 V.1 Findings by Cluster................................................................................................... 15 V.1.1 Livestock Cluster ................................................................................................... 15 V.1.2 Construction Cluster.............................................................................................. 16 V.1.3 Fruit and Vegetable Cluster................................................................................... 17 V.2 Conclusions by Cluster............................................................................................. 17 V.3 Recommendations by Cluster.................................................................................. 18 V.3.1 Livestock cluster.................................................................................................... 18 V.3.2 Construction cluster............................................................................................... 19 V.3.3 Fruit and Vegetable cluster ................................................................................... 19 VI. Summary & Recommendations ................................................................................... 21 VI.1 General Recommendations...................................................................................... 21 VI.2. Impact, Efficiency, Sustainability & Relevance......................................................... 21 VI.2.1 Impact.................................................................................................................... 21 VI.2.2 Efficiency ............................................................................................................... 22 VI.2.3 Sustainability ......................................................................................................... 23 VI.2.4 Relevance ............................................................................................................. 23 VI.3 Specific Recommendations ...................................................................................... 24 Attachments A. Summary of the Performance of the Kosovo Cl uster and Business Sup port Project - Dec. 2004 – March 2006 B. Status of the New Common Indicators, March 31, 2006 C. Project Clusters - Sample Client Satisfaction Survey - Interview Guidelines D. Interview List E. Bibliography EXECUTIVE SUMMARY PURPOSE: USAID/Kosovo requested SEGURA IP3 Partners LLC to cond uct a mid-term evaluation in Ma y and June 2006 of the Kosovo Cluster and Bu siness Sup port Project (hereinafter the “Project”), implemen ted by Chemonics International Inc. since late September 2004, in ord er to provide feedback for any necessa ry mid-course corr ections and to help guid e future planning. PERFORMANCE HIGHLIGHTS: Project implementation at mid -term is gen erally on-track, with th e most important targets being met. However, results have varied among components, with cluster activities ge nerally making good progress, but with general business support activities falling behind some targets, p articularly for business associations. The Project is ahead of target on five overall indicators including: t otal sales among targ eted enterprises; in creased capita l investment among targeted firms (from end 2004 through March 2006); labor productivity among targeted fir ms; number of register ed firms; a nd number of associations employing volunteer staff. Howe ver, the Project is behind target o n other indicators: the number of full-time jobs created in t argeted clu sters (close to meeting target); in creased fina ncing amon g targeted enterprises; exports as a percentage of imports; number of b usiness associations with strategic plans; and percentage of non-donor revenue generated by associations. CONCLUSIONS Impact: Sales by client companies have exceeded targets significantly, an important achievement of the Pr oject. There has been less impact in creat ing jobs, due to relatively modest targets set at Project start , particularly compared to Kosovo-wide needs. Althoug h project design did not emphasize strong exp ort results, any compet itiveness project must address the need to increase the e xport readiness of com panies. The Project is making good progress in import sub stitution. There has be en less imp act in expanding sa les in minority enclaves, despite strong efforts, due to restricted access to other markets in Kosovo. Efficiency: Overall management has been stro ng, with supportive admi nistrative, technical and head office supervision. However, frequent tur nover of expatriate per sonnel has complicated implementation, particularly for the Livestock a nd Fruit & Vegetable Clusters, and for Business Environment activities. Cost effectiveness appears positive when the total annual cost of Euro 4,000,000 is compared to the incr eased valu e of client company sales (Euro 10.6m. since Project star t-up). Yet, when me asured against the relatively low number of both client companies and new jobs created, costs per beneficiary appear higher. An alternative approach at a more acceptable cost is to continue focusing on expanding the n umber of client companies with the str ongest pote ntial for ex panding do mestic and particular ly export sales through production of higher value niche products. Sustainability: The activities of the Project will only be partly sustainable unless the Proje ct clearly builds sustainability into the project by strengthening the associations relevant to each cluster. Ho wever, sustainability de pends on key external factors be yond the control of th e Project, including the p ace of privatization, effe ctive implementation of key laws already passed or yet to be passed, and clarification of the final status of Kosovo. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 i Relevance: The inte rventions of the Project are highly relevant to achieving th e goals of USAID Strategic Objective No 1.3, However, Project activities alone ca nnot ensure that Kosovo meets these goals. The Government must still a dopt many i mportant pieces of legi slation and effectively implement t he laws that are already on the boo ks. Above all, busine ss associations and government should both be strengthened to ensure an operating environment that supports business creation, market expansion, and productive investment. BUSINESS ENVIRONMENT RECOMMENDATIONS Reduce the total num ber of cluster associations that t he Project should supp ort from the planned 20 to about 6 – 10 and include a ta rget relating to a member satisfaction survey. Ensure tha t associations increase the ran ge and qu ality of se rvices they provide to member companies, with Project services cha nneled directly through associat ions, in order to better integrate cluster companies and associations. Eliminate actions that have only a public benefits’ aspect. Associations have b een pushed to meet difficult targets in this area; put more focus on providing member benefits. Review strategic and revenue generation plans. The Project should not intervene in day-to - day operations of the associations. As there are no clea rly demonstrated benefits to using management companies, at the end of the first grant contract year, the associat ions should be allowed to make a decision on how to proceed. Show flexibility on targets for sustainability and help well functio ning associations, even if they cannot abide by th e 60-40-20 maxi m. Also, welcome o ther donors’ funds, if this leads to more and higher quality services or long-term sustainability. Review public-private dialog activities. Present key issues to government directly rather tha n continue th e more comprehensive public-pr ivate dialogue. Expatriate and local staff should together try to foster a dialogue about key issues for their clusters and associations. CLUSTER RECOMMENDATIONS Livestock Cluster: In dairy production, focus additional help mainly o n improving milk quality. Rather than continuing a focus at t he level of micro and small dairy farmers, support testing facilities/labs at key pro cessors, who will then source from producers w illing and able to meet standards. Continue focusing on n ew product development by helping to introduce higher value dairy produ cts with strong potential (new c heese product s and flavored/fruit yoghurts; poultry broilers (as avian flu threat recedes). Consider cutbacks in activities in cluding: the sheep sub￾cluster, beef, small dairy processors under 5,000 liters per day; micro dairy farme rs with less than 5 – 10 cows in the ir herds, under 2 hectares of land, and producing only for home/village consumption, Focus on integrating livestock asso ciations and cluster companies by pro viding increased member services and coordinating activities with the Project. Construction Cluster: Focus on the major constraint of limited access to financing and new investment. Continue current work with companies and banks to apply more flexible criteria to assess applications. Assist in and help speed up privatizations. Continue to diversify cluster clients beyond road construction / asphalt firms. Assist more companies to produce higher value construction materials such as porous concrete blocks and wood parquet flooring, both now with excellent export prospe cts due to strong marketing efforts. Encourage t he Road Construction Association, currently among the most well managed and effective associations, to pursue policy advocacy more actively. As recentl y decided, f ocus less o n sub-clusters with lowe r potential, Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 ii and those assisted by other donors, e.g., decorative stone, supported in creasingly by European Assistance for Reconstruction. Fruit and Vegetable Cluster: Continue to increase the number of client companies assisted by recruiting medium and larger companies with h igh potential in the se ctor. Target firms in high￾value processed niche products for import s ubstitution an d exports. Keep focusing on post￾harvest handling, and marketing, rather than f ocusing on production as in the p ast. Develop closer contacts and cooperation with the Ministry of A griculture a nd related Government agencies. As agreed, postpone previous work plan activity to assist a Kosovo-wide Association, until later in the project if appropriate. GENERAL CROSS -CUTTING RECOMMENDATIONS Integrate cluster and a ssociations more effec tively. This is critical for improving efficiency, effectiveness and sustainability. Focus on high potential, larger enterprises. Reduce assistance to small enterprises/farms without substantial growth potential. Increase the project’s reach to in clude more enterprises with growth potential. This can help make the overall project more cost effective . The Project can identif y additional enterprises by including more steps in the value chain or by redefining clusters t o be broader and more inclusive. Also, identify new clients among companies that are being privatized. Hire a new association adviser with substantial experience from successful association programs in the Balkans or the Commonwealth of Independent States. Start planning future strategy now by identifying new clusters to support. As there are few obvious clusters and intervention areas, the sooner this process starts the better. SPECIFIC QUESTIONS AND RECOMMENDATIONS Should there be an y programmatic shifts du e to Kosovo’s potential change of status? If accomplished in a smooth and stable manner, there may b e an overall change for the better in the business environment. However, unless it is accompanied by significant government reforms in programs and policies, the change of status may have only a marginal impact. Is KCBS working in clusters w ith the greatest potential for grow th? There are fe w additional clusters in Kosovo with promising growth prospects, but some rebalancing is needed: Cut back su pport for meat (beef, poultry and lamb), for small/medium dairy processors and for small dairy farms. Continue focusin g on high value processed food an d further fo cus on the construction cluster. Conduct diagn ostic studies to identify new clusters, such as niche tourism (adventure, backpa cking, skiing); wine prod uction (a ssuming USAID waivers); automotive recycling/scrap metal exports; and information technology as a cross-cutting cluste r that can serve a range of other sectors. How is the matching grant supp ort for ass ociations w orking? 90 percent of Strategic Activities F und resources are use d for livestock and association s, and the Project should distribute them more evenly. The matching grants are not working we ll in all asso ciations, as some of the associations have less income than assumed in their plans, and their strategic plans are too ambitious. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 iii How effecti ve is the a pproach to the private-public polic y dialogue component? The government seems to be an ineffective partner in develop ing a better business e nvironment. Any policy intervention should targ et and focu s on issue s of substant ial importance to either clusters or associations, rather than a general public private dialogue. Is it likely to be too costly to bring more long-term staff? There is likely to be no substantia l difference in the cost of long- and short- term staff. The key issue is to distribute the short-term assistance more evenly over the clusters to target key market opportunities. What has been learned from other USAID projects e lsewhere? A key lesso n is tha t th e current project is appr opriate, given the level of economic development. One caveat is that policy level interventions are diff icult in po st conflict economies, so th e Project sh ould reduce support for general policy making in favor of practical, direct enterprise development. How can t he Project’ s performa nce monitoring s ystem be improved? Conduct Client Satisfaction Surveys using indepen dent contra ctors; measure the valu e of exports by cluster, with targets set annually; report Kosovo-wide indicators b y cluster (currently limited to jobs , sales, financing); and include female employment data. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 iv I MID-TERM EVALUATION REPORT FOR THE KOSOVO CLUSTER & BUSINESS SUPPORT PROJECT INTRODUCTION The Kosovo Cluster an d Business Support project (herein after the “P roject”) has been unde r implementation since la te Septemb er 2004, or for just over 1½ years. The contractor for the Project is Chemonics In ternational I nc. In May 2006, USAID/Kosovo requested S EGURA IP3 Partners LLC to conduct a mid-term evaluation of the Project, which wa s conducted during May and June 2006. The purpose of this mid-term eval uation is to provide USAID/Kosovo with an objective external assessment of the app ropriateness and effectiveness of the Project. USAID has tasked the evaluation team with a ssessing the efficiency, impact, sustainability, and releva nce of the Project. The results of t his evaluation are inten ded to provide feedback to USAID/ Kosovo and the Project for any necessary mid-course corr ections, an d to help g uide future planning for USAID/Kosovo. We have structured this evaluation of the Project in the following five sections (i) Context, issues and evaluation methodology (ii) Performance at mid-term (iii) Improving the business environment: findings, conclusions, recommendations (iv) Analysis and conclusions – clusters (v) Summary and recommendations Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 1 II CONTEXT, EVALUATION ISSUES AND METHODOLOGY II.1 THE PROJECT AND ITS CONTEXT II.1.1 Description of the Project The Kosovo Cluster and Busine ss Support Project i s a US $20 million d ollar progra m, implemented over four years, combining two major components with activities addr essing three industry clusters and related business environment improvements. The cluster component addresses the livestock, fruit and vegetables, and construction materials sectors. In livestock, the most important product is milk, and in the construction materials sector, the most important product/service is road const ruction. The Project works with the most of th e value chain in its cluster s to impro ve performance. There are about 59 active client companies participating in the cluster program plus a n umber of p rimary producers, e.g. milk farms, vegetable growers, sheep farms, etc. The busine ss environ ment comp onent addre sses a ssociations and government advocacy in general. The project is supporting 8 associations, of which 6 associations are directly related to the clusters referred to above, an d as such are industry association s. The remaining two associations are engaged in improvi ng the busi ness environment in general. The Project help s conduct advocacy in ge neral by endeavoring to remove b usiness con straints imposed by the government and others, e.g. import restrictions in European Union co untries, either directly o r though the associations that it supports. In addition to technical assistance, the project has a Stra tegic Activities Fund (“ SAF” in the following) of US $ 2 million, which is used to support the two main components of the projects by awarding grants and subcontracts to project-related activities. II.1.2 Economic and Political Context in Kosovo The project is being implemented in a difficu lt environment charact erized by adverse mac ro economic indicators, a poor micro economic enter prise growth climate and a government wit h limited ability to implement an effective private sector policy. The macro economic environment in Kosovo is characterized by stagnating economic growth, a significant t rade balance deficit, a nd very high unemployment (some reports indicate that unemployment is as high as 60 to 70 percent). The micro economic enterprise growth climate is characterized by an i nadequate banking and financial sector with poor legal framework conditions for len ding, no equity market, an uncertain framework for foreign i nvestment, inadequat e and expensive utilitie s, inadequate and co stly transport for exports, a delayed privatization pro gram and generally uncertain legal conditions with ineffective recourse to courts. The govern ment is characterized b y indecisivene ss and a lack of ability to imple ment privat e sector policy in an effective and con sistent manner. This may be partly attributed to the division of political r esponsibilities between the Provisi onal Institutions of Self-Govern ment (PISG) and the United Nations Interim Administration Mission in Kosovo (UNMIK). Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 2 II.2 USAID/KOSOVO STRATEGIC PLAN (STRATEGIC OBJECTIVE AND INTERMEDIATE RESULTS) The Project is de signed to cont ribute towa rd accomplishing Strat egic Object ive 1.3 – Accelerated Private Sector Growth, and the following Intermediate Results: • IR 1.3.1 Increased competitiveness of the agriculture sector • IR 1.3.2 Improved capacity of private enterprises • IR 1.3.3 Improved business operating environment II.3 EVALUATION ISSUES & METHODOLOGY II.3.1 Evaluation Issues In the statement of work for this evaluation, USAID/Kosovo specifically requested that this report address the following priority and subordinate questions: • “Priority Questions: - Impact: What has bee n the quant itative and qualitative impact of USAID-funde d activities in the clusters where is working? How has the Project made a difference in the development of the private sect or? Has Project assistan ce made a difference in those enterprises’ ability to compete? What effect did the approach adopted by the Project have on the impact achieved? Is the cluster approach working in Kosovo? - Efficiency: Are the results being obtained by the Project being produced at an acceptable cost compared with alternative approaches to accomplish ing the same objectives? - Sustainability: As currently implemented, are t he Project’s activities likely to have a sustainable development impact after USAID funding has stopped? Will the organizations supported under th e Project, whether farmers, enterprises, and processors or business support or ganizations (e.g., associations, business service providers) have the capacity to provide fu ture support to t he private sector when USAID funding has stopped? - Relevance: As the flag ship, project in the pr ivate sector, how relevant is the Proje ct toward achieving USAI D Strategic Objective 1.3 “Accelerated Growth of the Privat e Sector?” Will these goals in the private sector be met by the Project alone? • Subordinate Questions: - Should there be any programmatic shifts with the potential change of status? Will there be new opportunities for the private sector with this change? - Is KCBS working in the clusters/sectors with the greatest potential for growth? - How is the matching grant suppo rt for asso ciations working? What about sub￾contracting arrangements with business service providers? Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 3 - Is there an appropriate balance b etween enterprise, association, a nd policy-level support? H ow effective is the a pproach to the privat e-public po licy dialogu e component? - Are the numbers, quality, and relative cost of long-term and short-term technical staff generally appropriate? - Is there potential for greater KCBS collaboration with other USAID projects? - What has b een learned from other USAID competitiveness/enterprise development projects in other countries? Are any of these lessons applicable to Kosovo?”1 We have al so added a few subordinate questions that emerged duri ng our discussions wit h USAID/Kosovo. II.3.2 Evaluation Methodology SEGURA I P3 Partners LLC conducted extensiv e docume nt reviews and about 80 interviews with project personnel, project clients (both associations and enter prises) and governmen t officials to f orm a basis for the evaluation. Pl ease see att achment D for a list o f the persons interviewed and attachment E for a list of the documents reviewed. The two evaluators an d authors of this report, Michael B. Dan and Richard Lind sey Wellons, used 26 and 23 days respectively to conduct the evaluation and write this report. They spent 19 days in Kosovo between May 24 and June 15, 2006. 1 This is directly quoted from the statement of work. Only the formatting has been slightly changed to conform to the general formatting of this report. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project 4 SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 III PERFORMANCE AT MID-TERM As the Project approaches mid-term, in general it appears to have performed well in meeting its most important targets. However, re sults have varied among components, with clust er activities generally making good progress, but general busine ss support activities, particularly for business associations, falling behind some targets. III.1 Overall Results The Project is ahead of target on the following overall indicators set out in its Annual Goals and Results, as indicated in the Project’s Perf ormance Based Management System, (Attachment A), based on data available through March 20062 : • Total sales among targeted enterprises • Labor productivity among targeted enterprises • Increased capital investment among targeted enterprises • Number of registered companies • Number of associations employing volunteer staff KCBS is behind target on the following overall indicators: • Number of full-time jobs created in targeted clusters (close to meeting target). • Exports as a percentage of imports (value of transactions). • Increased financing among targeted enterprises. • Number of business associations with strategic plans. • Percentage of non-donor revenue generated by associations • Value of company profit taxes collected (n.a.) • Number of PPP recommendations implemented (target TBD). • Number of companies using business-consulting services (target TBD) • Number and type of quality standards approved by targeted associations (target TBD). The Project’s awards of subcon tracts and grants through SAF include 3 7 fixed price subcontracts and 15 simplified grant agreements through March 2006. The total value of sign ed subcontracts, grants a nd procure ment of goods is Euro 735,368, o r about 35 % of the to tal amount budgeted, an a ppropriate level with th e Project th at is about one-third through its fou r￾year period. However, the distrib ution of grants and su bcontracts has been highly uneve n through March 2006, with about 90% awarded to the livestock cluster and for general business support, about equally, and the remaining 10% awarded to construction and fruit and vegetables cluster activities. In addition to the Proje ct’s overall indicators, the USAID/Ko sovo Mission has adopted several common performance indicators since Project st art-up, to permit co mparisons across USAID 2 In this eval uation rep ort, performanc e asse ssment is bas ed on data pr ovided i n t he most recent Quarter ly Report throu gh March 31, 2006, a nd meas ured ag ainst targets for e nd of Ye ar T wo (September 3 0, 200 6). Performance related to e nterprise indicators (jobs, sa les, production, financing and investment) is me asured over the period from the firs t Quarterl y Report (en d-March 20 05) thro ugh the most rec ent Quarterl y Report available (end-March 2006), as base line data that KC BS had intended to collect in l ate 2004 did n ot begin to collect until the second half of February 05 due to changes in the work plan approach following project start-up. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 5 programs g lobally. The project is on target on most of its common indicators, listed in Attachment B. III.2 Performance Highlights The most important achievement of the Project to date has been in hel ping generate increased sales among client companies, up Euro 3.6 million from March 31, 20 05 to March 31, 2006 , a 68% increase to date, and well above the end-2006 target of 10%. Another important area is job creation, which is on tra ck to meeting the end-2006 target. Howe ver, the number of new full￾time equivalent jobs cre ated by cluster companies (295 by March 31, 2005, and an additional 262 new jo bs in the following year through March 2006) is relatively modest. Project target s ramp up more rapidly over the next t wo project years, but still total a relatively modest 1,700 at the end of t he project in year four. Rather than being a result of Pr oject implementation, the modest achievement in job creation is due more to initial Project design, to realistic limitations on project impact, and to constraints of the environment. Another important are a where th e Project h as had a g ood start but where improve ment is needed is in the number of client companies a ssisted T he Project has assiste d a steadily growing, yet relatively modest, number of cli ent companies at mid-term. The tot al number of client companies assisted through March 2006 was 59 act ive and 8 no n-active companies3 , up from March 2005, at 38 active and n one non-active4 . The largest number of act ive companies was in Livestock (30, u p from 18), followed b y Construction (18, up from 13) and Fruit and Vegetables (11, up from 7). The total of 59 is a relatively modest number of firms assisted given the size of the project budget totaling about $ 20,000,000 over four years, even taking into consideration the assistance provided to more than 200 farms (sub-suppliers). However, USAI D designed the Project to provide a high quality of service. A major focus should be o n increasing the number of beneficiaries where appropriate, while still maintaining this high quality of service. However, t he definitio n of a Proj ect client is considerab ly more pre cise in ter ms of actu al assistance provided and implement ation than under its predecessor K osovo Business Support project, which counted up to 800 client co mpanies assisted gene rally during the initial reconstruction period in Kosovo following the war. Moreover, the Project quarterly results do not include output or employment multipliers or indirectly employment generated, which, if included, based on generally accepted formulae, would considerably enhance overall Project results. The main a reas where achievements have la gged behin d targets a re in gener al busine ss support particularly to business associations. Two out of the three overall indicator s measuring business association progress are behind target, due to various factors (see Section IV below). These factors also include external constraints, over which the Project has less cont rol, such as the lack of Government initiative taken in public-private dialog activities, as well as to possibly overly opti mistic assu mptions ma de during the initial pr oject desig n regarding associat ion development and progress toward sustainability. 3 Active companies are those to which KCBS provides services regularly each quarter, to which frequent site visits are made, and which have indicated their interest in utilizing assistance often through signed agreements for assistance 4 In addition to the 59 companies, 9 farms were also assisted. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 6 III.3 Project Design and Cluster Competitiveness Approaches The Project is beginning to make a positive difference in th e development of some key privat e sector industries, mainly by helping to improve production techniques, an area on which it has focused, and to a lesser extent b y assisting on post-production and marketing assistance. A number of client compa nies have improved th eir competitiveness because of imp roved product quality, with increased sales resulting, both domestic and for export. As to whether the clu ster approa ch is working in Koso vo, to some degree, yes, but a f ew caveats are in order. First, this Project is not a classic cluster competitiveness project in the full sense of th e Michael Porter approach. The Porter focus is predominantly on actively bringing together all stakeholders, inclu ding public sector, private sector, and all value ch ain linkag es, with the primary goal of cooperating to compete. Rather, this Project is a more narrowly focused SME/business association suppo rt project. I t was designed more as an extension of it s predecessor Kosovo Busine ss Support project, than as a Cluster Competitiveness project. A major difference is that the Project’s three clusters were effectively pre-selected well before project sta rt-up. In clu ster theory, the most appropriate clusters meriting support are meant to emerge during the initial implementation phase, based on diagnostic and market studies, th e emergence of cluster champions and the demonstrated commitment of key sta keholders. Nevertheless, the Project appears to be relatively successful to date, mainly because it has adapted cluster theory to fit local Kosovo economic and resource limitations, as well as taking into account the local uncertain political environment. As such, the Project appears to be setting appropriate foundations, mainly through production assistance and should cont inue is its recent focus on post -production and marketing assist ance, to b e determined as USAID’s strategic plan evolves. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 7 IV IMPROVING TH E BUSINESS ENVI RONMENT: FINDINGS, CONCL USIONS, RECOMMENDATIONS As describe d above, th e component to impro ve the business environment consists of the following three sub components: 1. Cluster related associations. 2. Non-cluster related associations. 3. Public private dialogue and interventions to improve the business environment We will discuss each of these subcomponents in the following. IV.1 C LUSTER RELATED ASSOCIATIONS There are currently 6 cluster related associations, i.e. associations that are directly related to the activities in the clusters. They are th e Kosovo Association of Milk Produ cers, the Kosovo Dairy Processors Associatio n, the Kosovo Poultry Producers and Feed Millers Association , the Alliance of Kosovo Agri business, the Association of Wood Processors of Kosovo and the Road Construction Associa tion of Koso vo. The Project is con sidering including or for ming several other associations related to the construction materials cluster. IV.1.1 Findings During our evaluation process, we made the following findings: • USAID Ta rgets. The USAID targ ets for the association component are the number of associations with approved strategic plans, percent of non- donor revenues generat ed by the asso ciations and t he number of associa tions emplo ying non-volunteer staf f. The Project is not currently meeting all these targets. The Project plans to support 20 associations during its implementation. • Integration of w ork with cluster companies and cluster related a ssociations. The project has only recently started to integrate association activities with cluster companies. Most associations do not yet provide any e ffective services to t heir member companies, largely beca use the Pro ject has est ablished t he cooperatio n with the associations only recently, earlier this year. Among associations, providing the most effective services is the Road Construction Association, which offers assistance on privatizations and marketing. It has the advantage of serving a relatively small, more easily manageable group of about 22 members, with relatively large sales, enabling them to pro vide more financial supp ort to the associat ion. Interviews in the field with client companies indica ted that the large majority of firms seen reported receiving virtually no services from associations. Within the Project, there is also a lack of coordination between the cluster staff a nd the asso ciation staff, which up until recently had required all cluster staff input regarding associations to be provided only through the Project’s association staff. • Maturity or status of associations. Most of the associat ions reached a comprehensive grant agreement late last year or e arly this year. Therefore, they have not been op erating pursuant to their grants for more than roughly 5 to 7 months. Some have formally bee n operating for longer. Ho wever, many associations suspend most of th eir activities when donor funding is not available, so effectively the project revitalized these associations. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project 8 SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 • Focus of the associations. The Project has told the cluster related associations t o focus on the public good rather than that of their members. • The Projec t’s management approach to the cluster related associations . Germane aspects of the project’s management of the associations are as follows: - Strategic an d revenue generation plans. KBCS has dire cted most of the cluster associations to adopt very ambitio us plans in terms of both strategic plans an d revenue generation. - Involvement of the Project in day-to-day operations. The Project gets too involved in the day-today manage ment of the associat ions in too dir ect a manner, i.e. the projects orders the associations to make certain decisions. - Use of Management Companie s. The Project has strongly encouraged the associations to use association m anagement companies. The asso ciations are currently managed as follows: ‚ An association management company model has been adopted by the Kosovo Poultry Producers and Feed Millers Association and the Kosovo Association of Milk Producers ‚ A m ixed manage ment m odel h as been adopted by the Kosovo Dairy Processors Association, where the board has a ppointed an executive director, but the remainder of the management is undertaken by a man agement company ‚ A traditiona l m anagement m odel has been adopted by the remaining associations, the Allian ce of Kosovo Agribusin ess, the Association of Wood Processors of Kosovo and the Road Construction Association of Kosovo, where the board appoin ts an executive director, who then hires personne l and contracts for the needs of the association. • Management of the a ssociations. As far as can be ascertained fr om mostly 2-hour meetings with the associations, all of them ap peared ably managed by presidents and executive d irectors who were sincere about the work of the association a nd the cooperation with the Project. • Financial self-sustainability . All of the a ssociations put a strong empha sis o n sustainability. The Project and the associations have agreed on a specific plan of reduced grants to the associations over time. In the first year, the Project covers 60 percent of the agreed cost s of the a ssociations, in the seco nd 40 percent, and in the third y ear 20 percent. Most asso ciations are cle arly concerned about r evenue generation, part icularly for the next years, where the grants from the Project will decline as a percentage of agreed operating costs. In interviews, several of the associations have expressed concern that it will be difficult to reach the targets set by the Project. The Project has multiple times emphasized that it will terminate grants to associations that cannot abide by the targets. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 9 IV.1.2 Conclusions • USAID Targets. The Project cannot effectively work with 20 associations in the remainder of the project period. Certainly, t hey cannot become s elf-sustainable. The association targets relate to inputs and not to t he performance of the associations in assisting their members. • Integration of w ork with clusters and cluster related as sociations. A major concern is the lack o f integration of association work with cluster co mpanies. There are very few substantive services yet provided b y associatio ns to me mber firms. Most services that client comp anies in th e field repo rt receiving are consid ered by firms to be from the Project, rather than from the associa tions. Moreover, within the Project, there has been a distinct sep aration bet ween the activities of the busin ess environ ment/ associatio n component staff and the cluster staff, which must be addressed. • Maturity or status of associations. Given the difficu lty and require d elapsed time to develop association s, t he Project is unlikely t o be succe ssful in trying to develop 20 associations. The project is half way co mpleted, and presumably, it chose the best associations at the outset. Most likely, therefore, it will take even more time to develop additional, likely weake r associatio ns. Given the issue s outstanding with the current associations, there is a substantial workload involved in supporting them. As in other emerging economies, the most successf ul a ssociations are those with few relatively affluent memb ers. Such a ssociations generally have more res ources, and each of the members feels that he has influence on the policies and programs of the association in question. • Maturity or status of associations. The relative immaturity of the associations makes it difficult to arrive at firm conclusions at this point. The project should probably have started up the association development component earlier. • Focus of the associations. It is d ifficult for nascent associations to ke ep and build their membership. To do so, they must focus their strategies on tangible benefits fo r their members. The focus on the public good is an issue for much more mature associations. In certain, well-defined ca ses, a focu s on the public good is also relevant for less mature organizations where thi s is in the explicit inter est of the members. An associat ion can focus on th e public goo d to build th eir credibility with the public to he lp its members. For example, a poultry asso ciation will focus on its effort to eradicate avian flue or ame liorate its impact on consumers to encourage the public to continue buying broilers and eggs. • The Project’s management approach to the cluster related associations. - Strategic a nd revenue generation plans. The strateg ic plan s a nd revenue projections do not see m realistic f or all a ssociations, as t hey are the result of a strong direction from th e Project for performance. The strategic plans and revenue targets must be realistic, a s it is not encouraging fo r a nascen t, strugglin g association to fail in achieving its plans, as the members may then conclude that the association and its management are ineffective. - Involvement of the Project in day-to-day operations. From a management point of view, a key objective in assisting associations is to build management capacity o r Mid-Term Evaluation of the Kosovo Cluster and Business Support Project 10 SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 management sustainability. The Proj ect compromises the autonomy of associations and the responsibility for building by intervening in day-to-day matters. - Use of Man agement Companies. There appears no clearly demonstrated benefit t o using association management companies for the following reasons: ‚ They blur responsibilities between the association board an d the management company. ‚ Their use a ssume a strict separatio n between board and managem ent tasks, i.e. between policy making and implementation, which usually do not obtain in associations in their early stages of development. ‚ They may not be cost effective – generally, in less developed eco nomies, services cost relatively more than in more developed econ omies. Some of the associations indicate th at they coul d provide the services less expensively themselves. The associations hav e also appr opriately su ggested tha t they might realize higher cost savings by sharing offices and staff directly either with other associations or one of their members. Sharing offices with one m ember might give rise to conflicts of interest, but could be appropriat e if the associations properly manage this issue, and the members agree on it. Moreover, t he two business service prov iders, which provide the asso ciation management services, are relatively small. One, REA, manages two associations, and anot her AFAS manages one associat ion. With so few associations under management, these two co mpanies cannot develop the economies of scale and scope that makes asso ciation management companies an effective model in highly developed econo mies such as the United States ‚ They weaken the ability of the board to execute policies, as the board has not recruited the Executive Director, and may imp ede the emergence of industry champions from association management. • Financial self-sustainability. Financial self-sustainability based on membership dues and fees for association ser vices is important for association s in mature ec onomies, as there are few oth er ways of survival for most associations. How ever, in an economy such as Kosovo’s, which is likely to continue to re ceive relatively large amounts of technical assistance f or an extended period, this may not be realistic or in t he interest of the members of the asso ciations. In fact, we argue that the members should expect eff ective association management to seek to attract don or funds to provide valuable service s for their members. The Project should put emphasis on each of the asso ciations becoming financia lly self￾sustainable in the sen se that they can provi de a core set of services to their members without furt her subsid ies and will not go into hibernation at the end of the Proje ct, as seems to be the norm fo r many associations in Kosovo. At the same time, the project and USAID should welcome additional donor funding to expand services. In addition, the financial self-sustainability is not a goal per se. The key goal of building associations is to put to gether organizations that can provide valuable services fo r their Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 11 members. If the associa tions cannot do that, the y do not provide any val ue. Towards the end of the P roject, if associations cannot become completely self-sustainable, but p rovide highly valued services t o the memb ers and build private sector development, in general, and have t he promise of becomin g self-sustai nable given some more time, the project should actively seek the support of donors to continue the work of the associations. Finally, the Project stat es that it will cut off associations th at cannot follow their plans and become self-sustainable . Howe ver, for the clust er related associat ions, there are f ew, if any, alternative associations to supp ort. As t he project is co nstructed, ideally, the cluster￾based associations should take over many of the activities of the Project, when the Project ends. Therefore, the Project must work constructi vely with these asso ciations rather than just cutting them off. IV.1.3 Recommendations • USAID Targets. Revis e the current targets and include a target relating to a member satisfaction survey to be undertake n by a thir d party. Reduce the total number of cluster associations that the Project should support from the planned 20 to six to ten. If the Project decides to support add itional asso ciations, the se should h ave a relatively s mall affluent membership to maximi ze the pot ential for them becoming self- sustainable wh ile st ill providing relevant services. This is a n important point, since the Project can only su pport new associations for a shorter period, i.e. the remaining project period. • Integration betw een c luster companies and cluster rel ated associations. The most effective way to address the lack of integration is to ensure t hat associations increase the range and quality of services they provide to member companies. The Project should ensure that all services that it provid es should be channeled directly thro ugh Associations, that association staff be trained to t ake over providing these services, and the members see the assistance as coming from associations. Within the Project, remove restrictions on cluster staff interaction with associations and improve communication and coordination on all related activities among the staff of the two Project components. • Focus of associations. Focus on actions with clear and concret e benefits to the membership. • The Project’s management approach to the cluster related associations. - Strategic and revenue generation plans. The Pr oject should initiate a re view of the strategic and revenue generation plans to ensu re that these reflect a focus on the benefits for members and are realistic and implementable. - Involvement of the Proj ect in day-to-day opera tions. Set a clear line between the project and the associations. Th e project should not intervene in day-to-day operations of the associat ions. The associations must have freedom of management. At the same time, if ther e are key management issues, where the Proje ct believes that the association s could improve, the Project should naturally engage in a dialogue with the associations, but this should not result in direct orders as to how an association should manage. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 12 - Use of Management Companies. There seem no clear ly demonstrated benefits t o using management companies. At the end o f the first grant contract year, th e associations should assess the costs and benefits of using a management company vs. using th eir own staf f and be allowed to ma ke a decisio n how to proceed. The project sho uld assist t he associations develop an overvi ew of the benefits an d financial costs. • Self-sustainability. Se lf-sustainability and revenue maxi mization are appropria tely the project’s goals and should continue to be. However, the Project should be flexible with the path towards sustainab ility and help well functioning asso ciations, ev en if they cannot abide by the 60-40-20 maxim. In addition, the Project should welcome other donors’ funds, if this lead s to more and high er quality services fo r the members or lo ng-term sustainability. USAID and the Project have informed us that the project will replace the Senior Competitiveness & Association Advisor, who recently left, with an advisor whose key responsibilit y will be to advise and conduct policy advocacy with the go vernment, while the loca l staff will take over the association management tasks. I n view of the associa tions issue s discusse d above, we recommend that that the Project hire an expatriate adviser with proven experience in developing associations in the Balkans or th e CIS either instead, or if budget a llows, in add ition to the adviser that the Project plans to hire. Howe ver, while making this clear recommend ation, we do realize that the project may find other ways of supporting the associations more effectively. If the Project decides for anot her approach, we believe that the a ssociation’s component will requir e closer and continuous supervision from the Chief of Party. IV.2 NON-CLUSTER RELATED ASSOCIATIONS These inclu de the association Ce nter for Association D evelopment (under the Chamber of Commerce), and BCC (the Association of Busine ss Con sultants). T hese activities are well implemented with good cooperation between the Project and the associations in question. IV.3 PUBLIC PRIV ATE DI ALOGUE AND INTERVENTIONS TO IMPROVE THE BUSINESS ENVIRONMENT IV.3.1 Findings • In general, the public private dialogue w as well received. One of the most be neficial outcomes was that donors, consult ants, local advocacy groups and persons kno w each better and can now discuss issues directly. • The constraints study, to some extent, the basis of the Private Public dialogue was done well. • The project does not seem to have much impact on the business environment through direct negotiations , even if the local staff of pro ject has go od connections to government. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 13 IV.3.2 Conclusions • The public private dialogue is not an effective path to promulgate further chan ge in government policy. At any rate, it is not certain that the Provisional Institutions of Self￾Government can implement substantial chan ge. The Provisional Institution s of Self￾Government should initiate any further broad comprehensive public-private dialogue. • The expatriate staff does not participate enough in discussing changes in th e business environment with the government. • The Provisional Institutions of Self-Gove rnment have very li mited ability to implement decisions , and for t his reason, even sub stantial effo rts with the self￾government are likely to result in quite limited improvements in the business environment. IV.3.3 Recommendations • The project should focus on presenting ke y issues for their clients to govern ment directly rather than continue the more comprehensive public-private dialogue. • The expatriate and lo cal staff s hould together try to foster a d ialogue w ith the government about key issues for their clusters and associations. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 14 V IMPROVING THE ECONOMIC PERFORMANCE OF CLUSTERS: FINDINGS, CONCLUSIONS, RECOMMENDATIONS The evaluation team based its review of cluste r performan ce on a thorough review of project reporting documents, on field interviews with 23 client companies drawn from all three project clusters in the major regions of Kosovo, including minority enclaves, and on interviews with the project international and local cluster staff and available short-term technical assistance. The evaluation team conducted field interviews wi th each client compa ny using a q uestionnaire for a Client Satisfactio n Surve y to ensure co mmon, prac tical data collection, w hich the tea m recommends that the P roject also adopt over t he next two years to more carefully monitor how well the project is responding to client needs. For all thre e cluster s combined, performance highlight s covering t he period f rom the first quarterly report of Marc h 31, 2005 (first two quarters of the baseline year 2004/05) to the most recent quarterly report through March 31, 2006 (first two quarters of 2005/06) include: • An increase in the value of the sales of Euro 10,615,581. • An increase in employment of 145 new jobs • A decrease in capital investment of Euro 279,035 • An increase in the value of financing of Euro 805,275 V.1 Findings by Cluster V.1.1 Livestock Cluster Implementation of activities in this cluster is generally on track with good results. The Livestock cluster has: • The largest number of active client companies, with 30 at March 31, 2006 • The strongest growth in new clients, from 18 at March 31, 2005 to 30 in March 31,2006 • The highest sales (Euro 9.2m at March 31, 2006), and the second best improvement, after the Fruit and Vegetables Cluster) • The second largest number of new full time equivalent jobs created with 77, (492, up from 415). • Sub-cluster achievements (in descending order of success) include the following: - Dairy: Production and processing are both on track an d generally doing well throughout the value chain. - Poultry: Also on track, with local egg production and consumption reviving (although imports have been restricted); some recovery initial consum er cutbacks due to th e avian flu scare; and broiler production now starting - Crops: Doing decently, with new varieties now starting - Sheep: Not on track. Issues in clude old breeds, relatively low quality wool, inadequate quality of meat produced, low local consumptio n of lamb, which appears difficult to in crease, and certification of lamb e xports according to European Union norms stalled in the Ministry of Agriculture. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 15 - Associations in the Live stock sector (Kosovo Association of Milk Producers, Kosovo Dairy Prod ucers’ Association) d o not yet provide ma ny effective services t o members, as indicated in field interviews with most client companies. Table 1: Livestock Cluster Performance March 31, 2005 - Mar. 31, 2006 As of No. of active Client Companies Sales (Euro ‘000) Full-time Employment Financing (Euro ‘000) Investment (Euro ‘000) Mar. 31, 2005 18 7,569 415 536 1,638 Mar. 31, 2006 30 9,232 492 516 88 Change + 12 + 1,663 + 77 (20) (1,550) Source: Project Database, Performance-Based Management System V.1.2 Construction Cluster Implementation is a lso on track generally, but with mixed results due in part to external constraints related to limited government s upport for new and impro ved infrastructure. This cluster has: • The second largest number of client companies, with 18 as of March 31, 2006, up from 13 in March 31, 2005. • The lowest increase in sales (Euro 203,000 o ver the period), due to l ow budget funding for road construction in Kosovo in 2004 and 2005. • The lowest level of financing (Euro 900,000 lower over the period) and investment (Euro 2.5m) although recent privatizations are providing increased investment. • One of the more effective associations (Road Construction Association of Kosovo) with strongest membership base in co st contributions from relatively larger and more profitable member companies. Table 2: Construction Cluster Performance March 31, 2005 - March 31, 2006 As of No. of active Client Companies Sales (Euro ‘000) Full-time Employment Financing (Euro ‘000) Investment (Euro ‘000) Mar. 31, 2005 13 851 438 970 2,799 Mar. 31, 2006 18 1,054 585 72 289 Change +5 + 203 + 147 (898) - (2,510) Source: Project Database, Performance-Based Management System Mid-Term Evaluation of the Kosovo Cluster and Business Support Project 16 SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 V.1.3 Fruit and Vegetable Cluster Implementation of many activities is delayed with generally weak results. The cluster has: • The lowest number and growth of client companies (11, up from 7 over the period) • The lowest number and increase of jobs (60, up from 22) • The highest increase i n sales, (Euro 1.7m to March 31, 2006), due to the high value export sales) • Positive financing, but declining investments • Activities on track are limited to forw ard contracts (although no harvesting yet) and blueberry variety test plots, pa cking and gra ding assist ance, and orchard pro duction equipment. • Work plan activities behind sch edule, inclu de market price tra cking, new varieties, Eurepgap assistan ce ( HAACP being done in stead), improved packaging, assist ance in cold chains and new processing lines, and promoting branding. • Products dropped from assistance include tomatoes, onions. • No active associations Table 3: Fruit and Vegetable Cluster Performance March 31, 2005 - Mar. 31, 2006 As of Sales Full-time Financing Investment (Euro ‘000) Employment (Euro 000) (Euro ‘000) No. of active Client Companies Mar. 31, 2005 7 229 22 0 92 Mar. 31, 2006 11 1,956 60 15 34 Change + 4 + 1,727 + 38 + 15 (58) Source: Project Database, Performance-Based Management System V.2 CONCLUSIONS BY CLUSTER • Clusters o verall have generated relativel y strong sales , with an i ncrease of nearly Euro 3.6m over the period, the most important achievement of the project • Clusters as a w hole have genera ted relatively few jobs, with an in crease of just 262 from Mar. 3 1 2005 to Mar. 31. 2006, indicat ing that more client companies with high potential for increased domestic and export sales, and job creation, must be assisted. • Overall, both financing and inve stment in all three cl usters face problem s, with limited cred it acce ss a nd low investment due to conce rns over future politica l and economic scenarios. • The Livestock cluster is the stro ngest performer in sales value an d second i n total number of jobs, indicating that this sector should be an area of future focus in all sub￾clusters except sheep. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 17 • The Construction cluster is stron gest in job creation, but highl y variable on sales, indicating that diversification is nee ded within t he sector to avoid the negative impact of public sector budget cut s for road improve ments (70% of construction clients depend on public sector contracts). Problematic financing and investment remain priority constraints. Privatization, although slow and u neven, offers opportunit ies for incr eased investment mechanisms, including joint ventures. • The Fruit and Vegetables cluster is strong in sales increases (although largely due to potato sales of a single major client compan y) bu t lo west in number of jobs. Results of a ctivities have been limited due in p art to high Project cluster staff turn over (2 short-term and 2 long-term interna tional adv isors in 1 ½ years) and an initially narrow focus on production rather than on achieving market-driven sales through a focus on post￾harvest, quality and marketing. V.3 RECOMMENDATIONS BY CLUSTER Implement the actions below, many of which the Project has already started. V.3.1 Livestock cluster • In dairy p roduction, focus additional help mainl y on improving milk quality . However, ra ther than continuing a focus at the level of micro and small dairy far mers, support test ing facilitie s/labs at ke y processor s, who will then sour ce from producers willing and able to meet standards. Focu s on enfor cement of dairy standards as government adoption of standards nears, if possible. • Focus on new product development b y h elping to introduce higher value dairy products with strong potential - New cheese products and flavored/fruit yoghurts. - Poultry broilers (as avian flu threat recedes). - Sheep cheese (if sheep not dropped). • Consider cutbacks in activities including: - The sheep sub-cluster, as the sheep herd in Kosovo has decreased since the 1990s by over 80%, local consumption has dropped, exports are likely to be only marginal and the industry generally has not proven to be competitive. Ho wever, make a decision following result s of current initiatives to export sheep to Bosnia based o n results. - Beef, drop it from work plan for 2007 as it is generally not price competitive compared to imports particularly from Latin America. - Smallest dairy processors, under 5,000 liters per day , will increa singly be less competitive, especially as large dairies consolidate into a few big dairies in the next 5 years. - Micro dairy farmers with less than 5 – 10 in herds, under 2 hectares, and producing only for home/village consumption, that are not likely to take initiatives to develop as entrepreneurs. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 18 • Focus on i ntegrating livestock a ssociations and clust er companies by providing increased member services and coordinating activities with the Project. V.3.2 Construction cluster • Focus on the major sector c onstraint, limited access to financing and new investment, by continuing current activities to work with companies and banks in applying more flexible criteria in assessing applications; assist in and help speed up privatizations. • Diversify cluster clients beyond road construction / asphalt firms , which will continue to be constrained by uneven public sector budget allocations • Assist more companies in high er value construction materials such as porous concrete blocks and wood parquet flooring, both now with strong export prospects d ue to strong marketing efforts. • Encourage the Road Construction Association, currentl y amo ng the most well managed and effective associations, to pursue polic y advocacy more actively with the Government, where potential exists for n ear-term results, e.g., a doption of standards now stalled in Government ministries and improved procurement transparency. The Project is exploring e stablishing a contact p oint in the office of th e PM to a ddress enterprise concerns faster and more effectively. • Consider focusing les s on sub-cl usters with lower potential, and t hose assisted by other donors, e.g., decorative stone, increasin gly supported by European Assistan ce for Reconstruction. V.3.3 Fruit and Vegetable cluster • Increase the number of client c ompanies assisted cu rrently at just 11, up fr om 7 in 2005. Focus on recruiting medium and larger companies with high potential in the sector. • Target firms in high-v alue processed niche products for import substitution and exports, e.g., frozen French fried potatoes, dried mushrooms, and wild berries, already identified the Project, and related high value processed foods with good potential. • Meet priori ty needs of clients, e .g., in post -harvest handling, in cluding grading, sorting, packing, cold chain, and in marketing, rather than focusing on production as in the past • Develop closer contacts and cooperation with the Ministry of Agriculture and related Government agencies. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 19 • Limit trade fair participation to the most relevant trade fairs (regional, and functional, e.g. FruitLogistica) rather than larg er general shows (Anuga, German y; Sial, Fran ce; NY Fancy Food Show). • Postpone previous work plan a ctivity to a ssist a Ko sovo-wide Association, until later in the project, if appropriate, which the Project’s cluster team has indicated it plans to do. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 20 VI SUMMARY & RECOMMENDATIONS Most of the Project client companies, donor orga nizations and other parties interviewed had an overall positive impression of the project, a perc eption shared by the evaluation team. However, there are several key areas where fine-tunin g activities with tactical adjustments appears necessary. We have suggested many activity-specific adjustments in the sections above. These and related findings, conclusion s and recommendations for the various components are summarized below in the following general recommendatio ns and in analyzing the four main cross-cutting categories of impact, efficiency, sustainability and relevance of the Project: VI.1 G ENERAL RECOMMENDATIONS We make the following five important recommendations: 1. Integrate cluster and associations more effectively. This is key to eff iciency, effectiveness and sustainability. 2. Focus on high pot ential, large enterprises, and reduce a ssistance t o small enterprises/farms without substantial growth potential. 3. Increase reach of project to more enterprises with gr owth poten tial to mak e the overall project and it s outcomes more cost effective . The Project can id entify additional e nterprises b y including more steps in the valu e chain or by redefining the clusters to be broader and more inclusive. Mo reover, the project can identify new potential clients among the companies that are being privatized. 4. Hire a new associat ion adviser w ith su bstantial experience from successful association programs in the Balkans or the Commonwealth of Independent States 5. Start planning no w for the future strateg y b y id entifying n ew cluster s and intervention areas. There seem to be few obvious clu sters and intervention areas, so the sooner this process starts the better it is. VI.2. I MPACT, EFFICIENCY, SUSTAINABILITY & RELEVANCE VI.2.1 Impact • Revenue: Client company sales h ave exceed ed targets significantly, and are th e most important achievement of the Project • Job creation: There h as been less impact in creating jo bs, due to relatively modest targets set at project start, particularly compared to Kosovo-wide needs, due in part to the relatively small numbe r of active clients, part icularly those in high-potential, hig h-value niche prod ucts. There has also been relatively limited impact in increasing f emale employment. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 21 • Exports /export readiness preparation: Although the project design did not emphasize obtaining strong export results, an y competitiveness project must a ddress the need increase th e export readiness o f companies. The Project has ach ieved positive overall results in exports, but most to date have been o verwhelmingly in exports of raw consumer potatoes to the region (Euro 1,500,000 out of total exports of Euro 1,645,000 through March 31, 2005). There have onl y been rel atively marginal exports of constr uction materials, mainly poro us blocks, and in horti culture, exports of drie d mushrooms. Still, production and marketing assistan ce has bee n provided by the project that may soon result in significantly higher exports particula rly in the wood sub-clu ster, where there is strong pote ntial for exports of up t o Euro 2,00 0,000 p.a. in parquet flooring to th e US /Canada (although with inputs of hardwood mainly imported from Romania and Bulgaria). • Import substitution: Good potential exists for certain processed foods, e.g., frozen fries, cheeses, pa rticularly if foreign direct investment in fast food outlets is attracted; also in agricultural inputs, e.g., plastic sheets for greenhouses, now imported. • Minority a rea impact: There ha s been less impact in expanding sale s in minority enclaves due to their restricted access to other markets in Kosovo. This is particularly the case for consumer goods clients, wh ere packaging of cheeses, yoghurt, etc. ind icates the origin of the product in minority areas. Origin is less a constraint for producers of asphalt and other building materials. In fr uits and vegetables, th e impact may be limited a s assistance in minority a reas is mainly just for wild berries, generating mainly sea sonal employment, although with potentially good export prospects. • Public-private dialog: Although the initial impact of activities in late 2005 was encouraging, in terms of raising public and private consciousne ss of key business environment initiatives t hat are requ ired in Koso vo, questions remain as to priority issues to focus on and the best approach to policy advocacy in future. VI.2.2 Efficiency • Management - Overall management has been excellent , with strong administrative and technical supervision provided and strong head office support. - However, a signif icant factor that has disrupt ed project implementation in sever al activities and clusters has been the high turnover of expatriate personnel: ‚ The initial Chief of Party was replaced after the first three months ‚ The positio n of Fruit a nd Vegetable Cluster Advisor has been filled by two short-term expatriate staff, and two long-term staff in just 1 ½ years. ‚ The Livestock Cluster Adviser was recently replaced in midterm. ‚ The Senior Competitiveness & Association Advisor left in mid-term, and his replacement has yet to arrive. As such, Project management, both in the field and at home office, ap pears to have scope for improvement in personnel selection issues. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 22 - The Project management should take advantage of the current opportunity to adopt appropriate adjustments to project strategy and activity implementation in the second half of the project, no w that major staff tra nsitions are in the pro cess of being completed, • Cost efficiency - Are the results being obtained by the Project being produced at an acceptable cost? When project costs of about Euro 4m per annum are compared to increased value of sales of clie nt companies (Euro 10.6m. sinc e project start -up, or Euro 3.6m. from March 31, 2005 to March 31, 200 6, the benefits appear positive. Yet, when we measure costs against other indicators, such as the relatively low nu mber of client companies (59 to March 31, 2006) and the number of ne w full time e quivalent jobs created (262), costs per beneficiary appear higher. - An alternative approach to accomplishing the sa me objectives at a more acceptable cost would be to focus closely in the second half of the project on furth er expanding the number of client companies with the strong est potential for expanding domestic and particularly export sales through production of higher value niche products. This would gene rate higher sale s, in comes and jobs and h elp reduce cost s per beneficiary. Rather tha n considerin g these as opportunistic sales, or as favoring large companies, thi s approach, if implemented on a su stainable b asis, will help generate a much mo re outward-oriented, competitive, perspective among all Kosovars. This is critically needed for an economy of limited scale and resources. VI.2.3 Sustainability • The activities of the Project will only be partly sustainable, unless The Project clearly builds sustainability into the p roject. Even at the micro level, the Project advisers agree t hat it must be re mind farme rs about good milking practices e very few months in order for benefits in productivity to continue. In the processing and manufacturing clusters, good practices may be easier to sustain, but are by no mea ns certain. To better build in sustainability, the Project must strengthen the associations associated with each cluster so that they ca n take over the project quality focused and lobbying activities, when USAID funding stops. However, sustainability depends on key external factors beyond the con trol of the pr oject. As acknowledged in th e USAID strategy, these includ e th e completio n of privatization , effective implementation of key laws yet to be passed, and clarification of the final status of Kosovo. VI.2.4 Relevance • The interventions of the Project are highl y relevant to achieving the goals of USAI D Strategic Objective No 1.3, Accelerated Private Se ctor Growt h, includin g the Intermediate Results of increased competitiveness of the agricultura l sector, improved capacity of private enterprise, and improved business operating conditions. However, the Project activities alone cannot ensure that Kosovo meets these goals. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 23 • To significantl y improve the business and investment environment, additional efforts in cooperation w ith the government, and b y the government, are nece ssary. In particular, significant additional assistance is required to attract investment capital, both domestic and foreign, on an efficient scale . The Go vernment must still ado pt man y important pieces of legislation and effectively implement t he laws that are already on the books. Abo ve all, business associations and governme nt both must be signif icantly strengthened to ensure an operating environment that adequately supports bu siness creation, market expansion, and productive investment. VI.3 SPECIFIC RECOMMENDATIONS Question Answer Will there be new opportunities for the private sector with this change? Should there be any programmatic shifts with the potential change of status? The potential change o f status for Kosovo, if accomplished in a smooth and stable manner, ma y result in a substant ial overall change for the bette r in the business environment. But, unless it is acco mpanied by significant government ref orms in programs and policies, the change of status may have only a marginal impact. • Programmatic shifts. A change in status accompanied by impro ved political and economic st ability may stimulate in vestor interest in Kosovo. If so, the Project should bro aden supp ort for bu siness environment improvements to help attract investors, in collabor ation/coordination with the Foreign Investment Agency in the Ministry of Trade and Investment currently supported by the European Agency for Reconstruction. • Opportunities for private sect or. A change in status resu lting in in creased stability will likely sti mulate economic activity. Assuming this scenario, this is now a propitious t ime for USAID to conduct a private sect or review of new strategies, clusters and activities on which to focus future assistance. Is KCBS wo rking in the clusters/sectors with the greatest potential for growth? • There are few addit ional clusters in Kosovo w ith promising grow th prospects. In gener al, the Pr oject is addressing some of the most important ones. We conclude that some rebalancing is required, specifically: - Cut back o n support f or meat (beef, poultry and lamb). - Cut back on support to small/me dium Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 24 Question Answer dairy processors and dairies. Fo cus released resources on larger units. - Cut back support to small dairy farms. - Focus on high value processed food. - Stress further building materials and construction cluster. - Set up feasibility project to assist new clusters, such as niche tour ism (adventure, backpacking , skiing); ta ble grape and wine production (assu ming USAID waiv ers to per mit assista nce) which has received only limited EU assistance in recent years; automotive recycling/ scrap metal exports; and information and communications technology as a cross- cutting cluster that can serve a range of other sectors. How is the matching grant support for associations working? What about sub￾contracting arrangements with business service providers? • 90 percent of SAF funds are used for livestock and associations. Most likely, the SAF fu nds could be used better if distributed more evenly. • The matching grants are not wo rking well in all associations, as some of the associations have less income than assumed in their plans, and their strategic plans are too ambitious. G enerally, associations with large membership s with limited individual resources do not pr ovide significant b enefits to their members and can therefore not collect much in terms of fees. • The sub contracting arrangements for business service provid ers work well and the Project should increase the use of them. Is there a n appropria te balance between • Policy sup port. The government seems enterprise, association, and policy-level to be an ineffective partner in developing support? How effective is the approach to the a better business environment. private-public policy dialogue component? Accordingly, any policy interventio n should clearly target an d focus on issues of substantial importance to either clusters or associations. Apparently, generalized policy components like the public p rivate dialogue are not cost effective. • Enterprise and ass ociation s upport. The balance seems a ppropriate, but the Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 25 Question Answer Project must integrate the enterprise and cluster approaches better to make t hem a cohesive approach. Are the numbers, quality, and relative cost of long-term and short-term technical staff generally appropriate? • It is likel y to be too costl y to bring more long-termers, gi ven the relativel y late phase of the project. Given the structure of benefits and payment, there is likely to be no substantial difference in the cost of lon g-termers and short-termers. Moreover, f ive expatri ates are a lready working on the project , and to cr eate a new position, the project must clearly identify a specific need and specific scope of work to deploy another lon g-term advisor. As seen by the evaluations team, t he key issue is t o distribut e the short-term assistance more e venly o ver the clusters to target key market opportunities. Is there potential for greater KCBS collaboration with other USAID projects? • The Project works w ell w ith other USAID projects, particularly BearingPoint to the extent that this is relevant. What has been learned from oth er USAI D competitiveness/enterprise dev elopment projects in other countries? Are any of these lessons applicable to Kosovo? • A key lesson is that the current project is approp riate give n the le vel of economic development. Only caveat is that policy level interventions are very difficult in post conflict economies, so, possibly th e Project should redu ce the support for general policy making in favor of practical, dir ect enterprise development. What improvements sh ould be made in the • Conduct Client Sati sfaction Surve ys KCBS performance monitoring system? semi-annually using independent contractors. • Add an indicator to measure the value of exports by cluster , with targe ts set annually. • Consider breaking out and reporting Kosovo-wide indicators b y c luster (currently limited to jobs, sales, financing). • Include fe male empl oyment da ta, now only in database, in Quarterly Reporting. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 26 Attachment A Summary of the Performance of the Kosovo Cluster and Business Support Project - Dec. 2004 – March 2006 SO# IR# SO Name Unit measure 2004 Actual 2005 Actual 2006 Target 2006 to date (Q2) 1.3 Accelerated Private Sector Growth 1 Value of company profit taxes collected Euros 42,840,00039,228,49740,500,000 - 2 (AR) Exports as a percentage of imports Percent 4.90% 5.59% 8.00% 4.78% 1.3.1 Increased Competitiveness of Targeted Clusters 1 Total sales among targeted enterprises Euro 35,755,626 19% 10% 68% 2 (AR) Jobs created within targeted clusters Number 0 295 600 262 3 Labor productivity among targeted enterprises Number 0 -11% 10% 60% 1.3.1.1 Improved Productive Capacity of Private Enterprises 1 ncreased capital nvestment among targeted enterprises Number 0 2,341,908 3,000,000 977,245 1.3.1.2 Improved Quality Control 1 Number and type of standards approved by target associations Number 0 0 TBD - 1.3.1.3 Strengthened Capacity to Access Credit 1 ncreased financing among targeted enterprises Euro 0 2,081,375 6,000,000 851,300 1.3.2 Improved Business Operating Environment 1 (AR) Number of companies registered - two quarters Number 40,703 48,497 47,000 52,913 1.3.2.1 Strengthened Business Consulting Services 1 Number of businesses using business consulting services Number 0 N/A TBD - Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 A-1 SO# IR# SO Name Unit measure 2004 Actual 2005 Actual 2006 Target 2006 to date (Q2) 1.3.2.2 Improved Capacity for Policy Dialog 1 Number of Private￾Public Task Group recommendations mplemented 2004 0 N/A TBD - 1.3.2.3 Business Associations Responsive to Client Needs 1 Number of associations with approved strategic plans Number 0 7 10 - 2 Percent of non-donor revenues generated by the associations Percent 0 4>50% 7>70% 2>50% 3 Number of associations employing non-volunteer staff Number 0 7 5 9 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 A-2 Attachment B Status of the New Common Indicators, March, 31, 2006 Indicator: Total number of enterprises benefiting from USAID business development assistance The actual number of USAID–assisted enterprises for Q2 – 2006 is 59 and in addition there are 9 farms; so the total number of the active clients of the project is 68. Indicator: Number of entrepreneurs receiving services supported by USAID The actual number of entrepreneurs for 2006 is the same with the number of active Project clients. Indicator: Number of firms using improved accounting and reporting as result of USAID assistance The total number of these enterprises is 31 in the second quarter 2006 based on the number of companies attended SCAAK’s accounting training through service provider Piramida in minority areas. Indicator: Number of people trained • Number of participants in USAID-assisted presentations was 55. • Number of participants in USAID-assisted seminars was 145. • Number of participants in USAID-assisted trainings was 290. • Number of participants in USAID-assisted training workshops was 433. • Number of participants in USAID-assisted both seminars and workshops were 12. Number of people attending other activities through USAID assistance: • Number of people attending USAID-assisted conferences was 117. • Number of people attending USAID-assisted roundtables was 17. • Number of people participating in USAID-assisted study visits was 11. • Number of people attending USAID-assisted demo presentations was 172. Total number of participants in these activities was 1,252. Indicator: Number of full time jobs in excess of two weeks The number of full time jobs of 262 is related to the IR.1.3.1 (2) Jobs created within targeted clusters. Indicator: Number of USAID-assisted transactions completed by local firms with US and other foreign firms. • Number of importing transactions Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 B-1 o From US firms 8 o From other foreign firms 215 • Number of exporting transactions o To US firms 0 o To other foreign firms 22 Indicator: Total annual value of transactions of USAID-assisted firms with US and other foreign firms. • Value of importing transactions o From US firms o From other foreign firms • Value of exporting transactions o To US firms o To other foreign firms 210,000 2,438,762 0 1,645,160 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 B-2 Attachment C Project Clusters – Sample Client Satisfaction Survey - Interview Guidelines We would be grateful if you would provide the following general information about assistance your company has received through the Kosovo Cluster & Business Support (KCBS) Project funded by USAID. All individual responses will be kept strictly confidential. Your responses will help us to evaluate the impact of the services, and to improve them in the future. I. Contact Information: Company : _________________________________________________ Address : ________________________________________________ Telephone: ___________________ Fax: __________________________ E-Mail : _______________________________________________________ Contact person: ____________________Title: _______________Tel:_______ II. Services Received: What services has your firm received through the KCBS project in the following areas, and how satisfied were you with them: Market Technical Human Quality/ Information Training A ssistance Resources Standards Other Type _________ _______ ________ _______ _____ _____ Highly Satisfied? _______ _______ ______ _______ _____ ______ Partly Satisfied? _______ _______ ______ _______ _____ ______ Unsatisfied? _______ _______ ______ _______ _____ ______ Have you received services through projects of other donors?: EU:_______ GTZ:_______ SWISS :________ Other:_______ Are you a member of any Business Association? Which?____________________________ Have you received any services from them? _______________________________________ Are you satisfied with their services? _____________________________________________ Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 C-1 ___________________________________________________________________________ III. Company Background Information: a. Main products/services of your company: __________________________________ c. Domestic and export markets, as a percentage of total sales : Kosovo Serbia/ Macedonia Albania European Union Other Montenegro ______% ________ % _______% _______% ________% _______% d. Company size: This data is intended to evaluate the scale of your firm’s operations. 2004 2005 -Employment (number of employees) Total ______ _____ Male ______ ____ _ Female ______ ____ _ -Gross sales/revenue Euro s ______ ____ _ -Export sales Euros ____ __ _____ e. Private/public ownership: _____% privately-owned _____% publicly-owned We would appreciate it if you would kindly fax this background information to our office in Pristina: Fax: +381 38 244 278. Thank you for your kind assistance in providing us with information that will help us improve our services to your company. Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 C-2 Attachment D Interview List First Name Last Name Organization Title Address Tel. Fax Cel Email Lumnije Ajdini Alliance of Kosovo Businesses Office Manager +381 (38) 54-1683 Skifter Ajvazi Rona, Dairy Processor Manager Prizren Flora Arifi USAID CTO/ Development Program Specialist Ismael Quemali St. No. 1, Pristina, Kosovo 10130 +381 (38) 24-3673, ext. 143 +381 (38) 24-94-93 farifi@usaid.gov Gursel Arifi USAID KCBS Meat Specialist Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Saqip Berisha Silcapor, Porous Concrete Blocks Producer Director Doganaj, Kacanik Ymer Berisha Bylmeti Director Miradi e Eperme, Fushe Ismet Bojku Devolli Company General Manager Fusha e Pejes p.n., Peja +381 (39) 33-540, 34-591, (38) 24-6866 Ross Bull Agricultural Master Plan for Kosovo - EAR Project Team Leader Ministry of Agriculture, Foresty & Rural Development, Rooms 211-212, 35 Mother Theresa Street, Pristina, Kosovo +381 (38) 21-1606 +381 (38) 21-16-05 Ardiana Bunjaku Society of Certified Accountants & Auditors of Kosovo Execu ive Director Rruga Sylejman Vokshi No. 14, Pristina +381 (38) 24-9043 ardiana@scaak-ks.org Roy Chapin USAID KCBS STTA Cattle Feed Nutrition Expert Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 D-1 First Name Last Name Organization Title Address Tel. Fax Cel Email John Clifford Institutional Support to the Ministry of Trade and Industry Regional Development Adviser Ministry of Trade and Industry, New Economic Faculty Building, Room 10, Pristina, +381 (38) 20-03-6049 +381 (38) 21-25-05 john.clifford@ks-gov.net Luan Dalipi MDA President of the American Chamber of Commerce, Managing Partner of MDA (consulting Firm) +381 (38) 24-6012 Luan dalipi@amchamksv.org Don Davis EU Rural Advisory Services Project Team Leader Ministry of Agriculture, Foresty & Rural Development, Rooms A-13, 35 Mother Theresa Street, Pristina, Kosovo +381 (38) 21-2236 +381 (38) 21-19-51 Muhamet Dervishi Pappenburg & Adriani, Asphalt Producer C.E.O. Sojeve Hashim Deshishku Lesna/AWPK Chairman/Pre sident of AWPK Rr. Zona Industriala p.n. +381 (38) 54-8125 +381 (38) 53-13-44 Peter Duffy USAID Program Officer Ismael Quemali St. No. 1, Pristina, Kosovo 10130 +381 (38) 24-3673, ext. 152 +381 (38) 24-94-93 pduffy@usaid.gov Isa Dukaj Ministry of Trade and Industry Chief of Division for Technical Standards and Industrial Property Old Eximkos Buliding, Office 02, Pristina +381 (38) 200-36015 Paul Forrest USAID KCBS Fruit & Vegetable Specialist Adviser Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Alajdin Fusha ABI, Dairy Procesor Manager STr. Tirana 9, Prizren 2 Hafiz Gara Ministry of Trade & Industry - Kosovo Standards Agency Execu ive Head of KSA Zahir Pajaziti SQ, Old Emimos Building,2nd Floor +381 (38) 21-3085 +381 (38) 21-28-07 hafiz.gara@ks-gov.net.com Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 D-2 First Name Last Name Organization Title Address Tel. Fax Cel Email Ramadan Gashi Road Constructors' Association of Kosovo Member of the Board Kroi i Bardhe Lok 31 +381 (38) 54-5509 +381 (38) 54-55-09 info@rruga.org Hamza Gashi Association for Finance and Accounting Services Execu ive Director +381 (38) 55-5012 Adem Jdetishi Simenthal Dairy Farm, nr. Gjakova Owner Gjakova Besim Beqai Kosovo Chamber of Commerce Chairman 20 Mo her Teresa Street, Pris ina +381 (38) 22-4741 +381 (38) 22-42-99 Zijadin Gojnovici USAID KCBS Dairy Production/Pr ocessing Specialist Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 zgojnovci@usaidkcbs.com Florim Grajcevci Ministry of Transport & Communication s Political Adviser Government Buliding, Floor III, # 305, Mother Teresa Street, Pristina +381 (38) 21-1368 florim.grajcevici@ks-gov.net Sarah Hackaj Institutional Support to the Ministry of Trade and Industry Public Relations Advisor Ministry of Trade and Industry, New Economic Faculty Building, Room 10, Pristina, +381 (38) 21-2507 +381 (38) 21-25-05 Veton Hajdini KTA Head of Agriculture & Forrestry Unit 8 Illir Konushevci Street, +381 (38) 50-004-00, ext. 115 +381 (38) 24-80-76 vatos.hajdini@eumik.org Sharon Hester USAID Office Director, Economic Growth Office Ismael Quemali St. No. 1, Pristina, Kosovo 10130 +381 (38) 24-36-73, ext. 149 +381 (38) 24-94-93 Shester@usaid.gov Eric Howell USAID KCBS Project Director/Actin g COP Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Diturie Hoxha Kosovo Bankers' Association Manager Josip Rela Street 29 +381 (38) 24-6171 +381 (38) 24-61-72 Pleurat hundozi EAR Economic Development 1 Kosova Street, P.O.Box 200,Kosovo, UNMIK +381 (38) 51-31-267 +381 (38) 51-31-302 pleurat.hundozi@ear.europe.eu Bojan Jakovljevic Kamilja Concrete Producer Manager north of Mitrovic Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 D-3 First Name Last Name Organization Title Address Tel. Fax Cel Email Annemarie Jepsen EAR Manager Operations (Economic Development) 1 Kosova Street, P.O.Box 200,Kosovo, UNMIK +381 (38) 51-31322 +381 (38) 24-99-63 Ahmet Jetullahu￾Meti REA-Pristina Director Rruga UCK, Pn. Pristina +381 (38) 24-4951/2 +381 (38) 24-49-51/2 DkaJini Beda Dairy Farm nr. Peje Owner nr. Peje Mustafe Korenica Korenica Wood Manufacturer Manager Rahovec, Kosovo Bedri Kosumi Pestova, Potato Producer & Processor Owner nr. Vushtrria (38) 54 89 03 Edvin Kotherja Poultry Association Execu ive Director Rruga UCK, Pn. Pristina +381 (38) 24-4952 +381 (38) 24-49-52 Kemajl Hoxha Sheep Farming, Restaurant Owner Ferizaj Mirlinda Kusari Women's Business Association SHE-ERA President Tirana St., Gjakova, Kosova +381 (390) 23-194 +381 (38) 54-18-31 Dragisa Kuzmanov ic Lahor-Sara, Dairy Processor Manager Brezovica A. Maloku Alliance of Kosovo Businesses Member of the Board +381 (38) 54-1683 Mike Mann Institutional Support to the Ministry of Trade and Industry Team Leader Ministry of Trade and Industry, New Economic Faculty Building, Room 10, Pristina, +381 (38) 21-2507 +381 (38) 21-25-05 mike.mann@ks-gov.net Rama￾dan Memaj Ajka, Dairy Processor Owner, GM Legjende, Prizren Bafti Murati Ksovo Veterinary and Food Agency Chief of Animal Health Section Rilindja Compllex of Containers, Office 60/61, Pristina +381 (38) 252-5313 +381 (38) 252- 5304/314 Arben Musliu USAID KCBS Milk Production Specialist Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Peter Oldham Economic Policy Office, Unmik Pillar IV/ EU Senior Economic Policy Adviser Room S-114, Government Building +381 (38) 50-4604, ext. 4327 381 (38) 404-604, ext 4290 oldham@unmikonline.org Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 D-4 First Name Last Name Organization Title Address Tel. Fax Cel Email Bashkim Osmani Alliance of Kosovo Businesses /Dona Member of the Board/Directo r General Rr. Llapi St. 32, Besiane +381 (38) 57-1713 Valdet Osmani USAID KCBS Construction Specialist Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Bekim Osm ani Dika Dairy Farm nr. Peje Owner after Peje Richard O'Sullivan USAID KCBS Senior Competitivene ss & Association Adviser Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Nazmi Pllana USAID KCBS Performance Based Management Specialist Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Skender Rama USAID KCBS Strategic Activities Fund Manager Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Mimoza Rexhepi Alliance of Kosovo Businesses Field Manager +381 (38) 54-1683 Haziz Rysha Escavatori, Road Construction Director Magjlistralija, Ferizaj Haziz Rysha Korrotica J.S.C., Asphalt Producer Director Magjlistralija, Ferizaj Ganimette Salihu AKA Manager Dardani SU 1/3 +381 (38) 55-5012 Avni Shabani Agroprodukt, Mushroom Producer Director nr. Besiana (38) 57 16 14 Agim Shahini Alliance of Kosovo Businesses President +381 (38) 54-1683 Vjollca Sharapollli Kosovo Dairy Processors Association (KDPA) Execu ive Director Dardania SU 1/3, Pristina +381 (38) 55-5012 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 D-5 First Name Last Name Organization Title Address Tel. Fax Cel Email Kurtesh Sherifi KAMP Execu ive Director Rruga UCK, Pn. Pristina +381 (38) 24-4952 +381 (38) 24-49-52 Matthew Smith USAID Kosovo Economic Growth Initiative (BearingPoint) COP Mujo Ulqinaku 1, Pejton City, Pristina 38000 +381 (38) 24-6178 +381 (38) 24-61-76 Ljubisa Staletovic Ana, Quarry Director Shterpca Eljesi Surdulli Road Constructors' Association of Kosovo Execu ive Director Kroi i Bardhe Lok 31 +381 (38) 54-5509 +381 (38) 54-55-09 info@rruga.org Mentor thaqi AKA/KCBS Execu ive Director/Polic y, Advocacy & Business Support Dardani SU 1/3 - Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 55-5012, 24-3664, 24-4278 +381 (38) 24-33-65 Daniel Themen KTA - Bearingpoint Consultant - Agriculture & Forrestry 8 Illir Konushevci Street, +381 (38) 50-00400, ext. 1115 +381 (38) 24-80-76 dthemen@eumik.org, Fatos Ukaj KTA Liquidation Officer 8 Illir Konushevci Street, +381 (38) 50-00400, ext. 115 +381 (38) 24-80-76 fatos.ukaj@eumik.org Sheqer Ukaj Ukaj Wood Manufacturer General Manager Peje, Kosovo +381 (38) Arieta Vula Association of Wood Producers of Kosovo Executive Director Str. Hajrullah Abdulla no. 25, Pristina +381 (38) 24-69-72 +381 (38) 24-37-76 Albert Wanous USAID KCBS Senior Livestock Cluster Coordinator Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Tony Warne r EU Rural Advisory Services Project Agronomist/R ural Development Specialist Ministry of Agriculture, Foresty & Rural Development, Rooms A-12, 35 Mother Theresa Street, Pristina, Kosovo +381 (38) 21-1951 #N/A Peter Welling GTZ Project Manager,Eco nomy and Employment Promotion Hajrullah Abdullahu Str. 25 +381 (38) 22-6024 +381 (38) 22-49-56 Martin Wood USAID KCBS COP Arberia (Dragodan) Str. 24 Maji No. 116, Pristina, Kosovo +381 (38) 24-3664, 24-4278 +381 (38) 24-33-65 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 D-6 First Name Last Name Organization Title Address Tel. Fax Cel Email Albert Xerxa Soni, Poultry, Egg Producer Administrator Gjakova 381 (0) 39 02 2785 S. Ken Yamashita Ph.D. USAID Mission Director Ismael Quemali St. No. 1, Pristina, Kosovo 10130 +381 (38) 24-36-73, ext. 216 +381 (38) 24-94-93 kyamashita@usaid.gov Agim Zajmi Ministery of Agriculture Adviser to the Prime Minster, Dr. Professor Mother Teresa Str. 36 +381 (38) 21-1828, 21-2598 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 D-7 Attachment E Bibliography Internal Project Reports Author Title Date Kosovo Cluster & Business Support Project Annual Report – Year One October 31, 2005 Kosovo Cluster & Business Support Project Work Plan – Year One January 31, 2005 Kosovo Cluster & Business Support Project Work Plan – Year One - Amendment May 31, 2005 Kosovo Cluster & Business Support Project USAID’s Comments to Work Plan for Year One NA Kosovo Cluster & Business Support Project Work Plan – Year Two January 21, 2006 Kosovo Cluster & Business Support Project Quarterly Reports 2005 & 2006 Various Kosovo Cluster & Business Support Project Weekly Reports 2004 & 2006 Various Kosovo Cluster & Business Support Project Kosovo at The Crossroads: The Private-Public Dialog on The Future of Kosovo’s Business Environment August 2005 Kosovo Cluster & Business Support Project An Analysis of The Value Added Tax on the Dairy Industry in Kosovo August 2005 Kosovo Cluster & Business Support Project Sales and Marketing Support Activities November 2005 Kosovo Cluster & Business Support Project Engineered Wood Flooring January 2006 Kosovo Cluster & Business Support Project Business Conditions Index in Kosovo 2005 Undated Kosovo Cluster & Business Support Project Recommendations for Improvements in the Performance Based Management System [PBMS] December 2005 Kosovo Cluster & Business Support Project / Michelle Adams-Matson Performance Based Management System March 2005 Kosovo Cluster & Business Support Project /Bruce Butterfield. Association Development August 2005 Kosovo Cluster & Business Support Project /Laurence Grand-Clement Building Alliances Between Kosovo Association of Milk Producers and Serbian Farmers August 2005 Kosovo Cluster & Business Support Project /Oscar Rizo Patron. Contract Farming Assessment for Kosovo October 2005 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 E-1 Author Title Date Kosovo Cluster & Business Support Project /Tim Hammond Implementing Recommendations in the Dairy Cluster December 2005 Kosovo Cluster & Business Support Project/ Dr. Abdulah Gagic. Poultry Disease Identification and Prevention Program and Diagnostic Laboratory August 2005 Kosovo Cluster & Business Support Project/ Dr. Dan Undersander Forages and Dairy Cattle June 2005 Kosovo Cluster & Business Support Project/ Dr. James Dickey Dairy Cow Reproductive Health and Management May 2005 Kosovo Cluster & Business Support Project/ Dr. Jeff Firman Report on Kosovo Poultry Sector January 2005 Kosovo Cluster & Business Support Project/ Dr. Roy Chapin Improving Nutritional Assistance to Kosovo Association of Milk Producers May 2005 Kosovo Cluster & Business Support Project/ Edwin M. Hayashi. Equipment Systems and Technology Support for the Kosovo Food Processing Industry October 2005 Kosovo Cluster & Business Support Project/ Henry Penner. Processing Equipment for Fruit and Vegetables July 2005 Kosovo Cluster & Business Support Project/ Lindell Whitelock Report on Assistance to KosovoAssociation of Milk Producers March 2005 Kosovo Cluster & Business Support Project/ Paolo Giovannangeli, Decorative and Dimensional Stone – Development Potential in Kosovo November 2005 Kosovo Cluster & Business Support Project/ Peter Wetzel Fruit Packing and Quality Control November 2005 Kosovo Cluster & Business Support Project/ Remzi Bakalli Feed and Egg Quality Control September 2005 Kosovo Cluster & Business Support Project/ Ron Nyce Kosovo’s Meat Market Potential September 2005 Kosovo Cluster & Business Support Project/Arturo Inda Cunningham. Improving Good Manufacturing Practices (Gmp) within the Kosovo Dairy Industry September 2005 Kosovo Cluster & Business Support Project/Greg Sullivan. Development of the Sheep Industry in Kosovo October 2005 Kosovo Cluster & Business Support Project/Jack Cox and Susan Burton Association Development April 2005 Kosovo Cluster & Business Support Project/Karen Byrne Communications Strategy March 2005 Kosovo Cluster & Business Support Project/Matt Anderson Wood Processing in Kosovo Secondary Manufacturing, Sawmilling and Dry Kilns June 2005 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 E-2 Author Title Date Kosovo Cluster & Business Support Project/Matt Anderson Wood Processing Report October 2005 Kosovo Cluster & Business Support Project/Richard O’Sullivan Kosovo Cluster & Business Support Project April 2005 External Reports, Articles, Etc. Author Title Date/Publication Austrian Development – ECIKS/ Kujtim Dobruna, Avdullah Hoti, Astrit Gashi, Margita Preni, Edmond Shabani, Xhevat Meha, Potentialanalyse Kosovo (Analysis of the Kosovo’s Economic Potential) Vienna, Austria, December 2005 Danish Dairy Board History of Danish Dairies Copenhagen, Denmark, undated Ernst, Ulrich; Krivoshlykova, Marina; Snodgrass, Donald R. and Winkler, James Packard Enterprise Growth Initiatives: Strategic Directions and Options –Handbook Washington D.C., July 2004 Ernst, Ulrich; Krivoshlykova, Marina; Snodgrass, Donald R. and Winkler, James Packard Enterprise Growth Initiatives: Strategic Directions and Options –Final Report Washington D.C., February 2004 European Bank for Reconstruction and Development/Food and Agriculture Organization (FAO) Agricultural Handbook London, England, October 1999 FAOSTAT Poultry, Poultry Meat and Egg Production in Central and Eastern Europe Rome, Italy, December 2004 FAOSTAT Milk and Dairy Production in Central and Eastern Europe Rome, Italy, December 2004 Foreign Agricultural Service (FAS) Dairy Production and Trade Developments Washington D.C.,May 2005 Gygax, Beatrice Improvement of white cheese safety, quality and profitability in Kosovo (abstract only). Bern, Switzerland, 2005 International Crisis Group Kosovo: The Challenge of Transition Brussels, Belgium, February 2006 International Crisis Group Bridging Kosovo's Mitrovica Divide Brussels, Belgium, September, 2005 Korsgaard, Jacob Mejeribruget i de nye østeuropæiske EU-lande (Dairies and Dairy Farming in the New Eastern European EU Countries) Copenhagen, Denmark, March 2005 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 E-3 Author Title Date/Publication Kosomi, Bajram, Prime Minister & Jessen-Petersen, Søren, Special Representative of the Secretary General Letter to the International Donor Community Pristina, November, 2005 Kosovo Business Support Project/ Chemonics International, Inc. Catalyzing Growth Kosovo Business Support Program October 2004 Management Systems International /Brenda Lee Pearson Kosovo Desk Assessment for USAID Washington D.C., February 2005 Ministry of Trade and Industry and UNMIK European Union Pillar Investing in Kosovo Pristina, June 2005 Mitchell Group, Inc. Promoting Competitiveness in Practice: An Assessment of Cluster-Based Approaches Washington D.C., November 2003 Mitchell Group, Inc. Evaluation of Competitiveness Initiatives: Survey of Non￾USAID Experiences Washington D.C., August 2003 Provisional Institutions of Self Government, Government of Kosovo, Ministry of Public Services Series 1: General Statistics Kosovo in figures 2005 Pristina, Kosovo, January 2006 Siegenthaler, Martin Profitability of cheese production in Kosovo (abstract only). Bern, Switzerland, 2005 Snodgrass, Donald R. and Winkler, James Packard Enterprise Growth Initiatives: Where Now? What Next? Washington D.C.,DAIdeas, Volume 1, No. 1 June 2004 Statens Jordbrugs- og Fiskeriøkonomiske Institut (The Danish Instute for Agriculture and Fishery) Danish Agricultural Economy Copenhagen, Denmark, August 2005 UNMIK The Kosovo Trade Regime Pristina, October 2004 UNMIK – European Union Pillar Towards a Kosovo Development Plan – The state of the Kosovo economy and possible ways forward Pristina, August 2004 UNMIK European Union Pillar– Economic Policy Office The Economic Foundations of Status – Kosovo Economic Outlook 2006 March 2006 Unmik On Air Milk Production in Kosovo August 22, 2003 USAID Profile: Kosovo Washington D.C., July 2005 www.kosovo-milk.com No title Pristina, 2006 Mid-Term Evaluation of the Kosovo Cluster and Business Support Project SEGIR Privatization II IQC No. AFP-I-00-03-00035-00, Task Order No.167-O-00-06-00046 E-4