Promoting Small and Medium Enterprise Growth
Despite the large number of small and medium enterprises (SMEs) in Cambodia, the unfriendly business environment has restricted their growth and potential for contributing to the economy. Frequent government interventions in business practices have led to corruption: illegal inspection fees, lengthy and often subjective licensing processes, and inconsistent implementation of regulations.
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SMEs in Cambodia face many regulatory obstacles that discourage growth and expansion.
[PHOTO: Chuck Schneider] |
According to a 2003 Asian Development Bank (ADB) assessment, government practices are a major disincentive for SMEs to formalize through licensing and registration. In fact, roughly half of the 27,000+ SMEs have avoided this process. The government recognizes these inefficiencies, and has proactively established the SME National Subcommittee to lead the reform process. With ADB funding, RTI will support the Subcommittee for the rest of 2005 to analyze the state of the SME sector, identify the inefficiencies in the business environment, and streamline regulatory and licensing requirements accordingly.
To date, the project has identified areas where licensing processes require reforms in order to improve transparency—mainly, preparing criteria for issuing licenses, eliminating unnecessary licenses, and developing a recourse mechanism for SMEs to appeal unfair administrative decisions by the government. RTI will assist in developing a “hotline,” whereby companies can contest misrepresentation or unfair inspections that disrupt their productivity and result in unofficial fees.
RTI also is helping to improve the regulatory process so as to lessen arbitrary government involvement (bribery, influence, and unjustifiable service fees) and procedural inconsistencies. RTI and collaborating partners have provided input for regulatory reforms that will govern the licensing and inspection of SMEs, and will ensure that the process adheres to industrial standards. These reforms will help deregulate business start-up activities, make regulatory requirements more transparent, and allow the SMEs to operate with more confidence and less interference. A side benefit will be that of inviting citizen participation. Tools such as the hotline, workshops, and conferences also will move the reforms forward.
“With an enabling business environment, SMEs can move out of the household and expand into larger markets,” says RTI’s Project Leader Charles Schneider. “Ideally, these improvements will allow business to be conducted legitimately, and small enterprises to become major players in their economy.”
More information: Charles Schneider,
e-mail cschneider@rti.org
Supporting Education Through Decentralization
Egypt’s government is working to improve the quality of instruction and the responsiveness of schools through increased decentralization in the education sector. Recent pilot projects have delegated management authority to the Governorate of Alexandria and to a sample of schools in selected districts in East and West Alexandria. To build on the success of these pilot projects, and to inform and guide the expansion of this model throughout Egypt, the U.S. Agency for International Development (USAID) is supporting the Egypt Education Reform Project (ERP) under the Education Quality Improvement Program (EQUIP2).
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High-level officials from subnational and national governments participate in
an education decentralization workshop held in Cairo.
[PHOTO: Shady Fouad, AED] |
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As a subcontractor to the Academy for Educational Development (AED), RTI supports ERP’s Decentralized Governance and Management (DGM) staff members, who collaborate with ministries and governorates to create a decentralized education system and the legislative, policy, and management changes needed to support it.
RTI is organizing and delivering a series of seminars and workshops. In March, Don Winkler and Luis Crouch of RTI delivered a one-day seminar to ERP staff—with strong representation from the DGM team—in Cairo. The seminar covered international experience in education decentralization, with a focus on policy and institutional changes, critical factors of success, and lessons learned.
Also in March, Don Winkler worked with Joseph Cohen from AED to deliver a three-day workshop in Cairo to high-level officials from subnational and national governments, including representatives from the Ministries of Education, Higher Education, Finance, and Local Administration. This workshop was based on training tools developed jointly by RTI and AED. By using these tools, workshop participants were able to define the intent of decentralization, determine the current status, build consensus, and prepare a plan to move education decentralization forward in Egypt.
RTI will continue its work under ERP through policy roundtables and a follow-on seminar targeting governors and ministers at the national level to discuss the experience of other countries in decentralizing education.
More information: Don Winkler,
e-mail dwinkler@rti.org
Continuing to Improve Urban Management
For more than 20 years, RTI has been a leading contractor for U.S. Agency for International Development (USAID) urban programs. Through successive indefinite quantity contracts (IQCs), RTI has implemented a broad range of urban-related activities throughout the world. Under the new Sustainable Urban Management (SUM II) IQC, RTI will build on and expand this experience by providing quick-response, short-, medium-, and long-term advisory and assistance services that answer the needs of USAID missions, bureaus, and operating units.
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Representatives from the Municipal Budget Reform Project’s regional training centers in Poltava, Khmelnytskyi, and Lviv. The red flags on the map of Ukraine indicate some of the 30 partner cities that are beginning to implement performance program budgeting (PPB).
[PHOTO: Bohdan Radejko] |
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SUM II will support a broad range of activities, such as improving urban services and shelter; increasing the effectiveness, responsibility, and accountability of local governments; enhancing environmental tools and practices; improving disaster preparedness, response, and recovery; and improving finance and credit systems. RTI will lead this five-year task order contract, joined by subcontractors BearingPoint, Casals & Associates, International Resources Group, and Worldwide Strategies, Inc.
RTI was recently awarded its first task order under SUM II: the Municipal Budget Reform Project in Ukraine. The goal of this three-year, $8.7 million project is to make municipal budgets more effective, transparent, and accountable to the citizens of Ukraine. RTI, in partnership with BearingPoint, will accomplish this goal by providing training and technical assistance to officials in 130 municipalities to strengthen their capacity in budgeting and financial management. The team will create budget manuals and Web-based templates and provide the accompanying hardware, software, and training that will enable municipalities to implement performance program budgeting. This new budgeting process will help municipalities achieve budgetary goals consistent with Ukraine’s longer-term development strategy.
In addition, the team will provide policy and management training to the Verkhovna Rada (Parliament)—including members of the Budget Committee, Local Government Committee, and Banking and Finance Committee—that will improve its capacity to conduct fiscal policy analysis, develop higher-quality national budgets, and produce effective legislation. The team will also form a representative national advisory committee to support the adoption and implementation of policies and legislation to reinforce the new budgeting process.
More information: Jim McCullough,
e-mail jsm@rti.org |
June/July 2005 
Starting Up
