1. 1 Regional Competitiveness Initiative: 4 th Annual Regional Conference on Competitiveness and Economic Growth Prepared by: David Cowles, Chief of Party, Kosovo Private Enterprise Program 16 June 2009 Panel Session (Topic A): World Economic Forum Competitiveness Indicators and Policy Actions

2. 2 Current Situation in Kosovo New Country, no WEF ranking Huge needs in policy arena Lots of laws, little ownership, understanding, or implementation New government appears overwhelmed with competing demands for time and resources Little to no involvement from private sector in policy development and implementation No actionable, prioritized reform agenda Pictures from Kosovo Private Enterprise Program

3. 3 Kosovo Private Enterprise Program (KPEP) Overview Four Year Project 2008 – 2012 $17.8 Million 4 Components

4. 4 Robust Business Services and Associations Improved Business Enabling Environment Workforce Development Support to Targeted Target Sectors 1 1 2 2 3 3 4 4 Cross Linkage of KPEP’s 4 Primary Components

5. 5 Selected Sectors Grouped In “Informational”, “Transactional” and “Transformational” - based on Approach Project will Take on Sectors Fishing and AquacultureInformation and Communication Technology Apparel and Leather Printing and Media Tourism Decorative Stones Forestry and Wood products Recycling Fabricated Metals and Auto Parts Energy Efficiency Sectors Selected InformationalTransactionalTransformational Agriculture Construction Pre-Selected

6. 6 The Value of Indexes and Indicators Builds awareness and understanding of drivers of competitiveness Allows comparisons across countries and tracks progress of a single country over time Supports informed dialog on policy agenda Helps policy makers establish and communicate clear priorities

7. 7 World Economic Forum: 12 Pillars of Competitiveness Framework

8. 8 12 Pillars - Basic Requirements Institutions Infrastructure Macroeconomic stability Health and primary education Pillars Institutions are new and extremely weak Huge needs particularly in power and transport Large and unsustainable fiscal and current account deficits Weak by regional standards but not regarded as a major constraint Situation Relevance to KPEP KPEP is not designed to address Basic Requirements. Some support to institutional strengthening is provided when a specific need is identified in a target sector or component

9. 9 12 Pillars - Efficiency Enhancers Higher education and training Goods market efficiency Labor market efficiency Financial market sophistication Technological readiness Market size Pillars Employers highly critical of present state of education and training Few formal barriers in goods market Unemployment est. at 40%: huge informal sector Access to credit is continually sited as a major impediment to growth Awareness and adoption of new technologies is very low Tiny local market with limited regional integration Situation Relevance to KPEP Work force development is a major component. KPEP addresses sector specific training needs while trying to improve overall delivery of training services No direct work in the labor market or financial markets The project does seek to improve adoption of modern production techniques and use of proven technologies Trade issues are a major impediment to growth; while not a major focus of the project by design, KPEP has by necessity become more and more involved in addressing and resolving trade related issues

10. 10 12 Pillars - Innovation and Sophistication Factors Business sophistication Innovation Pillars Rudimentary Little or none Situation Relevance to KPEP The focus of the project is to help firms and sectors improve business operations and adopt proven technologies

11. 11 Can the WEF Indicators Help a Nation Establish an Actionable and Prioritized Reform Agenda? For a country like Kosovo the challenge can appear overwhelming The needs are great - capacity and resources are limited Knowing where you fall short is important But a coherent plan of action must also consider reforms under each pillar with respect to: –Potential impact –Difficulty –Cost –Time lag

12. 12 Contact Information Booz | Allen | Hamilton David Cowles Senior Associate Booz Allen Hamilton, Inc. 8283 Greensboro Drive McLean, VA 22102, USA Work 381 38 233 006 Mobile 386 49 236 465 Cowles_David@bah.com