With the fall of communism in the late 1980s and early 1990s, countries with heavily integrated economies—Yugoslavia and the Soviet Union—were broken up. Command economies dictated by the state were transformed into market economies based on supply and demand, competition, and transparency. Yet E&E governments and the international donor community paid insufficient attention to the importance of regional economic integration to economic and social development. Without harmonization of trade and investment policies across the region, companies and the financial institutions and suppliers that serve them were restrained from the organic expansion that would otherwise flow naturally across borders. 

Through USAID’s Regional Economic Growth (REG) Project, SEGURA sought to address these constraints to growth through greater integration and harmonization of E&E markets with one another and with export markets. In contrast to traditional bilateral projects, REG brought together local, national, and regional organizations on regional platforms to stimulate economic integration through business-to-business (B2B) linkages and policy reform. Designed to cater to the region’s diverse needs, REG was a hybrid mechanism that combined multi-country “Core” activities with targeted “Buy-Ins” serving individual USAID Missions and operating units. 

Value Chain Integration

REG succeeded at strengthening regional information and communication technology (ICT), tourism, and agriculture/food processing value chains through targeted, export-oriented technical assistance. REG developed the capacity of nearly 2,400 firms to improve management practices, diversify and market their products and services, and connect with buyers and investors. In doing so, REG enabled more than 1,100 companies to obtain internationally recognized certifications and generated $12.5 million in exports and investment, and $40 million in startup capital. 

Sample results included: 

  • Establishment of the E&E ICT sector’s first major multi-country business association (3B ICT Network), comprising 1,000+ member companies from Balkan, Black Sea, and Baltic regions

  • Co-creation of sustainable, innovative entrepreneurship support programs TRACTION Camp and Entrepreneur In Residence, allowing E&E startup founders to access learning and networking opportunities typical of more developed markets

  • Agribusiness trade fairs and buyer missions leading to millions of dollars of contracts signed between E&E agribusinesses and large EU buyers such as OGV and Greenyard

  • Promotion of the Via Dinarica trekking route and other regional tourism destinations, resulting in prominent exposure in international travel media

  • Launch of Brand Albania, a public-private agrotourism partnership dedicated to promoting unique, authentic Albanian food products as a selling point for regional and international tourism

Business Enabling Environment and Trade Facilitation

REG improved the ease of doing business in the E&E region and made the region more attractive to foreign investors and buyers by promoting business-enabling reforms and reducing barriers to trade. In the Western Balkans, REG fostered public-private dialogue (PPD) through research and analysis. A particular success in this effort was Montenegro’s adoption of public-private partnership and concession laws that were drafted with REG assistance. REG also supported national and regional trade policy development. This work directly resulted in the establishment of National Trade Facilitation Committees in Bosnia-Herzegovina and Kosovo, and the adoption of 11 trade reforms, such as licensing simplifications and trade enquiry points, throughout the region. In Azerbaijan, REG procured an innovative trade and transportation portal to stimulate cross-border trade and investment. Developed with the Texas A&M Transportation Institute, this digital tool provides actionable business intelligence on the procedures and costs associated with shipping freight to and from Azerbaijani ports and railways.

Financial Sector Stability and Access to Finance

In Ukraine, geopolitical instability, unchecked inflation, and continually failing banks led to low public confidence in the formal financial sector. Upon USAID request, REG provided strategic communications support and technical assistance to help rebuild trust in Ukraine’s financial system. Improving strategic communications was a critical first step to increasing confidence in Ukrainian financial institutions. REG’s assistance ranged from overhauling the National Bank of Ukraine (NBU) website to designing promotional materials to celebrate the 20th anniversary of Ukraine’s national currency. With support from REG and other USAID projects, the National Bank of Ukraine won—for the first time in its history—the Transparency Award from Central Banking, a major international industry publication covering the operation of central banks and financial regulators.

REG also worked with several Ukrainian government institutions to ensure they were following international best practices in financial supervision and regulation. By deploying technical advisors and sponsoring international study trips, REG strengthened the capacity of NBU, the Deposit Guarantee Fund (DGF), and the National Securities and Stock Market Commission to regulate securities, derivatives, and deposit insurance systems. A particular success was the DGF’s self-assessment report regarding compliance with international deposit insurance conventions, which resulted in the IMF using its recommendations to produce an amendment to the DGF law.

Client:
USAID/Europe & Eurasia

Years:
2013-2019

Technical Areas:
Competitiveness;
Trade and Investment;
Monitoring, Evaluation, and Learning

Region:
Europe & Eurasia

Countries:
Albania, Armenia, Azerbaijan, Belarus, Bosnia & Herzegovina, Georgia, Kosovo, Moldova, Montenegro, North Macedonia, Serbia, Ukraine