ECONOMIC SECURITY PROJECT SEMI-ANNUAL REPORT #11 APRIL 1 – SEPTEMBER 30, 2011 October 19, 2011 This report was produced for review by the United States Agency for International Development. It was prepared by Development Alternatives, Inc. 1 2 Economic Security Project SEMI-ANNUAL REPORT #11 APRIL 1 – SEPTEMBER 30, 2011 October 19, 2011 DISCLAIMER The author’s views expressed in this report do not necessarily reflect the views of the United States Agency for International Development or the United States Government. Development Alternatives Inc. Vase Pelagica 15 11000 Belgrade, Serbia Phone: (381) 11 363 99 00 Fax: (381) 11 363 99 50 Under Contract: DFD-I-00-05-00250-00 Task Order #1 3 4 TABLE OF CONTENTS 6 Map of Economic Security Project in Serbia 7 EXECUTIVE SUMMARY 11 ECONOMIC SECURITY INTRODUCTION 13 IMPACT ON BUSINESS IN SOUTH SERBIA AND SANDZAK 15 South Serbia Cast Study: Light Manufacturing 16 BUSINESS OWNER PROFILE: QABILJ JAHIU, TOBLER-SKELE, PRESEVO 19 Sandzak and Novi Pazar Case Study Two: Apparel Industry 20 BUSINESS OWNER PROFILE: HAJRUDIN ĆORIĆ, MAXERS-MENUS, NOVI PAZAR 23 Innovative Business Solutions 23 Customized Business Software 24 Skilled Jobs 25 BUSINESS IMPLEMENTATION 27 I. Technical Assistance: Preparing to Export 27 A. Computer-Driven Resource Planning 28 B. New Marketing Material 29 C. ISO Standards 31 II. Sustaining Trade Fairs and Trade Missions 32 SUCCESS STORY: ASSTEX ESTABLISHED A PERMANENT FOOTHOLD IN RUSSIA 34 Trade Fairs 37 IMPACT ON YOUTH 37 A Policy Imperative: Integration of Youth into local economies 38 Youth Entrepreneurship Action Plans: Gaining new stakeholders, finding new beneficiaries 46 YOUTH BUSINESS POSTCARDS: UNION BOOKKEEPING AGENCY, PECINCI, AND SIBER POULTRY FARM, TUTIN 47 YOUTH BUSINESS OWNER PROFILE: MILOŠ DJAKOVIĆ, RUMA 48 SUCCESS STORY: VOUCHER SYSTEM STRENGTHENS 18 YOUTH-OWNED BUSINESSES 51 YOUTH PROGRAM IMPLEMENTATION 51 I. Support to Youth Offices 51 Youth Offices - YEAP 52 Capacity Building and Entrepreneurship Trainings: Preparation and Assessment 55 YOUTH OFFICE PROFILES: NOVI PAZAR AND LESKOVAC 56 YOUTH OFFICE COORDINATOR PROFILE: GORAN MIHAJLOVIĆ, RUMA 57 LETTER FROM THE MINISTER OF YOUTH AND SPORT 58 II. Support to Junior Achievement Serbia 60 JAS Organizational Capacity Assessment Tool 61 Fundraising 63 LETTER FROM THE CEO OF JUNIOR ACHIEVEMENT EUROPE 65 III. Strategic Partnerships – Cooperation with HELP ANNEXES 67 ANNEX A: Performance Monitoring Plan 69 ANNEX B: ISO Certification Status 71 ANNEX C: Youth Office Assistance Summary 75 ANNEX D: Media Coverage Report 5 6 EXECUTIVE SUMMARY Development Alternatives, Incorporated (DAI) is pleased to submit this eleventh Semi-Annual Report for the Preparedness, Planning and Economic Security Program (PPES) covering the pe- riod from April 1, 2011 to September 30, 2011. INTRODUCTION This Semi-Annual Report, like the 10 before it, provides information and data to demonstrate that the program continues to meet and exceed expectations. Short-term impacts have been evident since the first report and continue to grow with each reporting period; in this report, longer-term behavior- al and attitudinal changes are demonstrated and their im- Solving problems of pact is visible in the program’s partner organizations as Economically Devastated well as in an ever-widening circle of stakeholders that try to Communities replicate the activities and approaches. • Economic Security has The benchmarks the Economic Security program has business support or youth reached and the milestones passed have been accomplished activities in 73 percent of for the most part with partners that faced serious economic the country’s economically challenges. Both support activities of the program – busi- devastated communities. ness and youth – work extensively in economically under- developed communities. In fact, the program’s activities serve 73 percent of Serbia’s 40 most economically chal- lenged communities – those deemed economically devastated municipalities1. In choosing to target these underserved communities, Economic Security tackled the challenge of working where infrastructure and business support systems had been neglected for years. For Youth, it meant helping young people find opportunities in regions where unemployment runs above the 40 percent national average for youth; in some locations youth unemployment reaches 70 percent. Thus, program accomplishments that would be strong in the best of conditions are especially significant. They speak to the program’s success in project design and implementation; more importantly, they have had a major impact on the quality of life for our partners and their com- munities. In many cases they have led to collaborations among companies that were once com- petitors, advocacy and support from local governments for business where none or only token approaches existed before and links across educational institutions, students and businesses. All of this serves to give young people the skills and knowledge to become the regions’ workforce and tackle youth unemployment and outmigration. Despite these obvious obstacles of the economic conditions, Economic Security found its part- ners ready to be leaders. The trust developed between the program and its partners fostered innovation and success: business owners cooperated and collaborated with colleagues and competitors to achieve greater success for all; municipalities were convinced to think, work and invest outside the box on youth unemployment; Youth Offices accepted greater responsibility for solving unemployment within their municipalities; and young people accepted personal re- sponsibility for their futures. 1 The Government of Serbia has classified certain communities as economically devastated based on rates of unemployment, income, and economic development compared with the national average. 7 Business Support Despite working in some of the most underdeveloped regions of Serbia – during a few of the most economically challenging years in recent history – Economic Security’s beneficiaries con- tinue to grow, reach new markets, start new businesses and create new jobs. In this reporting period some of the team’s most significant results include: A MILLION DOLLARS IN TRADE FAIR SALES: Business support companies this period added $1.2 million in new sales generated from the program’s trade fair activity bringing the total sales over five years to $12.4 million. PERMANENT FOREIGN MARKETS OPENED: Economic Security-supported ASSTEX, the Sandzak textile association, succeeded in securing a $240,000 grant from the Serbian Investment and Export Promotion Agency (SIEPA) to cover almost half the cost of opening a fashion showroom and distribution center in Moscow for all its member apparel and textile manufacturers. Association members are investing their own resources to cover the approximately $260,000 in costs to open a sales center for Serbian-manufactured textiles in Russia. INNOVATIVE TECHNOLOGY TRANSFORMS PRODUCTION: A dozen of the program’s companies were trained on and are in various stages of using computer-driven resource management and operations software. The cutting-edge technology gives managers of every department, retail sales outlets and satellite production facilities real-time access to all the companies’ operations allowing improved decision making and planning for logistical and production management. Sales staff will be able to make offers that meet client needs while at trade fairs or face-to-face meetings. MODERNIZATION FUELS EXPANSION: Between ISO standard certification activities, resource management software installation and market expansion opportunities, Economic Security programs either made or are making loan applications for nearly $1.5 million in investments for plant upgrades, expansions or other new, modern equipment. Youth Office Support The Economic Security team’s activities help Serbia’s youth integrate and become influential in the economy through two main focal points: it helps them become more competitive for jobs and it prepares them to start a business. The approach combines direct support of individuals to build entrepreneurial and leadership skills with strengthening the institutions that serve and support young people, especially local Youth Offices. The Economic Security Youth Office activities work closely with the Ministry of Youth and Sport (MoYS) and align with the National Strategy for Youth, focusing on one of its key objectives – reducing youth unemployment. Since 2008, the program has worked with 98 of the country’s 122 Youth Offices. The program has conducted training of Youth Office Coordinators and intro- duced entrepreneurship training for 1,550 individuals in 87 municipalities. The emerging role of Youth Offices as centers for career and entrepreneurship information and Youth Coordinators as leaders in developing and implementing municipal policy to reduce youth unemployment was acknowledged and formalized this period when Parliament turned the National Strategy for Youth into the Law on Youth. Over the next 18 months, the program will expand its activities to provide assistance to every functional Youth Office in Serbia. The importance of municipal Youth Offices within local government has grown over the course of their partnership with Economic Security. Even as local governments were forced to reduce 8 spending in FY 2010 due to the economic crisis, overall funding for Youth Offices has grown by more than 40 percent between 2009 and 2011. In addition to support to Youth Offices, the