The Economic and Business Development Program was launched in 1998 following the destruction of many businesses during the tumultuous year of 1997. The mission of the program was to assist reform of the economy and the development of the private sector as the most vital part of the life of the country. The revival of the economy would come as a result of a range of well designed and coordinated policies which would bring about an enabling environment for competition and business development. In broad lines, the program aimed to create enabling laws and regulations through establishing dialogue between the government and the business sector; strengthening of entrepreneurial capacity and increase of knowledge related to market economy.
From year to year OSFA adapted the Program to the needs of the market economy in Albania. It tried to address the challenges by introducing social responsibility and a social dimension of the business sector development. In addition OSFA focused its efforts on developing entrepreneurial capacities of women and youth, mitigating the consequences of reforms on the poor and vulnerable groups by providing training and re-training for employment and self-employment. OSFA paid special attention to the development of the capacities of business associations.
The Program was particularly careful to ensure an even and balanced geographic distribution of its support. Funding went not only to the big organizations in Tirana, but also to the peripheral towns and regions for the purpose of contributing to the development of local businesses. The projects funded under this Program can be grouped into three main pillars: creating a business enabling environment; support to development of entrepreneurial skills; and building knowledge and awareness on the market economy. Of the successful projects, mention can be made of:
Creating a business enabling environment
Promoting the standard Code of Ethics for Big and Medium Size Companies;
The Albanian Business Center on Line
Strengthening free enterprise
Establishing the Besa Foundation
Entrepreneurship training programs
Disseminating knowledge on and creating awareness about the market economy
Supporting the enterprise management program at the Polytechnic University of Tirana
Establishing the J. Limprecht Library at the Faculty of Economics, University of Tirana
Training teachers of the subject of economy
Creating a taxpayer education facility
Creating a business enabling environment/Promoting the Standard Code of Ethics for Big and Medium Size Companies
Codes of Ethics are very good management instruments, not just preaching and moralizing tools. In the conditions of a capitalistic market economy, the Albanian private sector started to display the need for respecting ethics and codes of conduct in the relations among sector member, bur also relations between/among other actors and stakeholders in the society. The Code of Ethics came to be viewed as an indispensable means in the creation of new attitudes towards the law, the morale and the partners. The standard Code of Ethics was developed in three main dimensions: respect for the interest of the company, respect for the interest of the employees and respect for third party interests (clients, suppliers, competitors, community) in accordance with the law. The drafters took into account many models. However, the final product came to represent the combination of the American business rationale and the conditions of a transitional country. It should be noted, though, that the dominant factor was the Albanian culture and psychology and the characteristics of the business environment in Albania.
The Introduction of the Code into the business community was received positively by stakeholders. In the present time, the need to observe ethics in business transactions has become a real necessity. The OSFA supported Code of Business Ethics came to represent a very good basis for the emergence of other projects in the field of ethics. Some of these projects include the promotion of ethical behavior in the Albanian business community supported by USAID, training of trainers in the field of ethics, by the USAID funded EDEM Project; round tables with professors of business subjects; lectures with business students, and discussions between businesses and students supported by OSCE. The Code of Ethics has a good echo in the business world and was disseminated in various forms. OSFA also supported introductory and explanatory events in a number of towns throughout the country. The Code of Ethics was published in full version in the journal “Business” of the Union of the Chambers of Trade and Commerce. It also appeared in a publishing by the Institute for Development and Research Alternatives (IDRA) sponsored by OSCE.
Creation of a business enabling environment/Albanian Business Center on Line
All of the studies concerning the Albanian business or the relations between the Albanian business and the public administration, point to lack of access to business information as a stumbling block to business development. It is for these reasons that promted OSFA to make the decision to support the creation and operation of the Albanian Business Center on Line. The main function of the Center would be to collect, to process and make available information that would serve to inform business decisions by interested undertakers. “ALBIC” was a successful project implemented by IDRA and funded by OSFA. Its impact was soon to be verified in real life. ALBIC offers the following: General information about the country (Economic, demographic and institutional), complete information on fiscal system in Albania (full information on taxes and other obligations), information on the banking system in Albania, list of licensing and certification procedures, information on the Free Trade Agreements with neighboring countries, a directory of the Albanian businesses (www.adresar.albic.net), business laws on line, public procurement notices, business news, etc. These activities have been perfected and improved over time. The project is gradually moving towards self sustainability thanks to its increasingly improved performance in regard to the information, guides and counseling that it supplies for clients.
Strengthening free enterprise/Training Courses for young entrepreneurs
Unemployment of young people in Tirana has come to be a serious social and economic grievance. This project was designed to provide training courses for young people eager to develop their entrepreneurial skills. The target group focused on 100 people aged 20 – 30 years old, with secondary education that had not been able to find a job for themselves. Through participation in these courses, the young people would be enabled to start their own businesses or be employed in already established enterprises. Being able to either find a job or be self employed would in turn contribute to the young people’s integration in the social life, their economic empowerment and improvement of their personal status.
The implementation of the project was the joint contribution of a number of Organizations such as the Foundation for Urban Integration, Albanian Youthshakers and the Albanian Youth Council. The training program focused on the following topics: strategic management, business start up, business legislation, business improvement and expansion, marketing management, cost accounting, planning and budgeting, etc. The participants received training on techniques of designing business plans and discussing them with potential funders such as banks and foundations. Out the group, some 30 participants were singled out for their very good entrepreneurial and business skills.
Strengthening free entrepreneurship/Establishing Besa Foundation
Besa Foundation is a local Albanian micro finance institution established in 1998 based on the Loan Agreement between the Republic of Albania and the International Development Association (IDA) regarding development of micro credit institutions in Albania. The Open Society Foundation for Albania is one of the funders of the institution. The goal of the Besa initiative was to create micro lending schemes along with related services to promote free entrepreneurship in Albania. Besa’s initial capital was shared as follows:
25, 3 per cent by the Open Society Institute, 57, 4 per cent by the Albanian government and 10, 8 per cent by the World Bank.
From the very beginning Besa started off as one of the promoters of free market initiatives through providing advice and funding to micro enterprises in Albania. Established as a non profit organization, Besa will continue to support small and micro businesses to survive and develop in the conditions of the market economy. Besa clients represent all socio economic groups in Albania starting with the unemployed, the younger generation and women. From the very beginning, the Foundation was designed to provide technical assistance to entrepreneurs including start up, business improvement, marketing and financial management. In addition, the Foundation undertakes studies, researches and surveys in order to be able to adjust itself in a constantly changing market. Besa Foundation operates in full accordance with the principles of the free market in the provision of micro credit. Thanks to this approach, three years after its creation, the Foundation became independent and no longer relied on loans from the government and/or donors. Today Besa Foundation is a self sustainable, successful micro finance institution.
Building awareness and disseminating knowledge on the market economy/Post graduate training course in enterprise management.
In Albania, the nineties were accompanied by numerous political, social and economic transformations. A whole new and broad perspective was opened in the country which made possible its advancement towards establishing a market economy and an open society. The need to improve enterprise management and lead enterprises on the road to successful privatization brought to the fore a high demand for qualified managers and administrators. It is in this context that the Albanian higher education institutions started to seek the cooperation of foreign counterparts. A case in point is the cooperation between the Albanian Polytechnic University and the French Administration Institute. Thanks to the respective cooperation agreement, Albanian and French pedagogues taught the post graduate course in enterprise management. The Program was taught by 19 French and 10 Albanian instructors. Every academic year, the program admitted between 25 and 35 participants. Enrollment criteria included: knowledge of the French language, undergraduate level diploma and strong motivation to study at the post graduate level.
The cooperation started in the academic year 1998-1999 and was marked by the visit to Albania of the Chair of National French Foundation for Teaching in the field of Enterprise Management. The Program was sponsored by three donors: the French Foreign Ministry, the Open Society Foundation for Albania and the Polytechnic University in Tirana. Upon completion of the course which lasts 1-2 years (dependant on credit accumulation by students), the students are given a diploma from the University of Bordeaux IV Montesquieu, named “International Diploma in Enterprise Management” comparable to an MBA. Soros funding was mainly used to purchase teaching materials, cover some of the administration costs and the training of young faculty in France. Soros also covered the training of the best 5 students every year in French enterprises. Training period both for faculty and students lasted 2-3 months. The cooperation went on until 2002 and since then the school has become self sustainable. Until now, a total of 108 people have graduated from the school.
Building awareness and disseminating knowledge on the market economy/The Joseph Limprecht Library at the Faculty of Economics, the University of Tirana
The change of the system, like in other spheres of life in Albania, left its imprint on the higher education system, too. Due to increase of enrollment rate and upgrade of curricula and teaching, the need emerged to improve the teaching facilities available both to students and faculty. In this respect, the most acute need was to renovate the literature stock at the university libraries which had become obsolete due to the prevalence of books and journals from the Russian times. Inaugurated on 4 July 2004, the Joseph Limprecht Library at the Faculty of Economics, the University of Tirana, is a modern type library, the most efficient academic facility in the country. The library was named after the late US Ambassador Joseph Limprecht who lost his life in Albania and represents a joint initiative of USAID and Open Society institute.
Over the years, the Library has benefited from books donated by western universities. However, the most important investment is represented by the OSFA and USAID contributions which went for the renovation of the space, installation of the computer networks & applications and capacity building. With 300 m2, 150 seats and a stock of 30,000 book titles, computerized systems and modern applications, this may be considered the best public library in Albania. The library has about 300 subscribers and about 100 students use its facilities every day. Despite the short time of its existence the Joseph Limprecht Library has established a stable and fruitful cooperation with various academic institutions and counterpart libraries.
Building awareness and disseminating knowledge on the market economy/Training programs for teachers of economy
Improving and updating student knowledge of market economy and the private sector has a direct impact on their involvement in the world of business. It also contributes to successful cooping with the challenges of free enterprise. In order to improve student knowledge, it is necessary to upgrade and deepen the knowledge of teachers of subjects related to business and economy, especially at the level of secondary education. In this context OSFA supported a project by the Foundation for the Economic Education of Young People. The project goal was to improve and update teacher’s knowledge and skills. A one week seminar was held with teachers of secondary economic schools throughout the country. The training materials drew on textbooks designed by Junior Achievement International, translated and adapted to Albania’s conditions. These materials reflected the advanced economic knowledge taught in the modern schools of today. The teachers benefited from the latest developments in teaching strategies, including role play, simulations, and case studies. The trained teachers will also serve as trainers of trainers in order to cover the entire range of subjects and topics. In addition to acquiring teaching skills, the teachers were equipped with knowledge and techniques to continue self improvement and learning.
Building awareness and disseminating knowledge on the market economy/Building a taxpayer education facility
Through direct talks and interaction with the General Tax Directorate (GTD), OSFA came to be convinced that taxpayer education can play a direct role in improving tax collection. In 2002, OSFA joined PriceWaterHouse Coopers in the project to build a taxpayer education facility at the General Tax Directorate (GTD) in Albania. OSFA’s support went for improving capacity of local tax offices in the most important branches of the GTD and for production of educational materials for the wide public. The project was implemented in six pilot districts: Durrës, Elbasan, Fier, Korçë, Lushnjë and Vlore. An international expert was brought to Albania for a period of 100 days, to give expertise and design the awareness materials. In addition the expert also trained staff of the local tax offices towards improving relation with taxpayers. The main topics of the awareness materials (leaflets, brochures, awareness spots) were: What is Income Tax, What is VAT, Do I have to register as a VAT paying subject? How to calculate taxes, How can I Appeal an Unfair decision from the tax authorities, and many more. An important output of the project was the Taxpayer Service Form which was produced in about 1000 copies. This is the form used in tax offices by local tax officers in their relations with the public. In the context of the project, OSFA funded the participation of the General Tax Directorate in the Klik Expo Klik 2002 fair. The GTD had a stand where it exhibited materials produced by the Division for Relations with Taxpayers.