BiH Business Environment Strengthening Project (BESP)

dropped

The environment in which they operate remains central challenge for enterprises in BiH. Sheer volume of reforms needed to make thenecessary improvements can be overwhelming despite improvements made over the last few years. Key challenges remain, such as thesize and role of the SOEs, government inefficiencies, lack of support for nascent innovative activities, labor market rigidities,aging transport and trade infrastructure. All those require strategic direction by the authorities that is currently insufficientor lacking, as well as clear champions of change. The project therefore focuses on two specific areas – the automation ofgovernment to business interaction and entrepreneurship and innovation support. The first builds on previous engagement and clearcommitment of the authorities to ease the operation and services of government towards businesses and the second focuses on twosegments that can bring about growth and employment, particularly among the youth – the entrepreneurship and innovation. To addressthis, the project will have two interconnected components. The first focuses on improving the business environment for enterprisesto operate through reducing the administrative barriers, implementing an integrated service delivery at the entity level, andconducting a rapid skill diagnosis to better understand demand for skills and skills mismatches among MSMEs. The second focuses onstimulating innovative activities in existing firms and promoting new innovative startups through a mix of support instrumentstargeting SMEs, startups, and entrepreneurs. The project will be designed as a results-based hybrid IPF with two components. Thismeans the focus of the project will be on reaching sustainable results and this instrument is deemed best suited to support theauthorities implement the identified set of reforms. The proposed instrument will help meet client’s need to strengthen theinstitutional capacity of partner entity ministries and the entity secretariats. Moreover, the project financing will be disbursedto the Entities’ Treasury accounts based on the achievement of entity-specific sets of Disbursement Linked Indicators (DLIs).