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Strengthening SME Business Membership Organizations
Commissioning Unit: Ukraine
Evaluation Plan: 2018-2022
Evaluation Type: Project
Completion Date: 07/2018
Unit Responsible for providing Management Response: Ukraine
Documents Related to overall Management Response:
 
1. Recommendation:

Evaluation recommendation 1. Periodic revision of the LogFrame should become a practice in future UNDP projects on support to SMEs and longer-term duration of future project should be envisaged.

Periodic revision of the LogFrame should become a practise in future UNDP projects on support to SMEs in view of possible changing context and emergence of priority needs that were not foreseen at the time of the formulation of the project document. Longer term duration of future project should be envisaged (at least 5-year project) in view of the fact that changes in the business environment may take several years to materialise: from the identification of the issues to be addressed to consultations with SMEs, to the development of proposals and completion of the advocacy process with the concerned authorities.

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

Recommendation accepted given that the ability of projects/programmes to adapt to the changing and dynamic environment in Ukraine is critical for overall programme success. Ability of the projects/ programmes to adapt will be strengthened through dedicated training on RBM and project management.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
1.1 Deliver training on RBM and project cycle
[Added: 2018/08/13] [Last Updated: 2019/04/16]
CO 2019/03 Completed As the the project has become a part of the Energy and Environment portfolio, all teams within the portfolio have successfully completed an RBM and M&E training in December 2018. More training resources will be available after the updated policy on monitoring in line with the new UNDP POPP will be released. History
2. Recommendation:

Evaluation recommendation 2. Support the legal conversion of BMOs from the current NGO status to business associations;

Despite the legal advice provided by UNDP to the BMOs in various legal aspects: governance compliance, amendment of their statutes and internal structure, there is need to advocate with the government for the development of a separate legislation for business associations which are still considered as NGOs by the Ukrainian law with no specific mandate and status. BMOs need to have the legal mandate to defend businesses while the government will have to consult them as part of the private sector when preparing draft laws and regulations related to the business environment. 

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

BMOs do not have a separate legal status in Ukraine which implies that they are governed by the general law for non-profits, while some types of associations fall under the provisions of the Economic Code. Hence, there is a variety of governance and management arrangements in different BMOs depending on their scale and nature. Also, there are no adequate provision in the law for quality assurance of BMOs operation and provisions clearly identifying BMOs as primary interlocutors and private sector representatives in public-private dialogue (PPD). The recommendation is accepted partially, given that there are pro and cons as to establishing separate legal status for BMOs (or developing a separate law). The follow-up phase of the project will look into existing gaps and analyze opportunities to improve legislation on BMOs and consultations/dialogue with the private sector, where needed, and will provide relevant recommendations to the Government and private sector.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
2.1. Conduct research and preliminary legal analysis of the legislation governing the operation of BMOs, identify gaps and needs for improvement of relevant legislation.
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager 2020/03 Completed The law of Ukraine “On civic associations” analyzed. Findings integrated in the Project Document of the Phase II of the Project. History
2.2 Develop concept note for the follow-up phase of the project integrating the need for feasibility analysis of developing a law outlining special legal status for business membership organizations
[Added: 2018/08/13] [Last Updated: 2018/10/23]
Country Office, Portfolio Manager 2018/10 Completed Draft concept note has been developed and is under review History
2.2 Finalize project document and negotiate cost-sharing agreement with SECO
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager 2020/02 Completed New CSA signed in November 2019. History
3. Recommendation:

Evaluation recommendation 3. Support the completion of the strategic framework of the BMOs that includes goals, strategic objectives and related indicators, action plan and budget. The strategic plan is to be based on the current strengths and weaknesses of the BMOs than on the capacity assessment conducted at the earlier stages of the project, as well as on the findings of members’ needs survey. The engagement of internal and external stakeholders in the development of the strategy is a pre-requisite for its success.

BMOs have not yet developed a complete strategic framework during the time frame of the project. Though such shortages can be attributed partly to the weak capacity of most BMOs, nevertheless the approach used by the project in supporting the BMOs in strategic planning had also its weaknesses. The project relied on two kinds of support: the courses of KMBS, the mentors who were provided by the Business School to support the BMOs and finally the UNDP consultants. While there was consultation with the members, the strategy should also engage external stakeholders such as the Entrepreneurship Department at the Ministry of Economic Development, the Ukraine Chamber of Commerce and Industry, and other relevant business associations. In case there will be a second phase of the project, it would be necessary to continue the support to the targeted BMOs as part of the larger project for the business sector. 

There are two main pre-requisites for the preparation of the strategy in future interventions of UNDP with business associations: a capacity assessment of BMOs and members needs survey. ?- BMOs - organizational capacity assessment: the strategic framework should be based on the findings of organizational capacity assessment which will look at the strengths and weaknesses of BMOs and at the impact, effectiveness and efficiency of the work of the association and on the way the work is being carried out, in addition to the external environment in which they operate - Members- needs survey as well needs of the relevant SME sector: this will provide an assessment of the quality of services and identify the services needed by BMOs- members and the relevant SME sector

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The recommendation is acceptable and will be integrated into future UNDP private sector development project/programme based on availability of resources and solutions negotiated with the donors. In particular, future programme will be designed:

  • Deliver follow-up support to recipient BMOs in 2015-2018 to strengthen sustainability or results of the previous phase;
  • Conduct additional research on BMOs and business development services (both demand and supply sides);
  • Promote networking, collaboration and platform thinking among different BMOs, including the Chamber of Commerce, in order to strengthen their synergies and therefore the impact on the private sector development;
  • Supporting public-private dialogue based on regulatory impact assessment etc.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Integrate the recommendation into Project Document for the Phase II of the Project
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager, Business Development Unit 2020/02 Completed 7 BMOs of the Phase-I will become the project’s participants of the BMO-Phase II in order to strengthen sustainability of the results; Networking and public -private dialogue are embedded in BMO-II. History
4. Recommendation:

Evaluation recommendation 4. UNDP should support targeted BMOs and other business associations in future projects to develop platform for inter-firm cooperation through clusters or networks of firms, as a means to enhance competitiveness of SMEs in the local and export market

Small business associations should not be seen only as service associations but also as a platform that would promote inter-firm cooperation through cluster or network. Small firms have difficulty to compete individually in the local and export market and to meet the outsourcing requirements of foreign companies in terms of minimum order quantities (MOQ) and delivery logistics, unless they cooperate together in one or more of the following areas: design of product, joint purchase of raw materials and equipment, joint marketing. UNDP project should continue in future projects to promote the transformation of other business associations as a concept and model that provides the platform for interfirm cooperation. 

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The recommendation is acceptable and will be integrated into future UNDP private sector development project/programme based on availability of resources and solutions negotiated with the donors. In particular, future programme will be designed:

  • Deliver follow-up support to recipient BMOs in 2015-2018 to strengthen sustainability or results of the previous phase;
  • Conduct additional research on BMOs and business development services (both demand and supply sides);
  • Promote networking, collaboration and platform thinking among different BMOs, including the Chamber of Commerce, in order to strengthen their synergies and therefore the impact on the private sector development;
  • Supporting public-private dialogue based on regulatory impact assessment etc.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Integrate the recommendation into Project Document for the Phase II of the Project
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager, Business Development Unit 2020/02 Completed 7 BMOs of the Phase-I will become the project’s participants of the BMO-Phase II in order to strengthen sustainability of the results; Networking and public -private dialogue are embedded in BMO-II. History
5. Recommendation:

Evaluation recommendation 5. The scaling up of the current UNDP project to cover the meso level in selected regions of Ukraine would require an understanding of the whole business associations infrastructure as well as knowledge of the available business development services

The improvement of business development services to SMEs would require that UNDP undertakes the two following: (1) A diagnostic of business associations in selected regions or at the national level; and (2) A database on available business development services (BDS) in selected regions where future UNDP interventions are expected. The diagnostic of BMOs would enable UNDP to select the associations that can be considered as real business associations with significant representation. The database on BDS would allow the BMOs to refer SMEs to the appropriate BDS organization when the service is unavailable in the BMO. 

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The recommendation is acceptable and will be integrated into future UNDP private sector development project/programme based on availability of resources and solutions negotiated with the donors. In particular, future programme will be designed:

  • Deliver follow-up support to recipient BMOs in 2015-2018 to strengthen sustainability or results of the previous phase;
  • Conduct additional research on BMOs and business development services (both demand and supply sides);
  • Promote networking, collaboration and platform thinking among different BMOs, including the Chamber of Commerce, in order to strengthen their synergies and therefore the impact on the private sector development;
  • Supporting public-private dialogue based on regulatory impact assessment etc.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Integrate the recommendation into Project Document for the Phase II of the Project
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager, Business Development Unit 2020/02 Completed Recommendations integrated in the Phase II of the Project, specifically Component 2: Better MSMEs’ access to Business Development Services through BMOs History
6. Recommendation:

Evaluation recommendation 6. UNDP should not confine its support to few BMOs, rather it needs to support in future projects a network of business associations at the regional level that would improve business service provision to the whole SME sector. Single business associations, particularly the small ones, are unable to meet the needs of SMEs for services unless they join and coordinate efforts in the provision of selected services

BMOs should be able to address the challenges faced by the relevant SME sector and meet their needs and not confine their outreach to the membership. While service provision to members can be within the capacity of most of the targeted BMOs which have small number of members, a single business association, particularly the small ones, is unable to meet the needs of SMEs for services unless they join and coordinate efforts in the provision of selected services, such as training of SMEs in specific areas, exchange of experience through joint events, participation in fairs and exhibitions. UNDP needs to support a network of business associations at the regional level through training and coaching.

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The recommendation is acceptable and will be integrated into future UNDP private sector development project/programme based on availability of resources and solutions negotiated with the donors. In particular, future programme will be designed:

  • Deliver follow-up support to recipient BMOs in 2015-2018 to strengthen sustainability or results of the previous phase;
  • Conduct additional research on BMOs and business development services (both demand and supply sides);
  • Promote networking, collaboration and platform thinking among different BMOs, including the Chamber of Commerce, in order to strengthen their synergies and therefore the impact on the private sector development;
  • Supporting public-private dialogue based on regulatory impact assessment etc.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Integrate the recommendation into Project Document for the Phase II of the Project
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager, Business Development Unit 2020/02 Completed In its Phase II, the Project will support creation of BMO networks and coalitions and facilitate their cooperation with the Ukrainian Chamber of Commerce and Industry, relevant regional Chambers, and other bigger organizations in as much as such cooperation benefits the MSME sector. History
7. Recommendation:

Evaluation recommendation 7. UNDP is to enhance the capacity of BMOs in understanding advocacy strategy and partnering with universities and research centres for the preparation of evidence-based proposals

In view of the small size of most business associations, training on advocacy should focus on helping them understand advocacy strategy and communication rather than enable them to formulate proposals. Small BMOs do not have the human and financial resources to prepare the proposals. Since proposals should be evidence-based and require extensive research, BMOs should partner with universities, think tanks, research centres which can help them in the formulation of proposals. 

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The recommendation is acceptable and will be integrated into future UNDP private sector development project/programme based on availability of resources and solutions negotiated with the donors. In particular, future programme will be designed:

  • Deliver follow-up support to recipient BMOs in 2015-2018 to strengthen sustainability or results of the previous phase;
  • Conduct additional research on BMOs and business development services (both demand and supply sides);
  • Promote networking, collaboration and platform thinking among different BMOs, including the Chamber of Commerce, in order to strengthen their synergies and therefore the impact on the private sector development;
  • Supporting public-private dialogue based on regulatory impact assessment etc.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Integrate the recommendation into Project Document for the Phase II of the Project
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager, Business Development Unit 2020/02 Completed In its Phase II, the Project will support creation of BMO networks and coalitions and facilitate their cooperation with the Ukrainian Chamber of Commerce and Industry, relevant regional Chambers, and other bigger organizations in as much as such cooperation benefits the MSME sector. History
8. Recommendation:

Evaluation recommendation 8. UNDP is to enhance cooperation between business associations in the adoption of common position when advocating for a change in reform or regulation in the business environment

In view of the small size of the BMOs, it is difficult for them to succeed in advocacy activities and in changing laws and regulations in the business environment without achieving consensus on issues related to the needed reforms. UNDP future interventions should enhance networking and cooperation between business associations in order to reach a consensus on major issues to be presented to the national or regional authorities for change in laws and regulations. The same platform proposed in the abovementioned recommendation on service provision can be used for the purpose of advocacy. 

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The recommendation is acceptable and will be integrated into future UNDP private sector development project/programme based on availability of resources and solutions negotiated with the donors. In particular, future programme will be designed:

  • Deliver follow-up support to recipient BMOs in 2015-2018 to strengthen sustainability or results of the previous phase;
  • Conduct additional research on BMOs and business development services (both demand and supply sides);
  • Promote networking, collaboration and platform thinking among different BMOs, including the Chamber of Commerce, in order to strengthen their synergies and therefore the impact on the private sector development;
  • Supporting public-private dialogue based on regulatory impact assessment etc.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Integrate the recommendation into Project Document for the Phase II of the Project
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager, Business Development Unit 2020/02 Completed Integrated in the Phase-II of the Project. Thematic trainings will be provided to BMOs at the meso-level to build specialist capacity of BMO teams (e.g. service provision, advocacy etc History
9. Recommendation:

Evaluation recommendation 9. The success of advocacy efforts at the national level would require from the business associations to partner with influential private sector organizations such as the Ukraine Chamber of Commerce and Industry, as well as with the regional chambers. UNDP should consider the possibility of supporting the Ukraine Chamber in the restructuring of the organization and supporting capacity-building activities for regional chambers.

Advocacy at the national level would need partnering with more influential organizations such as the Ukraine Chamber of Commerce and Industry, as well as with the newly established Ukrainian Entrepreneurs Union (SUP) which represents the interests of SMEs and large businesses. UNDP should support the Ukraine Chamber in reforms: creation of SME department and creation of a research unit for advocacy purposes. In this connection, it is worth mentioning that the Ukraine Chamber expressed its interest to cooperate with UNDP, since such “cooperation will promote and strengthen the “image” of the Chamber”. The Chamber wishes to get involved in future UNDP project interventions. One of the area of interest of the Chamber where it needs support is the creation of a research centre that would help in advocacy activities. Joint activities between chambers of commerce and other associations in the regions will enhance the relationship between chambers and agree on common issues, which can be presented to the national chamber. By doing so, the regional chambers can in turn have influence on the national chamber for advocacy purposes. The involvement of the Ukraine Chamber of Commerce and Industry in advocacy activities would contribute significantly to the success of the proposals presented by the BMOs. 

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The recommendation is acceptable and will be integrated into future UNDP private sector development project/programme based on availability of resources and solutions negotiated with the donors. In particular, future programme will be designed:

  • Deliver follow-up support to recipient BMOs in 2015-2018 to strengthen sustainability or results of the previous phase;
  • Conduct additional research on BMOs and business development services (both demand and supply sides);
  • Promote networking, collaboration and platform thinking among different BMOs, including the Chamber of Commerce, in order to strengthen their synergies and therefore the impact on the private sector development;
  • Supporting public-private dialogue based on regulatory impact assessment etc.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Integrate the recommendation into Project Document for the Phase II of the Project
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager, Business Development Unit 2020/02 Completed The Phase II of the Project envisages cooperation with the Ukrainian Chamber of Commerce and Industry and up to 5 regional Chambers of Commerce as newly selected BMOs members. In addition, Activity 3.1. envisages support to the Chamber in its organizational reform directed at the creation of SME department and a research unit for advocacy purposes. History
10. Recommendation:

Evaluation recommendation 10. The success of public-private sector dialogue would depend primarily on the capacity of BMOs to jointly advocate for deregulation and on the capacity of the public sector to get a better understanding of the required reforms and in the application of Regulatory Impact Assessment (RIA) as a methodology for assessing the impact of draft legislations on the various sectors of the economy, before its adoption by the government.

The success of public-private sector dialogue would depend primarily on the capacity of private sector representatives to achieve consensus among themselves on the issues that need to be addressed and on the joint presentation of evidence-based proposals. Such mechanism would make easy for the public sector to assess the proposals instead of dealing with big number of proposals originating from many BMOs. The role of the public sector will be that of a facilitator to translate the proposals into legislations. In addition to building the capacity of the private sector (as discussed in the part related to advocacy), the role of UNDP would be to build the capacity of the national and regional authorities in understanding issues related to macro-economic conditions and reforms needed to improve the business climate based on international experience. UNDP is to further increase ability of the Ministry of Economic Development and Trade as well as other authorities for the application of the Regulatory Impact Assessment (RIA) as a methodology for assessing the impact of draft legislations on the various sectors of the economy before its adoption by the Parliament or the Government (for the sub-laws).

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The recommendation is acceptable and will be integrated into future UNDP private sector development project/programme based on availability of resources and solutions negotiated with the donors. In particular, future programme will be designed:

  • Deliver follow-up support to recipient BMOs in 2015-2018 to strengthen sustainability or results of the previous phase;
  • Conduct additional research on BMOs and business development services (both demand and supply sides);
  • Promote networking, collaboration and platform thinking among different BMOs, including the Chamber of Commerce, in order to strengthen their synergies and therefore the impact on the private sector development;
  • Supporting public-private dialogue based on regulatory impact assessment etc.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Integrate the recommendation into Project Document for the Phase II of the Project
[Added: 2018/08/13] [Last Updated: 2020/08/07]
Country Office, Portfolio Manager, Business Development Unit 2020/02 Completed Strengthening capacity of BMOs to advocate for deregulation is included in the Phase-II of the Project as Activity 3.2. Support partnerships for advocacy and dialogue History
11. Recommendation:

Evaluation recommendation 11. SECO should consider a longer-term duration of the next phase of the project and allow for more flexibility in project revision.

In view of the fact that capacity development of BMOs and adoption of reforms in the business environment are a long process, SECO should consider increase its funding to UNDP and extend the duration of the next phase of the project to at least five-year duration. More flexibility is to be provided to UNDP to introduce changes to the project design and revision to the budget with the view to allow UNDP to adapt to changing conditions in the political and socio-economic environment. 

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The above recommendation will be discussed with the donor for the Phase II and its implementation will depend on the conditions of the new cost-sharing agreement .

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Hold a meeting with SECO on the results of the final evaluation
[Added: 2018/08/13]
Country Office, Portfolio Manager, Business Development Unit 2018/08 Completed Final Board held on 30 June 2018, the recommendations were presented.
12. Recommendation:

Evaluation recommendation 12. SECO should also consider the provision of funding to UNDP to widen the scope of the next phase of the project to include private sector development.

UNDP support to BMOs and reforms would need to be complemented by support to private sector development at: (1) the policy level particularly direct support to the government in developing the relevant policy framework with particular attention to the promotion of public-private sector dialogue; and (2) firm level with the view to enhance firm competitiveness in the local and export market.

Management Response: [Added: 2018/08/13] [Last Updated: 2020/12/14]

The above recommendation will be discussed with the donor for the Phase II and its implementation will depend on the conditions of the new cost-sharing agreement.  

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Hold a meeting with SECO on the results of the final evaluation
[Added: 2018/08/13]
Country Office, Portfolio Manager, Business Development Unit 2018/08 Completed Final Board held on 30 June 2018, the recommendations were presented.

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