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This is an archived USAID document retained on this web site as a matter of public record.
THE REGIONS
In this section:
Guatemalan Government Gets Help to Stamp Out
Corruption
Small Loans Have Big Impact in Sudan
Moldova Streamlines Business Regulations
Moroccan Women Turn Argan Oil into Gold
LATIN AMERICA AND THE CARIBBEAN
Guatemalan Government Gets Help to Stamp Out Corruption
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Left to right: Alfredo Villa, private secretary to
the president of Guatemala; Glenn E. Anders, USAID/Guatemala
mission director; and Hugo Maúl Figueroa, presidential
commissioner for transparency and anticorruption, sign
the Memorandum of Understanding between USAID/Guatemala
and the Commissioner’s Office for Transparency
and Anticorruption, Oct. 26, 2005, in the presidential
palace, Guatemala City.
Rúben González
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GUATEMALA CITY, Guatemala—This Central American
nation ranked as one of the world’s most corrupt countries
in Transparency International’s 2004 survey gauging perceptions
of graft around the world.
A USAID survey conducted during the same year found that
49 percent of the public in the Central American country viewed
corruption there as rampant.
While recognizing that corruption cannot be stamped out
immediately, a USAID project that began in 2003 has been assessing
corruption in Guatemala and taking steps to reduce it.
The anticorruption project identifies and works on rectifying
weaknesses in government institutions that make them vulnerable
to corruption. Reducing corruption by a mere 1 percent could
save the Guatemalan government as much as $16.5 million per
year, USAID officials estimate.
“The overarching success of the program has been the
rapid, steady, and visible growth in public sector commitment
to improve efficiency and transparency in government operations
in general, and, in particular, of each of the entities that
the USAID program assessed,” said Richard W. Layton,
director of finance and business management at the USAID/Guatemala
and Central American Program.
Tackling the root causes of corruption is also expected
to encourage foreign investment. Officials hope that it will
also help convince Guatemalans to pay their taxes, which will
significantly boost the government’s coffers, given that
Guatemala has the lowest tax revenue collection rate in the
region.
USAID began anticorruption work here when former foreign
service national Edin Barrientos, who in 2003 was Guatemala’s
minister of agriculture, asked for help to get a clear picture
of the systems and management controls within his ministry.
Based on the findings, the Ministry of Agriculture implemented
several improvements, and is piloting fixed asset controls
and internal audit procedures that will be adopted by other
Guatemalan government ministries.
Impressed with the work, Guatemala’s then incoming
administration, headed by President Oscar Berger, asked USAID/Guatemala
to expand the project to nine other ministries: Education;
Public Health and Welfare; Finance; Communications, Infrastructure,
and Housing; Economy; Environment, and Natural Resources;
Culture and Sports; Labor; and Energy and Mines. It also asked
for help with four public sector entities: the National Tourism
Institute, Public Ministry (attorney’s general office),
Comptroller’s General Office, and Supreme Court.
Together with the agriculture ministry, these institutions
manage approximately 70 percent of Guatemala’s operational
budget.
“There were many challenges at the beginning because
of the natural concern that leaders had of what would be discovered
and how that would lead to public perception of government
inefficiency,” Layton said. “We were all nervous
about how to present results and the questions that the media
and the public would ask.
“This fear dissipated when each institution that was
evaluated began to understand the benefits the assessments
would bring to their work and the value of each public servant
in, first, the process of identifying areas for improvement
as a public service responsibility and, then, how to improve
the organizations’ image and reputation in Guatemalan
society.”
Each assessment looked at the legal framework, organizational
structure, administrative and financial management, and internal
and external controls in place for ministries to carry out
their stated objectives. Evaluators identified areas where
strengthening of systems and procedures was needed to reduce
inefficiency, graft, and “leakages.” USAID assistance
included support to prepare time-phased plans that each institution
could use to implement new or corrective measures.
The Ministry of Communications, Infrastructure, and Housing,
for instance, adopted a more decentralized budgetary system,
standardized its procedures and reforms for expenditure reporting,
started training programs for personnel, and improved information
technology.
AFRICA
Small Loans Have Big Impact in Sudan
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Emmanuel Bida sells cold drinks, cassette tapes, CDs,
and other goods in Yei, Sudan. He also rents out stereo
equipment for local events. He has taken out at least
six loans from the USAID-backed Sudan Microfinance Institution.
Laura Lartigue, Chemonics
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YEI, Sudan—Esther Moriba used to walk miles
to a distant market to buy her merchandise, but now she has
enough cash flowing to hire someone to bike to the market
to bring her goods back for her.
In the same region, Emmanuel Bida’s import business
is also offering a wider selection of goods for sale and rent.
And, Suzie Cici, buoyed by the success of her business selling
smoked fish at a local market, is making plans to open a restaurant.
“Now I’m motivated to work hard, because I’ve
learned that hard work will make you prosper,” said the
single mother of four.
Moriba, Bida, and Cici are getting help with their businesses
from the Sudan Microfinance Institution (SUMI), which provides
loans of between $100 and $3,000 to small businesses in a
region attempting a comeback after 22 years of civil war with
northern Sudan. Women, rural people, and those who were displaced
by the war are the program’s target audience.
SUMI, with four branches, has loaned more than $1.3 million
to 2,723 clients since it began in 2003. The repayment rate
has been high: 97.8 percent.
Given Southern Sudan’s dire conditions, few believed
SUMI would have even modest success. The war left little infrastructure
in the south, and no legal or regulatory systems to get government
and business moving. Against this backdrop, entrepreneurs
in southern Sudan are trying to make a go of it. SUMI is funded
by USAID to promote economic recovery in Sudan.
“Most businesses in Sudan are microenterprises, so
supporting them is practically supporting the entire commerce
sector,” said Irene Karimi, chief of party of the USAID-funded
Agricultural Enterprise Finance Program.
“Many people didn’t think southern Sudan was ready
for microfinance, but our clients are respecting the conditions
of the loans,” she added. “The project has promoted
a savings and borrowing culture among people who have long
been dependent on food aid. It has given people a sense of
dignity to have good credit, to work hard, and see their businesses
grow.”
USAID envisions SUMI becoming a self-sustaining, independent
business. Already some of its best advertising has been word
of mouth.
Cici, the hopeful restaurateur, was able to buy land, build
a house on it, and buy a car. Her four children now attend
school. She said many of her friends have also benefited from
SUMI loans. “Now we are encouraging other women to take
out loans so that they too can succeed,” Cici said.
Bida, who ended up with his wife and first child in a refugee
camp during the war, has taken out six loans, ranging from
$100 to $1,700. He sells imported audiocassettes, CDs, cold
drinks, and other goods. He also rents stereo equipment to
people putting on local events. “The loan has allowed
me to do things I could not do otherwise because I didn’t
have the capital,” said Bida, who has since had a second
child.
Moriba, who has eight people to feed in her household and
sometimes didn’t have money to buy enough food for them
all, was among SUMI’s first clients. “I still struggle,”
Moriba acknowledges, “but now my children are able to
eat three meals a day.”
EUROPE AND EURASIA
Moldova Streamlines Business Regulations
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Moldovan Minister of Economy and Commerce Valeriu Lazar
discusses his country’s new Guillotine Law with
Denis Gallagher, of USAID’s BIZPRO/Moldova.
BIZPRO/Moldova
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CHISINAU, Moldova—Hundreds of unnecessary, burdensome,
and corruption-friendly business laws and regulations have
just been eliminated from the books in Moldova.
Dionise Racu felt the difference immediately. Racu owns
SRL Auto Diagnostic, an auto repair shop in Hincesti, a town
about a 45-minute drive from the capital, Chisinau. He was
trying to obtain a bank loan to develop his business, but
had become ensnared in a labyrinth of local government requirements—many
with fees attached. One was for a certificate from the local
Ministry of Finance Fiscal Department.
“When I went there, they told me I didn’t need
it any more because it was abolished by the Guillotine Law
[which ended unnecessary regulation]. So I went directly to
the bank and I received the credit,” Racu said.
The Guillotine Law, as it has come to be known, has helped
Moldova reduce unnecessary legislation and policy directives
that have weighed down investment and business development.
Moldovan government officials believe that the guillotine
process will substantially reduce the 300 million Moldovan
lei ($24 million) that businesses were once required to dole
out annually in government fees.
Moldovan President Vladimir Voronin gave support to the
process. “The issue here is that without these reforms,
without the creation of new work places, without the creation
of new modes of production, this country will come to a standstill
in four years,” Voronin said in a late October interview
in Komsomolskaya Pravda.
About 40 percent of all laws and regulations affecting business
in Moldova were affected, with 10 percent of them cut and
another 30 percent sent to a special government commission
addressing regulation streamlining. The year-long effort has
been supported by USAID’s BIZPRO Regulatory Reform Program
(RRP), which aims to stimulate economic development and root
out corruption.
“The application of the Guillotine Law is one of the
most significant events in the reform process since Moldova’s
departure from the USSR,” said USAID Country Program
Officer John Starnes.
In December 2004, the Moldovan legislature passed the Guillotine
Law, which chops all acts from the book that are not specifically
retained, circumventing the need to individually repeal them.
The regulatory guillotine formally dropped with the publication
of two governmental decisions in Moldova’s Monitorul
Oficial, the Moldovan equivalent of the Federal Register,
in September and October 2005.
USAID has decided to extend RRP for another year to support
the extension of the guillotine approach to laws that affect
national, municipal, and regional government regulations.
The RRP also initiated a national advocacy campaign on regulatory
reform and corruption called “Join In and Fight Back,”
that uses billboards, TV spots, and thousands of posters in
offices, shops, schools, and public buildings to ensure that
the population understands what regulation streamlining means.
RRP is also distributing cards to truck drivers and shop
assistants informing them of their right to demand the name,
badge number, and specific law in question when police officers
stop or question them. The cards provide a hotline number
to report such incidents.
Roman Woronowycz of the USAID Regional Mission for Ukraine,
Belarus, and Moldova contributed to this story.
ASIA AND THE NEAR EAST
Moroccan Women Turn Argan Oil into Gold
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Members of the Doutama Women’s Cooperative pose
by their new line of valuable products.
M. Hedrick
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DOUTAMA, Morocco—Known as “Morocco’s
liquid gold,” argan oil is a prized commodity for the
Berber tribes in the south.
The people here and in surrounding villages in the Immouzer
region live off the sale of argan oil, which is harvested
by Berber women and is used as both a culinary and beauty
aid.
In 2002, USAID’s Watershed Protection and Management
project helped a group of these women establish a cooperative.
They built a traditional building and installed modern machinery
for oil extraction. That led to a tripling of revenues—from
60 dirhams ($6.50) to 170 dirhams ($18) per liter of the oil.
Now they are creating a tourist magnet from argan oil, which
is extracted through an arduous and labor-intensive process
from the nuts of the argan trees that grow only in the southwestern
region of Morocco.
It is increasingly coveted by Parisian chefs as a seasoning,
and it contains vitamin E and other healthful components.
Some believe it helps lower cholesterol and has other medicinal
properties. Even beauty product makers are incorporating the
oil into moisturizers and antiaging potions—including
in the new Plantidote line of skin care products from integrative
medicine enthusiast Dr. Andrew Weil.
To make their culinary tourism dreams a reality, the Berber
women tapped into USAID’s Morocco Rural Tourism Development
Program.
The first priority was to improve packaging and diversify
the product line. USAID funded the initial purchase of attractive,
cost-effective containers for both the cosmetic and culinary
oils. Then, to attract buyers, the program installed a sign
along the main access road directing passers by to the cooperative.
Already the cooperative’s location in the highly visited
region made it an ideal tourist pitstop. In the building’s
courtyard, a large interpretative display tells visitors about
the extraction process and daily life in the cooperative.
A map of the area provides information about other attractions,
encouraging visitors to extend their stay in the region.
As a result, argan oil now commands a higher selling price
and a larger clientele. From June 2005 to September 2005,
cooperative sales more than doubled compared to the previous
quarter. With the new bottles and labels, the price of the
culinary oil went from 170 dirhams ($18) to as much as 400
dirhams ($43) per liter. The cosmetic oil, a brand new product
for the cooperative, sells for 600 dirhams ($65) per liter.
The success of the cooperative has given its 44 members
confidence to plan for the future. “With the coop, I
feel my life is full,” said its president, Aïcha
Boumhati, 43. “I feel it’s given me some direction.”
Echoing this sentiment, 56-year-old Moutawakil Rkouche said
the money she has earned through the coop has helped her build
a better future for her children and grandkids.
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