CASE STUDIES

 

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3. Lviv, Ukraine: System for Ensuring Transparency and Public Access to Regulations Issued by City Council

The Problem

Prior to mid-1997, the Lviv City Council and raion administrations received more than 1,000 requests a year from legal entities and individuals for copies of regulations issued by the City Council, the City Executive Committee, or the Mayor. More than 50 percent of the requests related to regulatory documents dating back for several years.

In their applications, most requesters failed to specify the exact title of the document, often made mistakes in document dates, and often confused Mayor’s instructions with resolutions or approvals of the Executive Committee (City Council decisions are called approvals in Lviv). The problems associated with searching for documents were exacerbated even more in 1994, when the liquidation of five raion councils in Lviv gave birth to yet another category of regulations, namely, “instructions of the chief of a raion administration.”

Submitting a request with incorrect data might constitute a formal basis for rejecting a request for information. Nevertheless, government officials did their best to help requesters obtain the documents they needed.

The lack of a centralized database of regulations complicated the searching processes. Besides, the protocol office had not used computers in the document drafting process until 1994. Only typewritten hard copies of all regulations were available. Another problem was that the city was unable to publish all regulations in local newspapers. The bulletin boards installed by raion administration offices did little to help solve the problem.

Therefore, the regulatory process was far from transparent.

The Solution

The entire process of preparing regulations was computerized in 1995. Regulations issued before 1995 were cancelled. An electronic database capable of searching documents by type (approval, regulation, and instruction), title, date of issue, keywords, etc. was created.

However, the only beneficiaries of that development were officials of the Executive Committee who became able to work with documents in a machine-readable form. Businesses and the public remained in an information vacuum.

In 1996 and 1997, the local authorities proposed several options to create a transparent system for providing entrepreneurs with access to information resources of local authorities, including the following:

• Creating a Web site with all of the city’s regulations on it. As soon as new regulations have been duly issued and signed, information is posted/updated on the Web site within three days.
• Preparing a specialized directory of regulations.
• Creating a network of advisory office at which individuals could access the Internet and the internal information resources of the City Council.

The Results

The urgent need to ensure the transparency of local authorities’ actions gave a strong push to the development of the City Council’s Web site (November 1996) and later on, a Web portal (May 1998).

Visitors received access to practically all of the information needed to run a business, for example:

• Announcements of competitive selections and tenders administered by the City Council and its executive bodies.
• An investment directory showing opportunities with virtually all local enterprises.
• An electronic city map showing all buildings, public transit routes, landmarks, and tourist attractions.
• A telephone directory of all local authority officials.
• Office hours when public officials receive visitors and other useful information.

The City Council Web portal (http://www.city-adm.lviv.ua ) became the first Web portal of a Ukrainian local government and one of major components of the Lviv Integrated System for Processing Information (LISOI).

Since the number of regulations issued between 1994 and 2002 exceeded 10,000, a special section, Administration Services, was added to the Web portal in 2002. This new section hosted business regulations and was intended to streamline use of the Web portal.

Beginning in 2003, Web portal visitors could listen to sessions of the City Council online. Archived records of previous sessions are also available.

The search pane of the Web portal looks like this:

Internet, the City authorities decided in 1996 to publish a two volume directory, “Regulations Issued by the Lviv City Council, Executive Committee, and Mayor,” jointly with the NewBisNet Business Center and a number of local public advocacy organizations, The directory was published in early 1998 with the financial support of USAID. The directory, which is more than 2,000 pages long, contains not only regulations, but also analysis and comments on certain administrative procedures. The importance of this publication is hard to overestimate since it was the very first edition of this sort in the history of Ukrainian local government.

Unfortunately, not a single city raion succeeded in creating an information center networks due to budget constraints.

Thanks to this approach, and in particular, due to Internet technologies, the operation of the Lviv city government became much more transparent after 1997-1998.

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4. Ivano-Frankivsk, Ukraine: Creating a Permit Issuing Center

The Problem

As in many other Ukrainian cities, one of Ivano-Frankivsk’s chief problems was managing the city’s permit system. First of all, the list of permits and approvals was too long. There existed overlapping oversight in the issuance of certain permits by governmental bodies; the interaction between local governments, regional administrations, and the offices of central government agencies in the process of permit issuance was uncoordinated; the permit issuance process was opaque; and the process did not account for the time and financial burden placed on businesses forced to deal with the malfunctioning permit system. A survey of the managers of the agencies issuing permits in the city and the region found that the problems of the permit system included inadequately trained permit issuance staff, poor knowledge of the applicable laws, discrepancies between permit issuance procedures in different local offices of the same national permit issuing agency, as well as numerous additional complaints from entrepreneurs.

The Solution

The innovation’s main goals were to improve, simplify, and optimize the process of obtaining permits and approvals under existing legislation in Ivano-Frankivsk. To this end, a Memorandum of Cooperation was signed between the heads of city’s permit issuing institutions, the chairman of the NGO Coalition Board, and the mayor. The City Executive Committee approved a resolution on establishing a permit issuance center, which provided for organizing a working group to study how to streamline the process for obtaining permits and approvals. The working group drafted the “Permit Issuing Center Regulations” and “Permit Issuing Center Rules and Procedures.” An operational system and process for obtaining permits, and workflow charts for 20 permit issuance procedures, were created. In January 2005, an information and consulting center, the Permit Issuing Center, was launched as a first step in simplifying the permit system. The Center creates a single location where entrepreneurs can get exhaustive information about the permit process, the number of documents required, and the required fees. Since only 20 permit procedures (there are more than 60 in total) had been developed and simplified by January 2005, the city government has decided to continue these efforts. Roundtable meetings and public hearings with entrepreneurs are currently underway to coordinate the permit process. The opening of the Permit Issuing Center is scheduled for the fall of 2005. This work has been implemented with support from the EU project “Improving the Environment for Small and Medium-Sized Business Development in Ukraine" and the USAID-funded BIZPRO Project.

The Results

The main results from implementing this project have been:

• Entrepreneurs can now obtain full and exhaustive information about all the permit procedures.
• Entrepreneurs now spend less time obtaining the 20 permits for which the issuing procedure has been simplified.
• Amendments to and the drafting of new legislative acts to regulate the business permit issuing system at the local and the national levels have been initiated. For example, Ivano-Frankivsk has developed and approved the following resolutions: a City Executive Committee resolution "On the Measures for Establishing a Permit Issuing Center," a City Council resolution "On Approving the 'Permit Issuing Center Regulations," and a City Executive Committee resolution "On Approving the Procedure for Passage of Documents for Obtaining Permits by Businesses.”

All this activity has been aimed at creating a more favorable political environment for business development in the city.

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5. Ivano-Frankivsk, Ukraine: Simplified State Registration of Businesses: Registration Chamber

The Problem

According to a May 2001 survey of the business environment in Ukraine conducted by the International Finance Corporation, 55.7 percent of businesses in Ivano-Frankivsk regarded the permit issuance and business registration process to be a significant barrier to business operations, putting the city next to last among Ukraine’s provincial capitals. The problems cited in the survey included a lack of transparency and corruption.

In numerous meetings, entrepreneurs always stressed the problem of starting a business, particularly business registration, which required significant amounts of time and a large number of documents. Enterprises did not have clear information on the requirements for completing this process.

Because economic development was selected as a developmental priority for the city, simplifying business registration was viewed as an urgent problem.

The Solution

The creation of a registration chamber in the city of Ivano-Frankivsk was initiated by a coalition of NGOs and the local business community and supported by the municipal and regional governments and the USAID-funded BIZPRO project. In November 2001, the coalition of NGOs conducted a roundtable in Ivano-Frankivsk to discuss the most common problems the entrepreneurs were facing. The procedure of business registration was found to cause the greatest problems. Entrepreneurs were unanimous in their complaints about the lack of information on how to complete the registration procedures and the significant expenditures of time and money required.

The coalition conducted two surveys of entrepreneurs and the staffs of registration agencies to obtain clear information about the existing registration practices. The existing normative-legal base on the registration procedures for newly established businesses was also analyzed.

The signing of a Memorandum of Cooperation between heads of registration agencies, the mayor, and chairman of the board of the coalition of NGOs was an important step in this undertaking.

“The Registration Chamber Regulations and Registration Chamber Rules and Procedures” were developed, based on the simplified registration procedures worked out pursuant to existing Ukrainian legislation.

The City Executive Committee provided office space for the Registration Chamber, and the city appropriated nearly UAH 50,000 to launch its operation.

Although the initiative for creating the Registration Chamber came from the coalition of NGOs, responsibility for its implementation was gradually transferred to the local government. The Ivano-Frankivsk Registration Chamber was officially launched on April 30, 2002. To ensure its technical capabilities, the BIZPRO project donated computer hardware worth more than UAH 25,000. An automated software application was also developed.

The Results

The number of registered businesses increased by 13 percent from May through August 2002, compared with the same period in 2001.

It was the first time that representatives of various registration agencies worked in one office, communicated openly with entrepreneurs, and provided consultations on the issues of business registration.

Overall, the following important results were achieved:

1. Reduced registration time
   • The period of registration was reduced from 28 to 10 days.
   • The average number of visits per entrepreneur was reduced from 24 to 3, i.e., instead of visiting 8 agencies three times each, they were required to visit the Registration Chamber to:
     • Obtain information about registration requirements.
     • Submit a package of documents.
     • Collect the processed document package.
   • Use of the computer application simplified the procedure of registration agencies’ inquiries with regard to legal and physical persons.
2. Improved transparency
   • Information was posted with a clear listing of the steps to complete, the list of documents required, and the standard fees for each step.
   • The chamber minimized opportunities for corruption and bribery, procedure costs were reduced by 55 percent for individual entrepreneurs and by 35 percent for companies.
   • An NGO representative was present at all times to monitor the Registration Chamber’s work.
3. Increased revenue generation
   • Registration agencies/funds registered more businesses every month, which generated increased revenues for these organizations.
   • Tax authorities registered five to ten new businesses every month, which increased revenue generation for local budgets.

Following an in-depth study of the experience of the Ivano-Frankivsk City Registration Chamber, the head of the oblast administration issued an ordinance to set up "one-stop-shop” registration offices in all of its cities and raions.

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6. Berdyansk, Ukraine: Creating Transparent Procedures for the Issuance of Business Permits

The Problem

Developing and supporting small business is a key task facing the Berdyansk city government. In addressing this issue, both the City Council and its Executive Committee make every effort to create specialized programs for the development of small and medium-sized businesses, including the organization of specialized agencies to implement and support these programs.

The time and costs incurred by businesses to obtain permits impede business development in the city. In July 2004, the city conducted a focus group with local entrepreneurs, which revealed that the permit-issuing process was the single greatest problem for business owners. These issues included problems in the issuing of permits for construction projects, the land allocation process, and the issuing of permits for the installation of consumer-oriented retail services.

The Innovation

To lower the cost of doing businesses in Berdyansk and create a transparent business permit process, the Berdyansk City Council Executive Committee launched a project to start a “one-stop-shop” center for the provision of administrative services. Berdyansk was one of the first municipalities in Ukraine to obtain international ISO 9001 certification, confirming the quality of municipal services and the creation of a quality assurance system. This, in turn, has stimulated efforts to improve the system of administrative services to businesses.

The one-stop-shop format means that all the required documents will be issued by local government officials and received by businesses in the same building. The main goals and objectives of establishing a one-stop shop Administrative Service Center in the city were to do the following:

• Reduce the time required for businesses to start business activity (the time required for issuing of some services was reduced by half).
• Optimized document flow, including a reduction in the number of documents required (a clear set of required documents was compiled, and entrepreneurs now only have to submit the documents that are stipulated and justified by laws and regulations).
• Reduce costs related to the need for applicants to visit individual agencies, organizations, and institutions issuing permits (quite often, certain managers attempted to obtain bribes during isolated, individual meetings with entrepreneurs).
• Improve the coordination of permit issuing agencies, organizations, and institutions.

During a six-month period, the Executive Committee staff, with a regional BIZPRO consultant and businesses based in the city, worked hard to implement a number of measures aimed at launching the one-stop-shop. To clear barriers for business development, the mayor held a meeting in November 2004 with heads of institutions, enterprises, and organizations based in the city to discuss the advisability of, and the need for, a one-stop-shop. The meeting created a group of project participants. In early 2005, the City Council allocated a downtown building for the one-stop-shop and appropriated UAH 100,000 of municipal funds to renovate the building.

A working group was set up specifically to begin working with the heads of enterprises, institutions, and organizations, and with businesses based in the city. The working group developed flow charts clearly showing the process of issuing permits with a clear listing of specific deadlines for the completion of the process. A sample flow chart is shown in Fig.1. When working on the flow charts, an idea emerged to apply the ISO 9001 operational principles used by the Executive Committee at the enterprises, institutions, and organizations that agreed to participate in the project. This allowed for the maximization of the benefits of the innovations.

To implement the identified tasks and put the ideas into practice, two training seminars were delivered to the representatives of city’s enterprises, institutions, and organizations. The seminars presented the key principles of ISO 9001 standards: legislative justification for an entrepreneur’s submitting of documents with his/her application; a clear indication of deadlines for response to an application; a clear listing of the cost of services and payment procedures; the name, position, and contact information of an official in charge of the processing; a formal complaint process dealing with the service; and other important information.

On May 12, 2005, the Berdyansk City Council Executive Committee passed a resolution to implement the procedures for issuance of permits in accordance with the developed flow charts and information cards for each service. A one-stop-shop Administrative Services Center was launched in Berdyansk on June 29, 2005. Nearly 100 businesses have used its services in its first two weeks of operation.

The Results

The center’s opening has made it possible for entrepreneurs to obtain quality administrative services, reduce their financial and temporal costs, and take an active part in social and community life in the city. The one-stop-shop office now serves as a venue for conducting roundtable meetings with entrepreneurs and seminars and workshops for targeted groups of businesses (carriers, hair-stylists, public catering establishments, etc.).

At the same time, the city enterprises, institutions, and organizations that participated in the project have gained expertise in applying the ideas and principles of ISO standards. They have improved the transparency of their operation and openness of the processes related to serving entrepreneurs. This, in turn, leads to creating a friendly business climate, good partner relations, and the balance of interests within the triangle of Government-Community-Entrepreneur.

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7. Ivano-Frankivsk, Ukraine: The Free Access System

The Problem

Ivano-Frankivsk has a community center called Dilovi Initsiatyvy (“Business Initiatives”). Based at the center is an informational hotline dealing with issues of business operation, allowing entrepreneurs from all over Ukraine to call operators and learn about the latest legislative changes, get an explanation of unclear legislative provisions, or obtain information on the issues of business operation, taxation, etc. It also offers a training course, "Starting Your Own Business and Conducting It Effectively." The center is constantly monitoring hotline inquiries, conducting roundtables, forums, and business conferences.

An analysis of hotline inquiries has shown that 11 percent of questions referred to regulatory policies of the City Council. Business Initiatives conducted a survey among 240 graduates of the course “How to Start Your Own Business” who had been trained at the Women’s Business Support Center. The survey data showed that 37 graduates had not yet started because they did not have clear information about the costs and the sequence of procedures to obtain the permits required to start a business. Prospective entrepreneurs were concerned about unforeseen payments, which could lead to significant unexpected costs that would prevent the timely opening of their businesses. This has again shown that local entrepreneurs cannot obtain sound and consistent information concerning business regulation from the local city government.

Public hearings have been held on the draft “Regulations on Unified Register of Local Ordinances.” The regulations “On the Unified Register” drafted by a working group were presented at the hearings as part of implementing a regulatory reform in the region. In the opinion of Ivano-Frankivsk entrepreneurs, “The lack of, or limited access to, such information significantly increases business risks, promotes corruption, and worsens business environment in the city.” Entrepreneurs incur significant losses when they have no information about additional financial costs or time, which emerge after business registration and which are directly linked to local regulations. As a result, they cannot clearly formulate their business plans and calculate the financial requirements of a startup.

The Solution

The Business Initiatives community center promoted the idea of establishing a unified register of ordinances in the area of business regulation in Ivano-Frankivsk.

The establishment of a unified register of normative and legal acts regulating business activities in the city of Ivano-Frankivsk was intended to do the following:

The process of building an electronic version of the unified register of documents regulating business activities took nearly a year. The document was discussed at numerous meetings of the working group under the Regulatory Reform project in the Ivano-Frankivsk Oblast at roundtable meetings with entrepreneurs, and justifications for its implementation were provided. The Mayor's ordinances "On Building a Computer Database at City Executive Committee's Protocol Department" and “On Support to and Information Content of the Ivano-Frankivsk City Community Web Portal” have supported these efforts. The procedure set forth in the regulations has been borrowed from the procedure of maintaining the unified state register of normative and legal acts approved by Resolution No. 376 of the Cabinet of Ministers of Ukraine of April 23, 2001. Volunteers from the Business Initiatives community center and the staff of the City Executive Committee worked on creating a database of the unified register. The UkrSpetsTechnologia Company implemented the technical development of the system.

In September 2003, entrepreneurs and other citizens of Ivano-Frankivsk were given an opportunity to obtain all the documents adopted by the local government in the area of business regulation on their own. The Free Access system is made up of the unified register of Ivano-Frankivsk City regulations and a specially developed information and search system. The database contains more than 400 documents, which can be searched by such criteria as year of adoption, subject, and the governmental entity that issued the document. It contains resolutions and ordinances that have been passed by the Ivano-Frankivsk City Council, Executive Committee, and the Mayor. The system contains additional data about permits, licenses, and consents, as well as other important information. Easy to use, the database is being updated regularly by relevant departments of the City Executive Committee. The database is available at city Web site ( www.namvk.if.ua), and it is also distributed on a CD that can be updated online.

The Free Access system is built to be easily adaptable to the unified register database of any other local community.

General information about electronic version of the Unified Register:

The main section of the database can be opened in the window REGULATORY ACTS. It contains the subsections:

• Search by issuing agency.
• Search by topic.
• Search by adoption year.

Having selected the required subsection, the user is able to access the required regulations sorted by the chosen subsection. To retrieve information about the process for obtaining licenses, permits, or consents required for conducting business activities, the window PERMITS AND LICENSES is used. It contains information about permits, licenses, and consents issued by the Sanitary and Epidemiological Station, Fire Brigade, Directorate for Architecture and Urban Development, State Road Police, and other agencies. The section DATABASE SEARCH is used to search for documents using key criteria (year of adoption, keyword in the document name or body text, issuing agency). The system uses morphological analysis, so words or phrases in Ukrainian need to be entered in the search field, e.g.: taxes and fees, and relations, etc.

The Free Access information and search system, representing Ivano-Frankivsk’s unified register of regulations in the area of business, was developed with funds provided by the Democratic Grants Program of the U.S. Embassy in Ukraine.

The Results

The launch of the unified register of regulations and creation of the Free Access search system has made it possible to:

• Ensure that all entrepreneurs have equal access to the existing database (register of regulations). This prevents any likelihood that the information will be distributed to insiders only and closes opportunities for corruption on the part of officials, due to limited access to local regulations.
• Carry out a comprehensive review of the normative-legal acts that establish or interpret the rules for activities of entrepreneurs and improve regulatory instruments of the City Council and City Executive Committee. The increase in the systematic approach in operation of relevant departments has improved the efficiency of system performance and promoted positive changes in business environment.
• Improve the city’s business climate thanks to the building of trust between the local community and local government. For the first time, entrepreneurs have free access to the information essential for the starting, organizing, and development of their businesses.
• Help business associations and community and nongovernmental organizations involved in business support activities assist their collective and individual members by disseminating information vital for their businesses, analyzing the local regulatory environment, and trying to control and influence it.

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8. Ivano-Frankivsk, Ukraine: The “Triumph” Competition to Celebrate the Leaders of Economic Progress

The Problem

The development of business, the creation of new jobs, and attracting investments in city economy, are among the key priorities for revitalizing Ivano-Frankivsk’s economy. The small and medium-sized business sector has been developing rapidly and dynamically in recent years. Local businesses have broadened their range of activities, increased the quantity of activity, and improved the quality of services.

To promote small business, the municipal government has launched several activities to remove obstacles and barriers to business development and to improve the city’s business climate. Despite the many steps taken to support small business, however, the media paid little attention to these activities. It became evident that although entrepreneurs were using innovative business practices and technologies, the general public was not being informed of it.

The Solution

To be able to identify best practices and positive trends in business, the “Triumph” competition was launched in 2004 to celebrate the leaders of economic progress in the city of Ivano-Frankivsk. This event is now conducted every February.

The competition is intended to recognize and reward entrepreneurs working in diverse economy sectors. Prizes are awarded based on the results of their performance in the previous year.

The mayor directed that an Organizing Committee be set up to coordinate and address the organizational issues and implement the competition. The committee is composed of the staff of line directorates and departments of the Economy Directorate of the City Council Executive Committee. The City press office staff has been actively involved with the committee to provide promotional expertise and to create an open and transparent competition. The city’s deputy for the economy was appointed to chair the committee.

To select the winner and cover the whole range of activities and sectors in the local economy, the mayor created a Competition Committee. The leaders of the Ivano-Frankivsk Chamber of Commerce and Industry, the Regional Office of the Ukrainian National Committee of the International Chamber of Commerce, the Regional Association of Industrialists and Entrepreneurs, the Ukrainian-Canadian Business Center, business associations, the Mayor’s Entrepreneurs' Council, officials of the National Bank’s Ivano-Frankivsk Regional Directorate, the State Tax Inspectorate for the city of Ivano-Frankivsk, City Council members, and members of the City Council Executive Committee were invited to serve on the committee.

The Organizing Committee, after considering the suggestions and comments of the Competition Committee, created a list of nominees for the awards. Winners were selected and awarded in 16 categories in various activities and economy sectors, including:

1. Investment of the Year.
2. Successful Industrial Enterprise of the Year.
3. Exporter of the Year.
4. Tourism Enterprise of the Year.
5. Local Brand of the Year.
6. Bank of the Year.
7. Small and Medium Enterprise of the Year.
8. Retail Establishment of the Year.
9. Public Catering Establishment of the Year.
10. Consumer Services Enterprise of the Year.
11.  Construction Company of the Year.
12.  Housing and Utilities Enterprise of the Year.
13.  Reformist Leader of the Year.
14.  Patron of the Arts of the Year
15.  Largest Taxpayer to Budgets at All Levels of the Year.
16.  Largest Taxpayer to Municipal Budget of the Year.

A list of general criteria for all the nominations was created, including:

• Growth of annual output.
• Profitable operation throughout the year.
• Complete payment of taxes owned.
• Complete payment of wages during the previous year.

Nomination-specific criteria were also established.

The Results

Creating the tradition of conducting the “Triumph” competition is a step to:

• Publicly celebrate small and medium enterprises.
• Create a positive image for small businesses.
• Promote best business practices.
• Disseminate best practices of business development.

The "Triumph” competition is just one of the components the city is using to stimulate entrepreneurs to improve their results. The city is pushing entrepreneurs to increase production, expand the range of their products, introduce state-of-the-art production processes, renew and modernize consumer services, and expand service areas. All of this is expected to lead to a better standard of living for city residents.

The competition is targeted at spreading information about the best small and medium enterprises in Ivano-Frankivsk, not only within the city but also throughout Ukraine and beyond. Delegations from other Ukrainian and foreign cities are invited to take part in the celebrations.

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Municipal Government Honors Entrepreneurial Business People

By Olena Holikova, “Partnery”, Kharkiv

Olena Ovsiyenko, a contender in the municipal entrepreneurs’ competition, succeeded in transforming a bland, simple building into a very useful small retail center.

Frequently, businesses blame government for all their woes. Government officials complain that businesses are indifferent to what is happening in their communities. To overcome this barrier of misunderstanding, the town of Merefa, Kharkiv Oblast, has launched a competition for the most enterprising businessperson of the year.

The competition was a brainchild of Olha Kalashnyk, the editor of a weekly newspaper published by the Merefa City Council, and Volodymyr Voronov, the secretary of the City Council, with support from the Association for Economic Development of Kharkiv Oblast Local Communities, the Agency for Promotion of Small Town Development, and the Merefa City Council.

The competition’s main goal was to involve businesspeople in the development of the local community. The competition was composed of the following contests: participant's business card, quick quiz, best business plan; the entrepreneur who did the most for city development, and the best article an a given topic.

The “Business Card” competition is for the best presentation, sometimes dramatized, of the participant's business. "Quick Quiz” was conducted as a question-and-answer contest between participants. The best article competition was aimed at giving entrepreneurs a chance to present their vision of the problems of the local community and how to solve them.

The jury included representatives of the City Council, the Association for Economic Development of Kharkiv Oblast Local Communities, the Kharkiv Institute of Management, and entrepreneurs.

Ihor Vinohradsky, a businessman well known in the town for his charitable activities (supporting needy families), won the competition. He started his business with a small shashlik restuarant. He has built a business to service trucks and serve the needs of passengers passing through the town. Vinohradsky submitted to the competition plans for a hotel complex with developed infrastructure (as part of the municipal program for renovation and improvements of one of its main streets). The project is very topical, because the town does not currently have a single hotel. Three participants have submitted projects to provide leisure activities for children whose parents cannot afford extracurricular activities. A project under the working title of “Childhood Development Program” is now being prepared based on their proposals.

The competition winner will be included in city delegations, which take part in study tours throughout Ukraine for representatives of Local Economic Development Agencies, which are organized by the Regional Business Support Center.

According to Voronov, the most difficult part of this exercise was convincing the entrepreneurs to participate in the competition. Out of the 350 entrepreneurs registered in the town, only 28 were willing to take part.

Entrepreneurs were reluctant to share their plans to develop their businesses. Some of them did not even know what a business plan was. However, the main objective of the competition was achieved, as local government and business community have demonstrated their mutual interests in tackling local socioeconomic problems. The next step, targeted to bring the government and business closer together, will involve the establishment of a business center in Merefa, which would provide training and information/consulting services. However, as always, financing is a problem. The Merefa City Council will provide no-cost premises for the center in its new building, along with a telephone line and Internet access. Furthermore, the Center will be able to run advertising in the local weekly Merefyanski Visti free of charge. It is harder to find ways to finance the purchase of furniture, office equipment, and informational materials. The question of payment of wages for the staff also remains open for the time being. A search is underway for government resources and private sponsors.

As one of the ways for generating the required funds, the Center is considering charging for some of its services. These might include training courses required by entrepreneurs; the conducting of seminars in the basics of marketing, management, and accounting; and computer literacy classes for secondary school graduates.

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