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Notes From the Field: Working in the Western Balkans

Kaori Niina's picture

Belgrade, Serbia at dusk. Source - Adrien_DubuissonEditor's Note: "Notes From the Field" is an occasional feature where we let World Bank professionals conducting interesting trade-related projects around the globe explain some of the challenges and triumphs of their day-to-day work. The views expressed here are personal and should not be attributed to the World Bank. All interviews have been edited for clarity.

The interview below was conducted with Violane Konar-Leacy, an Operations Officer in the World Bank Group’s International Finance Corporation. She works for the Investment Climate group, and is based in Belgrade, Serbia. Ms. Konar-Leacy is currently managing a trade logistics project in the Western Balkans. She spoke with us about her personal connection with the region, and how she embraces the challenges of working in a politically complex environment.

Violane Konar-LeacyThe Trade Post: Tell us a little about how you came to be working on trade logistics in the Western Balkans.

Ms. Konar-Leacy: I have worked in trade and private sector development for most of my professional career. I started out in the field working for the US commercial service in Austria, helping American companies find business partners in Central and Eastern Europe. Then I moved to the US in the mid-90s, for school actually, and I subsequently also became an American citizen. After that, I worked in the US for more than 10 years. At one point I supported an SME network project in Southeast Europe. This got me to working with USAID, and I subsequently started working for a private consulting firm that took me back into the region.

So, I’ve worked in and on the region really for most of my professional life. I operated projects in Serbia, in Kosovo, and in Montenegro prior to joining the IFC. Most of these projects dealt with helping local companies become more competitive and to become successful exporters.

During this time, I got exposed in a peripheral way to trade logistics issues, because sometimes clients called us and they said, “My truck is stuck at the border. Can you help me? They’re not releasing it.” Or, “They’re charging me too high of a fee. Shouldn’t we do something?”

And so, this was kind of happening in a climate where if you had influence or you knew who to call, you could get something unstuck-- going through these arbitrary clearance processes. When I learned about this particular job opening focusing on trade logistics, focusing on streamlining clearance procedures in this region, I was quite interested. I thought it was a logical extension of what I had been doing thus far. Plus, the job was advertised as being posted in Belgrade, and I actually liked living here before so I was quite interested to return.

The Trade Post: What do you enjoy most about working in the region?

Ms. Konar-Leacy: Maybe since I am from Austria, it’s an environment I can relate to quite easily. You know, there are quite a few linguistic ties—and also personal ties, economic ties between the Western Balkans and Central Europe—Austria. I really like working with the people. Everyone is very welcoming. Personal relationships are important. So, it’s really quite gratifying. It’s an easy place to live; it’s very safe, compact. So it’s really a very good posting, I would say. I’m very happy to be based here.

The Trade Post: You mentioned the historical context of this region. Given that this is a regional product, what kind of hurdles have you run into and how have you tried to solve them?

Ms. Konar-Leacy: Yes, it is a somewhat tricky region politically. Bosnia and Herzegovina consists of two entities in itself, so we have multiple counterparts to deal with. There is the issue that Kosovo, which used to be part of Serbia, has been recognized by more than 100 countries since it declared independence but not by Serbia. There are still sensitivities that you need to recognize. There is a natural affinity between Kosovo and Albania; they’re very interested to work together. So, there are different levels of interest in collaborating across borders that we have to take into consideration when we operate there.

One thing to maybe just add, is for all these countries that we are working with here in the region, the eventual accession to the EU is very important. This convergence with EU requirements, the alignment with what’s called the EU Acquis is very important. So we are often asked when we propose reform initiatives, “Well, is this in accordance with what the EU wants?”

Often times we need to look for this regional expertise, because it is very specialized. So our consultants are mostly from the EU, because this technical knowledge is very important. It’s an additional piece of the puzzle that we are cognizant of here and that also helps our counterparts in starting to fulfill the obligations they need in order to become aligned with the body of EU legislation. And it’s also motivation that we can use when we work with them.

The Trade Post: Can you tell us a bit about your project and what you’re working on now?

Ms. Konar-Leacy: The project that I manage is to streamline border clearance procedures in the Western Balkans, which is essentially the CEFTA area—Central European Free Trade Agreement area, minus Moldova. It is a contiguous trading body connected by common borders. The countries that are part of the project are Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia. With the exception of Albania, these countries were all part of the former Yugoslavia, so they were once all part of the same system.

Now they are different countries with a bunch of borders between them. And this land area is not so big. When a company wants to move goods between one or more of these countries—trading inside the region or outside the region into the EU—trucks often have to pass multiple borders. The procedures at these borders are still quite cumbersome and inefficient, and the requirements are mostly different from one border to the next.

These requirements to comply, mostly checked by using paper documents given from country to country, create a time-consuming and complicated procedure that can really affect the ability of companies to get their goods to market quickly. And thereby of course, it’s a cost issue. It’s competition.

The Trade Post: Projects like this involve a lot of stakeholders. Can you describe how you work with these groups?
 
Ms. Konar-Leacy: The Investment Climate group is very private-sector focused. It’s our objective to improve the business operating environment, in order for firms to be more competitive, be able to grow, and employ more people. So, we make it our business to find out what businesses consider particularly burdensome—what causes them to spend more time or more money on the clearance process.

We try to identify these burdensome procedures and then work with the agencies that are responsible for making things faster and simpler, more efficient. Our counterparts are mostly the customs agencies and what are called SPS agencies. These are sanitary and phyto-sanitary agencies that deal mostly in issues relating to food safety.

In this particular group of countries, with agricultural products, food products, there is a concern for the safety of the consumer. And there is also the additional issue of fresh products, perishable products, which need to move fast. So, a lot of additional complications arise from the treatment of agricultural products. We’re working to try to lower the level of inspections and sampling that is taken.

The Trade Post: Can you elaborate on how fewer inspections can benefit trade and still be safe?

Ms. Konar-Leacy: Sure. We’ve actually just completed one initiative in Macedonia, which we are now taking forward into other countries in the region. We developed a risk-based approach to inspection and to sampling with the Macedonian food and veterinary agency, which essentially means that we developed a methodology with them that categorizes products and product groups as high-risk, medium-risk, and low-risk. Based on this approach, border agents can identify the levels of inspection and sampling based on these criteria.

So, the outcome is that there is more checking of what we consider high-risk groups, and less-checking of low-risk groups. This way, part of the consignment can move across the clearance procedure more quickly. We believe that we will achieve a reduction in sampling by 40 percent.

The Trade Post: Have you been working with other partners across the World Bank Group on this project? And if so, can you talk a little bit about this collaboration?

Ms. Konar-Leacy: Yes, we have been working on this Macedonia case, collaborating very well, very closely with the World Bank team that works on the second competitiveness loan for Macedonia. Our work to reduce inspections and sampling by the SPS agencies was one of the triggers of the loan. So, we essentially implemented the goals that the DPL set for the agency.  The prospect of the loan has been additional leverage to get agencies to, let’s say, stick to a particular timetable. So it worked out well for both sides, and was really a very good and very productive relationship.

We are also working with a group of researchers from the World Bank and the IFC on an impact assessment that is looking into customs and SPS agency reform in the region and how these will impact trade and firm behavior. So our relationships with agencies in the region and our ability to obtain data from them have helped this research effort, which will remain underway for at least the next couple of years.

It’s an important research initiative. There’s not so much research available in this particular field—how changes in customs and trade logistics impact the behavior of firms.  So, this will be important for all of us and our counterparts to better understand what these impacts are.  

The Trade Post: That seems like a lot on your plate. What comes next?

Ms. Konar-Leacy: Our project will run through the fall. It will have completed an almost three-year cycle by then. And we’re not done. There is plenty of work to be done in this area.

I mentioned risk management as one of the topics we are working on. We’re also working to harmonize the documents that are required for consignments crossing regional borders. We do a lot of capacity building with regards to clearance procedures, such as post-clearance audits, which means you check less at the border, but you check later. You establish a rapport with companies, and you check their books and their operations at certain intervals later on to make sure that they comply with customs procedures.

So, we’ve accomplished quite a few things, but there is plenty more to do. We’d like to continue our work. We’re looking for funding for a follow-up project at the moment. I think we will be able to find it. My horizon for this work is set on continuing for two or three more years to meet our goals to move goods more efficiently within the region, benefitting the bottom line of businesses.