USAID/OTI BOLIVIA HOT TOPICS
June 2005
Demand Fairs: Transparency in Public Procurement
Commerce between the public sector and small private enterprises is a source of tension in Bolivia. Many of the country's citizens have long maintained that their government's processes for procuring goods and services are exclusionary, driven by favoritism, and lacking transparency. Seeking to challenge this perception, the government issued a "Buy Bolivia" decree in January 2004, legislation designed to stimulate national production and promote transparency in public acquisitions, in theory opening up municipal procurement processes to small and micro enterprises. Noting the opportunity to further its work in providing economic opportunities for marginalized groups, the Office of Transition Initiatives funded a national media campaign last year that made information about the Buy Bolivia standards more accessible to local businessmen and women throughout the country.
Responding to a request by the Bolivian Ministry of Economic Development and representatives of Bolivian industry, OTI is taking its support of transparency in public commerce a step further. OTI is now providing technical assistance and funding for regional "demand fairs" (ferias a la inversa), which have become the primary instrument for promoting the Buy Bolivia legislation and putting its standards into practice. An important anti-corruption initiative, the fairs are expected to generate more than $200 million in new business opportunities for small and medium enterprises throughout the country.
Working through implementing partner PROCAL, a Bolivian business association dedicated to economic development and job creation, the OTI's grant funds training for public functionaries and business-sector representatives on how to organize the demand fairs. OTI is providing computers and other materials, and the grant covers the publication of results from these large public-sector fairs as well.
At the most recent fair, held in the capital of the Department of Oruro, representatives from dozens of local businesses attended the opening day, taking advantage of the opportunity to register on grant-funded computers, which maintain a database of local businesses. After this first step, attendees walked around the center to review stands erected by four departmental participants - the local branch of the Casa de la Salud, or National Health Bureau, and the Technical University, the Prefecture and the Municipality of Oruro. At each stand, the departmental participants posted lists of needs for a variety of public works and materials - from spices and uniforms to construction on public buildings and systems. Business representatives selected relevant goods and services and submitted bids to the four organizations for consideration in an open and transparent process. OTI-funded fairs already have been held in the Departments of Cochabamba and Sucre. At the Sucre event, the local municipality issued successful solicitations for more than 75 percent of its budget, receiving twice the number of bids for goods and services as it usually does. Six additional fairs are scheduled around the country.
Previous OTI support for the Buy Bolivia law, through partner PROCAL, has resulted in thousands of signed contracts. One OTI grant provided seed capital for a rotating fund to finance tools, equipment and training to increase the capacity of local businesses to execute already-won municipal contracts. Twenty-two micro-businesses borrowed from the fund to strengthen their ability to carry out their contracts; all 22 have since returned their loans. Future businesses participating in the ferias a la inversa will have access to the fund as well.
Since the successful execution of the first group of fairs, the national government has adopted the demand fairs as the critical mechanism for promoting development and government transparency.
For further information, please contact:
In Washington, D.C: Amy Frumin, LAC Program Manager, 202-712-4231, afrumin@usaid.gov
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