Feasibility Study, 23-2-2009
1
Supporting regional development in
Northern Albania
Feasibility study for a joint programme, commissioned by
Swiss Cooperation and Austrian Development
Cooperation
Erika Schläppi
Zdenek Vyborny
Silvana Simaku
Dritan Shutina
23 February 2009
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Index
Executive Summary .................................................................................................... 4
Accronyms .................................................................................................................. 9
1
Introduction: Mandate and methodology ........................................................... 10
2 The framework for a new programme: main orientations of Swiss and Austrian
Cooperation .............................................................................................................. 11
3
The relevant context .......................................................................................... 12
3.1
Delivering public services through deconcentration .................................. 12
3.2
The ongoing decentralization process: Achievements and challenges...... 13
a) Local governments established ..................................................................... 13
b) Competences transferred, but unclear responsibilities .................................. 13
c) Financial resources transferred ..................................................................... 14
d) Civil society, public participation and accountability....................................... 15
e) The qark still relatively weak.......................................................................... 16
f) The new decentralisation strategy 2008 ......................................................... 17
g) Conclusions ................................................................................................... 17
3.2
Regional development: new institutions and processes ............................. 18
a) The new Regional Development Cross-cutting Strategy ............................... 18
b) Open questions and challenges .................................................................... 19
c) Conclusions ................................................................................................... 21
3.3
The driving factor for regional development: EU integration ...................... 22
a) The current pre-accession phase .................................................................. 22
b) EU Regional policy with regard to members ................................................. 24
c) Conclusions ................................................................................................... 25
4
3.4
The donors‘ landscape ............................................................................... 25
3.5
The potentials for a joint programme .......................................................... 28
Suggestions for a future joint programme .......................................................... 29
4.1
Key principles and approaches .................................................................. 29
4.2
Suggested intervention at central level ....................................................... 30
4.3 Suggested interventions at regional and local levels....................................... 31
a) Establishing a funding scheme at Qark level ................................................. 31
b) Improving the flow of information and transparency ...................................... 33
c) Continue to support DLDP’s work with municipalities/communes ................. 34
5
4.4
Various options for combining the programme components ....................... 35
4.5
(First) operational considerations ............................................................... 35
Suggested next steps ........................................................................................ 36
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Annex 1: Terms of Reference (excerpts) .................................................................. 37
Annex 2: Short Note on Decentralisation .................................................................. 40
Annex 3: Compilation of the strategies most relevant for regional development ...... 48
Annex 4: Information about available IPA funds ....................................................... 61
Annex 5: List of interviewees .................................................................................... 66
Feasibility Study, 23-2-2009
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Executive Summary
The task
Austria and Switzerland have been supporting Albania in its development efforts for
more than fifteen years. In the spirit of improved harmonization and cooperation
among donors, they decided to explore the possibilities to join efforts and design a
joint programme in the field of regional development and decentralisation. In order to
assess the feasibility of a joint Swiss/Austrian funded programme, a study was
commissioned to a team of two international and two Albanian experts. During a
common mission of two weeks (19 November – 3 Devember 2008), the team was
mainly expected to provide an overview on relevant strategies and challenges for
regional development and assess its links with decentralisation, identify challenges
and achievements with regard to EU integration, and identify potential and suggest
elements for a future joint programme.
This report is presenting the team’s analysis of the relevant context, the conclusions
for a potential joint programme, and the recommendations for a future programme.
The context: Regional development and decentralization
Since 2000, Albania has moved forward on the way of decentralization. Local
governments at regional (“qarks”) and local level (municipalities and communes)
were established. Several tasks, property and financial resources were transferred to
municipalities and communes. However, these transfers are yet to be completed, the
distribution of competences is not always clear, and municipalities and communes do
often not dispose of the human and financial resources needed to cope with their
tasks. The qarks are still weak, with a relatively broad scope but limited tasks and
capacities, with limited political legitimacy, depending largely on municipalities and
communes for funding. Participation of civil society in local decision-making is low,
and women are largely under-represented in the political system, and practically
absent in the positions of power. A new decentralization strategy was elaborated,
which aims at addressing some of the challenges mentioned. Once oficially adopted
and implemented, it will be a valuable basis for future work on decentralization.
The regional development cross-cutting strategy has been adopted, but its
concretization and implementation is still ahead. It is difficult or even impossible to
say how it will affect Albanian reality, but at least it can be said that the focus on
regional disparities will allow for channelling national and external funds in a more
focused way, responding to the specific development needs of poor regions and lead
to more concise, coordinated, systematic and effective support. From the perspective
of poverty reduction, Northern Albania can hope for an instrument to catch-up at least
partly with the richer regions of Albania.
The regional development aspect is relevant for centralized and decentralized
structures. The concept of regional development is not changing the competences
and responsibilities for and methods of delivering services and managing public
affairs, but regional development is adding the lens of disparity between regions.
The new Regional Development Cross-Cutting Strategy mainly aims at channelling
existing (and future IPA regional development) funds into the system, by creating
institutions to plan, allocate and manage these funds, but the new institutions and
mechanisms will not realize regional development themselves. Central and local
authorities, deconcentrated and decentralized services will have to continue to fulfill
their tasks, deliver public services and play their roles in the projects according to
their legal competences and responsibilities. Regional development is adding a new
Feasibility Study, 23-2-2009
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dimension, it is complementary to the existing institutional framework based on
deconcentration and decentralisation. To be effective, regional development must be
seen as a common objective and its implementation should involve all ministries,
while for the moment the observed rivalry among various ministries and institutions
seems to hamper common efforts.
The EU regional policy approach leaves substantial room for member states and
candidate countries to define their own priorities of regional development. The
instrument for pre-accession assistance (for candidate countries) as well as the
structural and cohesion funds (for member states) financially support activities to
balance regional disparities, according to national strategic reference frameworks
and according to a series of operational rules set by the EU. Absorption capacity to
deliver on strategic planning, project management, maintainance of infrastructure,
and sustaining public services will be key for Albania. If additional funds (from the EU
or other donors) for regional development will be channelled into the system, regional
and local capacities will have to be increased particularly in poor regions, with a view
to absorb these funds at regional and local level.
Potential areas for support
Based on this assessment of challenges and opportunities, various potential areas
are identified, where a future joint programme could provide meaningful support to
the regional development and decentralization process:
-
At intermediate (Qark) level, there are several institutions with overlapping and
sometimes even conflicting mandates: The Qark and its administration is
relatively weak in terms of political legitimacy, funding, and competences
(coordination and planning). The prefect also has a similar role of coordination
focusing on deconcentrated ministerial services – and similar limitations in
capacity and power. The new institutions foreseen by the new Regional
Development Cross-cutting Strategy will also have a planning and
coordination role. To make the system work effectively and deliver, there is a
need for clarification of roles and functions of the various actors at regional
level, to ensure institutional coherence and good governance.
-
In the context of regional development and EU integration and in the logic of
the principles of the Paris Declaration on Aid Effectiveness, development
funds will be increasingly channeled through national systems for managing
investment projects, sustaining services, monitoring impact of investments.
There is a big need to build absorption capacities to access and manage
these funds, at regional and local level, particularly in disadvantaged
communes and municipalities.
-
In the perspective of regional development, all Qarks should offer to citizens
and enterprises an “attractive place to live and work”. This means, among
other things, a minimum standard of infrastructure and public services
accessible to everyone, even in poor regions and sub-regions. Even if
investment in infrastructure will be increasing in the future, there is a big need
for institutional capacities to sustain service provision and maintain
infrastructure at regional and local level, as well as to improve quality of
services at local level.
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While the Albanian authorities have the responsibility to find answers to these
challenges, donors can provide support at all levels. Several donors are present in
Northern Albania, specifically in the field of regional development and
decentralization. The EC engages strongly with the process of implementing the
regional development strategy particularly in Northern Albania, while external support
for the the decentralization process is limited. Support for local governance in
Northern Albania is focusing on a very limited number of qarks, municipalities and
communes, and engages with a limited number of topics (mainly regional and local
planning). While many donors are engaged in providing public services in many
sectors also at local level and thus may have an influence on local governance,
focused and systematic support for institution building, capacity building and public
administration reform at regional and local level is very limited. This leaves room for a
meaningful joint interventions of ADC and SDC in Northern Albania. Close
coordination with national and local actors as well as with other donors, particularly
with EC/UNDP focusing on implementing the regional development crosscutting
strategy, will always be needed.
Suggested interventions
Based on the experience from other countries, the Albanian context analysis and the
main orientations of Swiss and Austrian cooperation, a series of principles should
guide any intervention in the field of regional development and decentralization.

Regional development should be used as a comprehensive concept, including
economic, social, political and institutional development. As the EU Lisbon
Agenda mentions, it is about making poor regions a more attractive place to
live and work, improve knowledge and innovation for growth, create more and
better jobs.

Quality and accessibility of public services (like water, sewerage, solid waste
management, education and health) are key factors for making poor regions
more attractive or keeping them attractive for business to develop,
professionals to work, and families to life. Experience has shown that the best
approach to improving public service is to combine support for improving
political and administrative processes with tangible improvements in
infrastructure and services.

Alignment with national strategies and the policies and action programmes of
the national and local governments for their implementation is a must,
although the existing strategies are numerous and overlapping, sometimes
even conflicting. Building ownership for coherent approaches across sectors
and common engagement in implementing these approaches is an important
feature of effective regional development and decentralization. Moreover,
harmonization among and coordination with other donors is key, but continues
to be a challenge.

One of the key challenges in many decentralized systems is transparency and
accountability, and information. Practical experience from regional/local level
should be systematically used to nourish the discussion at national level, with
a view to better inform decentralisation policy and regional development policy.

A future programme must be designed in a flexible way, to respond to the
changing variables, risks and opportunities.
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
A focus on fostering political dialogue, public participation (particularly of
women) and engaging civil society in decision-making on regional
development is needed.

A joint programme must show patience, be realistic in its objectives, and
donors must be ready for a long term engagement to build trust among
partners and see tangible results.
Building on the potential areas of support, the report suggests various areas of
interventions at central, regional and local level:
At central level: assisting the central government in definitively adopting and
implementing the new decentralisation strategy, in the cross-cutting perspective of
regional development. In particular, this would mean
-
to clarify functions and roles of the various actors at regional level (territorial
reform if needed)
-
to develop the financial framework to accomplish tasks at regional and local
level, particularly taking into account the needs of poor regions, municipalities
and communes.
-
to develop standards for delivering services, and accountability mechanisms at
local and regional level, and design an action plan on how to help the local
governments to reach the quality standards
At regional and local level:
-
Establishing a funding scheme at Qark level, providing grants to
municipalities and communes for projects to be selected, according to
various criteria reflecting the particular challenges of municipalities and
communes. The objective of this funding scheme is to enhance absorption
capacities at regional and local level, improve governance in the participating
qarks, municipalities and communes and contribute to improve the quality of
services. The projects should correspond to the priorities set in the regional
and local plans, mainly or partly target the needs of vulnerable or marginalized
groups, focus on intermunicipal cooperation and involvement of civil society,
particularly of women. The fund could also foresee a special facility for
projects proposed by local civil society organizations, particularly of women’s
organizations.
The funding scheme mechanism should be managed through the qark
according to procedures and standards aligned with EU procedures and in line
with the new regional development cross-cutting strategy. Close cooperation
with EC will be crucial. The fact that the EC/UNDP programme on regional
development is planning to pilot the regional dimension of the Regional
Development Crosscutting Strategy in three qarks of Northern Albania, opens
important opportunities for cooperation and synergy, which will have to be
explored.
Given the limited overall budget for this component, it is suggested to select
two Qarks maximum for the implementation of the funding scheme. While
Diber is already served by the Netherlands/SNV’s intervention, it must remain
open here whether Shkodra, Lezhe and/or Kukes should be taken up.

Improving the flow of information: Transparency is a key feature of good
governance, particularly for holding authorities accountable and make public
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participation meaningful. Through their intermediary position between the local
and central level, the Qarks are well positioned to address the lacking
transparency of the system, and the qarks might use information to strengthen
their own role of coordination and planning. Northern Albanian Qarks could be
supported in gathering qualitative information and data, particularly on
municipalities and communes, thus documenting regional disparities within the
qarks, monitoring and analyzing the situation of various population groups in
the region, with a view to improve its own performance in coordination and
planning and provide a more solid basis for decisions of municipalities and
communes. Moreover, sharing relevant information with a broader public
should be systematically promoted, and communication strengthened, with a
view to improve citizens’ access to information as well as participation
particularly on regional development issues.

Continue to support DLDP’s work with municipalities/communes: SDC is
already funding the Decentralisation and Local Development Programme
DLDP in Skhodra. DLDP focuses on strategic planning, public services,
financial management and citizens participation in the 8 participating
municipalities and communes. It also provides some limited funds to test
project management in concreto. Although there are activities initiated and
planned to expand the positive impact to other local governments, the effects
here are still limited. The suggested joint programme could help DLDP to
broaden its impact, and at the same time profit from concrete experience with
local government procedures and mechanisms. In this sense, it would be more
than logic to integrate this programme in the joint programme.
The various components build a comprehensive intervention and the exchange of
experience made in the various arenas with different stakeholders would be very
fruitful and reinforce each component in an ideal way. If this comprehensive
approach is not possible or feasible, the different components could in principle be
realised individually, or in various combinations. Nevertheless, it is strongly
recommended to combine central and regional/local levels of intervention,
representing a bottom-up as well as a top-down approach to decentralisation and
regional development.
Suggested next steps
The suggestions provided by this report should be shared with all relevant
stakeholders, asking them for a first feedback on the ideas and options. The results
of this consultation will provide a first validation of the feasibility of the components
suggested.
Based on these comments, ADC and SDC should agree internally on the main lines
of the new programme (goals and objectives, intervention levels and components,
amount of funding, evt.: selection of qark to work in).
Main lines, overall objectives and approaches of each programme component should
be discussed and agreed with the institutional partners to be involved at central,
regional and local levels.
A key document should be elaborated, explaining the main orientation of the
programme, its objectives, the financial and operational framework. This key
document will serve as a basis for a call for proposals, which should be launched.
Feasibility Study, 23-2-2009
Accronyms
ADA
Austrian Development Agency
ADC
Austrian Development Cooperation
ALL
Albanian Leks
CARDS
Community Assistance for Reconstruction, Dev. and Stabilization
CHF
Swiss Francs
DLDP
Decentralisation and Local Development Programme
EC
European Commission
EU
European Union
GTZ
Gesellschaft für Technische Zusammenarbeit (Germany)
IPA
Instrument for Pre-Accession Assistance
LGU
Local Government Units
MADA
Mountain Areas Development Agency
MEI
Ministry of European Integration
METE
Ministry of Economy, Trade and Energy
MoF
Ministry of Finance
MoI
Ministry of Interior
NL
Netherlands
NSDI
National Strategy for Development and Integration
NUTS
« Nomenclature des unités territoriales statistiques »
OECD
Organisation for Economic Cooperation and Development
RDCS
Regional Development Cross-Cutting Strategy
SCO
Swiss Cooperation Office
SDC
Swiss Development Cooperation
SNV
Netherlands Development Organisation
ToRs
Terms of Reference
UNDP
United Nations Development Programme
USAID
United States Agency for International Development
9
Feasibility Study, 23-2-2009
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1 Introduction: Mandate and methodology
Austria and Switzerland have been supporting Albania in its development efforts for
more than fifteen years. Both countries focused In recent times on socio-economic
development and service delivery in Northern Albania. In the spirit of improved
harmonization and cooperation among donors, they decided to explore the
possibilities to join efforts and design a joint programme in the field of regional
development and decentralisation, with a view to support broad based sustainable
development and enhance access to economic opportunities and social services in
particular of poor people and marginalized groups in Northern Albania.
In order to assess the feasibility of a joint Swiss/Austrian funded programme, a team
of four experts was assigned to carry out a study. During its mission of two weeks (19
November – 3 Devember 2008), the team was mainly expected to
-
provide an overview on relevant strategies and challenges for regional
development and assess its links with decentralisation;
-
identify challenges and achievements with regard to EU integration;
-
identify potential and suggest elements for a future joint programme (for
details see excerpts from the Terms of Reference in annex 1)
With a view to inform and update the team, particularly the international experts, two
desk review pre-studies were provided by the local consultants, on the status of
regional development and decentralization in Albania (see annex 2 and 3). Another
paper provides an overview on available IPA funds for Albania (annex 4). After a
detailed briefing by ADC and SCO, more than 40 interviews and meetings were
organized with representatives from different ministries in Tirana, the heads of qark of
Peshkopi, Kukes, Shkodra, and Lezhe (by phone), the prefect of Shkodra, the
mayors of Kukes, Peshkopi and Puka, the vice-mayor of Shkodra, the heads of
commune of Zerqan and Dajci, various representatives of regional and local
administration, civil society institutions, implementing partners, and donors in Tirana,
Peshkopi, Kukes, and Shkodra (list of interviewees in annex 5). The team had many
interesting discussions in a generally open and constructive atmosphere.
The summarized preliminary results of the mission were shared and discussed with
representatives of ADC and SCO in Tirana, on December 2 and 3. The team also
presented a shorter version of preliminary results to the 35 stakeholders present at
the official debriefing organized by Swiss Cooperation and Austrian Development
Cooperation in Hotel Xheko Imperial, Tirana, on December 2. Based on these
discussions a first draft of this report was elaborated and discussed with Swiss
Cooperation and Austrian Development Cooperation in Vienna, end of January 2009.
These discussions have been taken into account in the final draft.
Responding to the ToRs, this report elaborates the frame of a joint programme
(section 2) and provides a short analysis of the relevant context (section 3). It
suggests some key elements for a future joint programme, taking into account
various options, opportunities and risks (section 4) and concludes with next steps
(section 5).
The team expresses its special thanks to the organizers for their confidence as well
as for special efforts to arrange a rich programme enabling the team to develop its
views.
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2 The framework for a new programme: main orientations of Swiss
and Austrian Cooperation
Austrian cooperation has been present in Albania since 1991, and Austria’s ODA
amounts to 50 Mio. Euro (30 Mio. for Northern Albania only). Development
cooperation focused on education, energy generation and social infrastructure, by
financing investments as well as capacity and institution building. ADC’s support was
mainly financial assistance and focused at local level. According to its cooperation
strategy 2007-20091, Austria will gradually shift to a programme support and
increasingly work with systems and structures, at meso and macro level in order to
increase outreach and impact of its support. The overarching objective is to promote
sustainable social and economic development and strengthen the public sector in
Albania. The strategy’s thematic focus is on strengthening public partners and the
improvement of public services in the fields of water management, environment,
tourism and education. Good Governance and gender are seen as cross-cutting
issues: all activities should contribute to greater transparency in the administration of
public funds, separation of politics and public administration, strengthening of local
governments and civil society.
Swiss cooperation also started in the early Nineties and is estimated at 130 Mio.
CHF to date. For the last ten years, the Swiss Cooperation Office in Tirana is
implementing a programme focusing on private sector development, vocational
training, health care, and the energy and water sectors. According to the Swiss
Cooperation Strategy 2006-20092, Swiss efforts aim at contributing to an improved
quality of life for all people, and focuses in particular on supporting Albania in
strengthening a social and free market economy and realizing democratic principles
for regional and European integration. Swiss cooperation is currently working in three
domains: democratisation and decentralisation, private sector development, basic
infrastructure and social services, with gender equality and governance as crosscutting issues. Since 2006 SDC is funding the Democratisation and Local
Development Programme DLDP focusing on the support of 8 municipalities and
communes in the Shkodra region (4.5 Mio CHF planned for 2006-2009). Swiss
Cooperation is in the process of designing a new strategy for the next years.
As members of the OECD, Switzerland and Austria are both engaged by the Paris
Declaration on Aid Effectiveness aiming at improving international cooperation’s
impact on development in partners countries. The declaration builds on partnership
commitments between donors and partners countries based on principles such as
ownership of the partner countries, alignment of donors with partner countries’
strategies and policies, harmonization among donors (particularly through common
agreements and an effective division of labour), managing for results and mutual
accountability. The recent High Level Forum on Aid Effectiveness in Accra adopted
an agenda for action focusing on country leadership for development programmes,
investing in human resources and institutions, effective use of country systems,
transparency about aid plans, establishing a new spirit of aid conditions, reducing aid
1
Landesprogramm Albanien 2007-2009, www.entwicklung.at/laender-und-regionen/suedosteuropawestbalkan/
albanien.html
2 www.swisscooperation-albania.ch/en/Home/Medium_Term_Programme
Feasibility Study, 23-2-2009
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fragmentation, untying aid, and increasing accountability for results, especially in
terms of gender equality, human rights and environmental sustainability.
In the spirit of enhancing impact and harmonization among donors, Switzerland and
Austria decided to explore the feasibility of joining efforts in a future joint programme
for Northern Albania, particularly with a view to strengthen institution building for
regional development and taking into account the recently adopted Regional
Development Cross Cutting Strategy. While Switzerland envisages to continue its
support to municipalities and communes in the Shkodra region, the future joint
programme should focus on Northern Albania. According to the ToRs of our mission,
the overall goal and the expected outcome of the future programme would be
the “support of a broad based sustainable economic and social development in
Northern Albania, in enhancing the access to economic opportunities and social
services, in particular of poor and marginalized groups.” Swiss Cooperation and
Austrian Development Cooperation expect that the programme will substantially
contribute to “the implementation of the cross-cutting strategy on regional
development and decentralisation reform in Northern Albania.”
3 The relevant context
Regional development is a complex concept. It involves State activities, public
investment and service delivery at various levels. This report does not aim at a
thorough analysis of this complexity; it just highlights some aspects in these domains
which are seen as most relevant for the current context of decentralization and
regional development, particularly for Northern Albania. Nevertheless, the team
analysed various issues more in detail, mainly in the form of three short pre-studies
which are annexed to the draft report.
3.1
Delivering public services through deconcentration
Coming from a authoritative and centralistic past, Albania’s public services are still
widely centralized: It is mainly the various line ministries’ task to formulate sectoral
policies and manage economic and social development issues related to the various
public sectors such as public transport, education, health, communication, trade, etc.
But ministries are not only present in the capital. Many of them fulfill their tasks in the
form of deconcentration and provide services to individual citizens through institutions
established at regional or even district level. . The line ministries follow primarily their
sectoral strategies, policies and operational plans. Based on the National Strategy for
Development and Integration NSDI 2007-2013 and supported by the donors, Albania
has developed a big number of sectoral strategies in practically all domains of
economic and social development. Up to the end of 2007, 35 sectoral and
crosscutting strategies had been drafted in the framework of the NSDI.
Sectorial strategies and priorities are primarily implemented in parallel, channeling
funds from the national budget (and from donors) top-down, mainly through
deconcentrated institutions controlled by the ministries, although some funds are also
channeled through local government (see the following chapter, on conditioned and
competitive grants). These sectorial policies have an important impact at regional and
local level, although their impact on regional diversity is difficult to assess. From a
regional perspective, the prefect (appointed by the Prime Minister) has the role to
coordinate and supervise the activities of the various ministries and their
deconcentrated sectorial service institutions present in the region. This is, however, a
challenging task, since the prefect does not have strong supervisory power on line
Feasibility Study, 23-2-2009
13
ministries, and there are a myriad of deconcentrated institutions to coordinate. For
example, the prefect of the region of Shkodra counts 52 deconcentrated institutions
from line ministries to coordinate. Coordination meetings are held once a month, with
approx. 70 representatives present.
3.2 The ongoing decentralization process: Achievements and
challenges
Soon after the radical change in 1990, Albania started a process of decentralization
involving political, administrative, and fiscal aspects. Since then, decentralization is
moving steadily, although it faces a series of challenges:
a) Local governments established
The territorial and administrative reform of 2000 abolished the former 36 districts and
established a new structure of 12 regions (qark), 65 municipalities, and 309
communes. The boundaries of communes and municipalities were left untouched,
with the average population of municipalities at 22’500 and communes at 5’200, but
48% of local government units with less than 5’000 inhabitants.3 The mayors and
heads of communes are directly elected in a majority vote, while the
municipal/communal councils are elected in a proportional voting system based on
party lists. The regional institutions (qarku) do not have their own democratic
legitimation: The regional council consists of representatives of the municipalities and
communes. They elect the head of qark who is in charge of the regional
administration.
Local governments are organized in three national Associations: the Albanian
Association of Municipalities, the Albanian Association of Communes, and the
Albanian Association of Qarks. The associations seem to play a growing role in
bringing the views of municipalities/communes into the political debate and are
increasingly successful in influencing political decisions on decentralization issues at
central level. However, they complain about lacking capacities and the limited interest
of local governments in joining forces for political lobbying: For influencing political
decision-making in their favor, mayors and heads of communes still seem to prefer
direct and personal links to central power holders.
b) Competences transferred, but unclear responsibilities
Referring to the principle of subsidiarity the organic law of 2000 4 and its recent
amendments transfers a series of exclusive, shared and delegated functions to
municipalities and communes. Main exclusive functions are: water supply and
sewerage, construction and maintenance of local roads and public spaces, public
lightening and urban transportation, public cemeteries, parks, sport activities, solid
waste collection, urban planning, cultural and historical heritage, social services and
administration of nurseries, elderly houses, etc. Shared functions of
municipalities/communes include school and pre-university services, health care and
social assistance, public order and environmental management and protection. In
3
4
Albanian Regional Development: Opportunities and Challenges, UNDP Mission Report September 2005
Law 8652 (31.7.2000) on ”Organization and Functioning of the Local Government”
Feasibility Study, 23-2-2009
14
reality these functions are treated as delegated functions, and in many cases there is
no clear division of responsibilities between the deconcentrated services and the
municipalities and communes, resulting in a strong trend to see the municipalities
and communes as another deconcentrated service delivery unit in these domains.
In reality, the transfer of responsibilities is not yet complete in some areas, and local
public services are not yet delivered as intended, for a variety of reasons. In some
cases, specific legislation is lacking (e.g. urban planning), there are some delays in
property transfer (e.g. roads, water supply and sewerage systems), or financial
resources and/or professional capacity of municipalities/communes is lacking in other
cases. Municipalities/communes also complain about the lack of transparency and
predictability of the transfer process: Some competences have been transferred at
very short notice, without proper preparation and information.
If the central authorities do devolve competences to the local level of government,
they often seem to disengage completely with the tasks transferred, although the
central State still should have a vital interest to have local tasks fulfilled according to
quality standards. The transferred competences are narrowly linked to many issues
still in the responsibility of the central level. For example, water supply systems
involve health issues, environmental protection issues, regional planning. It remains
unclear what minimal standards and regulations local public services should comply
with, and there seems to be no or very limited practical guidance from the central
government on how to deliver. Municipalities/communes are to submit their decisions
to the prefect for control of legality of the decision, but possibilities for unsatisfied
citizens to hold local authorities accountable are very limited.
The principle of subsidiarity asks for transfer of public tasks as close as possible to
citizens, but not closer than possible: Many competences which have been
transferred to Albanian municipalities and communes cannot be dealt with at local
level only, or local level solutions are not cost-efficient: For example, solid waste
disposals must be planned and managed with due regard to the interests of
neighboring communes which might suffer from negative impact from the field, and in
many cases, it does make sense to find regional solutions instead of local ones. Or
local governments complain about having financial and managing responsibilities for
services of regional interest, like for example the boarding school, which is primarily
used by students from remote communities of other communes. Based on the idea of
“non-fragmentarization” of the existing systems5 25 companies of water supply and
sewerage were created, which should work on the basis of specific regulation and
decision-making structures. It remains open whether these companies will be able to
deliver adequate public services. In any case, a national or regional legal and policy
framework, financial equalization or, at least, intercommunal cooperation is needed,
to avoid that each municipality acts in an isolated way without taking into account the
needs and interests beyond its boundaries. Although the Organic law foresees the
possibility of inter-communal cooperation, in reality, there is little cooperation, and
there are no real incentives for collaboration.
c) Financial resources transferred
The municipal/communal budgets are covered by central government grants and
local revenues. The unconditional grant covers about 50% of the local budgets. It is
5
NSDI Annual Progress Report, Chapter 2.7 ”Decentralization”, p.27.
Feasibility Study, 23-2-2009
15
calculated according to some criteria and a formula which is subject to annual budget
negotiations. Conditional grants are used to finance “shared” functions of
municipalities/communes, while competitive grants were introduced to finance small
capital investments at local level, with regard to roads, water supplies, education and
health. Moreover, since 2006, municipalities/communes are allowed to collect
property taxes on buildings and agriculture land, property transfer taxes,
infrastructure impact tax, small business tax, simplified profits tax and vehicle tax. In
general, the potential of local revenues has not been exploited fully, and it tends to
privilege municipalities and communes with a certain economic potential.
The financial transfers from central government have increased nominally over the
last years, although there is no proper link between the newly introduced Integrated
Planning System and the local budgets. The NSDI Annual Progress Report for 2007
mentions that in 2007 the unconditioned transfer was 10% higher than in 2006 (12.6
Bio ALL). The total increase of grants is 124% (2.6 Bio. ALL) compared to the year
2006. However, the financial transfers, in particular the unconditional grants, are not
really linked to an assessment of financial needs in relation to the concrete tasks
transferred. The basis of calculating the grant seems to reflect to some extent the
idea of balancing regional disadvantages and advantages6, although there is no
systematic assessment of impact on the financial situation of municipalities and
communes.
Municipalities and communes differ very much among themselves. While some big
municipalities are developing rapidly and are able to take up the devolved tasks,
many small or remote communes lack the basic financial resources and professional
capacities to deliver most basic services. In the Action Plan for implementing the
Regional Development Cross-Cutting Strategy METE expresses its concern that the
competitive grant scheme is likely to increase regional disparities and reverse
decentralization trends.7 In any case, the decreasing capacities of local institutions
contributes to a decrease in the quality of life of people and hampers further the poor
communes’ competitiveness for attracting small and medium enterprises. The
differences among municipalities and communes seem to be growing in a kind of
vicious circle, contributing considerably to the widening gap between the regions with
regard to economic and social development potentials.
d) Civil society, public participation and accountability
Coming from a communist past – in a totalitarian and stalinist version not comparable
to its neighbours in the Western Balkan - state institutions, legal procedures, and
political processes have changed substantially. However, state power at central and
local level is often managed and administrated by a generation of (male) politicians
and officials who were brought up in deeply hierarchical, centralistic, closed and
authoritative system, and politicians, administration and civil society are very slowly
learning new roles and attitudes. While it is generally assumed that local authorities
are more accessible to citizens and local civil society groups than the central
authorities, civil society does not yet seem to take much space in shaping political
decisions in Northern Albania. Although there are some good examples of changing
attitudes of authorities and growing self-confidence, trust and engagement among
citizens (men and women), civil society still plays a very limited role as a
6
7
See Regional Development Cross-Cutting Strategy 2007, S. 17.
Action-Plan for the RDCS, Phase 1 (2008-2009), October 2007, p. 6.
Feasibility Study, 23-2-2009
16
counterbalance to state power. A culture of public debate and dialogue within and
among the authorities has yet to be established, since decisions often continue to be
taken in non-transparent ways and are controlled even at local level by a still
centralized and very personalized power system within the two main political
partiesMany observers point to the fact that participation of women in local
decision-making is low. While some women are working in public administration at all
levels and some local women organizations are involved in development initiatives
and projects, very few women are involved in political decision-making at local and
qark level. Besides of some exceptions, women are practically inexistent in positions
of power, such as heads of qark, mayors, or head of communes. For example, only
2% of mayors are women.
Moreover, it still seems to be difficult for citizens to hold local (and central) authorities
accountable for illegal or inappropriate action. While citizens can go to court to
challenge individual decisions, this is not really seen as a viable option for many. And
there is very limited public space to raise political issues, ask for accountability and
challenge political decisions, either at local or at central level.
Like in other countries in the regions, there are a certain number of NGOs working on
development and human rights issues, but they often lack a broad local
constitutency. With the European integration process and the focus on alignment, the
focus of donors seems to shift more and more to government support, and the drying
out of international support leaves no choice to many NGOs who do not have strong
roots in Albanian civil society, to adopt new roles of (paid) service delivery.
e) The qark still relatively weak
It has already been mentioned that, according to the constitution, the regional
councils and the heads of regional councils do not have direct political legitimacy.
Since the qark councils consist of representatives of municipalities and communes,
they are often seen as local government association, rather than as an intermediary
level of government. Although the Organic Law No. 8652 provides a basis for
regional taxes and fees for public services, the regions lack any fiscal autonomy.
Qarkus are primarily financed by transfers from central government (particularly for
the costs of a relatively well developed administration) and municipalities/communes
which are supposed by law to transfer an agreed percentage of their own revenues
to regional budgets, but this seems not always to be the case.
Originally, the regions were established with a threefold purpose: to optimize the
provision of public services, to provide a platform for achieving common regional
interests, and to ensure the alignment of local regional and national priorities and
harmonize local and regional policies with national objectives.8 The Organic Law No.
6852 vaguely outlines the roles and responsibilities of the regions (qarku), stipulating
that the main functions of the council are the “development and implementation of
regional policies and their harmonization with the national policies at the regional
level”. However, the qarku do neither have administrative instruments nor the
financial means nor professional capacities to deal with this task. It seems that
particularly the big municipalities are unwilling to accept regional guidance or
intermediation in their direct dialogue with central authorities. Moreover, it is still the
8
See: Albanian Regional Development: Opportunities and Challenges, UNDP Mission Report September 2005.
Feasibility Study, 23-2-2009
17
prefect’s role to check the legality (but not the political appropriateness) of the
decisions taken by the municipalities/communes. Inspite of the qarku’s task of
regional coordination and planning, there is no clear role in overseeing the action of
municipalities/communes, or fostering most needed cooperation among local
instititutions.
The qark also has a right to exercise executive competences in the delivery of public
services: tasks can be delegated by the central government or by
municipalities/communes. For example, qarks have some role in managing rural
roads and most recently in the domain of construction police. In 2005, the central
government transferred responsibilities for the allocation of funds in the area of
primary education and health care to the regional councils. Already a year later,
these responsibilities were taken back and replaced by the competitive grant system,
directly allocating investment funds to the municipalities/communes in need. The
transfer of competences had resulted in a wide disperse of money and a number of
unfinished constructions of school. The transfer was done without much preparation
or consultation and did not factor in the strong limitations of Qarks to impose regional
interests against local interests of their members, which had heavily contributed to
make this process fail.
The qarks seem to be in a relatively uncomfortable intermediate position between the
central government, the line ministries, the prefect, and the municipalities/communes.
While many observers state that there is an absolute need for an intermediate level
of decentralization, others say that the territorial dimension of qarks is not adequate
for Albania, suggesting either to make them bigger in line with EU/NUTS 2 regions –
or smaller in line with the old district system.
f) The new decentralisation strategy 2008
Most of these concerns have been taken up by the strategy on decentralization which
has been adopted in July 2008 by the Committee on Strategic Planning of the
Council of Ministers (but not yet by the Council of Ministers). It aims at improving
governance, making institutions more effective, participative, democratic, and
transparent governance. With the objective of integrating into EU, the strategy is
based on the principle of subsidiarity. It plans to
-
re-think territorial division, election mode, financing and competences at qark
level, still focusing on regional planning and coordination;
-
develop an integrated financial framework for LG;
-
develop a legal framework for shared functions with line ministries;
-
develop and implement standards for local services;
-
develop technical guidance and build local capacity.
It remains to be seen whether this strategy will be confirmed by the Council of
Ministers, and how it will be implemented.
g) Conclusions
Since 2000, Albania has moved forward on the way of decentralization. Local
governments (regions and municipalities/communes) were established. Several
tasks, property and financial resources were transferred to municipalities and
communes. However, these transfers are yet to be completed, the distribution of
competences is not always clear, and municipalities and communes often do not
Feasibility Study, 23-2-2009
18
dispose of the human and financial resources needed to cope with their tasks.
regions (qark) are still weak, with a relatively broad scope but limited tasks
capacities, with limited political legitimacy, depending largely on municipalities
communes for funding. Participation of civil society in local decision-making is
and women are largely under-represented particularly in the positions of power.
The
and
and
low,
A new decentralization strategy was elaborated, which aims at addressing some of
the challenges mentioned. Once officially adopted and implemented, it will be a
valuable basis for future work on decentralization.
(for more details see pre-study of Dritan Shutina, annex 2)
3.2
Regional development: new institutions and processes
a) The new Regional Development Cross-cutting Strategy
While Albania’s growing economy is still facing many challenges linked to the
transition from a closed planned system to a market system, regional disparities
within Albania are great. According to the Regional Development Cross-cutting
Strategy RDCS poverty is 66% higher in rural areas than in Tirana, and 50% higher in
rural areas than in other major urban centres. The Human Development Index is
three times higher in Tirana than in the mountain areas of Albania, and there are
great disparities within qarks and even within municipalities and communes. These
disparities result in internal and external migration.
The new strategy on Regional Development aims at addressing regional disparity,
primarily by making the sectoral investments and activities of the line ministries
respond to regional disparities in a coherent regional approach. The strategy has
been endorsed by the Council of Ministers in 2007. It formally aims at a balanced and
sustainable socio-economic growth among the regions and plans to accelerate the
integration process into EU and NATO. One of the major political objectives of the
regional development process is to make Albania ready for accessing EU Integration
and Pre-Accession IPA funds which will be open for regional development, when
Albania will reach the status of a candidate for accession (see the following chapter
on EU integration). These two orientations are somehow reflected in the two strategic
objectives of the RDCS:
Strategic objective No. 1: ensuring that all qarks (or “counties” or “regions”) 9
are enabled to contribute to sustainable development and competitiveness – and
thus reduced social and economic disparities across the country. This will be
achieved through two programmes: the National Programme for the Development of
Qarks and the Disadvantaged Areas Development Programme.
The English text is using the term ”county” instead of ”region” or ”qark” and does not refer explicitly to the
existent institutions (and territorial delimitations) at regional level. According to some of our interviews, this is
intentionally so, to be flexible in the view of a possible territorial re-organisation. To avoid confusion, we use here
the term of ”qark”, since this is the term currently used for the existing territorial entity at regional level which
regional development is referring to.
9
Feasibility Study, 23-2-2009
19
Strategic objective No. 2: setting in place an efficient management framework for
regional development. This will be achieved through the elaboration of a new legal
framework and the development of institutional structures to manage regional policy.
The strategy introduces a series of new elements to Albanian policy:
-
in terms of strategic planning and policy:
o a single policy framework for development, taking into account the
specific needs of qarks;
o a single socio-economic development programming document for the
qark (the Regional Development Strategy),
o the concept of a regional development agreement, a multi-annual
strategic, operational and financial plan setting out central government
support for development priorities in each of the qark;
o the designation of disadvantaged areas for a period of five years, a
government plan for the development of disadvantaged areas and a
special budget line for special support schemes for both disadvantaged
qarks and disadvantaged communes and municipalities;
-
in terms of institutions:
o a National Partnership Council for Regional Development, bringing
together government ministries, qarks and local governments, the
social partners and civil society;
o an expanded department for Integrated Regional Development within
METE, for managing Albanian regional policy and for the future
implementation of EU regional policy.
o a new partnership between national, qark, municipal and commune
stakeholders, in the form of Regional Partnership Councils
o a single local agency to coordinate the implementation of the Regional
Developoment Strategy (the Regional Development Agency).
The national programme for regional development is planned to be budgetary
neutral: The majority of funds for implementing the strategy will come from the line
ministries and be contained within the sectoral strategies (including the competitive
grant for municipalities and communes), in accordance with the planned regional
development agreements. Additional support from the central budget is foreseen to
cover a proportion of the establishment and operational costs of the Regional
Partnership Council and the Regional Development Agency.
b) Open questions and challenges
The strategy has been adopted, and its implementation is in the very first phase. Its
future impact is not yet very clear. For many of our interview partners in Northern
Albania, the perspectives of regional development are still vague, due to the fact that
there is still a challenging process of concretization ahead, since the strategy left
open some important questions which are planned to be answered by guidelines,
laws and by-laws, and action plans. Given the diversity of views among the different
ministries on how to implement the strategy, the challenge will be to find common
ground on these important questions:
Feasibility Study, 23-2-2009
-
10
20
What is “regional development”? What will be the content and focus of the
regional development strategies? Infrastructure development? spatial
planning? delivery of public services? Promotion of economic activities?
Consolidating regional and local governance structures and institutional
capacities for investment and public services?
-
How to really make it cross-cutting and meaningful for sector policies? Who
is responsible for linking the regional development agreements with financial
resources, coming from the line ministries’ budgets?
-
How will be the relationship between the planned new institutions
(partnership councils and development agencies) at regional level and the
existing qarks which have the legal competence of planning and coordinating
regional development? Who will decide on investment priorities and planning?
-
How will the authorities respond to the particular needs of the civil society
and the private sector in the regions? Who will be invited and able to
participate actively in the decision-making on regional development? How will
the members of the partnership councils at national and regional level be
selected, and whom will they represent? Will the marginalized groups also
have a say?
-
What will be the consequence for the decentralization process? What
would be the impact, if additional EU funds will be channeled through the
qarks – or through new regional institutions in parallel to the existing qarks?
What will be the role of municipalities/communes in implementing EU-funded
projects? Will municipalities/communes and qarks be able to tap the additional
resources in their areas of competence or at least have a say, given the fact
that several interviewees expressed the view that regional development must
be seen as a top-down process steered by central government?
-
Regional disparities should also be reflected in the decentralization
process. If not taken into account properly, regional disparities may have a
variety of negative impacts. For example, the “attractivity to live and work” (see
the following chapter on EU regional policy requirements) in a particular region
depends to a large extent from the accessibility and quality of public services
under the responsibility of municipalities/communes. A low level of public
services (public utilities, education, health) is an important factor determining
the framework conditions for economic activities, and thus contributes to
decrease the competitiveness of the poor regions. In many cases, the lack of
opportunities for children’s education and the inaccessibility of health services
are important reasons for migration of well qualified professionals. In poor
regions, the needs for public service are different and may be even higher (in
social assistance, education, health) and more costly (because of
inaccessibility of the area) than in richer regions, while local governments will
not be able to count on tapping additional financial resources. The current
formulas for distributing unconditioned, conditioned and competitive funds to
municipalities and communes do take into account to some extent economic
disparities, but concerns remain that the distribution of funds benefit to those
regions able to co-finance and manage projects, i.e. richer areas.10 Regional
In the Action Plan for implementing the Regional Development Cross-Cutting Strategy METE expresses its
concern that the competitive grant scheme is likely to increase regional disparities and reverse decentralization
Feasibility Study, 23-2-2009
21
policy considerations should therefore also be mainstreamed in the
decentralization policy and reflected in an informed financial equalization
scheme.
(see also: Pre-study of Silva Simaku, annex 3)
c) Conclusions
The regional development strategy has been adopted, but its concretization and
implementation still is ahead. It is difficult or even impossible to say how it will affect
Albanian reality and impact on Northern Albania. But at least it can be said that the
focus on regional disparities will allow for a more differentiated approach to economic
and social development and a concise, coordinated and systematic support for poor
regions. From the perspective of poverty reduction, Northern Albania can hope for an
instrument to catch-up at least partly with the richer regions of Albania.
The regional development aspect is relevant for both deconcentrated and
decentralized administrations and public services. The concept of regional
development is not changing these ways of delivering services and managing public
affairs, but regional development is adding the lens of disparity between regions
to both. The new Regional Development Cross-Cutting Strategy mainly aims at
channeling existing (and future IPA regional development) funds into the system, by
creating institutions to plan, allocate and manage these funds. The new institutions
and mechanisms will contribute to plan and implement projects, but they will not
realize regional development themselves. Central and local authorities,
deconcentrated and decentralized services will have to continue to fulfill their tasks,
deliver public services and play their roles in the projects according to their legal
competences and responsibilities. Regional development is adding a new dimension,
it is complementary to the existing institutional framework of deconcentration and
decentralisation. To be effective, regional development must be seen as a common
objective and its implementation should involve all ministries, while for the moment
there is considerable debate among various ministries and institutions on how to
steer and implement regional development policy.
Graph 1: Public institutions and processes in the regions
trends. Various reasons are given: The level of disadvantage is no criteria for selection. The quantitative selection
criteria of “number of beneficiairies” favors big and urban municipalities/communes. There is no support for
disadvantaged communes for preparing applications, so lacking capacity means no money. And there is no role
for qarks in deciding on regional priorities.
Feasibility Study, 23-2-2009
22
Financial flows
govt.
Qarks
Nat. Partnership
Council
Agency
Reg. Partnership
Council
Agency
Deconcentration
n
Regional Development
Decentralisation
Central
MOI
Central
govt.
METE/MoF/ME
IMoJ
Central
ministries
Prefect
Municipalities/Communes
govt./line
Directorates
(District) ivisions
Citizens access to public services…
From the perspective of decentralisation, a particular challenge for implementing the
regional development strategy will be to clarify and strenghten the roles of new and
old institutions at regional level, with a view to express, defend and plan for “regional”
interests. The qarks (and the prefects) already have a formal role of coordination and
planning but the experience from Northern Albania shows that they are relatively
fragile and weak, and they are not really seen as politically legitimate to represent
regional interests. The new partnership council and a new regional development
agency will change the regional (and national) dynamics in this area. It should not be
handled as an additional parallel institution, but integrated in the existing political and
administrative system.
3.3
The driving factor for regional development: EU integration
One of the driving factors for the political debate on regional policy is the EU
integration process. Firstly, the perspective of accessing additional EU funds in the
pre-accession phase (see the following section a) and as a future member (see the
following section b) provides important incentives and clearly triggers political and
economic reform. But, since there is a broad consensus that Albania should
integrate into the EU system, the argument of adapting to EU standards is too often
used – and sometimes misused in the political debate.
a) The current pre-accession phase
The Instrument for Pre-Accession Assistance IPA is the EU’s financial instrument for
supporting the pre-accession process of countries aspiring to join the EU for the
period 2007-2013. In its current status of a potential candidate, Albania has access to
components 1 (Transition assistance and institution building) and 2 (Regional and
cross-border cooperation) of the Integration and Pre-accession IPA funds. For both
Feasibility Study, 23-2-2009
23
components, the Financial Agreements have been signed, and the programmes have
started. The second component is particularly relevant for Northern Albania, but the
funds available are relatively limited (2.8 Mio. Euro for 2008-2010). The other three
IPA components (“regional development”, “human resources development”, and
“rural development”) are only for candidate countries. Albania will have access to
these funds if and when it will be accepted as a candidate country – a political
decision which does not seem imminent for the moment. More EU funds (“structural
funds” and “cohesion funds”) will be available for new member states, in a relatively
far future for Albania (see section b). According to the Multi-annual Indicative
Planning Document MIPRD 2008-2010 the main focus areas of EU funded support
continue to be justice and home affairs, administrative capacity building, economic
and social development, and democratic stabilization. Under the component of
regional and cross-border cooperation local government units (LGUs) are foreseen
as beneficiairies. This probably means that municipalities/communes as well as qarks
can apply for funds to realize projects corresponding to the criteria spelled out.
Moreover, the „Municipality window“ will provide direct access to
municipalities/communes to additional funds, following the example of other South
Eastern Europe countries. The “Municipality Window” is a financing grant scheme of
the European Commission for hard infrastructure projects of communes and
municipalities: Project proposals are submitted to a Bank (Bank of Europe, European
Bank of Investment, etc), in order to get a loan. When the loan is approved, local
governments can apply to get a grant from the “Municipality Window” program in
order to cover their part of the project implementation. In any case, the IPA system
provides guidance for the effective financial management of funds, but it does not
intervene in the political debate on territorial and administrative organization of
partner states.
Like in other potential candidate countries, absorption capacity for IPA funds is
lacking in Albania. While it is important to develop the technical management
capacities on how to plan, implement and evaluate concrete projects, there is also a
more general need for developing the responsible institutions and procedures, with a
view to make project funded investments sustainable, use them properly and
maintain infrastructure and improve services. For example, the huge investment for
new roads is useless if there are no capacities for road maintainance, protecting
securing the new roads from landslides and keeping the usable in times of snow and
ice. It is important to develop sectoral and regional strategies, to plan and set
development priorities, it is also important to build capacities for planning,
implementing and evaluating projects, to maintain EU funded infrastructure and
sustain their use.
Examples from other accession processes in Eastern Europe show that one of the
main challenges for candidates was to build capacities for absorbing future EU funds.
In the case of the Czech Republic, capacity building for absorbing funds was one of
the main goals of the pre-structural programmes in the pre-accession period
(PHARE, SAPARD and ISPA). In this phase of seven years, thousands of mostly
small projects were implemented, and by this, the authorities and organisations
concerned learned practically about the procedures and principles of EU
programmes.
(see also: Pre-study of Zdenek Vyborny, annex 4)
Feasibility Study, 23-2-2009
24
b) EU Regional policy with regard to members
Although Albania will not become a EU member in the next future, EU standards will
continue to provide the most relevant orientation for political decision-making in the
next years, particularly with regard to political and admninistrative reform, regional
development and cross-border cooperation. This means that for designing regional
development and implementing the regional development strategy in Albania,
European regional policy will be an important factor to take into account.
The European Union’s regional policy 2007-2013 aims at putting solidarity into
practice, while strengthening the competitiveness of the EU economy as a whole:
Strengthening economic, social and territorial cohesion by reducing
developmental disparities between its regions is a fundamental objective of the EU
laid down in its Treaty, and it is absorbing one third of the EU budget. Under the first
objective of “convergence”, the EU cohesion policy focuses on funding investments in
84 EU regions, whose per capita GDP is less than 75% of the Community average.
Under the second objective of “regional competitiveness and employment”, 168
regions are eligible for financial support as so called phasing-in areas, subject to
special financial allocations due to their former status as areas under the first
objective. The third objective focuses on cross-border cooperation, allocating some
2% of the total funds. The three objectives are supported by three EU structural funds
and instruments, namely the European Regional Development Fund ERDF, the
Cohesion Fund and the European Social Fund ESF. The ERDF supports
programmes throughout the EU, while the Cohesion Fund focuses on transport and
environment infrastructure, as well as on energy efficiency and renewable energy in
the 15 Member States with a Gross National Income GNI lower than 90% of the EU
average. The ESF provides support to anticipate and manage economic and social
change. Across all cohesion policy programmes, the main fields of investment are
knowledge and innovation (24%), transport (22%), environmental protection and risk
prevention (19%), and human resources (22%).11
European regional policy, its instruments and programmes are largely managed in a
decentralized way by the national and regional governments concerned. Within the
common framework set by the EU, the member states and regions choose their own
prioritiy objectives. However, “each programme is developed in a collective process
involving authorities at European, regional and local level, social partners and
organizations from civil society.” Moreover, member states and regions must prepare
“National Strategic Reference Frameworks” as well as national and regional
operational programmes. Strategic guideleines on cohesion policy have been
developed to support effective planning at national level. According to these
guidelines, programmes should concentrate investment in high-growth areas, invest
in divers of growth and employment such as innovation and education, establish
comprehensive medium term development strategies, contribute to trans-European
infrastructure and environmental sustainability, mobilize additional resources, and
develop partnerships between different levels of governments and others. 12 These
programmes are negotiated and agreed with the Commission, but implementation is
the responsibility of the member states. The following rules are applicable13:
11
European Union Regional Policy, Working for the regions, EC 2004, p.3.
European Union Regional Policy 2007-2013, Working for the regions, http://ec.europa.eu/regional_policy.
13 See also: Charlie Woods, TAIEX Mission Regional Development Policy, 19-22 May 2008.
12
Feasibility Study, 23-2-2009
25
-
Each country must respect EU legislation, particularly on procurement,
competition, environment.
-
Adequate institutional framework and capacity of public administration,
respecting good governance, to ensure programming, implementation,
monitoring and evaluation;
-
Multi annual programmes and strategic planning;
-
Regional policy must concentrate on least prosperous regions as well as on
the Lisbon Agenda (contributing to a more attractive place to live and work,
more knowledge and innovation for growth, more and better jobs);
-
Additionality to local funds;
-
Emphasis on financial control and audit, monitoring, evaluation
-
Coordination among government institutions;
-
Access to information, active communication and transparency about activities
funded by EU Structural and Cohesion Funds;
-
NUTS 2 regions are used as a basis for regional development programming
(but not necessarily as a basis for territorial organization).
c) Conclusions
The EU regional policy approach leaves substantial room for member states and
candidate countries to define their own priorities of regional development. The
instrument for pre-accession assistance (for candidate countries) as well as the
structural and cohesion funds (for member states) financially support activities to
balance regional disparities, according to national strategic reference frameworks
and according to a series of operational rules set by the EU. Absorption capacity to
deliver on strategic planning, managing projects, and capacity to maintain and
sustain public services and investments will be key for accessing EU funds.
For Albania as a potential candidate for membership, this means that addressing the
current capacity gaps will be crucial. If additional funds for regional development will
be channeled into the system, regional and local capacities will have to be increased
particularly in poor regions, with a view to absorb the funds regionally and locally,
plan and implement the projects, and improve and sustain public services.
3.4
The donors‘ landscape
Various donors have been and are active in the area of decentralization and regional
development in Northern Albania.
According to the inventory of the Council of Ministers’ Department of Strategy and
Donor Coordination14, various donors have been funding activities in the area of
decentralization. The World Bank and the US supported regulatory framework, local
government finance, the law on spatial planning, and local economic development.
CARDS will support fiscal decentralization, while Sweden is supporting the
development of the legal framework for the local government staff to become part of
14
External Assistance Orientation Document, April 2008, p.20f.
Feasibility Study, 23-2-2009
26
the civil service. Sweden continues to support the Association of Communes, and the
Association of Municipalities is supported by various donors. The Netherlands have
several projects supporting governance in particular localities. UNDP’s local
governance programme and other bilateral donors have supported aspects of the
operation of regional councils and strengthening planning capacities. The transfer of
public properties was supported by the World Bank. Other donors are focusing
directly on improving local service delivery. Italy is funding the “ARTGOLD” local
development project. Several donors are supporting the decentralization (and
deconcentration) of social services, education and health, and also provide technical
assistance to decentralized water and sanitation services (particularly GTZ). Many
donors (such as ADA) provide support for specific sector activities directly to local
governments.
For the purposes of this report, the following ongoing interventions are of particular
interest:
Under the title of “Integrated Support for Decentralization” and with re-oriented
EU-CARDS funds, EC Delegation contracted UNDP for assisting the Albanian
government to prepare the necessary institutional and legislative frameworks for
managing IPA component 3 on regional development through establishing the
necessary coordination and cooperation mechanisms at the central level. In addition,
the project will expand in a number of selected qarks (most probably the three
Northern Albanian qarks of Kukes, Lezhe, Skhodra) with the aim of supporting qarks
establish appropriate decision-making and technical structures in synchrony with
national policies and plans. According to the most recent project documents, the
project will assist the pilot qarks in elaborating the Regional Development Strategies
foreseen in the National Programme for the Development of qarks 15 and provide
financial support for construction/rehabilitation of local infrastructure in accordance
with the Regional Development Plans as well as for partnerships with local
communities (planned 2.7 Mio Euro in total for the three pilot regions). Moreover, a
capacity building component will focus on the new institutions created by the
Regional Development Cross-cutting Strategy (the National Partnership Council for
Regional Development, the National Agency for Regional Development, the Qark
Development Council, the Qark Development Agencies), but also include local
government administrations at all levels, community based organizations and other
NGOs.
GTZ is (more symbolicly) present in Shkodra and Lezhe qark, with the aim of
supporting the regional development planning process, but concrete planning
activities have not been started. It also implements some pilot projects in the sense of
“concrete measures”, focusing on inter-municipal cooperation, and plans to invest in
establishing networks, particularly in the form of a “local action group” for
regional/rural development, as well as in capacity building.
The Netherlands and SNV are providing extensive support to Diber Qark through a
specific programme with the objective to promote sustainable development and
strengthen local government structures. A trust fund, providing communes and
municipalities with financial support for projects according to their own strategic
plans, has been established and is administered by the Qark authorities, while
The term used here is ”qark”, while the official translation of the Regional Development Cross-cutting Strategy
is ”county”.
15
Feasibility Study, 23-2-2009
27
technical assistance and capacity building for qarks and municipalities/communes is
provided by SNV. The experience is generally seen as a success particularly
because SNV builds on a long term and trustbuilding presence in Diber. The high
investment of SNV in technical support to local governments seems to have an
important impact on local as well as regional capacities to manage projects and
funds. Although the Netherlands will not continue this activity beyond Diber (since
their cooperation activities will be phased out in general), SNV is planning to extend
the trust fund idea to Shkodra.
Swiss Cooperation is currently implementing a Decentralization and Local
Development programme DLDP in 8 municipalities and communes of Shkodra,
focusing on several key issues of governance at municipality/commune level, such as
local
strategic
planning
and
territorial
planning
and
management,
municipal/communal public services provision, management support to local
councils, financial management, public partication and intercommunal exchange and
cooperation.
In a comparable approach, USAID is supporting good local governance in three
municipalities of Northern Albania (Shkodra, Lezhe and Kukes).
UNDP has various activities in Kukes Qark. It was partnering with EC for
implementing the Kukes Regional Development Initiative KRDI which aimed at
imnplementing small infrastructure projects through applying a social mobilization
approach and building capacities of local authorities and Community Based
Organizations (until 2008). UNDP also envisages a Cross Border Programme for the
region supporting local business and promoting cultural and tourist values.
Graph 2: Donors’ landscape in (Northern) Albania today
Many donors
different sectors
EC/UNDP
govt.
SNV
(Diber)
(GTZ)
Central govt.
METE/MoF/M
EIMoJ
Nat. Partnership
Council
Agency
Deconcentrationn
Qarks
Regional Development
Decentralisation
Central
MOI
Central
ministries
in
govt./line
EC/UNDP
Reg. Partnership
Council
Agency
Directorates
Prefect
Municipalities/Communes
(District)
Divisions
DLDP/SDC
(Shkodra),
USAID
Many donors focusing on
support
for
local
infrastructure
and
delivering
sectoral
services
Feasibility Study, 23-2-2009
28
To conclude: The EC engages strongly with the process of implementing the regional
development strategy particularly in Northern Albania, while external support for the
the decentralization process is limited. Support for local governance in Northern
Albania is focusing on a very limited number of qarks, municipalities and communes,
and engages with a limited number of topics (mainly regional and local planning).
While many donors are engaged in providing public services in many sectors also at
local level and thus may have an influence on local governance, focused and
systematic support for institution building, capacity building and public administration
reform at regional and local level is very limited.
3.5
The potentials for a joint programme
According to the ToRs, this study should identify and analyse the potential for a joint
programme, based on the context, its challenges and opportunities. The assessment
of the context brought as to identify the following areas of potential support:
-
At intermediate (Qark) level, there are several institutions with overlapping and
sometimes even conflicting mandates: The Qark itself is relatively weak in
terms of political legitimacy, funding, and competences, although there seems
to be a need for an intermediate level of administration and policy-making. The
prefect has a similar role of coordination focusing on deconcentrated
ministerial services – and similar limitations in capacity and power. Moreover,
the prefect is fulfilling a supervisory role regarding municipalities and
communes. The new institutions foreseen by the new Regional Development
Cross-cutting Strategy will also have a planning and coordination role. To
make the system work effectively and deliver, there is a need for clarification
of roles and functions of the various actors at regional level, to ensure
institutional coherence and good governance.
-
In the context of regional development and EU integration and in the logic of
the principles of the Paris Declaration on Aid Effectiveness, development
funds will be increasingly channeled through national systems for managing
investment projects, sustaining services, monitoring impact of investments.
There is a big need to build absorption capacities to access and manage
these funds, at regional and local level, particularly in disadvantaged
communes and municipalities. On the other hand, the implementation of the
Regional Development Cross-Cutting Strategy itself, particularly the
development of regional development plans at Qark level seems to be
extensively covered by the EC/UNDP programme and other bilateral donors
investing in strategic planning.
-
In the perspective of regional development, all Qarks should offer to citizens
and enterprises an “attractive place to live and work”. This means, among
other things, a minimum standard of infrastructure and public services
accessible to everyone, even in poor regions and sub-regions. Even if
investment in infrastructure will be increasing, there is a big need for
institutional capacities to sustain service provision and maintain
infrastructure at regional and local level, as well as to improve quality of
services at local level.
While the Albanian authorities have the responsibility to find answers to these
challenges, donors could provide the necessary technical and financial support at all
Feasibility Study, 23-2-2009
29
levels. The current interventions of donors cover these issues only very partly and
leave room for meaningful joint interventions of ADC and SDC in Northern Albania,
although narrow coordination with national and local actors as well as with other
donors will always be needed.
4 Suggestions for a future joint programme
4.1
Key principles and approaches
Based on the experience from other countries, the Albanian context analysis and the
main orientations of Swiss and Austrian cooperation, a series of principles should
guide any intervention in the field of regional development and decentralization.
Regional development is about reducing regional disparities and focusing on the
least prosperous regions. Regional development should be used as a
comprehensive concept, including economic, social, political and institutional
development. It is not only about public infrastructure, private sector investment, or
urban planning. As the EU Lisbon Agenda mentions, it is about making poor
regions a more attractive place to live and work, improve knowledge and
innovation for growth, create more and better jobs.
Quality and accessibility of public services (like water, sewerage, solid waste
management, education and health) are key factors for making regions more
attractive or keeping them attractive for business to develop, professionals to work,
and families to life. Decentralisation aims at bringing such public services closer to
people, with the assumption that this improves governance and makes State action
more transparent, accountable, effective, responsive and participative. But
particularly in poor regions, improving political and administrative processes alone is
not enough, when there is no money to invest in public infrastructure and services.
Experience has shown that the best approach is to combine support for improving
political and administrative processes with tangible improvements in
infrastructure and services.
Alignment with national strategies and the policies and action programmes of the
national and local governments for their implementation is a must, although the
existing strategies are numerous and overlapping, sometimes even conflicting.
Building ownership for coherent approaches across sectors and common
engagement in implementing these approaches is an important feature of regional
development and decentralization. Moreover, harmonization among and
coordination with other donors is key, but continues to be a challenge.
One of the key challenges in many decentralized systems is transparency and
accountability, and above all: communication. Policy makers at central level are
often not fully aware of the challenges faced by the decentralized authorities, and
they risk to design policies and take decisions which are difficult to implement. Local
authorities feel frustrated and alone, without the necessary means to fulfill their duties
and without meaningful instruments to influence and challenge the central power in
its decisions. In fact, decentralisation reform requires equal commitment from the
central and the local level, leaving some substantial autonomy to local authorities, but
ensuring common standards for public services, particularly in poorer regions.
Decentralization cannot achieve success if the central government considers itself as
the authoritative leader, giving orders and disengage with the reality faced by local
Feasibility Study, 23-2-2009
30
authorities. This means for donors, that practical experience from regional/local
level should be systematically used to nourish policy dialogue at national level,
with a view to better inform decentralisation policy and regional development policy.
Regional development policy is in the way of being developed, and decentralization
still needs consolidation in Albania. Institutions, competences and mechanisms of
decision-making can change rapidly. A programme must be designed in a flexible
way, to respond to changing variables, risks and opportunities.
Although Albania has gone a long way of transition already, the authoritative past still
influences attitudes and behaviors, particularly within the administration. State
institutions (including relatively autonomous local governments) continue to work in a
very hierarchical manner, leaving little space for new ways of thinking in terms of
transparency, accountability, effectiveness and participation. Party discipline seems to
keep its importance, and laws are perceived as orders, without any room for
interpretation. A focus on fostering political dialogue, public participation
(particularly of women) and engaging civil society in decision-making on regional
development is needed.
Changing attitudes needs time everywhere. A joint programme must show patience,
be realistic in its objectives, and donors must be ready for a long term
engagement to build trust among partners and see tangible results.
Since regional development and decentralisation involves a variety of stakeholders at
various levels, different components of the programme should address the needs
at central as well well as regional/local level.
4.2
Suggested intervention at central level
The rationale of our suggestion is that economic and social development in poor
regions depends to a large extent from improving local institutional capacities to
deliver public services. Regional development needs a solid and coherent legal and
policy framework and financial means for deconcentrated and decentralized
institutions and service delivery at all levels, and there is a specific need to
strengthen decentralized service delivery particularly in poor regions.
The overall goal would be to assist the central government in definitively adopting
and implementing the new decentralisation strategy, in the cross-cutting
perspective of regional development. Since decentralisation and regional
development both are cross-cutting issues involving the portfolios of several
ministries, their implementation must involve the responsibility of the Council of
Ministers and even the Prime Minister. This means that the interventions would have
not focus exclusively on partnerning with the Ministry of Interior.
Decentralisation should contribute to regional development and make local
institutions particularly in poor regions able to deliver a minimum standard of public
services within their area of competence, and thus contribute to make all Albanian
regions more attractive to live and work. In particular, this would mean
-
to clarify functions and roles of the various actors at regional level (territorial
reform if needed)
-
to develop the financial framework to accomplish tasks at regional and local
level, particularly taking into account the needs of poor regions, municipalities
and communes.
Feasibility Study, 23-2-2009
-
31
to develop standards for delivering services, and accountability mechanisms at
local and regional level, and design an action plan on how to help the local
governments to reach the quality standards
It should be stressed that a broad political debate on these issues (including the
territorial reform) will be needed. The three Associations representing the interests of
qarks, municipalities and communes would have to be involved closely – and
supported, if needed.
Opportunities and risks:
Elections will be held in 2009. A change in government could put current strategies, policies,
and priorities into question. This component should therefore not be seriously started before
the elections.
Substantial support for implementing the new decentralization strategy, particularly for
clarifying roles and make the regional system more coherent needs a clear articulation of
political commitment for cooperation, from the part of the central government. For the
moment, the various ministries involved (and the donors supporting them) have different
views on how to harmonize regional development concerns with decentralization and/or with
sectoral policies. It will be necessary to involve the Council of Ministers and the Prime
Minister to solve these political questions.
Both Austria and Switzerland have showed commitment to supporting Albania for a long time
already: They have a certain legitimacy to address crucial and even touchy issues in policy
dialogue and offer assistance.
Switzerland is the focal point of the Working Group on decentralization and regional
development. This provides important opportunities to lead a meaningful and informed policy
dialogue at central level and can open valuable entry points for assistance.
The three Associations of municipalities, communes and Qarks have developed institutional
and professional capacities and are in a position to cooperate constructively.
4.3 Suggested interventions at regional and local levels
According to our analysis, one of the main challenges in the field of regional
development and decentralization is the lack of capacity to absorb (future) financial
support at local and regional level. With the overall goal of strengthening good
governance and supporting improvements in local service provision at regional and
local level, the joint programme could contribute to develop procedures and
mechanisms as well as human capacities for planning, implementing, coordinating
and monitoring projects, maintaining infrastructure and providing services.
Although there is uncertainty relating to the future distribution of roles of the various
institutions at Qark level, intermediate institutions will most probably continue to exist
in one or another form, with a planning and coordinating role. Moreover, the
existence of municipalities and communes are not challenged at all. Regional and
local authorities will have an important role in designing and realizing regional
development.
a) Establishing a funding scheme at Qark level
The rationale of this element is to support the linkages between to increase
absorption capacities at regional and local level, and make good governance efforts
tangible, by investing in concrete projects, with an outreach to poor and marginalized
regions and population groups.
Feasibility Study, 23-2-2009
32
Following the positive experience of the Netherlands/SNV trust fund in Diber as well
as DLDP’s successful example of funding local initiatives, a scheme could be
established at Qark level, providing grants to municipalities and communes for
projects to be selected, according to various criteria reflecting the particular
challenges of municipalities and communes. While these criteria would have to be
elaborated in detail in close cooperation with the stakeholders involved, the following
directions should be envisaged:
-
The projects should correspond to local priorities and be in line with regional
priorities set in the regional and local plans;
-
The projects should mainly or partly target the needs of vulnerable or
marginalized groups (inhabitants from remote areas, women, children, etc.);
-
Cooperation projects presented by several LGUs should have priority;
-
Involvement of civil society, particularly of women, in designing and monitoring
should be a priority objective for all projects;
-
A special facility for projects proposed by local civil society organizations,
particularly of women’s organizations, could be envisaged.
The funding scheme mechanism should be managed through the qark according to
procedures and standards aligned with EU procedures and in line with the new
regional development cross-cutting strategy. Of course, close cooperation with
EC will be crucial. The fact that the EC/UNDP programme on regional development is
planning to pilot the regional dimension of the Regional Development Crosscutting
Strategy in three qarks of Northern Albania, opens important opportunities for
cooperation and synergy, which will have to be explored. While the suggested
intervention is preparing the ground by strengthening the absorption capacity of local
governments, the planned trust fund of the EC/UNDP programme aims at testing the
new institutions and mechanisms at regional and local level.
Projects should be co-financed by municipalities and communes.
The joint programme would need to focus particularly on technical assistance and
support for the management of the funding scheme (at Qark level) as well as for the
management of the individual projects funded (at municipalities/communes level).
The expected outcomes of this component could be:
-
improved governance in the participating municipalities/communes and qarks
-
improved
infrastructure
and/or
service
delivery
in
participating
municipalities/communes (although this is not the most important outcome,
due to the limited funds available in the trust fund)
-
development of best practice in management of investment at
municipality/commune level, in the form of a manual for other
municipalities/communes as well as Qarks. A close cooperation with the three
associations which could use these manuals for capacity building offers to
their members, is needed.
Given the limited overall budget for this component, it is suggested to select two
Qarks maximum for the implementation of the funding scheme, with the idea of
concentrating funds and technical support in a meaningful way. This would allow for a
funding scheme able to allocate significant contributions to projects as well as
Feasibility Study, 23-2-2009
33
investing in solid capacity building, with a view to develop and consolidate
mechanisms and procedures for replication in other qarks.
All four qarks of Northern Albania are seen as relatively poor, with the exception of
their respective urban centers (Shkodra, Lezhe and Kukes), so they would qualify in
principle. While Diber is already served by the Netherlands/SNV’s intervention, it
must remain open here whether Shkodra, Lezhe and/or Kukes should be taken up.
The answer will have to be given in coordination with EC/UNDP, depending on how
the two approaches can and should be coordinated. . The following pros and cons
should be considered:
-
In Shkodra, Austrian and Swiss Cooperation have been active for several
years and could therefore profit from a high level of credibility. Moreover, the
activities of DLDP have certainly prepared the ground for capacity building
interventions in the field of governance. The fact that DLDP is already working
with 8 municipalities and communes would not hamper a regional approach, to
the contrary, it would be most helpful, if the new approach is well coordinated
and clearly communicated. If Shkodra is selected, it would be clearly
recommended to build on the existing structure of DLDP which could scale up
their activities to regional level. A new structure in an already complex picture
might create confusion and compromise intended results.
-
In Kukes, UNDP has been present with different projects and established
relatively strong relations with regional and local authorities. Kukes may count
on UNDP and might not be willing to engage with another scheme coming
from other donors. But it might also be an advantage to select Kukes, since
EC/UNDP will be present from the beginning and coordination with the future
EC/UNDP trust fund could be easier.
-
In Lezhe, donors seem to be less present, so the authorities could be more
inclined to take an additional opportunity.
Opportunities and risks
Valuable experience with similar approaches to capacity building has been made at regional
(NL/SNV in Diber) and local level (DLDP Shkodra). These experiences are shared and can
be used for other Qarks, although time will be needed to build trust with new partners.
Both Austrian development cooperation and Swiss cooperation have been present in
Northern Albania with different and successful activities. This contributes to credibility and
trust in the region.
Other bilateral donors are active in regional planning or are envisageing to to so. The
suggested intervention may well be complementary to ongoing planning processes in several
respects, for example using the agreed priorities of regional planning in the selection process
of project funding. An active coordination with GTZ which plans to invest in regional planning
could be envisaged.
b) Improving the flow of information and transparency
Transparency is a key feature of good governance, particularly for holding authorities
accountable and make public participation meaningful. Through their intermediary
position between the local and central level, the Qarks are well positioned to address
the lacking transparency of the system, and the qarks might use information to
Feasibility Study, 23-2-2009
34
strengthen their own role of coordination and planning. They could have a particularly
useful role in channeling information from the central government to the
municipalities/communes, and vice versa. In order to take informed decisions at
central level, the government would need to know the regional situation and the
challenges at the very bottom of the system. This is apparently not yet the case,
although there have been big improvements in gathering and analysing statistical
data at central level. Northern Albanian Qarks could be supported in gathering
qualitative information and data on municipalities and communes, thus documenting
regional disparities within the qarks, monitoring and analyzing the situation of various
population groups in the region, with a view to improve its own performance in
coordination and planning and provide a more solid basis for decisions of
municipalities and communes.
Moreover, sharing relevant information with a broader public should be systematically
promoted, and communication strengthened, with a view to improve citizens’ access
to information particularly on regional development issues.
Opportunities and risks
The External Assistance Orientation Document mentions the establishment of information
systems for local governments as a priority for future donor support in the field of
decentralization.
Since this component is specifically focusing on building capacities at qark level, it is
particularly concerned by the uncertainty about the future of the qarks. But even if the
intermediate level of State organisation will be changed, mechanisms and capacities with
regard to information, communication and data collection can be transferred to new
institutions and be used by them.
c) Continue to support DLDP’s work with municipalities/communes
SDC is already funding the Decentralisation and Local Development Programme
DLDP in Skhodra. Similar to the NL/SNV project in Diber, but directly working with
municipalities and communes DLDP focuses on strategic planning, public services,
financial management and citizens participation in the 8 participating municipalities
and communes. It also provides some very limited funds to test project management
in concreto. The project is in its first phase and has provided some promising first
results. Its focus on processes within the 8 municipalities and communes targeted
allowed for tangible results after a relatively short time. Although there are activities
initiated and planned to expand the positive impact to other local governments, the
effects here are limited, at least for the moment. The suggested joint programme
could help the programme to broaden its impact, and at the same time profit from
DLDP’s concrete experience with local government procedures and mechanisms. In
this sense, it would be more than logic to integrate this programme in the joint
programme, or at least coordinate the activities as closely as possible.
DLDP’s efforts need to be consolidated in a next phase, with a view to draw coherent
and substantive lessons also for the joint programme and broadening and scaling-up
the positive impact on governance at local level. It is thus suggested to continue
these activities, in close coordination and cooperation with the suggested funding
scheme at regional level. It must remain open here how and where the DLDP should
expand or deepen its interventions. If Shkodra is selected for the regional/local
Feasibility Study, 23-2-2009
35
funding scheme component, DLDP should scale up. If Shkodra is not selected, DLDP
should expand its services, working directly with municipalities and communes within
and even outside of Shkodra region. Details ought to be decided by a proper
planning process for DLDP’s next phase, identifying strengths and weaknesses as
well as opportunities and risks.
4.4
Various options for combining the programme components
The planning process for the joint programme will have to answer the question
whether and how the various suggestions can be realized. There are various options:
The best option is to realize all the suggested interventions at central and
regional/local level. The various components build a comprehensive intervention and
the exchange of experience made in the various arenas with different stakeholders
would be very fruitful and reinforce each component in an ideal way.
If this comprehensive approach is not possible or feasible, the different components
could in principle be realised individually, or in various combinations. Nevertheless, it
is strongly recommended to combine central and regional/local levels of intervention,
representing a bottom-up as well as a top-down approach to decentralisation and
regional development. This means that interventions should not focus exclusively on
DLDP or at central level.
For options regarding the future of DLDP, see above.
4.5
(First) operational considerations
A steering committee, involving representatives from central, regional and local level,
civil society as well as donors, should steer the implementation process, make sure
of appropriate communication between the various levels of intervention, ensure the
coordination among the various components, and oversee the right mix of
interventions and activities. The steering committee would also be responsible for
ensuring flexibility and appropriate responses to a changing context.
The individual components should be steered by teams involving staff from the
institutions involved and representatives from central, regional and local authorities,
to promote interinstitutional cooperation and build ownership at all levels.
Although the management and implementation of the programme will need different
sets of professional competence, the programme should be managed by one
implementing partner, to facilitate mutual exchange between the components. The
implementing partner should be selected by a call for proposals, based on a well
defined programme framework (providing goals, objectives, planned outputs,
principles and approaches of the programme). Implementing organizations should be
particularly familiar with the local context. While it might be difficult to find adequate
local partners, a consortium of several (local and international) institutions could
ensure the diversity of expertise needed for the various activities suggested. The
design and management of the funding scheme component will probably be an
important part of the programme in terms of need for technical assistance and
budget. Most relevant expertise from SNV and DLDP in these fields should be
tapped. If Shkodra is selected for implementing the funding scheme, the potentials of
DLDP to be involved actively in the process should be explored as a priority.
Feasibility Study, 23-2-2009
5
36
Suggested next steps
-
The suggestions provided by this report should be shared with all relevant
stakeholders, asking them for a first feedback on the ideas and options. The
results of this consultation will provide a first validation of the feasibility of the
components suggested.
-
Based on these comments, ADC and SDC should agree internally on the main
lines of the new programme (goals and objectives, intervention levels and
components, amount of funding, evt.: selection of qark to work in).
-
Main lines, overall objectives and approaches of each programme component
should be discussed and agreed with the institutional partners to be involved
at central, regional and local levels.
-
A key document should be elaborated, explaining the main orientation of the
programme, its objectives, the financial and operational framework. This key
document will serve as a basis for a call for proposals. If not yet decided upon,
the selection of qarks could be left to the programme proposals which in any
case will have to design the right mix and sequencing of interventions.
-
A call for proposals should be launched. Proposals from partners or
consortiums with particular knowledge of the Albanian context (preferably
Albanian partners) should be privileged.
Feasibility Study, 23-2-2009
37
Annex 1: Terms of Reference (excerpts)
....
3.
Outputs of the feasibility study
Overall:
 The feasibility of a joint SDC and ADC funded programme on support to regional
development in Northern Albania 2009 – 2012 is assessed in the context described
above.
 Based on the assessment of challenges and potentials in the region as well as
institutional strengths/weaknesses main strategies, approaches as well as major
programme components are outlined.
 Basic information on possible implementing structures (capacities, resources, including
synergies with other donors is outlined
 Possible risks and mitigation strategies of the future programme are outlined
Specific: The specific outputs of the feasibility study are:
 a) The status of the implementation of the related cross-cutting and sector
strategies in Albania is summarized, including donors’ engagement; major challenges
and potentials are identified, existing good practises in Albania are identified and
assessed for replication in that region.
 b)The link with decentralisation process and existing regional development
activities is assessed: Progress in decentralisation reform and in particular potential of
scaling up DLDP towards a regional development programme is reviewed
 c) a short overview on major challenges and achievements of EU (pre-accession)
regional development policies and implementation processes in one or two selected
countries is provided; short reference is also made to good practises in other accession
and candidate countries and new member states


4.
d) The potential for a future joint programme is identified and analysed, including an
outline of synergies with ongoing activities, existing regional/local development plans…
e) Draft lines for future programme components including geographic scope are
outlined, in particular the model of
trust fund, strengthening Qark is outlined,
approach/methodologies and scenarios for a future organisational set up are proposed.
Specific Questions to be answered by the team
a) Status of the implementation of the related cross-cutting and sector strategies
(RDCS, rural development cross cutting strategy, gender equality cross cutting
strategy) (can be prepared in pre-study by local consultant, synthesis must be done
by international experts)
1. What are the priorities of the mentioned strategies and how are they tackled in the
action plans?
2. Which are gaps and shortfalls in the mentioned strategies?
3. What are the challenges for implementation? Who is involved so far in the
implementation of the strategies? Main players (including Stakeholder analysis)?
4. What is the status of the cross cutting strategy on rural development? Which role does
it play in the regional development?
Feasibility Study, 23-2-2009
38
5. Which donors are active in regional development? What is their scope of engagement,
what potential and challenges exist in cooperation with other donors in this field? (see
also matrix – overview on donors activities already exists, attached)
6. Which good practises in Albania exist for regional development, does a replication of
these practises and approaches make sense (with or without modification)?
7. How do existing regional development strategies and plans (such as EPTIZA)
contribute to implementing the national cross cutting strategy (RDCS)?
b) Links between decentralisation and regional development - Progress in
decentralisation reform and in particular potential of scaling up DLDP (expert on
decentralisation) (can be prepared by local experts (8,9), major questions to be asked
by the international consultant at the mission will be formulated based on the
prestudy)
8. What is the progress of the national decentralisation reform? What are major
achievements and what are major challenges?
What are the activities and lessons learnt of other donors in the field of decentralisation?
9 Where are the synergies, overlapping of the decentralisation reform with the national
cross cutting strategy on regional development? What are major potentials? Where are
major challenges, risks? What’s about activities linking regional development with
decentralisation? Lessons learnt in particular with SNV Dibar model?
10. What is the role of DLDP in the overall decentralisation reform?
11. What is the role of SDC implemented DLDP programme in regional development?
What is the potential of scaling up DLDP towards support to regional development? How
to make use of the achievements of DLDP for a future support to regional development?
12. Any other experience from decentralisation reform (other projects, initiatives in the
region/Albania …)?
c) Short overview on major challenges and achievements of EU (pre-accession)
regional development policies and implementation in two selected countries ( prestudy to be done by the international expert on regional development)
13.
What are the legal background and the main objective of existing EU regional
development policies which are relevant for Albania in the pre-accession period?
What are the main challenges Albania is confronted with to cope with EU standards in
this field?
14.
What are the lessons learnt for regional development in the pre-accesion
phases in two selectes member countires with comparable background (the Czech
republic, Bulgaria or another Balkan state)?
15.
what are the challenges and best practices of relevance for Albania’s reform
process particularly for regional development in Northern Albania?
d) Potential for a future joint programme of ADC and SDC
19. What are the priorities for and inNorthern Albania with regard to decentralisation and
regional development?
20. In which areas should the future programme engage (considering the programmatic
documents of Austria and Switzerland, the needs for external support and the existing
and planned commitment of other donors)? Would a trust fund at qark level make
sense?
Feasibility Study, 23-2-2009
39
21. Which synergies (Risks) exist with ongoing activities and existing development plans.
e) Future Programme components including geographic scope, approach and
organisational setup.
22. What are major possible components proposed for a future programme?
a. What are the goals and outcomes?
b. What is the level of intervention?
c. What is the type of intervention
d. What are the possible partners?
e. Geografic scope - The region for the intervention – Shkodra Qark? Lezha?
Kukes?
f.
What are measurable indicators and criterias for evualtion of summittes
project proposals?
23. Need for considering cross cutting issues (gender, poverty, environment, governance
etc.): How can gender equality be promoted throughout the programme?
24. How can the programme explicitly reach out to the poor strata of society?
25. How could a future organisational set up of the programme look like?
26. Which financing mechanisms are appropriate (trust fund, budget support)?
27. How does a trust fund to be set up at Qark level fit into the ongoing implementation of
the regional development strategy?
28. Organisation and implementation of the programme in view of H&A principles.
(ownership, participation, use of country systems)
...
Feasibility Study, 23-2-2009
40
Annex 2: Short Note on Decentralisation
(Pre-Study by Dritan Shutina)
I. Introduction
This document is a desk review undertaken in the framework of a feasibility study
commissioned jointly by Swiss Agency for Development and Cooperation (CDS) and
Austrian Development Cooperation (ADC), for a Regional Development Program in
Northern Albania. The desk review is undertaken in November 2008, prior to the
preparation of the feasibility study and the respective recommendations by the
mission team. This is not an exhaustive study and neither intends to make an
evaluation of the progress of decentralization in Albania. It rather intends to provide
to the team a general overview of the decentralization process and its relation to
regional development, highlighting issues relevant to the feasibility study. More
specifically the document aims:
1. To provide a general overview of the decentralization process in Albania;
2. To identify links between decentralization process and regional development;
II. Local Government and Decentralization process in Albania
Despite delays and different views on the progress and outcomes of the
decentralization process there is an overall agreement that the decentralization
process has been consensual and steady. Nowadays the overall regulatory
framework is almost completed while the real transfer of function is still to be
consolidated. The decentralization process has somehow entered the phase of
consolidation, where Local Government Units (LGUs) need to apply variety of
instruments to show the effectiveness of decentralization.
Soon after the radical shift of the political and social-economic regime, in 1991
Albania started the process of government decentralization in all aspects: political,
economic, fiscal and administrative. Decentralization was a consequence of the
transition from centralized to market economy. While the rationale behind
decentralization in early `90s was based mainly on political and administrative
aspects, at a later phase decentralization aimed at increasing economic sustainability
and achieving efficient allocation of resources and provision of services to citizens.
So, this decentralization has been in two major stages. The first stage was within
1991-1998 and encompassed the shift from deconcentration to decentralization;
establishment of the local government units (LGU) of the first level (municipalities and
communes); stronger political decentralization versus weaker fiscal and functional
decentralization and economic reforms. The European Charter of Local Government
was adopted in 1998 and ratified in 1999.
The second stage of decentralization started in 1999 and is currently in its final stage.
The fiscal decentralization was initiated during 2002-2003 and it is still going on. In
1999 the National Strategy for Decentralization and Local Autonomy was launched
and subsequently Law 8652, (31.7.2000) on "Organization and Functioning of the
Local Government”16 was passed by the Parliament. This law introduced also the
16
Known as the Organic Law
Feasibility Study, 23-2-2009
41
second (regional) LG tier: Counties17. The total number of LG units for both levels
increased to 308 communes, 65 municipalities and 12 counties.
Table 1: Population by County 2007
County
Number of LGs
Population
Area KM2
Berat
25
238,516
1665.4
Diber
35
195,711
2373.1
Durres
16
393,557
704.7
Elbasan
50
431120
3251.2
Fier
42
484358
1739.5
Gjirokaster
32
162,144
2902.2
Korce
37
359,204
3503.2
Kukes
27
115,233
1514.4
Lezhe
21
210,993
2479.1
Shkoder
33
337,727
3184.2
Tirane
29
979,633
1645.9
Vlore
26
362,235
2719.5
Total
373
4,270,431
27682.4
Administratively, each county is composed by one major municipality and one or
more smaller municipalities and several communes. Mayors and local councillors,
who are elected through popular vote, head municipalities and communes. Regional
councillors are chosen indirectly by the communal and municipal councils. Local
officials are appointed by the mayors and approved by the local councils.
The central government sets the parameters of policy and decentralization
implementation through laws and rules that specify what local governments can do
and cannot do. The Organic Law defines powers and functions of LGUs in Albania.
Based on this law, LGUs have the right to deliver appropriate services at appropriate
service levels, to raise revenues, and set expenditure priorities under their
autonomous budget. LGUs, can also hold properties, use them for raising revenues,
enter into contracts and keep their own accounts. The law is vague re the role of
counties. It simply states that counties can develop and implement regional policies,
coordinate national, regional and local policies and provide services assigned to
communes and municipalities if agreed and required by the latter. The law also
specifies the revenue raising powers for municipalities and communes, by defining
local taxes, user charges and fees, the ability of LG units to borrow, as well as the
intergovernmental transfer. However, the details about these revenue sources are
provided by additional laws and by-laws passed after 2000. Based on the Organic
Law, revenues for regions are raised through conditional and unconditional grants,
fees and charges for services provided by regions (if any), taxing powers defined in
subsequent laws, and provisions that are made by municipalities and communes`
own budgets.
17
In Albanian: Qarku
Feasibility Study, 23-2-2009
42
According to the Organic Low, there are three types of functions that can be
performed by LGUs, namely: own (exclusive) functions, shared functions and
delegated functions. While own and shared functions are specified in the law,
delegated functions are mentioned as subject to central government decision and
subsequent by-laws. The LG own functions encompass:
 Water supply, sewerage and storm water within residential areas
 Construction and maintenance of local roads and public spaces
 Public lightening and urban transportation
 Public cemeteries, green areas, recreation and sport activities
 Solid waste collection and city cleaning
 Urban planning, and local economic development
 Cultural and historical heritage
 Social services and administration of nurseries, elderly houses
 Few other activities re veterinary services, civic public order, etc.
Shared functions encompass school and pre-university services, health care and
social assistance, public order and environmental management and protection. The
law is not very specific re the meaning of “sharing”, thus under the absence of proper
legislation, shared services are mainly treated as delegated.
Though the tendency of decentralization in Albania is towards devolution of services,
in parallel, there is still deconcentration without authority. This is observed in the
existence of prefectures (administrative central government entities operating in the
region) and regional directorates of ministries (education, health, agriculture).
Functions are assigned to LGUs in Albania according to Organic Law, which
presumes subsidiary principle. Most of the own functions are already devolved; some
still are in a process of transfer due to lack of specific legislation (i.e. urban planning),
the ability of local government to manage services and upgrade poor systems (i.e.
housing, water supply) and delays in the ownership transfer process (roads, water
and sewerage). Revenue ability also plays an important role in delivering services or
not. Thus, veterinary services in communes are often not delivered as sufficient
resources are lacking. Public spending for water, wastewater and solid waste
collection are directed almost exclusively towards operating and maintenance costs.
So far, the utilities’ own financing through tariffs typically does not suffice to cover
even these types of costs. The limits of the tariffs are mainly set by law. These tariffs
are a determination factor for low current service levels, next to the management and
institutional capacities of the enterprises.
Currently, water and wastewater enterprises de jure are transferred to the LGUs,
while de facto the process is till to be completed. During the next years, the Ministry
of Economy Trade and Energy (METE) will work to transfer the property while
shareholder companies will and their managing authorities will be in place. The
transfer of responsibilities raises a number of difficult issues for LGUs. Water
companies have been subsidized by central government. Once fully transferred,
LGUs will still need again central subsidies to upgrade poor quality water systems
and cover huge capital investments.
“Shared” functions are another point of interest in LG expenditure responsibilities. So
far LGUs have not participated in decisions concerning the allocation of local
education expenditure. Lately, not only maintenance, but also responsibility on
construction of facilities is being transferred to LGUs. This is expected to increase the
accountability of LGUs towards citizens. Though curricula, employment of staff and
Feasibility Study, 23-2-2009
43
standards are set by the ministry of education, still local residents are very willing to
express their concerns re education to mayors. The situation is pretty similar for
health care services. The main issue with shared services is that these are treated as
delegated functions. Additional legislation is needed to define the shared services
laying out the roles of LG and central government.
Local services are financed by municipal budgets, composed by own revenues and
the central government grant. The grant is composed by the conditional grant, the
unconditional grant and the competitive grant. While the conditional grant is set
exclusively by the central government ministries, the unconditional grant and the
competitive grant are set upon formulas and criteria under a transparent and simple
process. The unconditional grant constitutes about 50% of the LGs budget. The
amount of unconditional grant to LGUs is unpredictable as it is subject to annual
national budget negotiation and change of formula. There is a discussion underway,
especially by the WB, to regulate the unconditional transfer by law thus making it
more stable. At the same time, replacing cumbersome financing from line ministries,
the competitive grant was introduced in 2006. The competitive grant allows LGs to
finance small capital investment in regard to: (i) road, (ii) water supply, (iii) education
and (iv) health. However, as there are more projects than finances (in 2007 there
were only 200 projects financed out of 750), trying to satisfy demand, leads to high
fragmentation of projects and partial financing. So, though the aim of these grants is
to increase predictability of municipal budgets, promote equity and a better
distribution of revenues they are not easily predictable.
Prior to the passage of the Organic Law, almost all LG expenditures were based on
decisions made by central government ministries (conditional transfers). With the
implementation of the Organic Law, conditional transfers are used for the financing of
“shared functions”. Furthermore, up to 2003 LGs were very much depended on
central government transfers. Starting from 2003, a strong increase in local revenues
can be observed, which is largely due to locally raised business taxes and the
infrastructure impact tax on new constructions.
Table 2: Local revenues over year
The Organic Law defines the local taxes, fees and user charges while the local
revenues` law adopted in 2006 provides for tax base, rates and collection. The
Feasibility Study, 23-2-2009
44
revenue sources available to LGUs include: property taxes (buildings and agriculture
land), property transfer tax, infrastructure impact tax, small business tax (SBT),
simplified profits tax and vehicle tax. The tax and the minimal tax rates are set by law,
while final definition of tax base and the rates for tax implementation is decided by
the local council. The Ministry of Finances has provided instructions on how to
administer different taxes.
As of January 2007, LGUs` tax offices collect the SBT increasing sufficiently the
collection ratio. However, the tax is meaningful for major urban centres and does not
provide significant revenues for small and rural LGUs. On the other side LGUs, so
far, have considered small business tax as their major source of revenue while it is
known that this tax is not stable and predictable.
Property tax is potentially major source of income that is not explored in full by LGUs.
For 2007 the total collection constituted only 0.1% of GDP compared 0.7-1.5% in the
region
Tax base for property tax is the area in “square meter” of buildings and/or land, rather
than the market value of the property. This has an advantage in terms of tax
administration (still not a strong formal property market in Albania). However, in terms
of revenue raising and equity matters is disadvantageous. There are two major
reasons why LGUs have not yet explored in full this tax. First, there is not an up-todate properties` database and there is poor cooperation of LGUs with Immovable
Property Registration Offices18. Second, differently than small business tax, it affects
the entire population and many municipalities are reluctant to explore it in full to avoid
perceived social problems. Seemingly, the tax on agriculture land is a potentially
good source of income for rural LGUs, which is not explored at all. The main reasons
for that is that LGs do not have proper databases and lack of formal land market.
The tax on transfer of property rights is imposed when an immovable property is sold.
This tax is collected by the IPROs when the transaction on the property is registered.
IPROs act as a tax collection agent and receive 3% of the tax revenues. This makes
collection easy, though there is the disadvantage of the underreported transaction
price, as IPROs are mainly interested in the registration rather than tax collection
process
Simplified profit tax (SPT) and the vehicle tax can be considered shared taxes. These
are collected by central government entities. The SPT tax is fully shared with local
government while the vehicle tax has a uniform rate across the country.
The infrastructure impact tax for new construction is collected when a new building
permit is issued. The urban planning office at the LGU is the collection agent. While it
is easy to be collected, there is the risk of underreported value of the new
construction (the base of the tax) and it discourages builders to seek permits.
Another source of financing for LGUs is now the borrowing. The law on “Local
Borrowing” has entered in force in February 2008. The law foresees the application of
short and long-term loans. Hence, by-laws providing regulations and instruction on
local borrowing are in process.
There are limitations related to the amount and the maturation time of a debt, which
needs to fit on the national limits and the Ministry of Finance, plays an important role
18
IPRO –Immovable Property Registration Office – central government entity.
Feasibility Study, 23-2-2009
45
overseeing and monitoring the whole process. It also can intervene in case of finical
distress. Given that local borrowing is part of the national dept capacity the amount
for LGUs will be always depended on central government needs. Currently the
national dept is 55%of the GDP leaving only 5% from the limit 60%. The local
governments can borrow up to 20% of their budget from unconditional transfer and
local revenues. This opportunity is only recent and there are no data on good or bad
practices. However, it looks that LGUs will need to improve their financial
management systems to be reliable for commercial loans.
III. Decentralization challenges
As mentioned above, the overall consideration is that the decentralization process in
Albania, despite delays, has not changed its course. However there are several
problems and issues that are impacting the overall outcome of decentralization.
The overall challenge LGUs face is that their performance should justify the purpose
of decentralization. Under USAID LG Programme there are undertaken several
surveys measuring citizen satisfaction on LG`s performance. Based on the data we
cannot yet conclude that there is a solid increase of performance and that is spread
throughout all LGUs.
Being the front door for citizens’ problems, LGUs are caught between responding to
immediate problems and strategic management to boost economic development.
This requires strong leadership as well as skilful and well-educated staff, which most
LGUs do not have. There has been donor support to assist LGUs in translating newly
given competences into effective instruments. Hence, these practices are not uniform
and spread throughout the country. In response to this, there were two priority
actions in the strategy of decentralization which are still to be addressed: (i) the
capacity development of LGUs staff and (ii) standardization of services. The Ministry
of Interior has planned that standards for services will be in place within 2009 but it
looks difficult that the deadline will be met as the process depends also by the line
ministries.
Under donor support influence different LGs have developed Strategic Plans or Local
Economic Development Plans. At first, these were not fully understood and there was
a bit of inflation of strategies, while there is a better appreciation now. Hence, the
strategies are not linked to financial planning and management as well as translated
into spatial planning. It is expected that by the next year, the Ministry of Finances will
require by law all LGUs to prepare a medium (3 year) financial plan. Seemingly, a
new urban planning law is under preparation. However, even in the big municipalities,
urban management and territorial administration are very week. So far urban
development has been driven only by the private initiative and LGUs have failed to
provide regulations or play a proactive role in the benefit of public interest.
The starting point of decentralization has been to bring the competences as close as
possible to citizens (the lowest level of government) with the assumption that LGUs
themselves will interact among them to address issues of common interest, thereby
take care of inefficiencies of the process. So far that has not been the case.
Reflecting the overall social mentality of individual control, LGUs are acting on the
perceived individual interest with not much consideration of common interest. Mutual
problems/conflicts related to urban planning and management, public transport, solid
waste etc. are prevalent among different LGUs. In fact the inter-communal
cooperation has been left too much on the individual will of LGUs and nor a guiding
Feasibility Study, 23-2-2009
46
platform neither stimulating instruments have been provided by Central Government.
i.e there has been almost no inter-communal project financed through competitive
grant during 2007, while this could be a powerful instrument to stimulate cooperation.
In line with the above, Capital Investment Planning and financing will be a critical
issue for the future. This will be not only in terms of planning and management but
also in regard to mobilizing financial resources to implement them. For example,
cities of Fier, Lezhe, and Durres have only 1-2% of their budget to finance all projects
identified in their Strategic Plans. Whatever, the performance of LGs will be they will
be highly dependent on Government financing for major capital investment projects.
LGUs can use borrowing to finance part of their capital investment projects. However
only major urban areas and rich communes can really benefit. Hence, all LGUs will
need to improve their financial management system and increase their credit
worthiness to access commercial loans. At this point, it is also important that Central
Government makes the unconditional transfer more predictable.
To provide LGUs with additional resources, it was foreseen that within 2008 all public
property would have been transferred to LGUs. That is not the case. The government
is pressing hard to complete this process (while there is an underground discussion
whether it is wise to transfer vital properties i.e pastures and forest to LGUs), but it
will be still difficult to be completed. This process is faced with the overall property
issue in the country that, among others has to do with the lack of proper information,
overlapping of ownership and lack of coordination between different government
agencies that provide or transfer ownership rights. On the other hand, though
allowed by law, none of the LGUs plays an active role to acquire property in addition
to the transfer process.
To conclude, since 2000, decentralization has entered a new phase of progress in
Albania focusing more on fiscal decentralization and efficiency of delivering services
to citizens. Still there are some challenges ahead. The legal framework needs still to
be completed with the respective regulations and by-laws (urban planning, local
borrowing, etc.). The issue of unfunded mandated remains also of concern. The
latest service transferred to LGUs is the legalization of informal settlements, which on
the other hand has been completely covered by LG revenues. Taxing power need to
be improved next to tax administration capacity. Inter-communal cooperation should
also be promoted as a mean for providing efficiently more qualitative services to the
citizen.
IV. Decentralization and Regional Development
Decentralization Strategy
The revised Strategy of Decentralization makes recommendations that aim both to
strengthen and consolidate decentralization and stimulate regional development. In
this regard there are certain challenging aspects regarding the considerations revised
by the strategy. Thus, the strategy defines that Albania should undergo through a
territorial reform for decreasing regional disparities, increasing economic efficiency
and stimulating economies of scale in service provision, and supporting regional
development. This reform emphasizes the process of consolidation of the small local
government units, mainly communes, and perhaps revision of the boundaries of the
(regional) second tier local government units, the counties.
Feasibility Study, 23-2-2009
47
On the other hand, the strategy recommends that a clear role should be allocated to
counties, thus listing a number of specific responsibilities that can be better
performed at a regional and efficient territorial and administrative scale. The
allocation of these tasks remains however optional and can be also fulfilled through
other institutional arrangements, i.e. inter-communal cooperation and/or
deconcentrated bodies. By leaving the allocation of such services optional, it leads to
continuous ambiguity on the role of counties. Further, in order to revise and
strengthen the role of counties, it is suggested that counties` councils are directly
elected. This would strengthen the role of counties, it would improve the current
interdependencies between counties in one side and municipalities and communes in
the other, it would improve the financial system for counties especially in terms of
sources and most importantly it would increase the accountability of counties as local
government units towards the citizens. Of course, the consideration for directly
elected county councillors is very much supported by the councils of counties, but on
the other hand, it is an issue that would impact the overall governance system in
Albania, and as such should be taken into consideration very carefully.
The strategy also underlines that 1st tier local government units should initiate local
and regional development activities, thus leading to a bottom-up regional
development approach. On the other hand, the crosscutting strategy for regional
development clearly supports a top-down approach for regional development, which
of course it is a good recommendation given the current development context in
Albania. However, in an atmosphere of government decentralization going on, the
two approaches should not be mutually exclusive and the national strategies should
be better aligned re these recommendations.
Further, the inter-communal cooperation is suggested as the way to reach efficiency
gains and perform tasks that can be better implemented at regional scale. However,
so far, the counties as ambiguous structures of regional development coordination
have not been able to encourage local government units to undertake intercommunal cooperation, while LGUs have not felt any need for cooperation. On the
contrary, while incentives and guiding platforms for inter-communal cooperation are
missing, LGUs, especially big municipalities do not feel the need for regional and
national coordination and guidance mediated by counties. Even the allocation of the
competitive grant for capital investments is very fragmented and to date there are no
cases of common applications.
Feasibility Study, 23-2-2009
48
Annex 3: Compilation of the strategies most relevant for regional
development
(Pre-Study by Silvana Simaku)
According to the Terms of Reference for a Joint Feasibility Study “On promoting
regional development in Northern Albania” Swiss Cooperation and Austrian
Cooperation are interested to explore potentials for a new programme in Northern
Albania. For this purpose a team of four consultants (two international and two local)
were charged inter alia with the task of assessing the challenges and potentials of
the regional development in Northern Albania and elaborating the situation analysis.
Analysis of the legal and institutional framework on regional development and
its links with decentralization
The territorial division of Albania is governed by Law No. 8652, approved in
2000 “On the organization and functioning of Local Governments” and Law
8653 in 2000 “On Administrative Territorial division”. This legislation divided
the country into two levels: counties (qarks) and communes /municipalities.
The counties represent a territorial administrative unit with an average
population (in 2004) of 260,605. The counties are sub-divided into districts
(but the latter ceased to be a normative sub-division of the country following
the passage of the two laws described above).
Role of
Councils
Regional
The task of the
Regions is first and
foremost to develop
and
implement
regional
policies,
Commune, municipality and county councils are the representative organs of
the local governments. The communes and municipalities are formed by
and
their
directly elected representatives, whilst the county council members are
harmonization with
elected from the commune and municipal councils within the county’s
the national policies
jurisdiction by their peers on those councils. The Mayors of the Municipalities
at the regional level.
and the Chairpersons of the Commune Council are ex officio members.
Those functions are,
County Councils have legal responsibility for planning and coordinating
however,
not
actions of regional interest (regional development planning). However,
clarified
in
the
limited resource base (fiscal and human) and limited acceptance by both the
Organic
Law
of
commune/municipality and national level has meant that the county councils
have yet to fulfil this role effectively.
2000. The Law is
founded
on
principles guiding the functioning of local governments in a European context, i.e. the
European Charter of Local Self-Government of 1985. This Charter stresses the
importance of subsidiarity, i.e. a drive to leave decision-making to the lowest
government level that is for all practical reasons possible. Furthermore, the European
Charter on the Role of Regions, to which Albania is a signatory outlines the crucial
role an intermediary government level can/should play in development planning.
The Regional Council according to the Organic Law exercises a number of duties of
a formal character, e.g. quotas for each commune and municipality, administrative
structure and staff, internal control of the region, protects and guarantees the public
interest on the regional level, etc. (Article 54). The central government as well as
communes and municipalities can delegate functions to the regional level (Article 13
of Organic Law on Local Governments).
But if the Regional Council is to develop and implement regional policies in line with
national policies, a priority task is to take the responsibility to interpret on the one
hand commune and municipal ambitions, on the other national overall goals (poverty
eradication, macroeconomic stability, national unity, etc), formulate regional goals,
and design a strategy of how to implement them.
Feasibility Study, 23-2-2009
49
To some extent this has happened in 2005 as the Regional Councils were trusted
with the allocation of funds for investments in the education and health sectors. But
the regional council administrations were not prepared in advance to perform these
tasks, thus the process did not result successful and the funds were again taken back
by the central government one year after.
Regional dimension of Government Program 2005-2009
In the Government Program for the period 2005-2009, a number of priority issues
have a geographical dimension, i.e. they touch upon the economic and social
development of the regions. Some of the Government ambitions are to be
implemented through line ministries and other Government agencies and authorities,
others through the municipalities, communes and regions.
Furthermore, the private sector in the form of NGOs, the business community as well
as the donor community are expected to play active roles.
The overall ambition of the Government is the reduction of poverty “through high
economic growth that will include every region and citizen of the country”.
As regards the role of local governments the Government Program points out a
number of issues of considerable importance.
First, local governments will have great freedom to set own taxes and fees.
Furthermore, the Government will increase the transfer of money to local
governments 3-4 times.
Secondly, the transfer of property to local governments will be speeded up, for
instance of water systems, land, roads, local public companies and social and
cultural buildings.
Thirdly, the decentralization strategy as regards shared functions will be
implemented in education, health, environment, housing, social services, public
order and road traffic. This is part of the Government strategy aiming at “narrowing
existing regional disparities”.
Fourth, local government border changes will only be considered if the purpose is
to attain progress and good governance. However, if such initiatives are taken, the
process will be inclusive and characterized by openness.
Fifth, the Government will promote an integrated rural and mountain area
development strategy. Such strategies will comprise improvement of public
infrastructure, environment protection, soft loans and supported by “regional
oriented territory and administrative reforms”.
Sixth, it is a Government policy that local ownership of rural resources like forests,
land and pastures as well as waters is encouraged.
Summarizing, the Government Program 2005-2009 explicitly spells out the need for a
better regional balance, and indicates that a better coordination of local and regional
sector policies and development work is necessary. Fast economic growth will have
to include every region and citizen in the country.
The economic resources for local governments will be greatly increased, and the
administrative set-up will be clarified and streamlined as the decentralization strategy
including local responsibility for infrastructure, housing, education and health, etc. is
vigorously implemented.
Feasibility Study, 23-2-2009
50
National, sector and cross cutting strategies
Up to the end of 2007, out of 35 sectorial and crosscutting strategies drafted in the
framework of the NSDI, 12 of them are approved by the Decision of the Council of
Ministers, 13 are in place and 10 are underway. Those strategies have identified the
sectorial and crosscutting policies’ priorities and strategic objectives to be achieved,
focusing on the commitments for the European Integration, as well as monitoring
indicators for the policies’ implementation and an estimation of their respective costs.
The National Strategy for Development and Integration 2007-2013 represents the
fundamental strategic document of the sustainable social and economic development
of the country, combined with the agenda of the integration in the EU and NATO
structures, and the implementation of the Millennium Development Goals.
Inter-sectoral Rural Development Strategy of Albania (ISRDSA) (2007-2013)
The Inter-sectoral Rural Development Strategy of Albania (ISRDSA) constitutes a
national strategy plan for rural development of Albania. The priorities of the rural
development policy laid down in this strategy have been set up in accordance with
the European Community priorities on rural development policy. The document is
designed in compliance with the baselines set out in Article 11 of the Council
Regulation (EC) No.1698/2005 on support for rural development by the European
Agricultural Fund for Rural Development (EAFRD). The NSP is prepared in
compliance with the Community strategic guidelines and the broader Community
strategic guidelines for sustainable use of resources (Council decision of Gőtteborg)
and the enhancement of economic growth and job creation (Lisbon Strategy).
The Albanian National Inter-sectoral Rural Development Strategy covers a time
frame of 7 years, commencing on January 1st 2007. The year 2007 will be used to
adopt the operational program for rural development, which will be prepared based in
this strategy. The implementation of some activities will also start in 2007, either on a
pilot basis or as regular measures. After the end of the first year of the
implementation the strategy, the operational program will be reviewed and adopted
accordingly.
The main pillars of rural development for Albania are i) sustainable increase of farm
income (50% of the budget is dedicated to this strategic objective); ii) sustainable
management of natural resources including forestry, pastures and water (10% of total
budget); and iii) creation of new job opportunities and better quality of life through
diversification and improved rural infrastructure (40% of total budget). These three
pillars are equivalent to the three main axes formulated in the EU Rural Development
Regulation and in EU support schemes for accession and pre-accession countries.
These priorities will contribute to the reduction of poverty. The Albanian strategy also
follows EU practice in identifying a fourth axis, that of locally based community
development planning, with a reserved budget and integrated into the design of
activities in the other axes. Within each pillar, a number of measures are defined.
Albania already dedicates yearly about 7 billion leks ( around 57 million Euro) to rural
development out of a total public investment of about 40 billion leks (around 326
million Euro). Current expenditure is dominated by farm and infrastructure
investment.
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51
In addition to the main pillars described above, the rural development strategy also
includes education, health, economic development and rural infrastructure
development not covered by local sources. The rural coverage of activities foreseen
in this strategy will be monitored using a system of ‘rural proofing’, similar to that
developed in EU member states. Each of the key ministries involved (notably
Education, Health, Economy and Transport) is required to submit a regular annual
‘rural proofing’ report which presents their programmes in rural areas, compared
with urban programmes, including evidence about expenditure per capita.
Based on the NSP, an Operational Programme of Rural Development for the
whole territory of Albania will be prepared. The implementation of the rural
development policy will be in the mid-term period carried out by the Rural Payment
Agency of Albania which will be organised as an independent institution under the
umbrella of the MAFCP with the support of different Government agencies at different
levels.
The implementation of the rural development policy after 2007 will introduce the
LEADER Approach as an instrument for decentralized governance and integrated
rural development. In the pre-accession period, MAFCP will build on existing
experience with LEADER style development, from MADA, ADF and local planning
activities. Support from the various donors will expand and replicate these
initiatives and projects all aiming at the creation of capacity for implementing
the LEADER Approach. In common with EU practice, all rural development funding
should have a community-based dimension. In addition, a further 5% of rural
development funds will be allocated exclusively for projects that use communitybased rural development practices for small projects.
Sector Strategy of Agriculture and Food (SSAF) 2007 - 2013
Strategic priorities
 To increase the financial support for farms, agricultural and agro-processing
businesses
 To improve the management, irrigation, and drainage of agricultural land
 To improve the marketing of agricultural and agro-processing products
 To increase the level and quality of technologies, information, and knowledge
of farmers and agro-processors
 To increase the quality and food safety of agricultural and agro-processing
products
Strategic goals
 Sustained management of land, as a basic component for the sound
agricultural development and completely in compliance with that
 Increase of employment, incomes, and farmers’ and their families’ life level
 Increase of agricultural and agro-processing sector’s economic efficiency that
is expressed through productivity enhancement and a higher quality of their
products
 Guaranteeing a higher food safety standard for all the population
 Improvement of the agricultural marketing
The new policy concept
 Improve the participatory character of the policy-making process in all its
steps: identification, drafting, approval, implementation, monitoring and
evaluation.
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Ensuring the continuity of policy circle, by avoiding pauses and fractures; so
that, agriculture support is secured and continuous.
Higher focus on the direct support in order to enable ‘the hit’ in critical points,
in the direct developing factors, such as technology (for agriculture production
enhancement and improvement of its quality).
Making obligatory and standardized monitoring and evaluation phase, in order
to identify and evaluate effects of the policies and programs, as a condition not
only for increasing commitment of policy management, but also to allow for
higher effectiveness of development actions.
Achievements or effects of development policies should be measured against
SMART indicators.
More attention for demand-oriented policies, and agriculture trade policies. In
the future, a special focus should be dedicated to policies
aiming at consumer’s demand management, based on effectiveness it proved
in other countries, and in some cases in our country, too.
Integration of Millennium Development Objectives. Albania has officially
agreed them, especially the objective of poverty reduction. This objective
although not explicit, is implicitly reflected in above-mentioned principles for
the new agriculture policy objective to increase productivity and employment in
rural areas.
The SSAF is mainly an economic development strategy, but not limited there.
Employment and income increase is also an essential part of the SSAF.
National strategy on gender Equality and domestic violence 20072010
The Strategy looks at and addresses two major issues: Gender Equality and
Prevention of Domestic Violence.
Strategy aims:
- Achieving gender equality in Albania through mainstreaming the gender perspective
into all aspects of policies developed and applied. This means equal participation by
women and men in the social, economic and political life of the country, with equal
opportunities for them to enjoy all rights and to place their individual potential at the
service of society;
- Improving protection, performance of the judiciary system and support for victims of
domestic violence, and focusing more specifically on prevention by attacking the root
causes of domestic violence and abuse.
Strategy vision
The country’s economic and social growth and the development and application of
appropriate policies to achieve gender equality will serve as a premise for designing
gender equality-related goals, and men and women’s equal access to decisionmaking at a central and local level, in the areas of education, health care,
employment, public services and prevention of domestic violence.
The main goal concerns incorporation of gender issues into public policies through
concrete, detailed and budgeted action plans, which help lay the foundation for
advancing gender equality and to minimise the phenomenon of domestic violence in
Feasibility Study, 23-2-2009
53
the future on the basis of international recommendations and instruments, while
referring to concrete conditions in Albania.
Strategic Priorities
 Reinforcing the protective legal and institutional mechanisms so as ensure gender
equality in Albania.
 Empowering women through their increased participation in decision-making.
 Ensuring women’s economic empowerment and their increased opportunities for
employment and vocational training.
 Promoting women’s equal access to quality education.
 Improving the social situation of women at risk by enhancing their access to
quality social services.
 Improving population health by boosting the health system’s response to specific
health needs of men and women.
National Cross-Cutting Strategy of Decentralization and Local Governance
Decentralisation Strategy 2008 aims at improving effective, participative, democratic,
transparent governance, respecting subsidiarity, EU integration through:
 Re-thinking territorial division, election mode, financing and competences at
qark level, still focusing on regional planning and coordination;
 Developing an integrated financial framework for LG;
 Developing legal framework for shared functions with line ministries;
 Developing and implementing standards for local services;
 Developing technical guidance and building local capacity.
II. Regional Development Cross-cutting Strategy (RDCS)
The RDCS, approved by the CoM No. 773 dated November 14, 2007, envisions
regional development in a balanced and sustainable socioeconomic growth among
the regions of Albania, in general, and of mountainous and peripheral areas, in
particular, in order to support a fast development of the whole country and accelerate
the integration processes into the EU and NATO”
The Government of Albania has identified the need for an integrated, coherent
regional policy based on its growing concern over the widening gaps in socioeconomic performance and fortunes between different parts of the country. The
Strategic Planning Committee at the Council of Ministers has sanctioned the
formulation of a Regional Development Cross-cutting Strategy (RDCS) and has
designated the Ministry of Economy to lead its preparation.
This cross-cutting regional development strategy has undergone a full and extensive
consultation process with the Government’s partners.
A further document – the Action Plan for the RDCS - sets the actions and timeframe
for the implementation of the strategy.
Regional Development in Albania
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54
Regional development is horizontal by nature, since it intersects with many other
sectors. Thus, an effective implementation of the RDCS would require very close
cooperation and synchrony of actions taken in the framework of other sector and
cross-sector strategies which have a say in local development, in addition to the
required flexibility for the RDCS to adapt to institutional changes necessary to meet
the EU practices and policy instruments on regional development.
The regional development level of counties is monitored through the index of the
socio- economic development which is calculated on the basis of some indicators.
This index of poverty of counties is compared to the national average in %. The
inequality between counties is clearly indicated where the counties of lower
development are Dibra, Kukësi, Lezha and Shkodra, where the poverty level is below
the national average.
This indicator is calculated on the basis of several indicators: (i) the indicator of the
poverty level above the national average in percentage; (ii) the level of the county’s
unemployment in relation to the national average in percentage; (iii) the revenues of
the local government above the national average in percentage; (iv) the opportunity
of the supply with

Regional disparity is present in an extreme form in Albania:
water above the
Poverty is 66% higher in rural areas than in Tirana and 50% higher in rural
areas than in other major urban centres. Tirana has a GDP index of 0.772
national average in
and compared to a mere 0.252 for mountainous areas and a Human
percentage; (v) the
Development Index (HDI) of 0.830 as against the mountain area HDI score
number of health
of 0.632. The disparities are extreme: for example, the unemployment rate
examinations
in Kukës is over 3 times higher than in Tirana, the poverty head county
above the national
ration in Kukës is over twice that in Vlorë, etc.
average
in

Internal migration is resulting from such massive internal
disparities: between 2005 and 2006 alone the population of Tirana
percentage;
(vi)
increased by 137,000 and that of Durrës by 45,000 whilst Dibër’s
the
level
of
population shrank by 43,000 (a 23% reduction in the county’s population)
compulsory
and Kukës by 30,000 (a staggering 27% reduction in the county’s
education
in
population)
relation
to
the

The measurement of disadvantage at district level indicates that
regional disparity is unequally distributed even within qarks. The same
national average in
pattern of unequally distribution is shown at commune level – within the
percentage.
district – demonstrating that there exist disadvantaged communes even
within less disadvantaged counties.
The
two
RDCS has
strategic
objectives and programmes:
 Strengthening the development capacity of qarks across the country to utilise and
manage their development potential: the National Programme for the
Development of Qarks.
 Supporting the disadvantaged areas to contribute to sustainable national
development and competitiveness: the Disadvantaged Areas Development
Programme.
The National Programme for the Development of Counties (NPDC)
The NPDC introduces a set of new elements into regional policy of Albania:
 A single policy framework for the socio-economic development of counties,
taking into account their specific development needs;
 A new partnership between national, county municipal and commune
stakeholders – the County Partnership Council;
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A single socio-economic development programming document for the county –
the county development strategy - and a single local agency to coordinate its
implementation – the
County Development Agency.
The concept of “county development agreement”: an agreed multi-annual
strategic, operational and financial plan setting out central government support
for development
priorities in each of the counties;
Effective monitoring, evaluation and reporting systems.
Disadvantaged Areas Development Programme (DADP)
The second instrument of the Strategy is the Disadvantaged Areas Development
Programme (DADP), aiming at eliminating the disparities between disadvantaged
areas and the Albanian average by enabling national, regional and local actors to
make a collaborative effort to maximize the development potential of those areas.
Its key features are:
A standardised basis for defining regional disadvantage through use of an agreed
model of the level of socio-economic development;
The designation of disadvantaged areas for a period of 5 years;
Assessment of disadvantage is made on the values of an index of level of
socioeconomic development. This will be based upon the weighted calculation of
several indices. According to these indices (weighted) the counties can be divided in
5 categories (Ist and II nd beign designated as disadvantaged counties), while
communes and municipalities in 6 categories (Ist and IInd being designated as
disadvantaged ones) .
A Government Plan for the Development of the Disadvantaged Areas and the
allocation of a special budget line for the Development of Disadvantaged Areas in
order to operate special support schemes for both disadvantaged qarks and
disadvantaged communes and municipalities. This Government plan will address
disadvantage at two separate levels: counties and communes/municipalities (within a
certain county).
Support for the counties will take the form of a “top up” provided by the
Government from the budget for the Disadvantaged Areas Development Programme
budget in exchange for an agreement from line ministries in the areas of economic
development, human resource development and infrastructure.
Support for the communes/municipalities will take the form of a “top up” provided
by METE from the budget for the Disadvantaged Areas Development Programme
budget in exchange for an agreement from counties to implement agreed elements of
their CDS
which
will favour the catching up of disadvantaged
municipalities/communes of the county.
Strategic objective 2: is aimed at setting in place an efficient management
framework for regional development.
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Strategic Objective 2 will be achieved through the promulgation of the Law on
Regional Development and associated secondary legislation and the development of
the necessary institutional structures to manage its regional policy.
The Law on Regional Development is drafted. Its third draft is currently available. The
draft law regulates the goals and principles with respect to the management of
Regional Development in the RoA. Only once there is political consensus on the
exact manner in which the strategy should be implemented, on the institutional
structures and the financing requirements should the Law be enacted.
The RDSC specifies the following institutional framework for Regional Development :
 National Partnership Council for Regional Development (NPCRD)
 County partnerships Councils
 Department for Integrated Regional Development (Ministry of Economy, Trade
and Energy)
 County Development Agency
The NPCRD is a national-level advisory body composed of the representatives of the
public (central state administration, county councils, municipalities and communes),
private and civil sectors and will be established in accordance with the Law on
Regional Development. Ad hoc partnership council has been established to monitor
the implementation of the Action Plan for the RDCS and the formulation of the Law
on Regional Development.
The Action Plan for piloting the Regional Development Cross Cutting Strategy
is primarily a task-oriented document which will comprises two phases:
• Phase 1 (2008-2009): outlines the steps needed to be taken in order to pilot the
RDCS, establish the legislative and institutional framework, and to prepare Phase 2
of the Action Plan.
• Phase 2 (2010-2011): will address the first two years of full implementation of the
approved RDCS.
Each phase of the action plan will provide a checklist of necessary tasks to be
performed.
General objectives of the Action Plan – Phase 1 (2008-2009)
By the end of 2009 the following results will be achieved by this Action Plan:
• The two major programmes (National Programme for the Development of Counties
and the Disadvantaged Areas Development Programme) will have been piloted in a
limited number of counties.
• The draft Law on Regional Development will have been prepared, been the subject
of extensive consultations and have been submitted to legislators.
• Secondary legislation will have been prepared and be ready for further action when
the Law on Regional Development has been passed.
• The Department for Integrated Regional Development will have been established
within the Ministry of Economy, Trade and Energy and will be capable of managing
and coordinating the implementation of RDCS.
Reporting on the Action Plan 2008-2009
The Action Plan – Phase 1 (2008-2009) focuses on the actions and tasks that are in
domain of the METE. For this reason its implementation will be managed by the
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METE itself, which will summarize the results achieved in Action Plan six-monthly
progress reports. These reports will be circulated regularly to the interim, ad hoc
National Partnership Council for Regional Development (until the full NPCRD is set
up through legislation/regulation).
The Action Plan final report will be prepared at the end of implementation and
submitted to the National Partnership Council for Regional Development.
On the basis of self-evaluation and in consultation with relevant stakeholders, the
new Action Plan for the period 2010-2011 will be elaborated.
III. Interventions from other donors in relation to Regional Development
UNDP-EU funded Project “Integrated support to decentralization” intends to assist
Albanian government to prepare the necessary institutional and legislative
frameworks for managing IPA component 3 on regional development through
establishing the necessary coordination and cooperation mechanisms at the central
level. In addition, the Project will expand in a number of selected qarks with the aim
of supporting local governments establish appropriate decision-making and technical
structures to make effective use of decentralized authority and resources in
synchrony with national policies and plans. Local infrastructure support will serve to
test the system and consolidate it for further eventual IPA funding and later structural
funds.
The Project will be focused on the Central level for a period of 18 months and only
after that will be expanded in some Qarks. The overall duration will be 38 months.
The assistance involves a considerable component of technical assistance, since the
approach is innovative for Albania and its public administration.
Another major component will be that of local infrastructure works in selected qarks
to support and test the systems of participative decision making and integrated local
planning. It is expected that by the end of the Project, necessary central
management structures for regional development will be in place, Albania would have
developed various NUTS 2 statistical country sub-divisions and chosen the optimal
one for negotiation and the local infrastructure component would have contributed in
the rehabilitation of about 10 large infrastructure works of joint benefit to several local
government units.
The Austrian Development Cooperation is engaged in a programme supporting
Regional Development in the Qark of Shkodra, through stimulating socio-economic
development and economic growth by attracting more public and private investments.
The programme consists in a series of outcomes related to (i) Capacity improvement
within the qark administration, (ii) establishment of a Basket Fund for investments in
infrastructure and environmental projects, and (ii) other support for implementing the
qark strategy. This programme will last until 2011. In addition, the donor is involved in
the Shkodra cross border programme focusing on the establishment of a trilateral
park in the cross-border region between Albania, Montenegro and Kosovo. Austria is
also heavily involved in water infrastructure projects throughout the region.
The European Commission envisages providing substantial support in the
improvement of national and sub-national statistics through mainly two programmes
targeting INSTAT. The first ongoing programme - Support to the regional offices of
INSTAT for data collection and adoption of the Acquis Communautaire – aims
at improving capacities of statistical regional offices to enable systematic data
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collection, entry and analysis for a core set of indicators. This programme will be
extended into a new phase in 2009 to further support the move towards compatibility
of Albanian regional breakdowns with those of the EU Member States. INSTAT, has
recently published statistical indicators by region, but further regional disaggregation
is still required and therefore further capacity building is needed to address this issue
.
The other programme - Support for alignment of Albanian Statistics with EU
standards – aims to produce GDP figures and improve the coverage and timelines
of national accounts aggregates in line with Eurostat standards. This will be realized
through ensuring the complete coverage of all economic units operating in the
country by (i) improving the quality of the different variables of enterprises, (ii)
ensuring the registration of all small units, (iii) avoiding duplicated enterprises in the
register, (iv) improving the business register by cleaning it from sleeping enterprises,
(v) establishment of a Farm Register, and (vi) making use the Farm Register for
conducting Agricultural Surveys.
The German Cooperation - GTZ – besides its involvement in the water
infrastructure sector is also active in supporting Regional Development in the
Regions of Shkodra & Lezha with regards to: (i) planning processes - preliminary
development plans and moderation of planning processes among stakeholders, (ii)
concrete measures – pilot projects of assistance to Thethi Tourism and Producers’
Groups in the rural area and Industrial Zone, Handicrafts Market and Shkodra Lake in
the urban area, (iii) networking – through establishment of one local action group
(LAG) for regional/rural development and training measures on regional
development. GTZ is following closely developments on the area of regional
development and stands ready to provide support in coordination among various
levels. In different donor coordination meetings on decentralization and regional
development GTZ has stated its readiness to support negotiation processes with line
ministries for the adoption and operationalization of the RDCS, support institutional
setting for regional development at the qark level, which are all strong points to
exploit.
OSCE is also active in local capacity building through a Local Government
Leadership Benchmark Programme in partnership with the Council of Europe.
Their programme aims to: (i) provide capacity building assistance to local
governments in the areas of effective leadership, strategic planning and management
in the provision of public services and community participation in local decisionmaking, (ii) support implementation of the Decentralization Strategy and Regional
Reform (with CoE), and (iii) Support implementation of public participation aspects of
the Aarhus and Espoo Conventions. Parts of this programme are still in the shaping.
The SNV and the Dutch Government provide extensive support to Diber qark
through a specific programme Support to Diber Qark. The overall objective of this
programme is to promote sustainable development and strengthen local government
structures in the Qark. A Trust Fund has been established and is administered by
Qark authorities, while capacity building services are provided by SNV. In addition,
Dutch Government provides assistance to local governments in other parts of the
territory with the main programmes being: Tirana Regulatory Plan - Local
Governance – Municipality of Tirana/MPWTT – supporting the Municipality of
Tirana to develop a Regulatory Plan, which will analyze the current land uses,
demographic situations and the capacity of existing and planned infrastructure;
Enabling Good Urban Governance (consolidation phase), etc.
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The Swedish Cooperation – Sida - is involved in a three years programme (20052009) focusing on Institutional Strengthening of the Albanian Association of
Communes. The project aims to: (i) Provide physical facilities and running cost for the
AAC for 3 years, (ii) Assist them in developing their strategic and communication
plans, (iii) establish democratic and participatory processes within AAC, (iv) conduct
training needs assessment for the mayors, (v) deliver training and capacity building
for the members, and (vi) strengthen representation and advocacy on behalf of the
AAC in the national policy-making arenas. This programme, although ending in Feb
2009 is likely to have a possibility of extension into a new phase.
The Swiss Cooperation is currently implementing a Decentralization and Local
Development programme in Shkodra, focused on five key activities (i) Local strategic
as well as territorial management & planning, (ii) Municipal/Communal public services
provision and management support to improve the functioning of the local Councils,
(iii) Municipal/Communal financial management, (iv) Participation of civil society in
public decision making processes, and (v)Inter-municipal and communal exchange
and cooperation. This programme will last until December 2009 and therefore would
provide first hand experience and lessons learnt to succeeding Projects.
In addition, in partnership with SNV, UNDP is implementing a joint Country
Engagement Plan AA4 which aims at facilitating effective and meaningful
participation of a broad range of stakeholders in the implementation of the Integrated
Planning System (IPS) in Albania. The specific objectives of this initiative are: (i) to
support the Department for Strategy and Donor Coordination (DSDC) in managing
and facilitating the participatory and consultative process required for the preparation
of sectoral and cross-sectoral strategies, (ii) support the government in
conceptualizing and implementing a long-term regional development policy, and(iii)
strengthen capacities of regional government structures and their association to
conduct meaningful consultations with the Government. This programme was running
during 2008 and will end by December.
UNDP is also envisaging being involved in a Cross Border Programme for Kukes
Region focusing in (i) supporting and building local capacities for entrepreneurship
and local business development, (ii) promoting cultural and tourist values of the
region and (iii) supporting small scale financing for the rehabilitation of tourist,
environment and cultural sites or landscapes.
EPTISA Regional Plan For Shkodra & Lezha
Eptisa Plan provides a comprehensive definition on Regional Plan trying to make it
compatible with the European Spatial Developing Perspective.
Vision Statement of Eptisa Plan for Shkodra & Lezha regions is to attract maximum
inward investment (and local investment,) so as to create the largest achievable
number of jobs of the highest quality. This will be done in a sustainable way, tackling
the obstacles to such investment, and making the region as competitive as possible.
The main message of the plan is this: that significant private investment will never
begin in the absence of a functioning land market and that such a land market is
impossible without a functioning planning system. This is more a political challenge
than a technical one.
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The plan develops goals and objectives on seven themes : Settlement and
market scale, land, Access, Physical Infrastructure, Social Infrastructure,
Environment, Economic Development
Indicators defined to measure the achievement of goals and objectives are based on
a system of interlinked database: Immovable Property Rights, Population,
Development Land,
Access,
Physical Infrastructure,
Social Infrastructure,
Environment, Economic Development. The budget for all themes is forecasted.
Eptisa Plan also foresees the establishment of a kind of management & coordination
office which will manage the overall process in the North Albania region. Along with
this office it is suggested the establishment of some other organizations for the
implementation of the plan.
IV. Future needs for donor support in Regional Development. Main challenges
for donors
One of the major development challenges Albania has identified relates to the lack of
tradition and proper policies for regional development and the current state of
extreme regional disparities. This situation is exacerbated by the transition economic
decline and the internal demographic changes, which have emptied and neglected
considerable areas of the territory in favour of development concentration in the
larger urban areas.
The strategic documents approved and in force actually in Albania do not have a
clear and solid definition of what is the scope of the regional policy. A common
understanding of all stakeholders should be reached.
In addition, beyond management at the central level, regional development occurs
naturally in the regions and is being implemented by the different levels of local
government. In this context, a major influence (not necessary negative) resides in the
progress and course of the decentralization reforms - especially with respect to
administrative and territorial reform and the scope of regional government – which is
another daunting task for the Government to achieve.
Capacities of regional level are almost in a sufficient number but not qualified and
skilled for the tasks the regions are going to perform.
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Annex 4: Information about available IPA funds
(by Zdenek Vyborny)
Instrument for Pre-Accession Assistance (IPA)
The Instrument for Pre-Accession Assistance (IPA) offers rationalised
assistance to countries aspiring to join the EU for the period 2007-2013 on
the basis of the lessons learnt from previous external assistance and preaccession instruments.
The IPA is the Community's financial instrument for the pre-accession process.
Assistance is provided on the basis of the European Partnerships of the potential
candidate countries and the Accession Partnerships of the candidate countries,
which means the Western Balkan countries and Turkey. The former Yugoslav
Republic of Macedonia, Croatia and Turkey fall into candidate countries.
Albania falls into potential candidate countries (with Bosnia and Herzegovina,
Montenegro, Serbia and Kosovo). EU hasn’t set yet an approximate date of changing
this status to status of the candidate country. A preliminary presumption of the date is
the end of the contemporary EU planning period.
The IPA is intended as a flexible instrument and therefore provides assistance which
depends on the progress made by the beneficiary countries and their needs as
shown in the Commission's evaluations and annual strategy papers.
IPA’s main aim is to support institution-building and the rule of law, human
rights, including the fundamental freedoms, minority rights, gender equality
and non-discrimination, both administrative and economic reforms, economic
and social development, reconciliation and reconstruction, and regional and
cross-border cooperation.
To ensure targeted, effective and coherent action, the IPA is made up of five
components, each covering priorities defined according to the needs of the
beneficiary countries. Two components concern all beneficiary countries:
 the "support for transition and institution-building" component, aimed at
financing capacity-building and institution-building;
 the "cross-border cooperation" component, aimed at supporting the
beneficiary countries in the area of cross-border cooperation between
themselves, with the Member States or within the framework of cross-border or
inter-regional actions.
The other three components are aimed at candidate countries only: the "regional
development" component, the "human resources development" component and the
"rural development" component.
The management of funds granted under this Regulation complies with the general
management conditions for Community funds set out in Regulation (EC, Euratom) No
1605/2002, which the Commission is responsible for implementing (management,
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62
monitoring, evaluation, reporting). Such management must also comply strictly
with the rules on the protection of the Community's financial interests. In this context
the Commission and the Court of Auditors have the power of audit over all
contractors and subcontractors, on the basis of documents and on the spot, ex ante
and ex post.
The Commission is also assisted by committees. The purpose of the IPA Committee
set up by the Regulation is to ensure coordination and coherence between
assistance granted under the different components.
The application of the IPA is also subject to a suspension clause, which applies to
all beneficiary countries that fail to comply with the principles of democracy, the rule
of law, human rights and minority rights, and the commitments contained in the
partnership (accession partnership or European partnership) or that fail to make
sufficient progress towards fulfillment of accession criteria or, for the Western Balkan
countries, towards the reform process.
The Multi-annual Indicative Planning Document (MIPD) 2007 - 2009 is the key
strategic planning document for assistance to Albania under the IPA.
The needs assessment points to a number of priorities which need to be addressed
with EU financial assistance. These priorities will be summarized under the headings
Political Requirements, Socio-Economic Requirements, European Standards
and Cross-Border Co-operation.
In order to improve Albania's capacity to make rapid progress towards the EU,
continued efforts remain necessary to increase the effectiveness of its executive and
legislative bodies. The relevant institutions should have sufficient capacity to meet
European standards, including for implementation and enforcement. This situation
will be taken into account in project selection.
Decentralised management is a long term objective of IPA. Given the current
conditions for financial execution in Albania, full decentralisation will not be
sought under the MIPD 2007- 2009. Nonetheless, pre-accession assistance in this
period will support the country's preparation for decentralised management of EU
assistance through capacity building of relevant administrative departments and
institutions, including internal control and audit.
Based on the above mentioned needs, the pre-accession assistance should focus
on:
- improving governance and the rule of law, particularly in the public administration,
judiciary and police
- supporting economic development and enhancing social cohesion
- adopting the acquis and building capacity for transposing, implementing and
enforcing the acquis
- strengthening of ties with neighbouring countries and EU Member States
Furthermore, the following cross cutting issues will have to be reflected in all
activities programmed under IPA:
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• Civil Society is understood as including employers' organisations, trade unions and
local government associations as well as non governmental organisations.
• Environmental impact assessment is compulsory concerning proposals for new
infrastructure investments projects.
• Equal opportunities and non-discrimination will be respected as regards gender
and minorities at the programming and implementation stages, particularly in relation
to socio-economic support programmes.
• Furthermore minority and vulnerable groups' concerns will be reflected in all
activities programmed under IPA, in particular where public services, legislative
matters and socio-economic development are concerned.
Main priorities:
• Support to the political system in order to improve the electoral system and
regulatory functions of the Parliament.
• Support to the Civil Society in order to promote the creation of a genuine
partnership between authorities and Civil Society in the democratic stabilisation and
the economic and social development of the country.
• Support the improvement of the Media Sector to develop an independent, high
duality public service broadcasting system and a regulatory environment in line with
European standards.
• Contributing to the Reform of the Public Administration in order to obtain a
reformed, streamlined, harmonised, effective, transparent and service oriented public
administration, capable of leading Albania through the Stabilisation and Association
Process.
• Support to the Police Reform to assist Albania to gain a police force which is
operating in an efficient and sustainable structure, capable of fulfilling its role in the
enforcement of the Rule of Law.
• Support to the Reform of the Judicial System with the overall strategic objective
of an independent, reliable and efficient functioning judiciary that guarantees the rule
of law.
• Support to the vulnerable groups (minorities - including Roma, women, children,
handicapped) to overcome their vulnerable and economic fragile situation and to
protect them against discrimination. Support to victims of trafficking.
Programmes to be implemented (e.g.):
• Improving the electoral process through the support to the address system and
civil registry.
• Capacity building for civil society organisations and municipalities, and the
definition of systems and channels of permanent communication and transparent
procedures between civil society and government.
• Support in the reform, strategy development, adoption and implementation of
the laws regulating the media and in form of technical assistance to the Broadcasting
Authority.
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64
 Support to activities of NGOs and the media community in the drafting and
establishment of a self-regulation system.
• Implementation of the Public Administration reform, modernisation and
streamlining of the entire public administration through institution and capacity
building and reform of the human resources management, at both central and local
level. Support to the Civil Service Commission. Support to local governments and
administrative and fiscal decentralisation.
• Institution and capacity building for bodies offering social services, including
social inclusion of vulnerable groups and minorities, trafficked persons.
IPA CBC Albania – Montenegro
(Multi-annual Indicative Planning Document – MIPD, 2007 - 2009)
It is designed following the principles underlined in IPA implementing rules and
provision established in the IPA regulation. This CB programme will be
implemented during the period 2007 – 2013.
Eligible area:
Shkoder Region, Kukes Region (cca 6 000 km², 337 000 inhabitants).
Gaps, disparities and potentials:
 strengths: tourism sector, natural resources, strengthening of SME’s – to be
attractive for FDI,
 weaknesses: high unemployment, strong migration flows, marginalization, social
hardship, youth emigration,
Overall strategic objective:
Promote cooperation between people, communities and institutions on the bordering
areas, aiming sustainable development, stability and prosperity in the mutual
interests of citizens of the two countries.
Specific objectives:
a)
economic development (valorization of tourist and cultural potentials,
b)
ecosystems and sustainable environmental development,
c)
citizens cooperation and partnership building,
d)
strengthen capacities to manage CB programme,
e)
programme information and improving capacities of beneficiaries to
prepare and implement projects,
f)
provide technical expertise for external programme evaluations.
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Measures and indicative actions:
Re-building or up-grading of small tourism infrastructure - e.g. walking paths, cycle
routes, equipping visitor centres, information points, networking tourism centres.
Beneficiaries:
LGU’s, professional associations, chambers of commerce, national and local
institutions, education and research institutions, vocational training centres, SME’s,
labour offices, NGO’s, Public enterprises.
Indicators:
1) objective verifiable,
2) result,
3) impact.
Specifications on size of projects, other requirements and selection criteria will be
detailed in the “Call for Proposals” and “Guide for Applicants”.
Total budget (2007 – 2009):
2,886 MEUR (community funding 85 % - 2,453, national funding 15 % - 0,433).
Organisational structures:
A. MEI (Unit for Regional Cooperation)
B. Contracting authority: Delegation of the European Commission
C. Joint Monitoring Committee
D. Joint Technical Secretariat (Shkodra)
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Annex 5: List of interviewees
Ferdinand Poni, Deputy Minister MoI, and his team, Tirana
Albert Gajo, Deputy Minister MEI, and Patris Kraja, MEI, Tirana
Thoma Rusha, Head of Progonosis and Regional Development Sector, METE,
Tirana
Oriana Arapi, Nevila Xhindi, Migena Dako, DSDC/Prime Minister’s Office, Tirana
Shkelzen Marku, Executive Director MADA, Tirana
Naim Gazidede, Head of Qark, and his team, Peshkopi
Ilir Krosi, Mayor, Peshkopi
Head of commune, Zerqan
Shefqet Bruka, Head of Regional Council, and his team, Kukes
Hasan Halilaj, Mayor, Kukes
Giovalin Kolombi, Head of Regional Council, and his team, Shkodra
Maxhid Cungo, Prefect Shkodra
Ridvan Troshani, Deputy Mayor, Shkodra
Arben Gjura, Head of Commune, Dajc
Agron Haxhimali, Albanian Association of Communes, Tirana
Fatos Hodaj, Albnaina Association of Municipalities, Tirana
Llazar Korra, EU-Delegation Tirana
Nori Shimomura, Country Director, and Vladimir Malkaj, UNDP Tirana
Darcie Nielsen, OSCE Tirana
David Smith, Local Governance Program in Albania (USAID), Tirana
Ismail Beka, Deputy Country Director, and Roland Cela, GTZ Tirana
Greta Minxhozi, the World Bank, Tirana
Christine Arab, UNIFEM Tirana
Beata Oleksy, OSCE Kukes
Valbona Karakaci, Hilmar Stetter and team, DLDP Shkodra
Hetona Myteveli, Sharon Hanson-Cooper, SNV, Tirana
Greg Booth, Lindita Manga, SNV Peshkopi
Sotirq Hroni, Erisa Cela, Institute of Democratisation and Mediation, Tirana
Mark Rupa, …
Sokol Bushgjokaj, Quendra Mjedisore Valbona, Tirana
Feasibility Study, 23-2-2009
Klaudia Darragjati, Technical Director, TEULEDA
Women NGO in Peshkopi
Women NGO in Kukes
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