USAID Sustainable Local Development Project USAID-SEIO Consultative Monitoring under USAID Assistance Agreements: 169-AA-10-EG/001 and 169-AA-10-DG/001 Susan Kutor, USAID/Serbia Economic Growth Office Director February 28, 2012

USAID Sustainable Local Development Project SEIO Aid coordination sector: Local Government and Local Infrastructure informal groups Budget and Duration Total Life of Project funding: $21.7 million December 2010 – December 2015 Implementing Partner Chemonics International Chief of Party: Patrick O’Mahony ObjectiveA More Competitive Market Economy (EG) Government Operations Improved (DG) Agreement169-AA-10-EG/001 and 169-AA-10-DG/001 ComponentsInter-Municipal Cooperation Local-Government Administration Public Participation Youth Development Business Enabling Environment USAID Sustainable Local Development Project 2

CONSULATIVE PROCESS TO DATE March USAID consulted with GoS counterparts at the workshop which included representatives of 10 ministries and agencies, donors, and others in order to ensure coordination and cooperation from the very first initial stage of the project. Date of USAID-GoS work plan reviews: Last review: September 2011 Next review: September 2012 USAID Sustainable Local Development Project 3

STATE OF IMPLEMENTATION Eight Inter-Municipal Cooperation (IMC) partnerships have been formally established, with a total of 32 participating municipalities/cities. First formal inter-municipal cooperation agreements, which have been established pursuant to the Law on Local Self Government in Serbia. Priority projects identified by IMCs; IMC working groups are currently adopting action plans for inter-municipal project initiatives; USAID to support development of select projects. USAID Sustainable Local Development Project 4

STATE OF IMPLEMENTATION (continued) Niche support helped to leverage more substantial donor funding (Leskovac Green Zone; Novi Sad training center; Pester Agribusiness Center). USAID is helping municipalities to prepare cross-border cooperation project applications for EU funding. PPP: Manuals completed; Possible public-private partnerships identified. Training of trainers conducted for monitoring of Public Utility Companies. Youth entrepreneurship supported through mentoring program. USAID Sustainable Local Development Project 5

INDICATORS USAID Sustainable Local Development Project 6 IndicatorBaseline 2011 Target 2011 Actual 2012 Target Number of business friendly municipalities Number or inter-municipal projects in SLAP system rated as fully prepared 0001 Number of public services in municipal clusters in support of business development N/a005 Number of PPPs in delivery of public services0001 Number of partner municipalities implementing mechanisms to improve management practices N/a007

KEY CONTRIBUTIONS FROM GOS PARTNERS FOR YEAR ONE Law on Concessions/PPPs adopted Law on Public Property enacted Law on Public Debt adopted, allowing public issuance of municipal bonds MERD supported NALED Business Friendly Certification program MoUs with MERD, Ministry of Youth and NES in development USAID Sustainable Local Development Project 7

OBSTACLES AND PROPOSED SOLUTIONS Issue: USAID had targeted an increase in local government own source revenues. Under the Law on Financing of the Local Governments (Oct 2011), more than two-thirds of the local governments have benefited from a budget increase for capital expenditures. Risk: Demotivation of the local self-governments to mobilize any efforts in the reform of the original source revenues (property tax). Solution: USAID + partners are exploring two possible activities: –Piloting program budgeting in the area of capital investments in order to assist municipalities to efficiently plan and dispose of the new revenues; and –Assisting local self-governments to upgrade management of those revenues that are directly linked to particular IMC initiatives (for example, sojourn tax – tourism projects). USAID Sustainable Local Development Project 8

OBSTACLES AND PROPOSED SOLUTIONS Issue: Establishment of an accredited distance learning program for public officials. Risk: Although there are positive elements, there is an issue of sustainability of the initiative. Solution: Map the obstacles and discuss with the GoS the possible way forward after the elections. USAID Sustainable Local Development Project 9

DISCUSSION USAID Sustainable Local Development Project 10