UNDP Macedonia Support to Economic Development – Status and Lessons Learned Sub-regional meeting in MSME development in South East Europe 6 April, 2004

Macedonia – Economic situation and challenges GDP per capita: $1,835 (2002); ppp $6,110 (2002) GDP growth rate : 0.7% (2002) Inflation rate : 2% (2002) Unemployment rate: 36.7% (2004) Share of informal economy: 45.1% (2003) Population below poverty line: 22.3% (2000)

UNDP Macedonia – Support to Economic Development Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice

Policy Advice at national level Stimulating Investments Programme for Stimulating Investments and Action Plan: Investment Promotion Action Plan to Improve the Business Environment Fiscal and Tax Investment Incentives Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice

Policy Advice at national level Programme for Stimulating Investments and Action Plan: Investment Promotion Action Plan to Improve the Business Environment Fiscal and Tax Investment Incentives Advice Capacity Building Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice Stimulating Investments

Policy Advice at national level Programme for Stimulating Investments and Action Plan: Investment Promotion Action Plan to Improve the Business Environment Fiscal and Tax Investment Incentives Legal Task Force Integrated business registration system Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice Stimulating Investments

Policy Advice at national level Programme for Stimulating Investments and Action Plan: Investment Promotion Action Plan to Improve the Business Environment Fiscal and Tax Investment Incentives Review Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice Stimulating Investments

Policy Advice at national level Harnessing the Potentials of Informal Economy Reduce Costs of Going Formal Access to teams of lawyers and other experts Increase representation Enhance access to capital Raising Awareness Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice

Objective: to strengthen capacities of LGs’ active role in the development processes and support to entrepreneurship LED Partnerships Capacity Building of LED Teams Holistic LED Strategies LED Action Plans Access to Finance: Municipal Economic Development Fund UNDP ICT Centres Co-operation with EU -based counterpart institutions Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice Development of Enabling Local Economic Environment

Municipal Development Fund Objective: to stimulate the local economic development processes Capital for small scale projects Seed funds to initiate implementation of local development priorities Incentive for LED process Cost effective mechanism Contribution of local stakeholders Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice

Employment Generation - MSP Objective: to support and empower municipalities in enhancing employment and incomes Focus: enhancement of potentials of the local economies and environment and improve the capabilities, job-readiness and marketability of the unemployed Approach: demand driven and competition process Initial partner: local authorities Key mechanism: PPP between various local stakeholders Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice Number of projects: 82 in 75 municipalities Funds: Project (1 mill$), Cash contribution (116,000), In kind ( 1 mill$) Vocational training: 480 On the job training: 533 Longer term employment: 709 (private: 587; public: 122) Additional opportunities for employment: 471

MSP: Type of projects

ICTD Objective: to promote access to ICT and enhance the electronic exchange of information and experience among LG and their communities through both training and electronic networking Second phase: to provide ICT-related services to a wide range of users including LGs and MSMEs 19 ICTCs More than 17,000 trainees New services: Collection point for a wide range of information services Providers of training and capacity building Enabling Local Economic Development Municipal Development Fund Employment Generation ICTD Policy advice

Lessons Learned Complex problems call for comprehensive interventions Carefully identify the entry point for policy advice Build on previous successful work Ensure professional credibility – excellent expertise and regional knowledge Government commitment is critical, capacities as well Coordination - complementarity with other donors and IFIs (competitors vis-à-vis partners) Flexibility and prompt response is important Communicate the UNDP mandate Potentials of partnerships on local levels Define evaluation/assessment criteria from the beginning