Albania Progress in strategic planning National Strategy for Development and Integration Forum on energy and poverty reduction strategies 26 June 2007  Athens

National Strategy for Development & Integration Started as donor driven process broad consultations expanded sectors 4-year action plans 400+ priority actions not linked to budget focus on EU Integration 7-year planning horizon 30+ sector, cross-cutting strategies informs decisions on budget ceilings National Strategy for Growth & Poverty Reduction National Strategy for Socio-Economic Development National Strategy for Development & Integration

NSSED goals and achievements National Strategy for Socioeconomic Development (NSSED) was the Albanian version of the PRSP (November 2001) 3

Weaknesses of NSSED as strategic planning framework However, NSSED had weaknesses as planning framework:  only covered part of the strategic agenda of the Government of Albania: e.g. reducing poverty and achieving European integration require different approaches and sector involvement  Covered only a limited number of sectors  poor links to budget; 4-year action plans overlapped with the 3-year medium-term budget; duplicate reporting  document was ad hoc; no links with strategic planning inside line ministries 4

Integrated Planning System In November 2005, the Government streamlined the core planning and budgeting processes by introducing the Integrated Planning System (IPS):  For the first time attempts to integrate all main processes of Government (NSDI, budget, EUI process, NATO membership, Public investment process, donor coordination)  Creation of Strategic Planning Committee, chaired by PM, to oversee IPS  Transfer of strategic planning (NSSED) function from the Ministry of Finance to the new Department of Strategy and Donor Coordination (DSDC) in the Office of the Council of Ministers  Explicit links between strategy and budget  renaming of NSSED – National Strategy on Development and Integration (NSDI) 5

6 IPS Accountability Strategic Planning Committee Council of Ministers Minister Strategy, Budget & Integration Group Programme Management Teams Department of Strategy & Donor Coordination, with MoF and MEI, to provide central coordination Inter-Ministerial Committee chaired by the Prime Minister chaired by Minister with DMs, General Secretary, senior Department Directors

Overview of NSDI - 1 The National Strategy for Development and Integration (NSDI) has the following main characteristics:  replaces the NSSED as principal strategic document of the Government  has a medium- to long-term horizon ( )  elaborates the 4 strategic priorities of the Government Programme: 1.NATO and European integration (including the key points of the National Plan for SAA Implementation) 2.democratisation 3.rule of law 4.social and economic development 7

Overview of NSDI - 2 Synthesis of full set of sector and crosscutting strategies  Sector strategies (20)  follow a given structure and set of standards approved by the Strategic Planning Committee  describe the full extent of activities for each ministry which are broadly costed  can be updated whenever policy priorities change as part of a regular planning and budgeting cycle  Crosscutting strategies (12)  describe selective policy priorities that are not under the mandate of a single ministry  are fully consistent with the underlying sector strategies 8

NSDI timeline  March 2006: Strategic Planning Committee decisions on strategic planning methodology  June 2006: NSDI, sector and crosscutting strategy preparation instructions issued for line ministries  October 2006: first drafts of sector and crosscutting strategies submitted  November-December 2006: review of first drafts  February-June 2007: consultation of sector and crosscutting strategies  July 2007: public consultation and launch of first draft of NSDI  October 2007: approval of NSDI 9

Example: Energy Sector Strategy  Lead: Ministry of Economy, Trade and Energy  Strategic priorities  Restructure energy system according to market principles to establish effective institutional and regulatory framework  Use energy more efficiently  Optimise energy supply system  Increase energy supply security through diversification and investments in generation capacity and interconnections  Increase use of renewable sources of energy  Open domestic market of electric energy and participate actively in regional market  Protect poor households through electricity subsidy scheme (a strategic priority of the social protection sector strategy) 10

NSDI – MTBP Linkages 11 Sector & Cross- Cutting Strategies [ ] Priorities Policy Note Macro- economic Framework Proposed MTBP 3-Year Budget Ceilings Strategic Planning Committee Budget Instructions MTBP 3-Year Budget Ceilings This process begins in January; Budget Instructions sent out to ministries in early March

Consultation Advisory Groups All ministries have formally established advisory groups for each strategy consisting of people representing domestic non-government policy stakeholders; Groups to assist not only in preparation but also in implementation Donors Line ministries invite donors to discuss advanced drafts Parliamentary commissions Each strategy must be submitted for information TV debates To take place across the country in July and September on core policy themes 12

Monitoring - 1 Clear distinction of monitoring arrangements 1. Monitoring of inputs and outputs is part of budget (MTBP) documentation, not of NSDI  Core document is the Ministry Integrated Plan, which summarises the outputs to be delivered in the current year according to the ministry’s medium-term budget submission  First set of Ministry Integrated Plans prepared in 2007; ministries will report against them in

Monitoring Monitoring of impacts and outcomes is in the focus of the NSDI  Core document is the Annual Progress Report, which is the responsibility of the DSDC and focuses on high-level indicators in a format accessible to the general public; not to be used as update to the strategy in the way PRSP progress reports were expected to be  Reports against the list of NSDI monitoring indicators  First report produced for 2005 experimentally to mark the transition to the new style; the 2006 report will be benchmark for the NSDI 14

Donor alignment  An output of the NSDI will be an external assistance guidance document to be produced by the end of 2007  will provide overview of national external assistance performance (e.g., disbursement rate) and progress towards Paris Declaration on Harmonization  will review each sector’s existing external assistance portfolio, assess against NSDI/sector priorities and identify gaps  will encompass all external assistance, including IFI loans, IPA and other multi-bilateral donors 15

Conclusion  the 2001 poverty reduction strategy did serve as the first attempt to develop a strategic, horizontal approach to policy planning and priority setting  the complex, far-reaching commitments of European Integration necessitated a new government-wide approach  poverty reduction goals and broad commitments (e.g., MDG’s) are still reflected in individual sector and cross- cutting strategies  however, this no longer stands as the exclusive driver of strategic planning 16