Local economic development in Eastern Serbia
Context
As part of the process of developing its market economy and moving closer to the EU, the Serbian Government has declared its intention to reduce regional economic disparities. Thus far most municipal authorities in Eastern Serbia have been unable to provide services that stimulate economic development while also meeting the criteria of good governance.
Objective
The basic conditions for local and regional economic development in Eastern Serbia are improved, taking into account the mechanisms and standards of good governance.
Approach
The key project partners are the nine Eastern Serbian municipalities (Boljevac, Golubac, Kladovo, Knjazevac, Majdanpek, Negotin, Sokobanja, Veliko Gradiste and Zajecar) as well as the Ministry of Economy, the Ministry of Finance, the Ministry of Regional Development and Local Self-Government, the Ministry of Agriculture, the Serbian Standing Conference of Towns (SCTM) and Municipalities and the Regional Development Agency Eastern Serbia (RARIS).
Advisory services provided by Serbian and international experts assist the partners at the local, regional and national level to create conditions that are conducive to private sector development in accordance with the principles of good governance. The project aims to:
• improve demand-based services for the private sector at local level
• promote local cooperation and foster networks at local level
• promote more productive and results-oriented cooperation between the various levels of administration, thus improving the operating environment for the private sector.
The project collaborates with the programmes and initiatives of other donors, primarily the Swiss Agency for Development and Cooperation (SDC), which co-finances the project.
Results
§ In the first three years of the project, the performance of the municipalities receiving project support in stimulating economic development improved by 11%, compared with an increase of just three per cent in a control group of municipalities receiving no project support.
§ Some 63% of local companies confirm an improvement in the service delivery by municipal offices aimed at economic promotion.
§ In 2011 the Regional Development Agency Eastern Serbia (RARIS), which is supported by the project, became the first regional development agency to be accredited by the Serbian Government. It thus serves as the point of contact for the government and is responsible for the implementation of regional development plans and measures. RARIS’s improved performance is also reflected in its ability to raise additional funds. On top of the project funding of around EUR 100,000 for the implementation of measures to stimulate local and regional economic development in Eastern Serbia, it secured additional funding of EUR 520,000 from other partners (municipalities, ministries, EU, other donors).
§ The municipality of Golubac received EUR 6.5 million from the EU to invest in tourism at the historic Golubac Fortress on the Danube River. This investment is expected to generate annual turnover of EUR 2 million and create 50 new jobs.
§ Supported by the project, the vintners associations of Knjazevac and Negotin became the first in Serbia to secure a geographical indication for their wine, according to the new EU regulations. This has been accompanied by an improvement in the quality of the wine and the ability for the producers in the relevant municipalities to achieve higher prices.
§ The project supported the National Alliance for Local Economic Development and the Serbian Standing Conference of Towns and Municipalities in carrying out the Vision 2016 initiative. In twelve municipalities and towns, local authorities and small and medium-sized enterprises (SMEs) were asked to submit proposals for reform for the next government. The Vision 2016 recommendations have been fed into the coalition agreement that is now being implemented by the current government
.