Regional and local economic development

Project description

Title: Regional and local economic development in Macedonia
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Macedonia
Lead executing agency: Cabinet of the Deputy Prime Minister for Economic Affairs; Macedonian Ministry for Local Self Government (MoLSG)
Overall term: 2010 to 2015

Context

As a precondition for its planned accession to the European Union (EU), Macedonia has undertaken to gradually incorporate the full body of European laws into Macedonian legislation and to apply them in accordance with EU rules. By adopting the Law on Balanced Regional Development in 2007, the government laid the foundation for a regional policy in line with EU norms. This policy aims to eliminate the structural inequalities that exist between the country's regions. GIZ is supporting Macedonia in developing and establishing appropriate structures that are aligned with EU cohesion policy.

In this context, since 2008 GIZ has been helping to ensure that regional development gains greater acceptance in Macedonia both at national and at regional and local level. In addition, structures have been set up in all eight regions for planning, developing and implementing regional development projects.

Objective

The regional structures are able to plan, implement and manage increasingly complex regional development measures and measures with medium-term to long-term EU financing competently, transparently and efficiently.

Approach

In 2015, with further funding from the EU, regional development programmes running from 2015 to 2019 are to be established for all eight regions in Macedonia. The key stakeholders at national and regional level will be involved. GIZ is supporting the National Council for Regional Development and the Ministry for Local Self Government (MoLSG) in carrying out various activities, for example organising six seminars per region and a conference each to present the strategies developed. In addition, further meetings and seminars are being organised to involve civil society and business associations in regional development so that the relevant actors at national level can be coordinated more effectively.

GIZ is also supporting eight regional structures in selecting and planning at least ten medium-scale to large-scale regional development projects. GIZ will provide the eight regional councils and centres involved with grants of up to EUR 20,000 to allow them to implement a range of measures, such as drawing up feasibility studies and cost-benefit analyses. They are also being advised on how to select and analyse the projects. The programme will support the regional structures in acquiring funding at national level and from other potential donors to implement the projects.

Results

The Regional and Local Economic Development in Macedonia (RED) programme has supported the Macedonian Government in creating the conditions and goals for balanced regional development by adopting new national laws and strategies. In addition, functioning regional development councils and centres have been set up in the eight regions. They are able to design projects of their own and are hence in a better position to draw on and use existing national regional development funds.

The regional structures in Macedonia are now increasingly able to draw up long-term development plans in cooperation with all the relevant stakeholders in the regions, including business and civil society partners. In addition, they can develop complex projects and acquire and use funds. By the end of 2014, for example, 26 project applications with budgets of around EUR 1 million each had been produced. They included a cross-border project involving collaboration between Gostivar Municipality and Kosovo which utilised funding from the Instrument for Pre-Accession Assistance (IPA) and had a budget of more than EUR 500,000. There are also various projects geared towards the joint marketing of regional products. By the end of 2014, five of these projects had already secured funding totalling EUR 11 million.

At national level, the measures carried out to date have helped achieve a higher level of awareness and interest in regional development. With support from GIZ, a national fund for regional development with a budget of EUR 4 million has been established and will be launched in 2015.

As part of the RED programme, partners are developing plans for a cross-institutional system that can be used to record and manage national funds for regional development from the various budgets more effectively. This will allow the Macedonian Government to control and document its targets more successfully, for example to invest one per cent of the gross national product in regional development.