Valbona Kuko Coordinator for Donors Assistance Department of Strategy & Donor Coordination

1. Government of Albania Strengthening National Capacities for Efficient Management of External Assistance 14-15 May 2007 Podgorica, Montenegro Valbona Kuko Coordinator for Donors Assistance Department of Strategy & Donor Coordination

2. Purpose of Presentation to provide an update on: • Main political developments • Implementation of Integrated Planning System [IPS] • introductory presentation provided at last year’s conference • Progress done as regards aid coordination & future steps

3. MAIN POLITICAL DEVELOPMENTS • On 12th of June 2006 Albania signed the SAA between EU and its Member States and Interim Agreement • On 30th of July 2006 The Albanian Parliament ratified the SAA and Interim Agreement • On 7th of September 2006 the European Parliament ratified the SAA • The ratification process from the Member States has already started (8 countries already have ratified) • The Interim Agreement entered into force on 1st of December 2006.

4. Integrated Planning System (IPS) • IPS provides a broad planning and monitoring frameworkdesigned to ensure that the Government ofAlbania’s core policy and financial programsfunction in a coherent, efficient and integrated manner; the six core programs include: • National Strategy • Medium-Term Budget Programme • European Integration • Government Programme • Public Investment • External Assistance

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

6. National Strategy for Development & Integration 2001 2003 2007 National Strategy for Growth & Poverty Reduction National Strategy for Socio-Economic Development National Strategy for Development & Integration • 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 • linked to budget ceilings • donor driven process

7. NSDI Strategies 11 CROSS-CUTTING STRATEGIES 20 SECTOR STRATEGIES • Agriculture & Food • Basic Education • Culture • Defense • Economy • Employment • Energy • Finance • Foreign Affairs • Health • Anti-Corruption • Consumer Protection • Decentralization • Environment • Gender Equality • ICT • Organized Crime • Property Rights • Regional Development • Rural Development • Social Inclusion • Higher Education • Justice • Public Order • Social Insurance • Social Protection • Statistics • Tourism • Transport • Urban Planning • Water

8. NSDI Annual Progress Report • reports annually on pre-selected list of 30+ high-level indicators • covers MDG’s • information provided mostly from statistics agency and special surveys • approximately 50 pages • former NSSED progress report was several hundred pages long • reported on each ministry’s 4-year action plan (400+ items)

9. NSDI – MTBP Linkages Budget Instructions This process begins in January; Budget Instructions sent out to ministries in early March Sector & Cross-Cutting Strategies [2007-13] Priorities Policy Note Strategic Planning Committee MTBP 3-Year Budget Ceilings Macro-economic Framework Proposed MTBP 3-Year Budget Ceilings

10. MTBP Programme Hierarchy Programme Description MARCH-APRIL Programme Policy Statement Programme Goals APRIL-MAY Programme Expenditure & Investment Plan Programme Objectives Programme Outputs Programme Activities Programme Budgets

11. Ministry Integrated Plans [MIP] JULY OCTOBER NOVEMBER DECEMBER Ministry Monitoring Plan Ministry MTBP Submission Draft Ministry Integrated Plan review monitoring measures with DSDC • enter into database • publish MIPs • publish last year’s results • report quarterly

12. IPS-European Integration Linkages PLANNING & BUDGETING MONITORING & IMPLEMENTATION Do NSDI sector & cross-cutting strategies fully reflect EU integration? Have good performance measures been developed for SAA commitments? EU Integration Process Are SAA commitments captured in the MTBP/budget? Were planned budgets for SAA commitments actually expended? Are necessary policy/legal approvals in place? Are IPA projects being implemented effectively?

13. New Public Investment/External Assistance Process Ministry proposes project PI Committee Reviews If yes, include in budget Include in MTBP? Ministry prepares Appraisal Assign Project No. [database] If no, seek foreign financing Annual External Assistance Strategy, indicating gaps, presented at Donors Conference

14. IPS Information Systems SAA Treasury Donor EA Data IPA MTBP PI and TA Projects IPSIS & EAMIS

15. DSDC Line Ministries & Agencies Development Partners Others MTBP DB Treasury DB EAMIS DB SAA/IPA DB PIM DB Debt DB IPSIS DB EAMIS – Indicative System Architecture MEI Policy Planning Strategy Programme Project EAMIS MoF Reports IPSIS

16. EAMIS - Key Solution Concepts • Data from Approved Source • Direct feeds from MoF, Line Ministries, Donor community • Data model supports multiple needs • External reporting - based upon OECD DAC survey • Technical Indicators - ability to track by each project • Additional documentation - ability to add additional documentation to each project • Support development of EA coordination plans and reports • Ability to track Project Technical Indicators • Not just financial indicators

17. IPS Trust Fund • $7.2 million Multi-Donor Trust Fund • administered by the World Bank • contributing donors include • Austria • European Commission • Italy • Netherlands • Sweden • United Kingdom

18. IPS Trust Fund Structure

19. Strategy for External Assistance2008 - 2010 Policy Framework • External assistance is a core component of the IPS • External assistance supports implementation of the NSDI • External assistance integrated in the national budget • The IPA included as a key component of the EA envelope • Clear delegation of authorities and accountabilities • Need for updated legislation

20. Strategy for External Assistance2008 - 2010 Performance Framework • Learning lessons from the past • Performance measurement • Reporting, monitoring and evaluation • Managing risks • Partnerships

21. Strategy for External Assistance2008 - 2010 Development Effectiveness • Consultation and participation • Transparency of decision making • Predictability • Capacity building and sustainability • Controls against abuse

22. Strategy for External Assistance2008 - 2010 Institutional Framework • Government institutional mechanisms • Government – Donor Coordination • Development partner mechanisms

23. IPA Process and Progress

24. Progress • Finalisation of MIPD 2007-2009 • Finalisation of IPA 2007 projects • Nomination of NIPAC- Minister of European Integration • Starting IPA 2008 programming process

25. Main Challenges-Towards • Decentralisation of IPA management during 2007-2009 • Setting up legal framework for establishing the decentralized system in Albania- June 2007 • Provision of an in depth assessment of the current administrative structures in the Ministry of Finance and main line ministries as regards their readiness to assume the responsibilities of the decentralized management of assistance- October 2007 • Establishment of the CFCU in the Ministry of Finance- starting by January 2008 • Nominating SPO functions in major line ministries ready to manage EC assistance and transfer of EU assistance implementation responsibilities from the EC Delegation to CFCU upon accreditation by the EC- • Goal: IPA 2008 to be managed through decentralised system

26. THANK YOU FOR YOUR ATTENTION