MACEDONIAN DECENTRALISATION MODEL: Context and Challenges of the Decentralised Service Delivery Case Study

1. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery MACEDONIAN DECENTRALISATION MODEL:Context and Challenges of the Decentralised Service DeliveryCase Study Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

2. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery Republic of Macedonia - Profile Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

3. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Development context • Macroeconomic stability • Larger degree of trade liberalization • 33.54% of the population bellow the poverty line • Extremely high unemployment rate • The growth: around 4% annually (in average) • In 2007: • The growth was around 6% • Gradual increase of the economic reforms • Macedonia on the 4th place among the ten top economic reform countries worldwide in 2007 (recognized by the World Bank) Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

4. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Key factors for political stability • The Ohrid Framework Agreement - OFA • Functioning of the rule of law • Progress made • Implementation of the legislative part of the OFA • Equitable representation of communities in public administration • Implementation of the decentralisation • Last parliamentary elections held in democratic manner • Political dialogue on issues of fundamental national importance • Legal framework for strengthening the independence and the effectiveness of the judiciary is largely in place • More efficient and effective policy for fight against corruption and other forms of crime Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

5. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • State system • Parliamentary democracy • Type of government • Central government • Only one layer of local government • Local Government • 84 municipalities (local self-government units) • The City of Skopje (with 10 municipalities functioning on its territory) Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

6. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Broad challenges faced by the country • EU integration • Candidate country for European Union (EU) membership - achieved • Concrete date for start of the negotiations expected in 2008 • NATO accession • Invitation for membership expected (forthcoming NATO Summit, April 2008 in Bucharest – Romania) • Implementation of the Ohrid Framework Agreement - OFA • Further regulation of the use of languages of the communities • Resolving the status of ethnic – Albanian ex-combatants • Socio-economic context • High degree of the poverty • Extremely high unemployment rate • Corporate restructuring • Attraction of foreign direct investments • Labour market and education reforms Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

7. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Specific challenges of the decentralisation process • Decrease disparities between municipalities • Ensure appropriate balance among different stakeholders • Ensure an appropriate balance between resource appropriation and spending needs • Ensure an appropriate degree of capacity in various fields, on both central and local level • Build partnerships and ensure accountability • Provide adequate solutions for more dynamic local development • Increase the standard of municipal tax collection as well as the capacity of the municipalities to manage state-owned land. • Increase the number and competence of the municipal staff Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

8. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Capacity development issues(1) • Recruitment and promotion of the civil servants still not sufficiently implemented by objective and merit-based criteria • Lack of a strong commitment to meet the announced objectives • More transparent, professional and depoliticised public administration • Better organised public services • Implementation of the police reform - underway • Law on freedom of information – under implementation • Regulatory Guillotine – launched Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

9. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Capacity development issues(2) • The ministries are preparing strategic plans but very few are implementing them • Capacity to prepare legislation, and hence the quality of draft laws, continues to be uneven • The transparency of the legislative drafting process remains limited and prior consultation of stakeholders unsystematic • Activities of civil society are still hampered by lack of finance and heavy dependence on foreign sources of financing • The standard of municipal tax collection throughout the country is dissatisfactory as well as the capacity of municipalities to manage state-owned land • The number and competence of staff of municipalities are insufficient. Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

10. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Primary client on national level • Ministry of Local Self-Government (MoLSG) • Secondary clients on national level • Ministry of Finance (MoF), • Ministry of Transport and Communication (MoTC), • Ministry of Environment and Physical Planning (MoEPP), • Ministry of Health (MoH) • Ministry of Education and Science (MoES) • Primary client on local level • One urban and one rural municipality Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

11. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • The mandate of the Ministry of Local Self-Government • To follow the development and propose measures for promotion of the local self government; • To follow the status of the territorial division and developing standards for the size, population and the needs of the local self-government units • To propose the system, policy, measures and instruments for achieving a more balanced regional development and for encouraging the development of the economically underdeveloped areas • To attain and use the resources allocated for economically underdeveloped areas • To carry out supervision over the legality of the work of the organs of the local self-government units and the City of Skopje • The mandate of the municipalities • To execute their constitutionally and legally determined competences Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

12. Country policies, rules and norms – Milestones • Ohrid Framework Agreement - signed in August 2001 • Amendments of the Constitution – adopted in November 2001 • In January 2002, a new Law on Local Self-Government was enacted. • End of 2003 - Programme for Implementation of the Decentralisation Process 2004-2007- adopted • Another 40 laws adopted until 1 July 2005 • April 2005 - Detailed Plan for Transfer of Competences and Resources (DPTCR) - adopted • 30,221 employees and 548 institutions transferred as of 1 July 2005 • In the area of education (over 25,000 teachers and support staff are transferred ) • Municipalities are responsible for employing approx. 40 % of public employees, whereas before the process started, local government accounted for less than 5 %. • September 2007 - Programme for Implementation of the Decentralisation Process 2008-2010- adopted UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

13. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • The major competencies which have been decentralised • The management and maintenance of primary and secondary schools; • The management and maintenance of old age people’s homes and kindergartens; • The management and maintenance of local cultural institutions; • The management and maintenance of the fire and rescue services; • Urban Planning and construction (permitting procedure and transfer of Ministry of Transport and Communication Units responsible for local urban planning) • The fiscal aspects of decentralisation • Transfer of ear-marked (first phase) and block grants (in the second phase of the fiscal decentralisation) to fund education, welfare, fire and rescue services and cultural institutions; • Tax shares and the raising of own revenues by the municipalities. • Presently the property taxes seems to be the strongest fiscal instrument of the municipalities. • The chosen concept lacks clear fiscal equalization tool and favors the urban compared to rural municipalities. Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

14. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Priorities of the Ministry of Local Self-Government • The start up of the coordination and the implementation of the Programme for implementation of the decentralisation process 2008 -2010 and the related Action Plan for 2008 • Coordination of the preparation of 18 laws (mainly changes in the existing laws) and 23 by-laws through the Decentralisation Working Group and the ten thematic Sub-Groups • Coordination of the resolving of the disputes related to the not yet transferred immovable goods with disputed right of ownership • To assist together with the Ministry of Finance the remaining 33 municipalities and the City of Skopje to enter into the second phase of the fiscal decentralisation • Priorities of the Ministry of Finance • Assist all municipalities, and especially the small and the rural municipalities, to enter the second phase of the fiscal decentralisation; • Establish functional and objective financial monitoring system of the realisation of the earmarked, the block and the capital grants by the municipalities; • Establish minimum service standards (where they currently do not exist) and reassess the basis of aligning the service delivery based on minimum service standards with the financial capacities of the municipalities as the most proper manner to calculate the costs of the services • Consider and determine measures for improvement of the grants and develop effective fiscal equalisation system Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

15. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Modes of operation, civic engagement, etc. within and across sectors (1) • The Decentralisation Working Group (DWG) - highest inter-ministerial body headed by the Minister of Local Self-Government and focused dominantly on monitoring and reporting to the Government. 16 Different ministries and central government agencies as well as the ZELS are represented. • 10 Sectoral sub-groups, for each transferred competence - coordinated by the Ministry of Local Self-Government, members are representatives from the line ministries and ZELS. The Sub-Groups are the level where most of the practical and detailed work is undertaken, and their tasks include the monitoring, assessment of risks, overview of the laws and by-laws and reporting to the DWG Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

16. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery • Modes of operation, civic engagement, etc. within and across sectors (2) • Basis for the coordination between the stakeholders: • A Memorandum of Co-operation with the Association of the Local Self-Government Units (ZELS) which regulates consultation over government decisions and legislation • A Memorandum between the Ministry of Local Self-government, the Association of the Units of Local Self-Government (ZELS) and the Civil Service Agency on co-ordinating the training for the municipal administration which established the Trilateral Committee made-up of these three bodies as the coordinating mechanism for training efforts • A Commission for the Following of the System of Financing of the Municipalities, a body set up according to provisions of the Law on the Financing of the Municipalities. The Commission is made up of representatives of ZELS, the Ministry of Finance and the Ministry of Local Self-Government Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

17. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava

18. UNDP Regional Project Western Balkans on the Path to EU Integration: Strengthening Decentralised Service Delivery THANK YOU VERY MUCH FOR YOUR ATTENTION Capacity Development and Capacity Assessment Training, 14 -15 February 2008 Bratislava