| Grant Profile: |
| Project Title: |
Support for Kosovo Decentralization [Bank-executed Portion] |
| PCF/LICUS/SPF: |
PCF |
Status: |
Open |
| File Number: |
361
| Region: |
ECA |
| Sector: |
Law and justice and public administration |
Country: |
Kosovo |
| FY approved: |
2008 |
Grant Theme : |
Public sector governance |
| Keyword(s): |
Administrative and civil service reform |
Approved Amount: |
$1,160,950.00 |
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Grant Recipient:
UNMIK and Kosovo authorities |
Grant Purpose:
The purpose of the proposed grant is to assist the Kosovo authorities in putting in place effective decentralization arrangements, consistent with the outcome of the resolution of Kosovo’s Status.
The grant will provide timely technical and limited investment assistance to support the preparation of decentralization legislation (particularly Law on Local Finance), and the implementation of the revised system for intergovernmental fiscal transfers. It will also provide technical assistance and small-scale investment support for building capacity required to allow current decentralization arrangements to function more effectively and efficiently, and to enable a transition to a next stage of decentralization. The grant will also make a contribution towards improving public service delivery by building core administrative capacities for municipalities, including in the area of utilities’ management and by providing implementation assistance in specific sectors affected by the new decentralization arrangements, notably business licensing and business registration, real estate registration, health, and road transport.
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Grant Activities:
Component 1: Technical Assistance for Legal Framework on Decentralization
This component will provide technical expertise for the drafting of framework legislation on decentralization, notably the law On Local Finance and provide secondary expertise for the draft law On Local Self-Government, which is already under preparation. The technical assistance to be offered by the Bank will aim to ensure that the framework legislation complies with the Status Settlement, the Kosovo Constitution and EU norms. In addition, the technical assistance will aim to clarify the respective mandates of central and municipal levels of government and ensure the fiscal sustainability of decentralization arrangements and the effective provision of public services at the local level.
Component 2: Capacity Building for Implementing Decentralization Arrangements
This component will aim to support the implementation of the decentralization arrangements to be defined by the new legal framework. The component will represent the second phase in the implementation of the proposed grant, with delivery envisaged to begin after the adoption of the framework legislation on decentralization. It will comprise four activities:
a) technical assistance for the implementation of revised intergovernmental fiscal transfer system required for decentralization;
b) support for municipalities to implement new competencies in four sectors (local road transport, health, business licensing and registration, and cadastral and real estate registration);
c) technical assistance for the coordination capacity of the Ministry of Local Government Administration and – possibly – limited support to the Ministry of Public Services in linking municipalities to the civil service payroll system;
d) core capacity building for municipalities.
Component 3: Support for capacity building to implement new municipal competencies
The Settlement Proposal envisages delegating a number of new competencies to municipalities, such as business registration and licensing, hiring and training of education personnel, and management of municipally-owned POEs for water and other utilities services. This would require urgently building policy and administrative capacity in municipalities. It is therefore proposed to support the following activities:
Activity 3-A: Transport (maintenance of local roads)
Activity 3-B: Healthcare management and investment planning
Activity 3-C: Business licensing and registration
Activity 3-D: Cadastral and real estate registration
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News:
Authorities in Kosovo have committed to a time-sensitive objective of improved decentralization within the budget cycle for 2009. Since February, 2008, they have remained involved in activities aiming to improve existing mechanisms of budget allocation to municipalities and increase the transparency of expenditures at municipal level. These objectives are supported by the ongoing “Support for Kosovo Decentralization” grant which became effective earlier in 2008.
The Law on Local Finance, prepared by the Government in Kosovo, in cooperation with the World Bank and the International Monetary Fund, has marked the first step in effective decentralization arrangements. The Law was adopted by the Assembly on March 13, 2008, and promulgated by the President of Kosovo on June 15, 2008, committing authorities in Kosovo to an improved legal framework of decentralization.
Alongside efforts to improve the legal framework decentralized activities in Kosovo, central government and municipal leaders have engaged in workshops and learning field visits aiming to increase their understanding of the implications of decentralization and enable them to identify municipalities’ needs in terms of capacity development. As a result of the workshops and visits, participants have expressed their increased interest in using citizen feedback to improve public services in Kosovo. Additional demand-driven learning events are expected to further improve the understanding of successful decentralization by government leaders in Kosovo.
The project has also supported the Government in managing the decentralization process and, in particular, implementing the Decentralization Action Plan and improving formulas for budget transfers to municipalities, while complying with the new Law on Local Finance. The project is also expected to improve network links between the central government and municipalities and provide substantive technical assistance activities in the areas of transport, healthcare management, cadastral and real estate registration, and business registration and licensing.
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