The Municipal Economic Growth Activity is a local economic development program which develops the skills of local governments to foster economic growth and employment by creating a business environment where the local private sector can flourish.
Program components include:
- Policy advocacy, support to legislative reforms and strengthening the capacities of the National Alliance for Local Economic Development (NALED) and the Standing Conference of Towns and Municipalities (SCTM);
- Building the professional ability of newly created Local Economic Development (LED) offices to strategically plan local economic development, promote investment, and support local entrepreneurship;
- Developing municipal technical capacities, such as debt management, investment project preparation, Public-Private Partnerships, and asset management;
- Facilitating private sector growth, by building networks of stakeholders, encouraging public-private partnerships, and introducing economic development tools and facilities;
- Providing matching grants to fund projects that advance LED Strategic Plan priorities.
Key accomplishments to date:
- Over one billion Euros of direct investments were realized in program cities and municipalities, over 13,200 new jobs created in 470 new businesses, 32 Local Economic Development Offices established;
- Demonstrating a more systematic approach to development, so far 17 municipalities have adopted Local Economic Development Strategic and Implementation Plans and 7 Capital Investment Plans (CIPs); 6 more are well advanced in Strategic Plan preparation/adoption and 18 more have CIPs in progress;
- Subotica, Kragujevac, Krusevac and Uzice have formed Business Incubators to help new businesses establish themselves, through below-market rents, and access to professional services, two more Business Incubators are under development (Zajecar, Novi Sad);
- Supported enactment of a Law on Local Government Finances (2006) that increased local fiscal autonomy and put government transfers on a predictable, transparent basis; a Law on Local Self Government (2007) that established LED as a new responsibility of local governments; a Law on Public Procurement (2008) that improved the transparency and efficiency of the public procurement process, particularly in respect to municipal borrowing, andthe new Law on Planning and Construction which, among other improvements, makes possible the private ownership of urban land;
- The Program established and has spun-off the National Alliance for Local Economic Development (NALED), the first advocacy organization to bring together leaders from businesses and municipalities to promote their mutual interests. NALED, through its membership revenues and grant supported initiatives, has now become self sustainable;
- Together with NALED, the Program implemented the Business Friendly Certification process which introduces municipalities to the standards they must attain in order to attract and retain investors;
- The Program helped conceive and support NALED’s highly visible, "Out-of-the-Maze" campaign, aimed at the simplification and/or elimination of obsolete administrative procedures. Over 300 suggestions were gathered and compiled into a Grey Book, which has become an important resource for the GoS’s “Regulatory Guillotine Project.” This already led to the new Law on Changes in the Law on Tax Procedure and Tax Administration, that significantly reduces the time needed to register a business.
USAID works with the municipalities of Indjija, Kragujevac, Krusevac, Novi Beograd, Loznica, Prokuplje, Subotica, Uzice, Vranje, Zrenjanin, Vrsac, Sabac, Pecinci, Pancevo, Smederevo, Cacak, Paracin, Kraljevo, Arilje, Prijepolje, Leskovac, Bujanovac, Medvedja, Nis, Novi Pazar, Novi Sad, Pirot, Presevo, Sremska Mitrovica, Valjevo and Zajecar. Other important partners are the Standing Conference of Towns and Municipalities (www.skgo.org), NALED (www.naled-serbia.org), SIEPA, and three Ministries: Finance, Economy and Regional Development, and Environment and Spatial Planning.
The program started in October 2005 and is implemented by the Urban Institute (www.urban.org). More information about program activities are available at: www.mega.ui-serbia.org.