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Strumica micro-region centre for local economic development

From Municipal Cooperation

Strumica micro-region centre for local economic development
Service Areas: Socio-Economic Development
Country: Macedonia
Municipalities: Strumica, Novo Selo, Vasilevo, Bosilovo
Contact persons: Sofče Janeva, Žulieta Gjurkova, Elpida Paneva, Zoran Zimbakov
Legal form: Informal
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Coordinates: 41° 26' 29" N, 22° 38' 31" E

Description of the problem/need for IMC

Since no local community can remain isolated from global economy forces, the local communities have to network and cooperate to discover new markets and development opportunities and to improve overall living conditions. The change in the social and economic conditions and the decentralization process led the municipalities to seek possibilities for improving the economic development basis of the entire Strumica micro-region, including the depressed neighbourhoods and unincorporated rural areas. Hence, the Municipalities of Strumica, Novo Selo, Bosilovo, and Vasilevo established a joint centre for local economic development (LED) as a form of partnership between the public, private and NGO sector in order to create better conditions for economic development and job creation.

Note: The Municipalities of Strumica, Vasilevo, Bosilovo and Novo Selo belong to the Strumica Micro-Region as one geographic entity. The region is a unique and indivisible geographic area in all its characteristics: climate, pedology, hydrology, natural resources (minerals and forests) and human resources. It also has an efficient infrastructure and economic linkages. Until 1996, the municipalities of Strumica, Vasilevo, Bosilovo and Novo Selo were one local self-government unit, the Municipality of Strumica.

Description of the IMC practice

The IMC is generally concerned with the following activities:

  • planning micro-regional economic development;
  • determining joint development and structural priorities of the Strumica micro-region;
  • managing economic policy at the micro-regional level;
  • developing small and medium-sized enterprises (SMEs) and entrepreneurship at the micro-regional level;
  • establishing and developing institutions and agencies network and promotion of the partnership at the micro-regional level.

The main area of the IMC concerns LED. The decision of the Councils of the four municipalities involved in the adoption of the Strategic Plan for Economic Development of the Strumica Micro-Region serves as the legal ground for establishing the LED Centre of Strumica Micro-Region. The municipalities cooperate in the overall economic development through: joint implementation of the Strategic Plan for Economic Development of the Strumica Micro-Region and implementation of joint priority projects such as website administration (agroinfo.gov.mk, strumicaeconomy.com) and the rural tourism projects.

A joint body, the LED Centre, was established for the joint implementation of the Strategic Plan for Economic Development of the Strumica Micro-Region as a joint initiative of the Mayors of the four Strumica Micro-Region Municipalities.

There are six local officers involved in the IMC (one Team Coordinator and five staff members). The LED Centre is located in the office building of the Municipality of Strumica and the premises are provided at no charge. Only one staff member from this municipality works full-time on the premises of the LED Centre. Two local officers are involved in IMC: the Team Coordinator, who is Head of LED, and the Adviser, who is in charge of preparation and implementation of the Centre’s joint projects.

In the Municipality of Novo Selo, there are two local officers involved: the Team Coordinator, who is the Head of Centre for South-East Regional Planning Development. He or she is in charge of preparation and implementation of the Centre’s joint projects. The second officer is an Associate for Finance, Budget, Communal Taxes, who is in charge of the preparation and implementation of the Centre’s joint projects.

In the Municipality of Vasilevo, there is only one officer involved in IMC, an Associate for Project Implementation and Coordination.

The Municipality of Bosilovo is also represented by one officer, the Adviser for Public Communal Affairs.

Each municipality finances its own employees of the Joint Centre including their part- or full-time activities linked to the Centre’s operation. The participation of the municipalities in the implementation of the projects related to the Economic Development Strategic Plan is also determined on a project-by-project basis. Stakeholders, donors and concerned private sector representatives fund the projects.

The main factors in the sustainability of the IMC are:

  • the joint projects that are financed by the municipalities
  • regular update of the website;
  • support for the four municipalities by the institutions (technical, financial, logistical);
  • a clear definition of the positions in the Centre within the local institutional framework of the four municipalities, including their bodies, administration, and other local public institutions and enterprises;
  • a clear definition of the position of the Centre with respect to the newly opened Centre for South-East Regional Development (in compliance with the Law on Equitable Regional Development);
  • joint preparation and project application.

The IMC addresses accountability to citizens as follows: regular updating of the joint websites; regular communication on the projects prepared and implemented by the Centre; regular meetings with citizens and stakeholders of the four municipalities; and regular communication with the Councils of the four municipalities during the preparation and implementation of the projects based on the Strategic Plan for Economic Development of the Strumica Micro-Region.

The Councils of the four municipalities pass decisions related to the preparation and implementation of the projects based on the Strategic Plan. The Centre’s Team Coordinator is accountable to the mayors of the four municipalities for the Centre’s operations, who jointly review all issues related to the Centre’s operations.

Establishment of the IMC practice

The IMC was initiated by the Municipality of Strumica by submitting a project to UNDP. Later on, the other three municipalities joined the initiative. The first step was the study on the economic development of the Strumica Micro-Region, prepared in 2001. The project application, based on this study, was then submitted to UNDP, and а LED team for the Strumica Micro-Region was established in 2005. Later in 2006, the Strategic Plan for Economic Development of Strumica Micro-Region was prepared with support of UNDP. The LED Centre was established in May 2006 as a joint initiative of the mayors from the four municipalities in the Strumica Micro-Region. [Finally, the Strategic Plan for Economic Development of Strumica Micro-Region was adopted by the Councils of the Municipalities of Strumica and Novo Selo in September 2006, and by the Municipalities of Vasilevo and Bosilovo in March and April 2007.

Characteristic phases of the IMC process:'

  1. Initial consultations
  2. Preparation of the study
  3. Creation of the partnership for preparation of the strategic plan
  4. Adoption of the Strategic Plan
  5. Establishing of Centre for implementation of the Strategic Plan.

Political affiliations positively influenced the establishment of IMC. Both the mayors and most of the municipal councillors belong to the same political party. As concerns external assistance, the commitment of external experts in the area of the local institutional and LED was required during the process of establishing the IMC, in particular, assistance from UNDP, which was a prerequisite for the latter’s success. UNDP provided technical assistance and equipment for: the preparation and training for LED, strategic planning and communication skills; the establishment of the partnership between the parties; the preparation of a Profile and Strategic Plan for economic development of the Strumica Micro-Region; ongoing work of each team member of the Centre.

Direct assistance from the Central Government was not necessary; however, the Ministry of Local Self-Government participated in the preparation of the Strategic Plan.

One of the main obstacles during this establishment was that the Municipalities of Vasilevo and Bosilovo faced certain resistance by the Council members of the opposition parties.

The most important success factors in the establishment of the <IMC are:

  • willingness to cooperate between the Mayors and Councils of the four municipalities;
  • high quality cooperation of the administrations of the four municipalities;
  • technical assistance of UNDP;
  • efficient partnership between the parties concerned;
  • excellent interpersonal relationships within the Centre team, which included efficient and effective coordination and implementation of the tasks;
  • and expert knowledge and skills of the team members in areas relating to the activities of the Centre.

Benefits and shortcoming of the IMC practice

Benefits

  • the information exchanged between the municipalities on a daily basis;
  • organization of joint promotion of the region through participation in fairs and the distribution of joint promotional materials;
  • the Strategy and projects for LED prepared;
  • the website www.agroinfo.gov.mk, which informs citizens on daily prices of agricultural products from the Strumica micro-region, annual crops and export, and other agricultural information;
  • the Internet page strumicaeconomy.com, which promotes the regional economy and is the first portal of commercial entities developed by the municipalities in the Republic of Macedonia;
  • sustained and strengthened competition among the local companies; the identification of new markets; and the provision of technical and educational assistance to local companies;
  • enterprises in the region, an important link in the economic development, are informed about various events, and presentations. Business meetings are also organized. For example, the business meeting organized in Strumica in 2006 financed by the UNDP (representatives of the business sector of all the municipalities, participants in the UNDP project); the business meeting in Thessaloniki in 2007, financed by GTZ (business sector representatives from the Strumica region with the representatives from the Thessaloniki business sector);
  • a dynamic and entrepreneurship culture established and maintained;

Although a specific partnership agreement has not been signed, the LED Centre actually operates as a partnership between the local government, business entities and NGOs, and is reviving institutions and creating new ones as well as developing and supporting new alternative industries with further diversification of the economic base. The NGOs and the commercial sector are frequently invited to participate in all phases of the Centre’s operations.

It must be pointed out that the UNDP financed the implementation of three projects (street and road network mapping, placing of tourist information signs, and installation of waste containers and bins), for a total of US$58,000. GTZ financed the implementation of three projects: (a).preparation of two websites www.agroinfo.gov.mk and strumicaeconomy.com; (b) the promotion of the Strumica economy in Greece; and ( (c) the project for developing rural tourism, for a total of EUR 32,000. The salaries of the Centre’s employees are covered by the municipalities. Since the Centre is a project-driven organization, the municipalities, provide local contributions on project-by-project basis, mainly in-kind, for projects to be implemented in line with the LED Strategy and according to particular donors requests.

The initial costs for establishing the Centre were covered by UNDP. The employees perform their tasks as part of their regular activities covered by the Municipality. The initial costs are covered in several ways by providing additional technical and financial aid for implementation of the joint priority projects of the Centre.

Shortcomings

To date, shortcomings have not been identified of the established form of the IMC both by the partner municipalities and the citizens.

Future plans for the development of the IMC practice

According to the Law on Equitable Regional Development, the Municipalities of the South-East Region, the planner municipalities (Strumica, Novo Selo, Vasilevo, Bosilovo, Radovis, Konce, Valandovo, Bogdanci, Dojran and Gevgelija) prepared the Programme for Regional Development through a partnership with various stakeholders, including the representatives of the public and private sectors, and the NGOs from all the municipalities. The Programme was adopted by the South-East Regional Planning Development Council. The initiation process was supported by GTZ. A South-East Regional Planning Centre was registered and the Head of the Centre was elected in accordance with the Law on Regional Development. The Centre’s seat is in the Municipality of Strumica. The Centre is responsible for the preparation and implementation of equitable regional development projects.

It is expected that the formal/legal relationship between the LED Centre of the Strumica Micro-Region and the South-East Regional Planning Centre will soon be established. There are also plans to expand cooperation between the four municipalities (Strumica, Novo Selo, Vasilevo and Bosilovo) in the following areas: the establishment of a joint IT network; joint waste management and wastewater treatment activities; and regulation of licence issuance for taxi services. There are several reasons for this expansion. First, the joint IT network will increase the efficiency of the cooperation between the four municipalities. Second, the waste management and wastewater treatment calls for cooperation in finding adequate solutions at the micro-regional level. Third, the taxi services currently cover the territory of the four municipalities and should be jointly regulated.

Main lessons learned on how to establish IMC and make it a success

  • The location of the Centre must be defined in the local institutional framework of the involved municipalities, including their bodies, administrations and other local public institutions and enterprises.
  • Mututal cooperation, particularly with the administrations of the involved municipalities, is also required.
  • Initial financial resources and equipment for establishing the Centre are essential.
  • The capacities of the Centre’s employees need to be strengthened through specialist knowledge and skills related to the Centre’s field of activities.

All involved municipalities consider this practice replicable in other municipalities. To facilitate this, the Central Government should:

  • provide initial technical and financial aid, equipment and space for establishing of similar centres.
  • provide technical and financial aid for preparation and delivery of specialist training for the employees of the centres;
  • accurately define the transferred competencies related to LED, such as management of unoccupied construction land owned by the state, forest management, and strengthening the role of the municipalities in water management;
  • transfer the competencies of the state market inspectorate to the local level;
  • complete the transfer of the competencies related to trade, catering and tourism.

To facilitate replication in other municipalities, Association of the Units of Local Governments of Macedonia (ZELS) should:

  • provide initial technical and financial aid, equipment and space for establishing of such centres;
  • provide technical and financial aid for the preparation and provision of specialist training for the employees of the centres by approaching interested donors;
  • continue to represent the municipalities in the negotiations with the Central Government for a clearer definition of the transferred competencies for LED;
  • transfer management of the construction land owned by the state and forest management and strengthen the role of the municipalities in water management;
  • Transfer competencies of the state market inspectorate and those related to trade, catering and tourism.

Readiness to support other municipalities to establish IMC

All four municipalities are willing to share their experiences gained during the process of implementing the project for LED. The project team can disseminate their knowledge and experience, particularly on establishing of partnership for LED and the preparation of the Strategic Plan for Economic Development.

Acknowledgment

The information about this practice was collected and presented by Toni Popovski.