UNDP MacedoniaSupport to Economic Development – Status and Lessons Learned

Sub-regional meeting in MSME development in South East Europe6 April, 2004

Macedonia – Economic situation and challenges

• GDP per capita: $1,835 (2002); ppp $6,110 (2002)

• GDP growth rate : 0.7% (2002)• Inflation rate : 2% (2002)• Unemployment rate: 36.7% (2004)• Share of informal economy: 45.1%

(2003)• Population below poverty line: 22.3%

(2000)

UNDP Macedonia – Support to Economic Development

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation

ICTD

Policy advice

Policy Advice at national level

Stimulating Investments

Programme for Stimulating Investments and Action Plan:

•Investment Promotion

•Action Plan to Improve the Business Environment

•Fiscal and Tax Investment Incentives

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation ICTD

Policy advice

Policy Advice at national level

Programme for Stimulating Investments and Action Plan:

•Investment Promotion

•Action Plan to Improve the Business Environment

•Fiscal and Tax Investment Incentives

Advice

Capacity Building

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation ICTD

Policy advice Stimulating Investments

Policy Advice at national level

Programme for Stimulating Investments and Action Plan:

•Investment Promotion

•Action Plan to Improve the Business Environment

•Fiscal and Tax Investment Incentives

Legal Task Force

Integrated business

registration system

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation ICTD

Policy advice Stimulating Investments

Policy Advice at national level

Programme for Stimulating Investments and Action Plan:

•Investment Promotion

•Action Plan to Improve the Business Environment

•Fiscal and Tax Investment Incentives

Review

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation ICTD

Policy advice Stimulating Investments

Policy Advice at national level

Harnessing the Potentials of Informal Economy

Reduce Costs of Going Formal

Access to teams of lawyers and other experts

Increase representation

Enhance access to capital

Raising Awareness

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation ICTD

Policy advice

Objective: to strengthen capacities of LGs’ active role in the development processes and support to entrepreneurship

•LED Partnerships•Capacity Building of LED Teams•Holistic LED Strategies •LED Action Plans•Access to Finance: Municipal Economic Development Fund •UNDP ICT Centres•Co-operation with EU -based counterpart institutions

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation ICTD

Policy advice

Development of Enabling Local Economic Environment

Municipal Development Fund

Objective: to stimulate the local economic development processes

•Capital for small scale projects•Seed funds to initiate implementation of local development priorities •Incentive for LED process•Cost effective mechanism•Contribution of local stakeholders

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation ICTD

Policy advice

Employment Generation - MSPObjective: to support and empower municipalities in enhancing employment and incomes Focus: enhancement of potentials of the local economies and environment and improve the capabilities, job-readiness and marketability of the unemployed •Approach: demand driven and competition process•Initial partner: local authorities•Key mechanism: PPP between various local stakeholders

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation ICTD

Policy advice

Number of projects: 82 in 75 municipalitiesFunds: Project (1 mill$), Cash contribution (116,000), In kind ( 1 mill$)Vocational training: 480On the job training: 533Longer term employment: 709 (private: 587; public: 122)Additional opportunities for employment: 471

MSP: Type of projects

26%

21%

6%7%

31%

5% 4%

Professional training, skills and qualification that leeds to employments

On job training with employment and self-employment

Development of services and support tosustainable businesses

Development of networks and support to sustanable businsses and vunerable groups

Strengthening of local economy through infrastructure

Small range investments , small family businesses

Joining projects linked to Project's aims

ICTD

Objective: to promote access to ICT and enhance the electronic exchange of information and experience among LG and their communities through both training and electronic networking

Second phase: to provide ICT-related services to a wide range of users including LGs and MSMEs

•19 ICTCs•More than 17,000 trainees•New services:

•Collection point for a wide range of information services •Providers of training and capacity building

Enabling Local Economic

Development

MunicipalDevelopment

Fund

Employment Generation ICTD

Policy advice

Lessons Learned

• Complex problems call for comprehensive interventions

• Carefully identify the entry point for policy advice• Build on previous successful work• Ensure professional credibility – excellent expertise

and regional knowledge• Government commitment is critical, capacities as well• Coordination - complementarity with other donors and

IFIs (competitors vis-à-vis partners)• Flexibility and prompt response is important• Communicate the UNDP mandate• Potentials of partnerships on local levels• Define evaluation/assessment criteria from the

beginning