Serbia 2002

Focal area: Economic restructuring, regeneration and reform
Sector: Economic development - Municipal support

Programme: Fund capacity strengthening measures, equipment and works for selected municipalities
Cost: €5 million (+/-20%)


Over the last decade, Serbia’s municipalities have been subjected to severe financial and institutional changes (e.g., re-centralisation of administrative decision making and financial allocations). This combined with the recent decade’s political and economic turbulences resulted in badly neglected local basic infrastructure and public services. Many public buildings were badly maintained (leaky roofs, broken windows), basic services such as water supply, heating etc. were provided intermittingly, if at all, streets were full of potholes, basic medical facilities were often not functional. Municipalities were overwhelmed with refugees and IDPs. More important, the resources, which were available, were often allocated in a non-transparent, arbitrary and inefficient manner (e.g., lack of adequate tendering procedures).

The government is about to decentralize many previously re-centralised functions including the related financial resources. In order to cope with these “new” responsibilities, effectively and efficiently, municipalities need stronger institutions and more effective and transparent administrative procedures.      

Project activities

2.6.1 Provide funds for training, equipment, works and studies (approx. €5 million)

The programme will improve the capacity of selected municipalities to more effectively undertake their responsibilities, enable them to fund some urgent works and assist in preparing project proposals for eventual IFI funding, such as the EBRD’s municipal funding programme. The programme will focus on a number of secondary towns with a high concentration of refugees, unemployed and other vulnerable groups. It will also set criteria as to what type of investments would be supported to limited the project’s complexity and increase its impact. The project will be closely coordinated with the planned activities of USAID and EBRD.