Inclusive Urban Development in South East Europe

Mayors Symposium, Graz, Austria
March 21, 2016

Graz, Austria
Photo: Dragutin Andric
  • Fiscal decentralization in South East Europe is still a work-in-progress, and city authorities are being forced to do “more with less”. For most municipalities, a large share of their own revenues comes from land based instruments, affecting their volatility and reliability.
  • Cities often lack mature capital investment projects. Development of such projects is challenged by the unpredictability of local government revenues, and a lack of both political continuity and strategic planning.
  • Often, there is a lack of trust in local government; the municipal administration is often seen as totally detached from its citizens. Lack of citizen representation in civic affairs can be accompanied by low levels of accountability and integrity of local government institutions.

In South East Europe, local governments currently face a wide range of challenges, including fiscal decentralization, mismatch of revenue and expenditure management, absence of infrastructure investments, weak local institutions, weak mechanisms of social accountability, increased need to combat corruption, frequent shifts in political structures, and slow institutional reform.

The World Bank-Austria Urban Partnership Program aims to strengthen the capacity of local governments in the South East Europe region, and to equip locally-elected officials, city administrators and technical staff with practical tools for decision-making – in order to more effectively manage urban development for inclusive and sustainable growth.

Although global in scope, the Urban Partnership Program targets the Western Balkan countries of Albania, Bosnia and Herzegovina, Croatia, Kosovo, FYR Macedonia, Montenegro and Serbia.

During its first phase (2011-2014), the Program reached over 60 municipalities in the region. The second phase, which started in 2015, aims to scale-up engagement and reach an even larger number of municipalities, by offering a very holistic and collaborative approach to evidence-based policy making.

The Mayors Symposium held in Graz, Austria on February 29 – March 1, 2016, organized in cooperation with the City of Graz and the Austrian Ministry of Finance, gathered over 160 representatives from seven South East Europe countries. Participants included central and local government officials, including 50 Mayors and Deputy Mayors, representatives of finance departments, urban planning practitioners, Local Government Associations, Non-Governmental Organizations, Network of Associations of Local Authorities of South-East Europe, and other partners and key stakeholders of the Program.

Mayors Symposium, 2016, Graz, Austria
Photo: Dragutin Andric

The Mayors Symposium is hosted by the Urban Partnership Program on an annual basis and offers a platform for dialogue in South East Europe with a view to sharing innovations happening in the region’s cities and beyond. It also offers an opportunity to present progress to date in the core areas of the Program: municipal finance, urban planning and land management, integrity building, and social sustainability and citizen engagement.

The Symposium showcased what has been achieved on the way to reform, and how the Program helps cities move forward based on the application of self-assessment tools for local governments, including: Municipal Finances Self-Assessment, Urban Audit, Social Sustainability Assessment, and Integrity Building. 

The event brought together transformational Mayors from Europe and beyond to share their inspiring stories and lessons learned with city leaders from South East Europe.

For example, the Mayor of Graz, Austria, recommended that leaders consolidate all of their cities’ finances into one balance sheet, which the Mayor can see and have oversight of. The Mayor also said that it was his opinion that cities would do best to not privatize their public assets of energy and water. Finally, the Mayor outlined what he believed to be the most important skill or quality of a city leader: “Trying to find a way for people to live in peace together, to build social cohesion. Because without that, there is no future.”

The Mayor of Oklahoma City, USA, explained how one of his major personal realizations had been that “People don’t necessarily follow jobs, they live where they want to live and the jobs follow. It is hard to get companies to move to your city, so first focus on your existing companies, on your own environment and schools, and the investment and people will follow.”

The Mayor of Vilnius, Lithuania, said that, for him, integrity meant, “To say what you mean and do what you say.” He added that integrity was an essential component of any Mayor’s make-up – “if they were going to be able to sleep at night!” It is the city’s responsibility to create the demand: to make information publicly available and to help society to understand why it is so important.

Mayors from across South East Europe discussed the priorities for their municipalities as well as the kind of leadership required to transform cities in the region. They agreed that enhancing integrity, accountability and transparency were not just goals in themselves, but mechanisms to achieve other goals such as improving quality of life, attracting investment, people and jobs, and enhancing relationships with citizens as well as with central government.

Priorities for the region’s Mayors are diverse and country-specific. For example, the Deputy Mayor of Tirana, Albania, mentioned many priorities for her city: perhaps most importantly the implementation of the new national plan, but also others such as reducing car dependency. For the Mayor of Novo Sarajevo, Bosnia and Herzegovina, the most pressing priority is administrative reform, whilst in Kocani, FYR Macedonia, the priority is engaging and retaining youth in the city.

In Nis, Serbia, the priority is making infrastructure improvements (Corridor 10, for example) and stabilizing finances. The Mayor of Shtime, Kosovo, explained that his city has a number of priorities, including rational resource allocation, investment in innovation, and preservation of the environment and resources. He argued that coalitions were of vital importance to transforming cities and increasing the lobbying power of local governments.

The Mayor of Cetinje, Montenegro, recommended that leaders use and valorize natural resources in their local areas. He explained that Cetinje had experienced great success by investing in a local cave (Lipska Cave), which had had a multiplying effect on the local economy through visitor attraction. The Mayor also argued that creating a more business-friendly environment is key for the development of cities in the region.

The Mayor of Shkodra, Albania, explained that Albanian citizens “do not have a culture of raising their voice”, which limits their propensity to engage with local politics. The Mayor of Gjakova, Kosovo, meanwhile, argued that “you have to invest in people too” – her city is doing this through participation in the UNICEF Program “Kosovo Fit for Children”, for example.

The Mayor of Pula, Croatia, agreed that Information Technology, brochures and social networking were all useful tools, but it was important to go beyond this and tackle the endemic low level of confidence of the public in politicians. He recommended “going to see people, showing them their opinions matter” as the best means of doing this. In Sabac, Serbia, it was reported that this type of engagement is already happening: the Mayor answers five questions from citizens per day on Facebook, and regularly meets with citizens in person.

Two days of deliberations demonstrated clearly that there is increased demand for use of diagnostic tools for local governments offered by the Urban Partnership Program, and that there is great momentum to replicate local government tools in more municipalities throughout the South East Europe region.

Gallery - Mayors Symposium, 2016, Graz, Austria

Materials, Day 1:

Setting the Stage Catherine F Vitkovic
MFSA and UA Macedonia
MFSA Serbia Brdarevic
Urban Audit Albania Case of Fier
Municipal Finances Capital Investment NALAS
Capital Investment Planning and Financing S.Drezgic
Combining ESIF & PPP Colak AIC
Investment Opportunities Krizevci
Towards Better Local Governance Ilona Raugze Latvia
Leaders for Resilience DRM Joaquin Toro
Leadership in Times of Emergency DRM Kraljevo
Floods 2014 Bijeljina DRM

Materials, Day 2:

IB SSCE Maribor Igor Kos
IB SSCE UPPII World Bank S.Palmreuther
SSCE Challenges and Opportunities Aida Ciro
Integrity Building and Urban Governance Lj.Simonoska
City of Elbasan SSCE
Integrity Building City of Krizevci
DWP DANUBIS Water Services Benchmarking
AM Experience of PU Bijeljina
PUC Subotica Asset Management
NALAS - AM for Water and Sanitation Sector in SEE
Open Vilnius Remigijus Simasius




"The MFSA tool is very useful and can help LGs assess their financial performance and look for additional financing. On the other hand, it is a huge responsibility to translate the budget into strategies that will drive LG's development",
Reisa Duraj, Head of Finance and Treasure Relations Sector of the Shkoder Municipality, Albania

"This capacity building program will enhance knowledge and skills of local governments, particularly of medium and large cities."

 All testemonials >>>


City to City Dialogue - Cities, Drivers of Economy, Vision 2030
Skopje, April 10-12, 2019.

World Bank-Austria Urban Partnership Program (UPP) held its ninth City to City dialogue and technical workshops organized in collaboration with our regional partner NALAS (Network of Local Government Associations in South East Europe) and the City of Skopje, supported by the Swiss SDC and GIZ. The event took place in Skopje, North Macedonia and hosted over 130 participants from South-East Europe countries and beyond, with central and local government officials and technical practitioners from finance, urban and economic development departments, City Leaders, Local Government Associations, the Network of Associations of Local Authorities of South-East Europe, EC representatives and many other development partners and key stakeholders from the region and beyond.

The underlying theme of the Dialogue - Cities as Drivers of Economic Growth, focused on sustainable local economic development, including local finance, urban planning, accountability, and public participation in improving service delivery to citizens.  The event served as a chance to validate the progress of the WB-Austria Urban Partnership Program and the process of city's self-assessment with SEE participants. The Conference also showcased good practices in city management from Ljubljana, Slovenia and Tirana, Albania, and from other cities in SEE and wider Europe.
The first day of this event included technical sessions on municipal finance, urban planning and land development, urban audit, action planning and implementation, borrowing and creditworthiness and lessons learned from World Bank projects, while the second day conference explored the role of the cities and municipalities in the economic development agenda, enhancements to benefit the citizens of South-East Europe and cities’ learning from best practices.

During the Day 1 opening two sessions, several important topics and questions were raised: where do municipalities stand in terms of local governments finances, planning, land and investments programming and where do they need to go as well as what are the main local level advantages, challenges and opportunities. UPP local experts shared experiences from the test-piloting of MFSA 2.0 online version as well as experiences Urban Audit (UA) implementation. Local experts together with several municipal representatives from Kisela Voda, Bar, Gostivar and Gjirokastër shared their views and suggestions on operation and utilization of the online MFSA tool. Following the general presentation of the improved UA framework, the municipalities of Elbasan, Gostivar and Prilep presented their experiences with the UA tool. They stressed that citizens’ engagement in the decision making by focusing on transparency, accountability and participation in MFSA&UA is highly important.

Participants learned that UPP has high representation in SEE - working and having worked with more than 90 municipalities in the region, including 6 capital cities. That means UPP cities represent an impressive 9% of the regional territory and 22.5% of the regional population. The final conclusion was that to move forward, UPP will need to focus more on support to the CIP and implementation of the Action Plans, including dominant action on revenue collection and budget planning and execution, substantial for expenditure control, internal audits, and transparency improvement.

Throughout the day, participants could hear about ongoing studies and technical assistance programs related to municipal finances in the Western Balkans, as well as several panel discussions showcasing the results and experience of action plan implementation based on the MFSA results and the use of MFSA as a tool to facilitate creditworthiness and borrowing capacity for Local Authorities.

The city of Banja Luka, Bosnia and Hercegovina presented their alignment of MFSA action plan implementation with the strategic documents. The existing MFSA action plan had two goals: (i) financial status improvement and (ii) management. City of Rijeka, Croatia, explained how based on the MFSA results, they recognized the main challenges such as the city's weaknesses in planning due to large deviations from the budget plan's execution by more than 10% (the action plan reduced it to 3%). City of Subotica, Serbia explained that MFSA provided the opportunity to determine the financial position and to plan the finance management reform. The City adopted the Financial Management Plan 2016-2020 and set up the expected results for that period. The city administration defined 7 implementation measures: improvement in capital projects planning, budget planning, revenue collection, and improvement of commitments control and cash management control, increase in debt management capacity, improvement of PIFC and implementation and further development of the internal control and audit function.
Key recommendations from the discussion were to ensure the close co-operation with the central government regarding the introduction of property tax (Rijeka), better co-operation with the state in the preparation and planning of local budget guidelines (Subotica) and the need for greater degree of consistency in city management (Banja Luka).

The Day 1 last session of the workshop was dedicated to sharing experiences on creditworthiness and borrowing capacity. Marjan Nikolov, the UPP local expert explained the three main questions mayors should put about their borrowing capacity: Are we creditworthy? How much can we borrow? How much can we invest in the next 5 years? He argued that the order of these questions is an important indicator on how visionary and goal-oriented a Mayor is. Thus, the MFSA can serve as a helpful tool for the credit rating of LGU-s. Anto Bajo, the UPP local expert, shared that in Croatia no consensus exists on the best methodology and the set of indicators (input variables) to be used for credit risk assessment and that no local units bankruptcy instrument exists, which renders the standard credit risk assessment based on historical behavior of local governments, impossible. Following the discussion, Sasho Trajkov from Gazi Baba Municipality stressed the importance of LGU’s economic growth in the process. The situation in the Municipality of Gazi Baba shows that a well-designed and participatory Urban Audit helped the local economy grow, accordingly increasing the tax base and fiscal income. Marjan Junčaj, from City of Podgorica, shared the experience of the capital city of Montenegro in establishing a local level credit reliability model. He argued that borrowing capacities can be developed through different national and local level scenario analysis.
A final remark by Ms. Farvacque-Vitkovic, stated that along with developing capacities to borrow, LGU’s main focus should be ‘why borrow’. In the end, the discussion on creditworthiness is only relevant, if used as means to a higher end- that of making cities more livable and local economies more sustainable.

Participants could also attend the launch of Better Cities, Better World: A Handbook on Local Government Self-Assessments by Catherine Farvacque-Vitkovic and Mihaly Kopanyi, who are World Bank’s leading senior experts on urban development and municipal finance with extensive working experience in more than 30 countries. Ms. Farvacque-Vitkovic explained that this handbook focuses on key urban issues and helps city leaders and municipal staff to address issues through a solutions package. It provides inspirational ideas and clear-cut methodology for starting and guiding the process and for municipal staff capacity building.



The second day of the conference focused more on the political level discussions and panels, with opening speeches by ministers, mayors and EC representatives. The Mayor of Skopje and newly appointed NALAS President, Mr. Petre Shielgov, opened the conference, followed by speeches by Mr.Suhejl Fazliu, North Macedonia’s Local Government Minister, Mr. Zoran Sapuric, North Macedonia’s Minister tasked with Regulations for Improvement of the Investment Climate for Domestic Companies, Mr. Andrej Zernovski, Foreign Affairs Deputy Minister, Mr. Amer Kapetanovic, RCC Head of Political Department. Last, but not least, the audience could hear a video message from Mr. Johannes Hahn, the European Commissioner for European Neighborhood Policy and Enlargement Negotiations.

Panels presented ongoing regional studies including Western Balkans Urbanization and Territorial Review (WBUTR), financed by the UPP. The WBUTR is a comprehensive analysis of the urban sector in the Region, aiming to inform and support development of integrating urban strategies that increase the impact of sector specific initiatives and enhance the sustainability of urban development (i.e. by fostering regional cooperation, competitiveness, connectivity and economic development). It analyzes urban systems, the economic geography and probable EU accession related development. It also provides actionable recommendations for a faster and more inclusive growth through enhancing competitiveness of leading cities and ensuring national and local access to opportunities in the peripheral and lagging regions. The WBUTR will be published in the Summer 2019.
The highlight of the day was the inspirational story by the Honorable Erion Veliaj, Mayor of Tirana, who spoke of “Cities that should serve the people not the cars” while referring to his great efforts to make Tirana a greener city.

Furthermore, four workshops were organized within the Conference, on the following topics:

1. Smart Cities. Digitalization for LED – during this session, Ms. Jeton Puka from the municipality of Vlorë presented their smart cities experience and chosen strategies and directions 
2. Innovative Strategies and Tools for Planning and Creating Sustainable Cities - TOD and Placemaking => The main objective of the panel was oriented to planning and managing cities for a sustainable development.
3. Sustainable Urban Mobility Planning (SUMP) and Sustainable Energy and Climate Planning (SECAP) - drivers of development and sustainable growth
4. Citizen to Engage in Cities – session presented good practice examples which clearly demonstrated recurring citizen’s participation when they receive feedback and when citizen’s ideas are attended to

The closing remarks of the Conference City to City Dialogue: “Cities as Drivers of Economic Growth – Vision 2030”, were made by Mr.Petre Shilegov and H.E. Mr. Wojciech Jerzy Tyciński, the Ambassador of Poland in North Macedonia.

Cities and municipalities valued the opportunity to participate in another City to City Dialogue which proved to be a successful attempt to summon the Region on a table to discuss achievements, different topics of interest and pressing issues.




Action Planning Rijeka, Banja Luka and Subotica.pdf
Fiscal Capacity Of MGB - S. Trajkov.pdf
Introduction to MFSA Toolkit.pdf
LGSA Handbook.pdf
Local Government Finances, Planning, Land and Investments Programming in SEE - C. Farvacque - Vitkovic.pdf
MFSA and LSG Creditworthiness, Borrowing and Investment Capacity.pdf
Municipal Finance ofWestern Balkans in the context of decentralization.pdf
Municipal Services Improvement Project - Lessons Learned.pdf
Ocjena kreditne sposobnosti - Anto Bajo.pdf
Transparency, Accountability and Participation in MFSA and UA - Sandra Kdolsky.pdf
UPP results survey C2C Dialogues.pdf
Urban Audit framework - Challenges and Results in the Municipality of Elbasan - E. Kenuti.pdf


Parallel Sessions
Parallel sessions - CONCLUSIONS.pdf

Smart Cities - Digitalisation for LED
Rijeka - Smart City.pdf
Smart Cities - Jeton Puka.pdf
Skopje Smart City Strategy - Ognen Marina.pdf

Innovative Strategies and Tools for Planning and Creating Sustainable Cities - TOD and Placemaking
ToD for Sustainable Belgrade Planning 2019 - Skopje.pdf
Sustainable cities Ljubljana – Urban space and sustainable mobility change - Vladimir Babic.pdf
C2C - 100 Villages - Albania.pdf
Sustainable Cities - 100 Villages - Albania - Fiona Mali.pdf
Placemaking-Sarajevo - Zina Ruzdic.pdf

Sustainable Urban Mobility Planning (SUMP) and Sustainable Energy and Climate Planning (SECAP)
GIZ ORF-EE - Dubravka Bosnjak.pdf
Krusevac SUMP - Jelena Brkovic.pdf
Banja Luka - Jelena Pavlovic.pdf
SCTM presentation - Klara Danilovic.pdf
SECAP Prijedor - Boris Srdic.pdf

Citizen to Engage in Cities
C2C Dialogue Session 12 Parallel Session on CE April 11 - Intro.pdf
C2C Dialogue Session 12 Parallel Session on CE April 11 - Transparency in Croatia - Dario Runtic.pdf
C2C Dialogue Session 12 Parallel Session on CE April 11 - Migration and Local Dev - Alexei Gafeli.pdf
C2C Dialogue Session 12 Parallel Session on CE April 11 - Communtity Forums Model - Gorjan Slavkovski.pdf

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