Local authority development – instrument of economic reconstruction and progress

On the occasion of the seminar „Local Economic Development in FRY – Serbia and Montenegro“, Mr. Bozidar Djelic, Minister of Finance and Economy, announced today a deeper reform of the local authorities financing system by the middle of the coming year, and declared that a local authorities solidarity is necessary in Serbia, to prevent the market from enlarging the gap between developed and undeveloped municipalities.

„Economic development on the local level is equally important as strengthening of democracy“, declared Mr. Djelic, adding that the infrastructure network in Serbian municipalities is in a bad situation, especially in the domain of drinking water supply, heating systems, transport, roads, recycling industry (according to the Beta Agency sources).

Finance Minister also announced the creation of a Local Infrastructure Development Agency, during the first trimester of the next year. „The Agency’s main purpose would be to provide help to local authorities in their project realization, as well as to establish project portfolios available to all local authorities“, declared Mr. Djelic.

According to the Minister, a high level of fiscal decentralization has already been reached, which is to be followed by a Parliamentary debate on the way of sharing the income realized from sales and salaries fund taxes, between the Budget of the Republic and of the local authorities.

Mr. Rodoljub Sabic, Minister State Administration and Local Self-Government, declared that the level of local authorities’ autonomy in Serbia has been raised during the past two years, and that the relation between the central administration and the communes has also changed. „A negative point at this moment is the issue of municipalities not yet disposing of any property, taken away during the past regime“, said Mr. Sabic.

Mr. Francis O’Donnell, the permanent representative of the United Nations Development Programme
(UNDP), declared that the development of local authority represents an instrument of economic reconstruction and progress. „By developing local authority, we can stabilize the political situation, and our goal is to create institutions and take responsibility at local level“, said Mr. O’Donnell. He also added that local authorities executive bodies should develop a more transparent work mechanism, and thus attract people to the public administration employment domain.

A two-day seminar, organized by UNDP, is aimed at understanding the role of local authorities and promoting support to the local economic development. Representatives of the Serbian Government, municipalities of southern Serbia and northern Montenegro, and other municipalities of mixed nationalities, as well as a few representatives of western European countries’ embassies attended the meeting.

During its last session, the Government of the Republic of Serbia established the Law proposal on the volume of funds and participation of municipalities and cities to the sales and salary taxes income, for the year 2003 and therefore pursued the trend of local authorities strengthening and the realization of a several projects from the local budgeting program. The funds for municipalities and cities raised the most in comparison to other public finances domains. Local authorities and their competence reforms represent a part of the whole public administration reform project, aimed at creating a public administration at the service of citizens.