Regional Development

 The development of a coherent regional development policy, and adequate institutional arrangements for its implementation, a requirement for Albania to access the EU’s Instrument for Pre-Accession (IPA) regional development funds, progressed during the first half of 2010. However, changes in the institutional arrangements for development and implementation of the regional development policy resulted in fragmented mechanisms, with responsibilities related to regional development spread across several institutions. As a consequence, the reform process slowed down. Continued efforts are necessary to ensure national ownership of the regional development agenda, while review of the national regional development strategy remains a priority.

In early 2010, the Ministry of European Integration was given responsibility for coordinating preparations for accessing IPA3 funding, the Strategic Coherence Framework was submitted to the EU for review and a draft Operational Programme for regional development was prepared. Under the strategic leadership of an interministerial committee headed by the prime minister, the Department for Strategy and Donor Coordination (DSDC) was given the role of technical secretariat for the Regional Development Fund, a mechanism for managing a national competitive grant scheme.

Limited progress was made on decentralization reform, with division of responsibilities between different levels of central and local government remaining unclear. Fiscal decentralization is also pending, with division of responsibilities for tax management and administration remaining unclear. Lack of clarity on responsibilities for spatial and urban planning, exacerbated by weaknesses in land records and ownership rights, is an impediment to local development. Ensuring clarity on administrative and fiscal responsibilities and strengthening capacities at the local level will play a key role in fostering sustainable local development. Support to agriculture and rural areas remains a priority. The sector benefits from IPA funds to support development of institutions and a framework for accessing IPA5 funding once Albania becomes an EU candidate country.