Growth and Fiscal Stability Initiative Quarterly Report 30 September 2010

Key outcomes of the quarter include the development of work plans submitted for discussion to USAID, the production of a multi-purpose flyer introducing the three key USAID projects involved in municipality activity, and the conclusion of forward planning and municipal selection for the initial launch of the Public Expenditure and Financial Accountability (PEFA) methodology. The Public-Private-Partnerships (PPP) Component was successfully launched during the first quarter, with the development of an integrated work plan and the mobilization of the PPP component lead and local advisors. GFSI advisors worked to address urgent framework issues, encouraged the Ministry of Finance and Economy to establish a working group to identify PPP legislative priorities, and developed a PPP framework strategy to guide future activities. To strengthen the institutional framework for PPP, GFSI advisors began to define the key responsibilities of the PPP Unit and update the organizational structure accordingly. The Privatization Agency of Kosovo (PAK) received 200,000 Euro from the Kosovo Government to initiate the recruitment of a law firm to assist in resolving legal issues associated with moneys held in Trust following the privatization of socially-owned enterprises. Revised legislation has been developed and circulated to the ICO for comment, which would simplify the legal issues associated with the Trust Fund processes. Once legislation is agreed and adopted, it is expected that PAK will consider engaging outside counsel. The GFSI PPP component faces resistance to changes required to strengthen and expand Kosovo's PPP program, including building PPP capacity in municipalities and line ministries, creating independent Project Implementation Units (PIUs) and Project Management Units (PMUs), and revising procurement documents. Uncertainty related to upcoming national elections also poses a challenge to the project. GFSI advisors have cooperated and coordinated activities with various USAID projects, including BEEP and DEMI, and identified joint activities with SEAD, KPEP, and other projects. The Kosovo Government's Strategic Plan 2010-2014 identifies five cross-cutting factors as having a profound effect on the development environment in Kosovo: youth integration, gender equality, full participation of minorities, and protection of Kosovo's environment. Activities in the GFSI program have been taken into account during the work planning phase and will be addressed where possible in day-to-day activities and program design. The GFSI Project aims to support private sector participation through Public-Private-Partnerships and through support to the Privatization Agency of Kosovo. The project's objectives include strengthening the ability and capacity of central and local institutions to identify, develop, and implement PPP projects, and providing targeted technical assistance to the Privatization Agency of Kosovo to bring the liquidation of privatized SOEs to timely closure and put privatization proceeds to work in the Kosovo economy. The project's progress and success against the work plan include the launch of the PPP Component, the development of an integrated work plan, and the mobilization of the PPP component lead and local advisors. GFSI advisors have also made progress in developing an integrated capacity building program, including a comprehensive training needs assessment and a draft curriculum for an institutionalized training program for PPP.