USAID/Kosovo Economic Governance Activity Annual Summary Report (Year 4)

The Activity has three objectives: (1) Business Environment Improvement, (2) Strengthened Public Financial Management, and (3) Enhanced Strategic Communications. During the period of April 2022 – March 2023, the Activity continued to conduct important reform activities. One of the key initiatives was the support provided to the ten partner municipalities to implement the Government of Kosovo (GoK) program for the treatment of constructions without permit. As of March 31, 2023, the average estimated market value of legalized/formalized buildings in the 10 partner municipalities reached an estimated 705.3 million Euros. To further facilitate the legalization process at the municipal level, the Activity supported the Ministry of Environment, Spatial Planning and Infrastructure (MESPI) to update the Circular on Treatment of Constructions without Permit at the Municipal Level. This circular provides additional guidance for municipalities on important issues raised by municipal implementers. The Activity also implemented a five-week legalization motivation initiative in the 10 partner municipalities, where Activity team members were stationed in various localities with legalization branded stands distributing informational printed materials and answering questions from citizens. Additionally, Activity-subcontracted Legalization Community Engagement Teams conducted 13,489 targeted door-to-door visits to owners of constructions without permit. The Activity worked with 17 private sector and civil society organizations to promote the legalization program throughout Kosovo and assist citizens to apply through direct contacts, door-to-door visits, public discussions, and social media. The Draft Law Amending and Supplementing Law No. 06/L-024 on the Treatment of Constructions without Permit was completed and includes amendments extending the deadline for legalization applications until December 31, 2025, with the possibility of two additional 12-month extensions by the MESPI Minister until a final possible deadline of December 31, 2027. The draft law was approved by the Assembly of Kosovo in its first reading and is expected to be approved in the second reading during the first half of 2023. The Activity also worked closely with the International Finance Corporation Investment Climate II Project to review and develop draft amendments to the primary sectorial legislation in the areas of market inspections and construction inspections to ensure alignment with the framework Law on Inspections. Furthermore, the Activity supported the National Committee on Trade Facilitation to conduct the Trade Facilitation Self-Assessment based on the World Trade Organization methodology. A final draft of the TFSA is expected to be finalized in the first quarter of Year Five. Additionally, the Activity finalized the Overview of Kosovo E-Commerce Statistics Collection, Processing and Publication Report jointly with the Kosovo Agency of Statistics. The Ministry of Finance, Labor and Transfers Macroeconomics Division further expanded its analytical toolkit and conducted regular roundtables with economic statistics producers and users as per International Monetary Fund guidelines. The Activity's support to the Ministry of Finance, Labor and Transfers Macroeconomics Division aimed to enhance the division's capacity to analyze and provide economic data to inform policy decisions. Overall, the USAID/Kosovo Economic Governance Activity continued to make significant progress in implementing reforms to improve the business environment, strengthen public financial management, and enhance strategic communications in Kosovo.