Municipal Coalition Earns Borrowing Authority for Cities
CHALLENGE Less than ten years since local governments became independent from the central government, Albania’s 65 municipalities still struggle to provide citizens with basic services, let alone finance larger infrastructure needs or foster economic growth and investment in their communities. Fur-thermore, the resource-strapped and fledgling Albanian Association of Municipalities (AAM), the organization constituted to speak for city interests, has not had much influence in the decentralization debate, until recently, largely as a result of USAID assistance.
INITIATIVE In 2004, USAID began assisting the mayors’ association to advocate for cities on major components of fiscal decentralization. USAID provided the Association with training, onsite assistance, support for study tours to the United States and help formulating the Association’s strategy and starting up its monthly newsletter. The Association gained a seat at the table during the small business tax policy debate, and acquired know how on how to mount a lobby on behalf of the cities’ interest in own-source tax revenue. With USAID support, the Association and other stakeholders began in 2006 crafting a bill giving local authorities the right to borrow. After finishing this year long process, the mayors again joined forces to push it through central government approval and on to Parliament. That same municipal lobby then appeared during the parliamentary hearing on the bill and ensured city interests were factored into in lawmakers’ deliberations.
RESULTS After almost two-years of consensus-building, drafting and lobbying on the part of municipal association, Albania’s Parliament finally passed by a unanimous vote the Local Government Borrowing law this February. The law gives cities the right to access commercial bank credit and to issue bonds in order to finance local development projects. A new USAID program will now help 10 cities avail themselves of the borrowing law by working to create bankable plans for infrastructure and capital investment projects. Executive Director of the AAM, Fatos Hodaj, says the Association’s work was key to the effort and significantly enhanced the mayors’ ability to advocate with one voice for their interests. “Our duty is to serve.” said Hodaj, “Our mayors are our clients.” In the coming months, the AAM will conduct a series of seminars for mayors on the new investment opportunities. Further on Hodaj sees the association playing an important role in the new urban planning law which would give municipalities’ independent authority to plan and manage growth in their jurisdictions. “Based on our experience and results with the borrowing law I believe we will definitely have a role to play,” said Hodaj.
