Country Programme Document

Country Programme Document

Second regular session 2006

11 to 15 September 2006, New York

Item 3 of the provisional agenda

Country programmes and related matters

Draft country programme document for the Republic of Montenegro

(2007-2011)

Contents

Paragraphs / Page
I.Situation analysis...... / 1-10 / 2
II.Past cooperation and lessons learned...... / 11-15 / 3
III.Proposed programme...... / 16-33 / 3
IV.Programme management, monitoring and evaluation...... / 34-36 / 5
Annex
Results and resources framework for the Republic of Montenegro
(2007-2011) ...... / 6

1

I. Situation analysis

1. On 3 June 2006 Montenegro declared independence from the State Union of Serbia and Montenegro (SCG). As a partner in its transition to a modern, sustainable European state, UNDP, through its country programme (2007-2011), will support targeted economic, environmental and governance initiatives and related institutional reforms for achieving sustainable development. These initiatives will also support the other major post-independence ambition of Montenegro – that of accession to the European Union.

2. The economic reform programme of Montenegro since 1997 has had two main components: macroeconomic stabilization and market-oriented structural reforms. The adoption of the Euro on 1 January 2002, as its official currency, has been crucial to economic stabilization. Fiscal reforms for improved revenue collection helped to cut the budget deficit to 3 per cent of gross domestic product (GDP) in 2004, foreign trade has been significantly liberalized, and an estimated 70 per cent to 80 per cent of former publicly owned capital assets were sold to private ownership by the end of 2005. There has also been increased participation in the economy by small and medium enterprises (SMEs). GDP growth has been steady, but still relatively low for the sub-region (average of 2.5 per cent per annum since 2000). However, travel and tourism economic activity is expected to grow by 10.3 per cent per annum in real terms between 2004 and 2014, which is expected to play a major part in boosting growth and employment in the future.

3. The poverty rate for Montenegro (meaning an income of approximately $5 per day) is estimated to be 12 per cent and concentrated especially amongst the Roma and ‘internally-displaced persons (IDP). In addition, some 30 per cent of the population is economically vulnerable.

4. A sharp regional disparity in poverty levels is noticeable. With 45 per cent of the poor living in the north of the country, the poverty rate there is almost twice as high as the national average. Measured by the decile ratio and Gini coefficient (decile -7.0, Gini – 0.29), Montenegro is among the most unequal of countries in the West Balkans, indicating that the large gap between rich and poor may be widening.

5. Unfortunately, the position of women in the labour market deteriorated throughout the 1990s. In fact, the unemployment rate among women is nearly twice as high as that among men (35 per cent vs. 20.6 per cent). In addition, a significant salary discrepancy exists between men and women, even when education levels are equivalent. In comparison to their male counterparts, women generally have lower access to managerial and leadership positions, and in the current restructuring process women lose more jobs than men. The representation of women in the Parliament and Government of Montenegro remains extremely low, ranging between 11 per cent and 16 per cent.

6. The exceptional wealth of natural resources, especially in the impoverished northern region, however, represents considerable untapped potential. Future growth and prosperity based on tourism, renewable energy resources, forestry and organic produce will depend on how well these valuable assets can be utilized in a sustainable manner. Given the small size of the domestic market, future growth and prosperity will depend to a large extent on how successfully it develops export oriented and tourism industries in a socially and environmentally responsible way.

7. The new state faces several challenges. The public sector still accounts for too large a proportion of GDP (59.2 per cent in 2003), and the total cost of wages and salaries in this sector is high compared to the other sectors. There continue to be severe skills shortages within Government structures in terms of both technical and managerial competencies and the state has yet to embark on a much needed re-structuring and modernization of public administration. The gap between policy formulation and implementation is generally wide and implementation capacities are in need of substantial strengthening.

8. While accession to the European Union would be a huge opportunity for Montenegro, the process of accession poses significant challenges that will test the weak capacities of the Government at both the central and local levels. These challenges will be in terms of development planning and implementation, and undertaking the regulatory, policy, institutional and legal reforms associated with the introduction of the European ‘Aquis’. Additionally, management of European Union

funds under the forthcoming Instrument for Pre-Accession Assistance (IPA) and absorption of these funds will be a major issue, particularly at the local level, unless institutional capacity issues are suitably addressed.

9. The expected rise in donor presence will place a further burden on the administration in terms of managing an increased and more diversified foreign assistance portfolio and ensuring that this is aligned with national priorities.

10. In terms of corruption and transparency, the Transparency International corruption perception index for Serbia and Montenegro for 2005 is 2.8 – typical for countries with high levels of corruption. Significantly, 80 per cent of small and medium enterprises in Montenegro stated that they faced corruption in their dealings with public authorities. The Joint Staff Assessment (JSA) of the Montenegro Development Poverty Reduction Strategy (DPRS) recommended increased attention to this issue.

II. Past cooperation and lessons

learned

11. Although the UNDP presence in Montenegro will inherit part of the legacy of United Nations activity in the former Federal Republic of Yugoslavia and the SCG, the previous country cooperation agreement and the United Nations Development Assistance Framework (UNDAF) documents allowed no real programme segregation for Montenegro. However, a recent Assessment of Development Results (ADR) has provided important recommendations and lessons that could be used to formulate a separate programme for Montenegro. In addition, both the Millennium Development Goals (MDG) report and the national human development report (NHDR), prepared in 2005, provide key recommendations for development and baseline data for monitoring.

Key lessons learned

12. Social inclusion. UNDP has learned the value of developing innovative partnerships to empower networks of the most disenfranchised groups in society. It will be crucial to support non-governmental organizations (NGOs) in overcoming their current polarization over political and economic issues and forging long standing strategic alliances, leading to their greater impact on decision-making and policy formulation.

13. Governance. The Capacity Development Programme for the state administration has proven to be an excellent model for flexible partnerships. The main lesson learned from the preceding period was to shift responsibility for day-to-day implementation away from UNDP and to further increase national ownership.

14. Economy and the environment. Past activities have shown that emphasis needs to be shifted from the protection of natural resources to providing sustainable livelihoods through supporting the emergence of an environmentally responsible private sector. This will generate wealth for more equitable economic development. UNDP will continue to build on its experience in the pursuit of this objective.

15. The learning from these lessons has informed the design of the new programme, which will reinforce the lead role of UNDP, particularly in the field of sustainable development in support of European Union accession.

III. Proposed programme

16. The proposed programme addresses the key strategic goal of the newly independent nation, which is to become a prosperous, member state of the European Union.

17. This proposed programme is divided into three major outcome areas corresponding to the areas where key lessons were learned, namely: Greater social inclusion of marginalised groups; capacity development for public management; and promotion of environmentally sensitive economic development.

A. Social inclusion and poverty alleviation

18. Within this area, UNDP will focus on improved access to quality public services and the development of opportunities for vulnerable groups, particularly the Roma, women and other at-risk categories. The four components of this outcome area are as follows:

19. Support to the Roma and other vulnerable groups in their efforts to access public services, employment and development opportunities. This will be achieved through support for decentralization in the social security system which aims to foster increased participation by local actors and beneficiaries; greater use of community rather than institutionally based services; greater choice for users; and the development of innovative employment programmes. Key partners are social welfare centres (SWC), the Ministry of Labour and Social Welfare, Roma civil society organizations (CSOs), the National Employment Agency and local employment offices, the United Nations High Commissioner for Refugees (UNHCR) and the United Nations Children’s Fund (UNICEF).

20. Promoting employment opportunities for the vulnerable and social groups at risk of exclusion. This will be achieved by supporting productivity-enhancing investments and employment generation programmes for hard-to-employ groups, unskilled and semi-skilled labour and (vulnerable) women, with a focus on strengthening the enabling framework for SMEs in the northern part of the country. Key partners are the SMEs, local self-governments, the National Employment Agency and the Ministry of Labour and Social Welfare.

21. Promoting the participation of women in business, politics and governance. This will be achieved by supporting the Office of Gender Equality in the effective implementation of the national action plan for gender equality. UNDP efforts will be concentrated on advocating for gender legislation, integrating gender equality in the national policy priorities and supporting the formulation and implementation of frameworks that provide more favourable development opportunities for women. Furthermore, support will be provided for gender-disagregated data processing to facilitate better policy making. The main partners will be the Office of Gender Equality, the Ministry of Justice, the Ministry of Labour and Social Welfare, NGOs, the National Employment Agency, local employment agencies, local self-governments and the Statistical Office.

22. Enabling the provision of harm reduction interventions for those living with HIV/AIDS, and improving the effectiveness of HIV prevention programmes in Montenegro, concentrating on the following vulnerable populations: intravenous drug users (IDUs), commercial sex workers (CSWs), men having sex with men (MSM), sailors, tourism workers, prisoners, Roma and the youth. Key partners are the Ministry of Health, the Public Health Institute and civil society.

B. Capacity development for public

management

23. UNDP will spearhead a programme to ensure the consolidation of efficiency, accountability and transparency in the areas of public administration and environmental governance. The aim is to support both the state administration and the political system to deal efficiently with the transition to independent statehood and European Union accession. This outcome will be supported by the following three initiatives:

24. UNDP will provide technical assistance and training to the Prime Minister’s cabinet and the general secretariat to strengthen the policy making and coordination system and improve the links between policy priorities and the budget. To facilitate these outputs the Capacity Development Programme (CDP) will be gradually transformed into a self-sustaining management unit for donor coordination, resource mobilisation and procurement.

25. UNDP will provide key ministries with relevant expertise to increase their absorbtion and implementation capacity, particularly in order to maximize forthcoming European Union development assistance.

26. UNDP will assist the efforts of Montenegro efforts to comply with European Union environmental standards and international conventions. This requires: (a) improved coordination for policy development and the integration of environmental concerns into other sectors (through key partners in the Office for Sustainable Development and the National Council for Sustainable Development); (b) expanded awareness and capacity at the local and national levels on key environmental issues; and (c) better understanding and implementation of policies, thereby fostering a sense of ownership for sound environmental decision-making among stakeholders at all levels.

C. Environmentally responsible economic

development

27. UNDP will support the private sector to carry out environmentally sustainable practices and sustainable planning and management of natural resources. This programme will consist of the following five components:

28. UNDP will continue to support the development of tourism by the private sector in the underdeveloped regions, as per the recommendations of the strategic framework for development of sustainable tourism in northern and central Montenegro, drafted by UNDP and adopted by the Government in September 2004. Key Partners are the Ministry of Tourism, the private sector and local communities.

29. UNDP will enhance its focus on public private partnerships through pilot initiatives, along with implementation of the Global Compact, especially in the development of small hydro plants. The public partners will be the office of the Deputy Prime Minister and the Ministry of Economy and Energy.

30. UNDP will ensure sustainable use of space through the development and implementation of policy documents and laws focusing on spatial planning, illegal buildings and informal settlements at the national and municipal levels.

31. UNDP will create geographical information systems (GIS) that will enhance government capacity to plan and monitor the sustainable use of natural resources.

32. With the help of the Global Environmental Facility (GEF) UNDP will assist the Government in adjusting laws to European Union standards and improving management in protected areas. Key partners are the Ministry of Environment and Spatial Planning, the Ministry of Forestry and Water Management, the national parks, the private sector and local communities.

Cross-cutting

33. Privatization plus improved transparency and reduced corruption in the delivery of services will remain cornerstones of all UNDP activities. These objectives will be achieved by means of technical support to local NGOs and the Government, facilitating dialogue and supporting the implementation of legislative and institutional changes.

IV. Programme management,

monitoring and evaluation

34. UNDP will continue discussions with the Government on priority setting; on establishing an effective system of coordination and monitoring of donor support; on the requirements for the effective application of a medium-term budget framework; and on the implementation of the Paris Declaration on donor coordination and harmonization.

35. UNDP will use the conclusions and recommendations of the draft ADR to revise and upgrade its monitoring and evaluation (M&E) mechanisms. Its M&E processes will align closely with national M&E processes. Sustainable development data combining per capita GDP, the human development index (HDI) and ecological footprint measures will be used for medium-term M&E. MDG data will be used for long-term M&E. Data from Transparency International and from the Poverty Reduction Strategy Paper (PRSP) will be used as cross-cutting measures of impact. Projects will continue to be subject to evaluations to ensure efficient management and achievement of their desired impact.

36. By the end of 2006, UNDP Montenegro will be certified as a practitioner of the Prince2 programme and project methodology, a widely used international certification fully in line with management practices under the United Nations simplification and harmonization process.

1

Annex. Results and resources framework for the Republic of Montenegro (2007-2011)

Programme
component / Programme outcomes / Programme outputs / Output indicators, baselines and targets / Role of partners / Resources by goal
(in dollars)
Outcome 1:
Social inclusion and poverty alleviation / 1. Poverty and social exclusion of vulnerable groups reduced through improved social security system, employment and economic and gender mainstreamed opportunities. / 1.1 The Employment Agency staff equipped and trained on job counselling for vulnerable groups. Vulnerable group focal points within the Employment Agency identified.
1.2 Business support and incubating mechanisms for SME development established.
1.3 The staff of social welfare centres (SWCs) trained and equipped for improved vulnerable group targeting, community level social policy design and targeted services delivery.
1.4 HIV prevalence maintained at a low level amongst vulnerable groups; introduction of methadone substitution treatment, needle exchange services and voluntary counselling services for People living with HIV/AIDS (PLWHA). / No. of Employment Agency and SWC staff trained.
Baseline: 0; target: 10
Unemployment rate of vulnerable groups decreased by 20 %.
Baseline: N/A
No. of labour policies and programmes designed/revised.
Baseline: 0; target: 5
No. of business support mechanisms established.
Baseline: 0; target: 3
No. of innovative social protection mechanisms in place.
Baseline: 0; target: 10
60% of people infected and affected by HIV/AIDS receiving counselling and support service. Baseline: N/A / Line ministries (Ministry of Labour and Social Welfare, Ministry of Economy)
National Employment Agency
Agency for SME development
Agency for Enterprises Restructuring
Bilateral and multilaterals donors
SWCs, the PRSP team
Local authorities
Local CSOs and employers’ associations
National Statistics Office
Ministry of Minorities
Ministry of Health
Health centres
Bilateral and multilateral donors as potential funding partners
Ministry of Interior/Policy
Ministry of Education
Ministry of Tourism / Regular:
629,000
Other:
5,700,000
2. Gender issues mainstreamed through national development strategies, policies and legislation.
Governmental gender mechanism in place to implement the National Action Plan (NAP), gender equality legislation, and gender policies. / 2.1 Gender related training needs of Government employees identified; pool of gender experts created, training designed and implemented.
2.2 Technical assistance provided to the Office of Gender Equality, the Statistical Office and CSOs for monitoring and implementation of NAP for gender equality.
2.3 Political parties sensitized on the issues of the quota system. / No. of government employees sensitized on gender mainstreaming.
Baseline: 0; target: 20
No. of training programmes delivered.
Baseline: 0; target: 24
M&E unit trained and equipped.
Baseline: 0; target: 1
No of CSOs involved in M&E of NAP.
Baseline: 0; target: 5
10 % increase of women in the Government.
30 % quota accepted by (parliamentary) political parties.
Baseline: 0; target: 3 / Government of Montenegro
Office of Gender Equality
Ministry of Justice
Parliament
National Statistics Office
CSOs, etc. / Regular:
228,000
Other:
800,000
Outcome 2:
Capacity development for public management / 1. Efficiency and transparency of Government improved in order to effectively lead policy formulation, coordination and service delivery in accordance with European Union requirements.
2. Government capable of efficiently managing the requirements of independence and European Union accession. / 1.1 Institutional review of Government completed.
1.2 Technical support and policy advice provided to implement recommended structural/organizational changes as well as for improved project management.
2.3 On-the-job training for senior Government staff provided, as well as advice on the development of consultative procedures and information communication technology. Establishment of international connections that should help key institutions to access funding from the European Union.
2.6 The Council for Sustainable Development transformed into a fully functional institution. / Rules and procedures for the general secretariat of the Government revised in accordance with European Union policy management standards.
No. of senior civil servants in the central Government trained with UNDP support. Baseline: 15; target: 50
No. of central Government institutions benefiting from UNDP institutional capacity building. Baseline: 5; target: 9
Cross-institutional strategic support provided by the Office for Sustainable Development on a continuing basis, including for regional projects.
Integrated priority-setting mechanism developed with assistance of the donor community.
The Capacity Development Programme transformed into a self-sustaining management unit for donor coordination, resource mobilisation and procurement.
Improvement in Transparency International anti-corruption rating. / Prime Minister’s office and general secretariat
Ministry of Justice
Ministry of International Economic Relations and European Union Integration
Civil society
The World Bank and the European Union are the main advocates and largest funders of public sector reform / Regular:
868,000
Other:
11,500,000
Output 3:
Environmentally sustainable economic development / Sustainable planning and management of natural resources in close partnership with the private sector.
/ 2.1 Technical expertise and training provided to selected local communities for spatial planning.
2.2 Technical support provided for establishing geographic information system (GIS) and trainings conducted.
2.3 Expertise and training provided to the Ministry of Tourism and the private sector in the implementation of selected strategic framework recommendations.
2.4 Targeted companies educated on responsible environmental corporate practices using the mechanism of Global Compact.
2.5 Concrete public private partnership pilot initiatives in energy generation initiated.
2.6 Expertise provided and trainings organized to improve management in selected protected areas. / No. of spatial plans developed in northern municipalities.
Baseline 0; target 6, i.e. DEM Layer, land use map, detailed maps of forests, biodiversity, settlements and urban areas
No. of training programmes implemented.
Baseline: 0; target: 3
No. of recommendations implemented.
Baseline 0; target 2
Global Compact signed. No. of seminars on Global Compact. Baseline 0; target: 2
New megawatt power generated from small hydro sources. Baseline 1.1% of domestic electricity generation; target: 5% or additional 15-20 megawatts
No. of management plans revised in participatory manner. / Ministries of Environment Protection and Spatial Planning, Agriculture, Forestry and Water Management, Tourism, Labour and Social Welfare, Economy, Energy Regulatory Agency, Electricity Power Company, Agencies for Employment & SME development,
national parks, municipalities European Agency for Reconstruction, GEF, World Wildlife Fund, United Nations Children’s Fund, Council of Europe, The World Conservation Union, Food and Agriculture Organization, Netherlands Development Organization (SNV), Swedish International Development Agency (SIDA), Government of Finland, LUX Development, FODEMO, Business Associations; NGOs, private sector, United States Agency for International Development, the Norwegian Government, other bilateral/multilateral donors as potential funding partners / Regular:
858,000
Other:
6,300,000
Totals:
Regular :
2,583,000
Other:
24,300,000
Grand total:
26,883,000