By Peter Clavelle
Governments (national
and subnational) and citizens, in countries in all phases of the development
process, are recognizing the paramount importance of sustainable development.
While numerous definitions of sustainable development exist, the most popular is
“to ensure that development meets the needs of the present without compromising
the ability of future generations to meet their own needs”.
The growing
understanding of sustainable development is being coupled with a global movement
toward decentralization. Decentralization is most frequently defined as the
transfer of power and resources from national to subnational governments. Decentralization
holds the promise of enhancing local democracy, improving the delivery of
public services, and promoting local economic development. The growing
commitment to sustainable development and the trend toward decentralization are
resulting in a redefinition of economic development-and the role of local
government in attracting investment and creating jobs. Local governments are
being given the explicit authority, and accepting new responsibilities, for
economic development. With decentralization, much of the responsibility for
economic development has shifted to the local level. Local Economic Development
(LED) reflects this new reality and represents a community’s process to improve
economic conditions and the overall quality of life.
Local Economic
Development does not just happen. LED requires both a vision and a strategy. LED
requires political leadership and the building of local capacity. It requires
that the community as a whole, including traditionally marginalized
populations, are represented in the LED process. LED requires that
municipalities launch new efforts to engage the private sector in efforts to
stimulate investment and create jobs.
The municipalities of
Albania are uniquely suited to undertake Local Economic Development. The July
2014 Law enacting Territorial Administrative Reform (TAR) reduced the number of
local governments from 374 to 61, providing an unprecedented opportunity to
strengthen local governance. A new Law on Local Self-Governance (Organic Law)
enacted in December 2015 entrusted the newly-consolidated municipalities with
the authority and responsibility to serve their citizens better. The Organic
Law explicitly states that local governments have the right and responsibility
for conducting economic activities. The Law further states that the exclusive
functions of municipalities in local economic development include: the
preparation of programs for local economic development, support to small
business development, the provision of financial grants to support small and
medium sized business activities, and the performance of services in support of
local economic development.
The Mayor’s role in
Local Economic Development cannot be overstated. Mayoral Leadership includes a
recognition that job creation and other Local Economic Development (LED)
activities will benefit from a more intentional engagement of the Municipality
with the private sector. Mayoral Leadership requires the building of local government capacity and improving the business enabling environment.
The Leadership of the Mayor is required to link territorial planning and land
development with economic development, creating new job opportunities and a
better business climate. The Leadership of the Mayor is required to guarantee
that local democracy is the underpinning of both planning and development. Mayoral
Leadership is necessary to ensure the full participation of populations
normally excluded from the political and economic mainstream.
Each municipality of
Albania is unique. There are differences in economic challenges, community
assets, and municipal capacity. Nevertheless, international best practices and
the Albanian experience show that there are common themes and steps that
produce stronger local economies and improvements to quality of life. Here are
10 things Mayors can do to lead LED efforts:
- Implement General Local Territorial Plans-Mayors have the authority and responsibility to implement the GLTPs. Creating awareness and building consensus for the vision and goals set forth in the GLTP is a key role. Mayors must ensure that the Local Detailed Plans (LDPs) legally required for major developments are prepared and approved prior to the initiation of any development/building permit procedure by the Municipality. The LDP provides a platform for land development negotiations between interested stakeholders (the Municipality, developers, landowners, citizens). Under the Mayor’s leadership, a multi-disciplinary team of municipal officials (political, urban planning, economic development, and communication officials) should collaborate with private sector stakeholders to study the project’s technical and economic feasibility, weigh the costs and benefits of different development options, and select the preferred option.
- Prepare
Economic Development Strategies-Most Albanian municipalities do not have a specific economic
development strategy. Under the leadership of the Mayor, a consultative process
can be used to identify and prioritize LED projects pursuant to the Municipal
Development Strategy of the General Local Territorial Plan. These
projects-rather than simply being public infrastructure projects-should be
projects that stimulate investment, engage the private sector, and create jobs.
Potential funding sources for each priority project should be identified.
- Apply Financial Instruments
for Land Development (FILD)-It is increasingly recognized
that for decentralization to succeed, infrastructure has to be provided and
maintained, and someone has to pay for it. It makes sense and is fair that
developers who are benefiting from private development contribute to the cost
of the infrastructure required to support that development. Mayors can lead
efforts to apply the financial instruments authorized by Albania’s 2014 Law on
Territorial Planning and Development. The use of financial
instruments-including Conditioned Building Intensity, Tax Increment Financing,
Business Improvement Districts, Betterment Fees, and Special Assessment
Districts-will significantly enhance efforts to achieve fiscal decentralization
and financial sustainability. (See
USAID/PLGP Policy Paper “Financial Instruments for Land Development”.)
- Build
Municipal Capacity for Local Economic Development-The Mayor’s leadership is essential to
building the local government capacity required to successfully create a business-friendly
environment and implement LED Activities. Municipalities need to accompany
their new responsibilities for LED with increases in skills, capacity, and
funding. Under a Mayor’s leadership an Economic Development Department
(Directory) should be created with the charge to recommend and implement a
comprehensive economic development strategy. The Department’s responsibilities
should include: to work on behalf of the Municipality to stimulate investment,
and to attract, retain, and encourage the development of both existing and new
economic enterprises; to develop, coordinate, implement, and administer
economic development strategies and projects for the Municipality; to recommend
to the Mayor and Municipal Council, and solicit on behalf of the Municipality,
grant-in-aid funds for the Municipality; to administer and manage such
grant-in-aid programs in accordance with the laws and regulations thereto; to
coordinate and facilitate participation in economic development with citizens,
community organizations, and private sector actors. The Director of the
Department should be appointed by the Mayor on the basis of professional
competency and made responsible for the management, direction, and control of
the Economic Development Department subject to the orders and laws of the Municipality.
Building LED capacity will require an assessment of the existing institutional
framework and current capacities of a local government to promote
competitiveness and job creation.
- Encourage Private Sector Engagement-Job creation and other LED
activities require the engagement of the municipality with the private sector. Historically,
there has been no structure in place to institutionalize consultation and
communication between the private sector and municipality. A Mayor’s leadership
is essential to strengthening and sustaining the municipality’s engagement with
the private sector. One model is to create an Economic Development Advisory
Council (EDAC). An EDAC will strengthen and
institutionalize private sector engagement with the municipality. The EDAC will
provide an ongoing opportunity for private sector actors to provide input and
recommendations for municipal policies and priorities related to local economic
development, including: improving the business enabling environment and supporting
the recruitment of new businesses and the retention/ expansion of existing
businesses in the Municipality. EDACs, with USAID/PLGP support, have been
launched in a number of Albanian municipalities and are showing promise in
increasing private sector engagement.
- Support the Needs of Your
Local Business Community-Local businesses,
particularly small businesses, are essential to a stable and vibrant local
economy. Cities around the world are shifting their focus away from attracting
large firms from outside the community to growing businesses from within.
Mayors play the lead role in attracting new businesses to the municipality and creating an environment that
supports the growth and expansion of local businesses. Business leaders are
likely unaware of the assistance and resources available to them. Business
leaders also want to know that the municipal regulatory process is timely and
predictable. Mayors can improve the enabling and regulatory environment for
businesses by making them aware of available assistance and can ensure that the
development review process is streamlined and transparent. One practical action is for the
Municipality to prepare a “Guide to Doing Business”. (See “Guide to Doing
Business in Berat”) The Guide would be a resource to starting and growing a
business in the city. In addition to providing the Guide in print form, the
Municipality could make this information available on its online portal.
- Empower Marginalized Groups
and Individuals -The Leadership of the Mayor
is required to remove the barriers that have excluded certain populations
(women, youth, Roma, and Egyptians) from the social, economic, and political
mainstream. Women and girls are marginalized, disempowered, and
disenfranchised. For example, unemployment among women and girls is higher than
among men and boys. A Mayor’s role includes to understand the social and
economic concerns of women and girls (youth). It is essential that Mayors
support public and private initiatives that generate employment opportunities,
promote social entrepreneurship, and economically empower women.
- Connect LED with Other
Municipal and Regional Policies-LED activities must
be developed and implemented in conjunction with a municipality’s comprehensive
planning process. The leadership of the Mayor is essential in determining how
other municipal policies support or discourage your economic development goals.
For example: Are your transportation initiatives supporting local retail and
tourism? Are workforce training programs meeting the needs of local businesses?
Is housing adequate to meet the needs of workers in your municipality? Is tax
policy fair to business? Have you developed connections between economic
vitality and environmental quality? Are there publicly owned land and buildings
that can be used for LED? It is also important to know how your local economy
fits into the broader regional economy. Local businesses rely on the resources
available in the region, including workers, transportation, housing, and
amenities. The Economic Development Advisory Council may be a useful platform
to consider these issues.
- Deliver a Strong and Clear
Economic Development Message-Mayors need to be
the “Chief Communicator” for their municipality. Vital to successful economic
development are strong communications and a compelling message. Mayors can use
public speeches, interviews, the municipality’s website, and social media to
unify the community around economic development. Clear communications will
assure developers and business owners that their investment has broad support
among local leaders and citizens. Political campaigns provide a unique
opportunity for Mayors and Mayoral candidates to articulate an economic
development message that is non-partisan and transcends traditional political
rhetoric.
- Be Open and Transparent-A key ingredient for sustainable development, and a successful municipality, is trust and confidence. Through open and transparent processes and good communications a Mayor can secure the trust of citizens, civil society, and the private sector. There is no single way to ensure openness and transparency. However, among the tried and trusted mechanisms being used in Albania are: Citizen Advisory Panels (CAPs), Economic Development Advisory Councils (EDACs), Community Based Scorecards (CBS), Local Safety Councils, Youth Boards, and Participatory Budgeting. USAID/PLGP has created models for all of the above.
Mayors have the power, the authority, the responsibility, and
the ability to improve the economic well-being of their communities. Hopefully,
this paper offers specific and practical suggestions for actions that Mayors
can take. Good luck!Peter
Clavelle served as Mayor of Burlington, Vermont, USA for seven terms (1989-1993
& 1995-2006). Prior to being elected Mayor, he was Burlington’s Community
and Economic Development Director-working for then Mayor Bernie Sanders. Since
2006 he has worked for Tetra Tech, an international development consulting
firm. From 2012 to 2016 he served as Chief of Party for USAID’s Planning and
Local Governance Project (PLGP).