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Budget Reallocation Provides Access to Food Aid in Times of Crisis

A government must be responsive to the needs of its citizens, throughout times of crisis and in its everyday operations. USAID’s Planning and Local Governance Project (PLGP) partners with municipal governments in Albania to provide capacity-building and coaching to staff, strengthening their ability to pass on that support to their communities. In 2020, PLGP’s Municipal Expert responded to both a call for help and set the foundation for long-term economic growth through the same tool: fiscal restructuring.

Following the shifts under covid-19, families throughout Albania were desperately seeking basic aid. In response to confirmed coronavirus cases within the borders, the Government of Albania took swift action: closing schools, non-essential business, and clearing the streets within a week. With many families still recovering from the 6.4 magnitude earthquake in November, and sources of income suddenly cut off or drastically lowered, local governments were inundated with requests for assistance. Access to services (including grocery stores and pharmacies) was also drastically impacted, with many no longer able to travel as public transportation abruptly ceased and closed borders eliminated support from emigrated family members. As fiscal packages and budgets for 2020 had already been approved, mayors struggled to respond to this increased need from their citizens and looked to PLGP for support for thousands of families facing food insecurity. These families encompassed the most vulnerable populations, including the elderly, persons with disabilities, single mothers, and victims of domestic violence. In response, PLGP’s Municipal Expert provided virtual coaching to finance officers and suggested alternative ways to organize Municipal Council Meetings in our partner municipalities of Bulqiza, Cerrik, Dibra, Kamza, Librazhd, and Pogradec.

By reassessing their municipal budgets, mayors were able to reallocate funds with appropriate approval from Municipal Councils, increasing the percentage of their total annual budgets designated as Emergency Funding and enabling the distribution of food and aid packets to those in need of this crucial support. Movement of money in this way allowed for transparent support to citizens in real time.

In Bulqiza, the Foreign Assistance Coordinator expressed his gratitude, stating, “I would like to thank wholeheartedly the USAID Project for its work and commitment to help the Municipality of Bulqiza with valuable information and recommendations on how to cope with this situation of “Natural Disaster.”

The steps taken in Bulqiza included a reallocation of 3 million ALL (appx. 25,800 USD) to support those in need, including food support for 200 families over two months and a call for volunteers and businesses to contribute their support as well.

 “We didn’t have any food left at home. These food packets will feed my family and help us survive in these difficult times,” said a mother of three in Cerrik.

Nimble pivoting like this is a perfect example of responsive government. However, PLGP’s support went beyond recovery to planning for the future economic growth of new businesses following this time of crisis.

Empowering Women and Young Women and Men through Local Incentives

Economic empowerment of women and youth is important in building community resiliency, including to challenging problems in Albania like domestic violence and violent extremism. PLGP worked at the local level to support women and youth entrepreneurs through economic empowerment activities and municipal incentives. Increased independence extends women’s and youth’s ability to contribute to their communities, supporting themselves and those around them.

To identify the value chains, women participants, and activities that would have the most transformative impacts, PLGP conducted a gender-sensitive value chain analysis—Albania’s first that was designed to reveal the economic contributions and potential of women. PLGP’s gender and economic experts recognized that their support to women’s economic activity and entrepreneurship could be amplified by leveraging the project’s established relationships with municipalities. Local tariffs are set and administered in accordance with Law No. 139/2015 “On Local Self- Government.” PLGP worked closely with partner municipalities during the 2020 budget planning process to coach the municipal technical staff to include incentives for women and youth entrepreneurs in the annual fiscal package.

As a result of the ongoing coaching and support given to the local staff, tariff reductions were approved for the first time by the respective municipal councils in the municipalities of Bulqizë, Cërrik, Dibër, Kamëz, Librazhd, and Pogradec.

For new businesses managed by girls and women, local tariffs are reduced from 20-50% for the first year of their operations.

For businesses opened by individuals (girls and boys) up to the age of 25, local tariffs are reduced by 20-50% for the first year as well.

During his presentation of the annual budget in the City Council, the Mayor of Cërrik, Mr. Andis Salla, said: “The idea is simple, and makes perfect sense, when women and youth are empowered economically and are part of decision making in their communities, societies are more cohesive and more peaceful.”

Since the beginning of 2020, in PLGP’s partner municipalities, 11 women and girls benefited from the incentive and have opened and registered new small businesses providing goods and services in clothing, hairdressing, and tailoring.

“I learned about this from a friend of mine and decided to apply and see what happens. It wasn’t that easy to go through the procedure, but the municipality staff helped me. It is not a lot of money, but it helped. I paid 25% less in local taxes and tariffs. Since January, I am the owner of a small clothing business. The pandemic made it difficult, but I am happy as even during these difficult times, I am helping my family and raising my children better,” said Shkurta a first-time business owner from Cerrik.

The reduction of local taxes and tariffs for women is expected to impact not only their inclusion and empowerment in economic activities, but also change the dynamics in the families and the role women play in the community. PLGP provided complementary support—technical assistance and commodities—to the women who received municipal fiscal incentives to enhance their chances of successful entrepreneurship and grow the economic impact of their work for them, their families, and communities.

Strategic fiscal planning, through budget reallocation and tariff reduction, have enabled PLGP’s partners to provide support to their citizens throughout the struggle of Covid-19 and opened doors for new growth and resiliency in the future.

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