Coalition Earns Borrowing Authority for Albanian Cities
Less than 10 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. Furthermore, 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.
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| Several representatives of the Albanian Mayors’ Association, including the Chairman of the AAM, Mr. Fatos Hodaj (back left) and the Mayor of Kucovë, Mr. Artur Kurti, participated in the parliamentary session to discuss the borrowing law |
In 2004, USAID began assisting the AAM to advocate for cities on major components of fiscal decentralization. USAID provided the Association with training, on-site assistance, support for study tours to the U.S. and help with formulating the AAM’s strategy and launching 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 crafting a bill in 2006, which would give local authorities the right to borrow. After finishing this year-long process, the mayors again joined forces to push the bill through the central government approval process 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.
After almost two years of consensus-building, drafting, and lobbying, Albania’s Parliament finally passed by a unanimous vote the Local Government Borrowing law in February 2008. 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 new investment opportunities. In the future, 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,” remarked Hodaj.
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