Final Report: Sustainable Local Development in Serbia

Home , Aleksandrovo (Merošina), Bela Palanka, Crna Trava, Jablanica (river), Kovilovo, Kraljevo

SUSTAINABLE LOCAL DEVELOPMENT PROJECT IN SERBIA

FINAL REPORT

SEPTEMBER 21, 2016

This publication was produced for review by the United States Agency for International Development by Chemonics International Inc.

SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT

CONTENTS

1.INTRODUCTION...... 1 2.ABOUTTHEPROJECT...... 2 2.1TheOriginalApproach...... 2 2.2Change...... 3 2.3NewPlansandPrinciples...... 5

3.PROJECTACTIVITIES...... 8 3.1INTERͲMUNICIPALCOOPERATIONSUPPORT...... 8 3.2SECTORSUPPORTFORSMALLANDMEDIUMͲSIZEDENTERPRISEDEVELOPMENT...... 15 3.2.1Textile–DenimProduction...... 15 3.2.2FootwearSector...... 17 3.2.3Wood/FurnitureSector...... 19 3.2.4MetalProcessingSector...... 23 3.3AGRICULTUREENHANCEMENT...... 24 3.3.1HorticultureIncubatorProgram...... 24 3.3.2ProducttestinglaboratoryservicesintheRegionalCenterforAgriculturalDevelopment (RCAD)inSjenica...... 25 3.3.3CenterforCollectionandProcessingofNonͲTimberForestProducts(NTFP)inTutin....26 3.3.4FoodͲtestingequipmentforSuboticaLaboratorytoenableincreasedexport...... 27 3.3.5SomborAgricultureEducationCenter...... 27 3.3.6The‘MountainBreakfast’brand...... 29 3.4INNOVATION...... 30 3.4.1ICTAcademies...... 30 3.4.23DImPulsCenterinKraljevo...... 31 3.4.3TechnologyandFoodͲProcessingParkinLeskovac...... 32 3.5FOREIGNDIRECTINVESTMENT(FDI)ATTRACTIONACTIVITIES...... 35 3.6STRENGTHENINGPUBLICADMINISTRATIONTOENABLEINTERͲMUNICIPALBUSINESS GROWTHANDINVESTMENTS...... 38 3.7INTEGRATINGYOUTHEQUITABLYINTOLOCALECONOMIES...... 43

4.LESSONSANDCONCLUSIONS………………………………………………………………………………………………………………….46 AnnexA: EightIMCAreasͲNewCriteriaPrograms50 AnnexB: FinancialReport66 AnnexC: PerformanceMonitoringReport67 AnnexD: IndexofReportsandProducts94 AnnexE: TableofCooperatingNGOs96

SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT

ACRONYMS

AYES AssociationofYoungEntrepreneursofSerbia B2B Businesstobusiness BEE Businessenablingenvironment BFC BusinessFriendlyCertification CB Capacitybuilding CIP CapitalInvestmentPlanning CMS CustomerManagementSoftware CSO Civilsocietyorganization EU EuropeanUnion EUPROGRES EuropeanPartnershipwithMunicipalities FDI Foreigndirectinvestment FTP FoodTechnologyParkinLeskovac GDS GlobalDestinationforShoesandAccessoriesTradeFair GIZ DeutscheGesellschaftfürInternationaleZusammenarbeit GoS GovernmentofSerbia Ha Hectares IMC InterͲmunicipalcooperation IMCA InterͲmunicipalcooperationarea IZ IndustrialZone LED Localeconomicdevelopment LG LocalGovernment(appliestoacityoramunicipality) MAPs MedicinalandAromaticPlants MoU MemorandumofUnderstanding NALED NationalAllianceforLocalEconomicDevelopment NAPOR NationalAssociationofYouthWorkers NARD NationalAgencyforRegionalDevelopment NiCAT NisClusterofAdvancedTechnologies NCP NewCriteriaProgram NES NationalEmploymentService NFE NonͲformaleducation NGO NonͲgovernmentalOrganization NTFP NonͲtimberforestproducts PGI ProtectedGeographicalIndication PMP Performancemonitoringplan PPP PublicͲprivatepartnership Project USAIDSustainableLocalDevelopmentProject PUC PublicUtilityCompany RCAD RegionalCenterforAgriculturalDevelopmentinSjenica RDA RegionalDevelopmentAgency SCC SerbianChamberofCommerce SCTM StandingConferenceofTownsandMunicipalities SDA/RAS SerbianDevelopmentAgency SEDA SandzakEconomicDevelopmentAgency SIEPA SerbianInvestmentandExportPromotionAgency SK SmartKolektiv SLAP SystemofLongͲlistedAdvancedInfrastructureProjects SME SmallͲandmediumͲsizedenterprise STTA ShortͲtermtechnicalassistance TA Technicalassistance VET Vocationaleducationandtraining WG WorkingGroup WP Workplan

SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT

1. INTRODUCTION

ChemonicsInternationalInc.isproudtopresentthisFinalReportonUSAID'sSustainableLocal DevelopmentProject(SLDP),whichChemonicsimplementedfromDecember22,2010toAugust21, 2016.SLDPwasaprojectrichininnovationandlearning.Asdescribedbelow,theproject,a beneficiaryofUSAID'spatience,flexibility,andcreativity,changeditsmanagementmethodologyand approachinitsthirdyeartorealizeitsoriginalgoalsofcreatingeconomicgrowthinlocalregions.In thisway,SLDPwasanunusualproject,fortunateintheallowanceitwasgiventolearnlessonsand adoptnewsolutionsasitevolved.AtrueproductofUSAID/implementercollaborationand partnership,SLDPbeganasaprojectemphasizinggovernanceandprocessandendedasaproject focusedonprivatesectordevelopmentandconcreteeconomicimpact.Alongtheway,italways soughttoharmonizegovernanceprioritieswitheconomicimperativesandresults,andascanbe seeninthesummaryboxthatfollows,itssuccessfulactivitiesaremanifold.

SummaryofAccomplishments: x SLDPexpertsworkedwith69individualcompaniesandninesectorclusters/associations ofproducers,assistingthemtoimprovetheirproduction,expandtheirproductofferings, modernizepromotionalactivitiesandmaterials,andestablishcontactwithpotential buyersabroad. x WithSLDPassistance,6,958newjobswerecreatedinpartnerinterͲmunicipal Cooperation(IMC)areas. x 657youthswhoparticipatedintheSLDPͲsponsoredactivitiesfoundnewemployment. x From2013Ͳ2015,businessrevenuesofSLDPpartnercompaniesincreasedby$25million, adding529newjobs.

x Atotalof782youthsparticipatedSLDP'seducationalprograms,andtheprojectorganized 452internships,enabling657youthstofindemployment.

x Foreigndirectinvestmentattractioncoaching,businessretentionandexpansiontraining, brownfieldredevelopmentandassetmanagementguidancehelpedpartnerIMCareasto attract$211.8millionininvestmentfrom2013to2016.

x 2,877locallyelectedandappointedofficials,membersofCSOs,media,andbusiness peopleparticipatedinprojectͲsponsoredtrainingandexperiencedsystemimprovement throughSLDPtechnicalassistance.

x 70eventsandinitiativesorganizedthatpromoteddialoguebetweentheprivate,public andcivilsectors. x 9municipalandinterͲmunicipalinfrastructuredevelopmentprojectssupportedin differentstagesofdevelopment. x 7publicͲprivatepartnershipssupported.

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2. ABOUTTHEPROJECT

2.1TheOriginalApproach

SLDPbeganasaprojectmeanttoimprovelocaleconomicdevelopmentbyemployingasetoftools, includinginterͲmunicipalcooperation("IMC"),tostrengthenrelevanteconomicͲorientedlocal administrativeprocessesandencouragepublicandyouthparticipationindecidinglocaleconomic issues.SLDPwasexpectedtoidentifyeightIMCareas,consistingofthreeormorecitiesortowns, and,ineachIMCarea,tomanagethecreationofajointworkingplatformoflocalgovernment, business,andcivilsocietyfromeachmemberͲcommunity.ThisplatformofInterͲmunicipal cooperationwoulddecideon,andimplement,mutuallybeneficialeconomicdevelopmentprojects fortheentireIMCarea,andeachcommunitywouldcontributeresourcestothateffort.The objectivesofSLDP,asdraftedbyUSAID,wereasfollows:

...toassisttheGovernmentofSerbiaandrelevantministriestoenhancethecapacitiesofits localgovernmentstoprovideservicesandfacilitateeconomicdevelopmentinatransparent andparticipatorymannertoreduceopportunitiesforcorruptionwithinthepublicsector. ThelongͲtermobjectiveoftheProjectistocreateasustainablelocalenvironmentfor businesstogrowandprosperthroughimprovedlocalgovernmentcapacities,business advocacyandincreasedpublicparticipationintheareaͲbasedeconomicdevelopment.

Initsfirsttwoyears,SLDPconcentratedonthethreetoolsfordevelopmentthatwereoutlinedinits StatementofWork:i.e.,IMCprogramming,publicadministrationreform,andyouthdevelopment andparticipatorymechanism.Ofthesedevelopmenttools,IMCprogrammingpresentedthemost difficultmanagementchallengebecauseitwascompletelynewtoSerbia.BoththeIMCconceptand theinstitutionalmechanismsformanagingIMCprogrammingwerealienandwithoutlegalor administrativeprecedent.TheeightIMCareasapprovedbyUSAIDincludedmultiplecitieswhose mayorswereofdivergentparties,whosebudgetswereoperatedcompletelyindependentlyofany otherIMCcommunity,andwhosebusinessprofilesandeconomicneedsandprioritiesvariedfrom communitytocommunity.ThoughSLDPattemptedtowrestleagreementforjointprojectsfromthe variousIMCplatformsofadministrative,business,andcivilsocietyleadersthattheprojectmanaged tocreate,theresultsweredisappointing:itwasnotreadilyapparenthowtheidentifiedprojects wouldproducepalpableeconomicgrowthordevelopment.Theproject'sfundswereinsufficientto implementthekindoflargeinfrastructuralprojectsthatarethenaturalfruitofIMCprogramming andweresuggestedbymostIMCcommittees,sowehadtocompromiseondoingfeasibilitystudies forprojectsthat,perhaps,wouldbedoneinthefuture,oncefundsmaterializedfromsomewhere. Othersuggestedprojectsconstitutedflightsoffancy,unmooredbyeconomicanalysisorbusiness logic,suchasaLeskovac"greenagriͲzone"oraGISmappingofKrajlevoagricultureland.Stillother projectsgrewfrompoliticalagendasandcompromisesunrelatedtoneed,suchasanairport developmentplaninUzice.BytheendofYear2,SLDPanditsbeneficiarieshadtochooseamong suchprojects.Theirmeritwasthattheyhadbeendevelopedinatransparentandparticipatory mannerbythevariousIMCcommitteemembers;theirdeficiencywasthattheycouldnotpromise economicimpact,evenif“successful.”Theprojectwasfacedwithafamiliarconundrum:Is developmentfundingtogotocultivationofprocessesortoaquestforimpact?

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TheothertoolsemphasizedbytheStatementofWork,administrativereformandyouth development/participatorymechanism,wereimplementedwithgreaterease.Bytheirnature,these toolsweremeasuredinoutputs,suchaspeopletrainedandeventsheld.Aftertwoyears,successful activitieshadbeenregisteredintheseareas,buttherewasnowaytoknowwhethertheworkwould culminateina"sustainablelocalenvironmentforbusinesstogrowandprosper."

Component2:LocalGovernmentAdministrationandComponent3:YouthDevelopmentand ParticipatoryMechanism–attheendofFY2012 9 Ninepublicservicesinsupportofbusinessdevelopment;fourLGsimprovedtheirasset managementcapacities,threeimprovedPUCmonitoring;32LGsreceivingUSGassistance thatimprovestheirperformancerelatedtoIMCmechanismsforsustainabledevelopment; eightassistedinachievingBFCstandards;Projectexpertsassistedkeypartnersindeveloping sixadvocacyinitiatives. 9 TwentyͲthreeprojectͲassistedmunicipalities,whereatleastoneprojectistakingintoaccount orsupportingparticipationofunderrepresentedgroups:sevenmunicipalitieswhereethnic minoritiesbenefitfromIMCprojects(4inSouthSerbiaand3inSandzak);and16 municipalitieswhereyouthdevelopmentprojectsaresupportedbyNAPORactivities(NAPOR isaprojectgrantee). 9 ThirtyͲone(31)youthsbeganinternshipsintwelveprivatecompanieswiththeprospectof futureemployment. 9 TheprojectsupportedimplementationoftheNationalCareerGuidanceStrategy,in cooperationwiththeMinistryofYouthandSportsandwithpartnersonsubͲnationallevel, anddeliveredsixtrainingsessionsincareerguidanceanddevelopmentto65representatives ofIMC,andsupported10mobilecareerguidanceteamstodelivercareercounselingservices toyouthinruralIMCareas.ThroughagranttoKOMS(SerbianYouthUmbrellaOrganization), 194youngpeoplewereenrolledinSLDPͲsponsorededucationalprograms. 9 SupportedtheNationalEmploymentService(NES)tocompletealaborforcegapanalysisand employerneedsforecast. 9 InFY2012,SLDPissuedgrantstoleadingCSOsinsevenIMCareastointegratepublic participationandcitizens’voicesintoIMCgovernancemechanismsandensurelocal developmentplanningismoreinclusiveandsustainable. 9 BytheendofFY2012,101institutionsandorganizationshadparticipatedinSLDPͲsponsored activities.Inadditiontothestrategicpartnershipstheprojectmaintainedwithkeypartners, suchasthenewlyestablishedMinistryofRegionalDevelopmentandLocalSelfͲGovernment, theNationalAgencyforRegionalDevelopment,theStandingConferenceofTownsand Municipalities,theNationalAllianceforLocalEconomicDevelopment,KOMSandNAPOR,the NationalEmploymentService,andregionaldevelopmentagencies,morethan90other institutionsandorganizationsreceiveddifferenttypesofassistanceandassumedmore substantiverolesinregionaldevelopmentprocesses. 9 TwentyͲoneinitiativeswereundertakenbyorwithsupportofofficials,toengageindialogue withthepublic. 9 Theprojectprovidedtrainingto955participants(47.5percentofwhomwerefemale)from localgovernments,publicutilitycompanies(PUCs),CSOs,andbusinesses.

2.2Change

AttheendofYear2,USAIDtoldprojectmanagementthatitwasnotclearwhetherSLDPwashaving anyimpactontheeconomiclivesofcitizensintheplaceswhereitwasworking.Whenproject managementcitedmeetingsheld,trainingcourseslaunched,projectsproposed(andevenpartially

SLDPFINALREPORT Page|3 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT implemented),USAIDrightfullyasked"sowhat?"WereSLDP'sendeavorsaddingupto improvementsthatcouldbeseenontheground?Didtheprojecthaveaconcretegoal,orsetof goals,thatitwasheadingtowardandwouldachieve?ThesepenetratingquestionscompelledSLDP totakestockandreͲthinkitscharacter.WithUSAID'spermissionandencouragement,theprojectreͲ organizeditsstaffandreͲenvisioneditsmission.Internally,SLDP'sstaffdeterminedthatUSAID's concernscouldbemetonlyiftheprojectswitchedfrompursuingprocesschangestohuntingfor opportunitiestocatalyzerealeconomicimpact.

Thisdeterminationbroughtaboutarapidchangeinprojectmethodologyandmanagementculture. First,wenolongerhadthetimerelyonotherstosuggesteffectivegoalsorprojects;rather,we decidedthatasconsultants,wewouldguideeconomicresearchandanalysisandonthatbasis, wouldsuggestprojectstoourIMCpartnersthatwebelievedhadrealpotentialforeconomicimpact. Second,weneededtofindauniversaltargetthatallofourmayorsandcommunitiescouldagreeis important,sothatwewouldnotbesprinklingprojectresourcesinpursuitofdiffuseresults idiosyncratictoeachoftheregionsandcommunitieswherewewereworking.Third,wedecided thateveryprojectcomponent,andeverytoolandresourceitused,wouldbededicatedtoachieving thisuniversaltarget.Noadministrativereformoryouthactivitiesoractivitiesinparticipatory decisionͲmakingwouldoperateindependentlyofSLDP'sotheractivitiesandmaintarget.If municipalutilitycompanieswereinconsequentialtothemainobjective,orifaPPPpossibility engagedapurelyinsularobjective,theprojectwouldnotdealwithit;ifyouthofficesbrought nothingofvaluetothemainprojectactivity,they wouldnolongerbeasubjectofSLDP'sconcern.

SLDPmanagementthenwentbacktoits The unemployment rate in beneficiariesinfaceͲtoͲfacemeetingstoreͲexamine Serbia in April 2012 was theeconomiccharacteristicsofthecommunities 25.5%. The most affected age whereitwasworking.Repeatedly,itbecameclear groups were young people thateachofthevariouscommunitieswas between 25 and 39 years old preoccupiedwithdifferentagendas,whichthey wishedtoaddresswithdonorsupport.Auniversal (source: National Employment targetforanIMCarea,letaloneforalloftheIMC Bureau and Republic Statistical areas,wouldbedifficulttocomeupwithifthe Office of Serbia. focusstayedanchoredtotheadministrativeand civilsocietyagendasthatoccupiedeach community'sattention.Beyondtheseagendas, however,loomedasingularpainfulfactonwhichallcommunityleaders,anywhere,couldfocus— thelackofjobsandhighunemploymentintheircommunities.InSLDP'spartners,thepernicious symptomsofjoblessnessandunemploymentwereuniversallypresentandacknowledgedasaroot causeofeconomicpain.Butnoonewasattackingitinadirectandsystematicway.ForSLDP,this meantthatwehadfoundouruniversaltarget—chronicunemployment.

NomayororNGOinSLDP’spartnercommunitieshadamarketͲbasedunderstandingofhowtodeal withthisissue.Certaincitieswereusingpartsoftheirfederalsubventionstocreatenewcity governmentjobs.Otherswerepayingprivateemployersthesalariesrequiredforafewworkersfora singleyear.YouthswerelearninghowtoprepareresumesandbusinessplansfordreamedͲofstartͲ ups.Buttheobviousandmostdirectsolutionforbattlingunemploymentistoincreasethebusiness

SLDPFINALREPORT Page|4 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT successoftheprivatesector.Yeteventhoughthisistheonlywaytoaddjobsinamarketeconomy whereprivatesectortaxesarethebasisforpublicbudgetingandspending,nodonor,national governmententity,orlocalleadershipwasfocuseddirectlyonprivatesectorgrowth.Inour meetings,mayorsaskedushowtheprivatesectorgrows,andweansweredinoneoftwoways:by addingnewinvestorstoacommunity'sprivatesectorroster,orbymakingexistingbusinessesmore competitivesothattheycanpenetratenewmarketsandgrow.Localleaders,however,didnotknow howtoaddresseitherofthesesolutions.SLDPofferedtohelp,conditionalonUSAIDapproval.

2.3NewPlansandPrinciples

TherigorsofreducingunemploymentbyenlargingtheprivatesectorrequiredthatSLDPembrace theguidanceofmarketprinciples.Firstandforemost,projectactivitieswouldallbedemandͲdriven; iftherewerenomarketdemandforanideaaboutgrowingtheprivatesector,theprojectwouldnot pursueit.AlthoughthiswouldseemtobeaselfͲevidentmanagementprinciple,economic developmentworkoftenconcentratesonthecapacityofafirmorgovernmentorstatetoproduce goods,withoutattentiontowhetherthosegoodsaredemandedbyanyonewhowillpayforthem. SLDPwouldnotdothat.DemandstudiesshowingpositivemarketandrevenueͲgeneratingdemand wouldprecedeallfutureprojectactivities.

Second,becausewewereconcentratedonenlargingtheprivatesector,sustainableandrobust businessgrowthhadtobethetargetofourprivatesectorwork.Inacompetitivemarketplace,such robustandsustainablegrowthdependsontheprivatesector’sabilitytoproduceandmarketeverͲ moreefficientlyandwithhighervalueproductsresponsivetoeverͲgrowingdemand.Therefore,we adjustedour"client"base.Wewouldworkonlywithelements(orsectors)oftheprivatesectorthat couldpenetratenewmarketsbecausetheyhadalreadyshownthepromiseofbecomingsufficiently competitiveinqualityandefficiencytomeetidentifiableandgrowingdemandinthosemarkets.In otherwords,howeversternitsounds,SLDPwouldworkonlywithconcretemarketpotentialtoadd amagnitudeofsustainablejobsintheforeseeablefuture,andwouldnotengageinpovertyrelief, startͲupwork,orsocialentrepreneurialwork.

ArmedwiththesetwoprinciplesandUSAID’sgoodwill,theprojectsettoworkidentifyingthe programsbestsuitedtoaddjobstoeachIMCarea.First,SLDPdistinguishedthisnewinitiativefrom precedingeffortsbylabelingtheactivitiesitwouldchooseasNewCriteriaPrograms(NCP).To incorporatetheprinciplesstatedaboveandrealizerealresultsoverthethreeyearslefttoSLDP,the projectresolvedtoselectNCPactivitiesaccordingtoasetofcriteriaapprovedbyUSAIDinadvance. USAID'sapprovalofthesecriteria,whichcamewithmuchbackͲandͲforthdiscussionandsuggestion atthehighestMissionlevel,wascritical.Thecriteriacreatedayes/noframeworkforwhatthe Projectcouldconsiderwhenourcounterpartsadvocatedideasthatmaynothavemetthefullintent oftheNCPinitiative.Weweredeterminednottoallowthe“freeͲforͲall”decisionͲmakingprocess thatIMCCommitteeshademployedinSLDP'sfirstgoͲaroundofchoosingIMCprojects.Now,we werelookingforeconomicimpactthroughconsensualdecisionͲmakingonstrict,evidenceͲbased, analyticalstandards.

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TheapprovedcriteriagoverningtheNCPinitiativespeakforthemselvesandareasfollows:

CriteriaforselectingNewCriteriaProgramsinpartnerIMCs: 1.Proximaterelationtojobcreation 2.Plausibility(fitswithincultural,economic,andpoliticalconstructs) 3.Feasibility(expectedbenefitwouldexceedcost,andbenefitsovercostsaretestable) 4.Implementablebypartnersandproject 5.Originalandinnovative(dependingonextentofinnovativeproductsandservicesemployedin NCPrealization) 6.SLDPcomponentsinvolved(youthwork,competitivenessandmarketingconsulting,andFDI attractionwork) 7.Leveragingbyotherdonors 8.DoesnotalienateanyIMCentity 9.BenefitmorethanoneIMCentity 10.Localgovernmentstrategicplansorrecognizedbusinessneeds

TheprojectnotifiedourpartnersofitsdecisiontopursueanewNCPinitiative,usingthese underlyingcriteria.Wethentook10weekstocanvassourIMCpartnerswithmeetingsofall participantsheretoforeinvolvedwithSLDP(Committeesandstakeholders),businessleadersbyopen invitation,andschoolsanduniversities.Wewantedourpartnerstothinkabouteconomic developmentprojectsandideasinlightofthecriteriaandnewgoalofprivatesectorgrowth.The project'sstaffandconsultantssimultaneouslyperformeddeskanalysisofthemostfundamental economicandbusinessaspectsofeachIMCarea,alongwithascanofthebestsectorsandeconomic assetspresentineachIMCarea.Agreatdealofthisinternalworkdrewonstudiesdoneinthe project’sfirsttwoyears,butfresheyesandapproacheswereapplied.

FourweeksafterthenotificationsweregiventoourIMCpartners,SLDPheldanEconomic DevelopmentForumineachIMCarea,inwhichwediscussedproposalsandideasabouteconomic developmentactivitiesthatmettheNCPcriteria.IdeasattheForumcamefromourlocalpartners, butouroutsideprojectspecialistsandinternalstaffalsoofferedprogramsuggestionsforeachofthe eightIMCareas,whichhadbeencirculatedinadvanceoftheForums.Theforums,attendedby USAIDandmayorsandtheirteamsfromeachIMCcommunityandbyallpublicstakeholders, producedlivelydialogue.Participantsheldthecriteriaascentraltothediscussions,andideaswere vettedintermsoftheiradherencetothecriteria.Theprojecttookcarefulnoteofthecommentsand reactionstoeachproposal,includingtheonesadvancedbyourownteam.

ThreeweeksfollowingtheEconomicForums,theprojectpublishedwhatitconsideredthe conclusionsreachedbyeachIMCForumandvettedtheseconclusionswiththeIMCleaders.From thatexercise,projectstaffseteachIMCarea’soveralljobͲproducinggoalandthespecificunderlying activitiesthatwouldrealisticallyachieveit.Together,thesegoalsandactivitiesconstitutedtheNew CriteriaProgramineachIMCarea.Inpresentationsto,anddiscussionswith,USAIDMission managementandspecialists,theseprogramswereconsideredandapprovedbyUSAIDinlightof theirmeetingthecriteria.TheNCPprogramforeachIMCareaisincludedinAttachmentAtothis report.

Tworemarksneedtobemadeatthisjuncture,becauseitisimportanttorememberhowUSAIDand SLDPagreedtoviewtheseNCPprograms.Theseremarksillustratetheclosecooperation,

SLDPFINALREPORT Page|6 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT reasonabilityandflexibilitywithwhichUSAIDapproachedthisprojectreͲdo;USAIDwasatrue partnerhere,notasimplemanagercheckingoffdeliverables.Wearegratefulandinspiredbyhow constructivelytheMissionaddressedprojectmanagement,andhownonuancesofthenecessary changeswerelostontheMissionprofessionals.

First,thegoalsofeachNCPprogram,suchas"increaseby20percent"werenormative,not contractual.Theywereusedasstrongmotivationforprojectstaffandbeneficiariestoexecutethe underlyingactivitiesoftheNCPprogram.Second,becauseofthefocusonenlargingtheprivate sectorasaprimarygoal,projectdeliverablesthatdealtexclusivelywithprocessoutputgoalshadto bemodifiedoreliminated.USAIDandtheprojectworkedtochangeourMEPtobetterreflectwhat SLDPwasgoingtodointhenextthreeyears.ThesechangesaredescribedinAnnexAtothis Report.Whenreadcarefully,theydemonstratethemagnitudeofqualitativeadjustmentsthat weremadetoswitchtheproject’sfocusfrominstitutionalprocesstoeconomicimpact.

OncetheNCPprogramswereapprovedbyUSAIDandbyourpartners,theproject'sworkforthe nextthreeyearswasset.AsstatedinourFY2014WorkPlan,weproceededasfollows: x Tomaximizechancesofsuccess,eachNCPismatchedtotheeconomicassets,business strengthsandprivatesectorneedsofeachindividualIMC.InIMCareaswherethereisa significant,butstatic,SMEmanufacturingsector,enhancingthecompetitivenessofkeysectors toexpandtheirmarketsisthefulcrumoftheProject'swork.InIMCareaswhereeconomic activityistiedtolowͲvaluebusinessactivity,suchascommodityfarming,theprojectisworking tomovethebusinessprofiletohighervalueendeavors,suchashorticulturalfarmingandfood processing.IntheIMCareaswheretherearekernelsofneweconomicactivityinICTand innovativemanufacturing,theprojectwillworktoturnthoseinchoateeffortsintosuccessful demonstrationmodelswithmoreuniversalandsystemicindustrialapplication.InseveralIMC areas,wherethelocation,economiclogic,andinfrastructureareappropriate,theProjectis guidinginflowinginvestmentpromotiontoaddjobstotheregionaleconomy. x NCPprimarilydescribeswhattheproject'sScopeofWorkidentifiesasComponent1work; however,wehavemoldedComponents2and3tosupporttheNCPssothatallprojectactivities fullysynchronize.Component2activities,whichdealprimarilywithmunicipalities’capacityto carryoutlocaleconomicdevelopment,areeitherdirectlysupportiveofparticularelementsof theNCPsordesignedtobuildtheknowledgeandskillsnecessarytoexecuteactivitiessimilarto thoseoftheNCPactivities.Component3activities[youthandparticipatorymechanism]are concernedwithdevelopingaworkforcethatmatchestheprivatesectorneedsintheproject's IMCareas.

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3. PROJECTACTIVITIES

SLDPwasessentiallyrunningeightNCPprogramssimultaneouslyingeographicallydistantpartsof thecountry,soboththeexecutionofandreportingabouttheactivitieswasmanageriallydiffuse. However,becauseinallIMCareas,wewereconcentratedonthegoalofexpandingtheprivate sector,wewereabletouseacoregroupofforeignanddomesticexpertsinmultipleIMCareas, therebysavingresourcesandincreasinglearnedexperienceacrossthevariousIMCs.Becausewe hopethatthisFinalReportmaybereadnotonlyasachronicleofourworkbutalsoasageneralized manualforprivatesectorcompetitivenessworkinmultipleregions,wewillpresentouractivities andtheirresultsthematically,ratherthanregionbyregion.

3.1INTERͲMUNICIPALCOOPERATIONSUPPORT

In2011,theprojectformedeightinterͲmunicipalcooperation(IMC)areas,whichsoughttoenable localgovernmentstocollaborateandpartnerwiththeprivatesectorandcivilsocietytooptimize availablemunicipalresourcesandservicesandbuildcapacitiestoidentify,leverage,andabsorb public,private,anddonorinvestmentfunds.ThecontractscopeofworkidentifiedNisandNoviSad asleadcities,andaddedVranjeandNoviPazar,asdirectedbyUSAID,basedonMissionprioritiesfor assistingthesetwounderdeveloped,ethnicallydiverseregions.Selectionofthenextfourleadcities andassociatedclustersproceededthroughatwoͲphasedcompetitiveprocess.First,theproject invitedlocalgovernmentstofilloutadetailedquestionnairetoconfirmtheirinterestinproject participationandtoscoreallthelargerlocalgovernmentsontheircapacitytoserveasleadcities.A shortlistofcitieswastheninvitedtosubmitapplications,inwhichtheyproposedpartnercluster localgovernmentsandpriorityIMCprojectideas.TheprojectrecommendedtoUSAIDthehighest rankedcitiesasprojectleadcitypartners,basedonboththescoredquestionnaireresponseandthe application.Inthisway,SLDPidentifiedUzice,Kraljevo,Zrenjanin,andSuboticaasthefinalfourIMC areas.

ToensurefunctioningIMCareastructures,theprojectinstitutedIMCforumsandcoordinationand workinggroupsthatenabledpartnersineachIMCareatoengageinmeaningfulandinclusive decisionͲmaking,projectͲplanningandexecution.SLDPassessedIMCbusinessopportunities, focusingonthecapacityamongexistingbusinessleadersandtheirsupportofinnovationasadded valuetodevelopmentofnewproductsandchanceforeconomicgrowth.Allactivitiesimplemented inIMCswereinterrelatedanddividedintothreeobjectives:

1.1.Improveintermunicipaleconomicdevelopmentbyguidingworkonspecificprojectsthatwill addjobstotheterritory

1.2.SustainIMCcapacitytosucceedininvestmentattractionandbusinessgrowthnecessaryto enhanceregionaleconomiccompetitiveness

1.3.SpreadandimbuetheinstitutionalandtechnicalknowledgegainedthroughsuccessesofinterͲ municipaleconomicdevelopment

Inaddition,withproject’ssupport,eachIMCdevelopedthenewcriteriaprojectsmatchedtothe economicassets,businessstrengthsandprivatesectorneedsofeachindividualIMC.Thetable belowrepresentstheNCPsimplementedbyparticipatingIMCs.

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InterͲMunicipalCooperation(IMC)Area NewCriteriaProgram A.UziceͲledIMC UziceIMCRegionalValueChain x UZICECITY x CAJETINAMUNICIPALITY x NOVAVAROSMUNICIPALITY x PRIJEPOLJEMUNICIPALITY x PRIBOJMUNICIPALITY B.NoviPazarͲledIMC NoviPazarͲEntrepreneurshipthatSells x NOVIPAZARCITY x TUTINMUNICIPALITY x SJENICAMUNICIPALITY C.NisͲledIMC GrowSouth x NISCITY x LESKOVACCITY x MEROSINAMUNICIPALITY x GADZINHANMUNICIPALITY x DOLJEVACMUNICIPALITY D.VranjeͲledIMC InvestonCorridor10 x VRANJECITY x BUJANOVACMUNICIPALITY x PRESEVOMUNICIPALITY x VLADICINHANMUNICIPALITY E.KraljevoͲledIMC KraljevoIMCCompetitivenessthrough x KRALJEVOCITY Innovation x CACAKCITY x GORNJIMILANOVACMUNICIPALITY x VRNJACKABANJAMUNICIPALITY x RASKAMUNICIPALITY Zrenjanin–ledIMC DiversificationofAgricultureͲͲNewJobsfor x ZRENJANINCITY RuralYouth x KIKINDAMUNICIPALITY x NOVIBECEJMUNICIPALITY Subotica–ledIMC SuboticaIMCAgribusinessExpansion x SUBOTICACITY x SOMBORCITY x KANJIZAMUNICIPALITY NoviSadͲledIMC MetroNoviSad:FirstPlaceforBusiness x NOVISADCITY x SREMSKIKARLOVCIMUNICIPALITY x BEOCINMUNICIPALITY x TEMERINMUNICIPALITY

A.UziceIMC:TheUziceIMCRegionalValueChain

TheIMCareawasformedinDecember2011.In2013,theIMCandtheprojectlaunchedthe economicprogram“UziceIMCRegionalValueChain.” ProjectactivitiesinthisIMCareafocusedonsupportingthelocaltourismindustryinreachinga10 percentincreaseofpurchasesfromlocalvendors.TheUziceIMCincludesthelargecityofUziceand

SLDPFINALREPORT Page|9 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT thepopularresorttownsofZlatibor,Zlatar,andTara,alongwitheconomicallyhardͲhit municipalitiesinthewest.Recognizingthepotentialoftheseresorttowns,theprojectworkedto engageothermunicipalitiesintheIMCinthetourismvaluechain.In2013,SLDPinitiated cooperationwiththeZlatiborRegionalDevelopmentAgency(RDAZlatibor)todevelopandanalyze thetourismsupplychainofthedestinationsofTara,Zlatibor,andZlatar.Then,in2014,theRDA producedanalysesofasupplychainfromtheregion’stourismindustry,listinglocalproductsthat couldmeethighhotel,recreation,andcateringdemandwithadditionaltargetedsupport.In2015, theprojectawardedRDAZlatiboragranttocreateandmarketalocalgastronomicalbrandand promoteitthroughregionaltourismagencies,hotels,andrestaurants.Thegrantalsoaimedto consolidatelocalbusinesslinkagesandconnectthetourismindustrywithspecific vendors/producersoflocalfoodproductsandhandicrafts.Theactivitygatheredrepresentativesof theRegionalChamberofCommerce,associationsofhotelsandrestaurants,regionaltourist organizations,andtravelagenciestojointlycreateuniqueculinarychoicesspecifictotheregional mountainresortsofZlatibor,Zlatar,andTara.Theseeffortsculminatedinthedevelopmentofthe MountainBreakfastRegionalGastronomicBrand,whichconsistedofspecificfooditemsindigenous toeachresort.TheprojectandRDAZlatiborcreatedanewregionalvaluechainconnectingtourist representativesandfoodproducersthroughabusinessͲtoͲbusinessmeetingthatallowedproducers tonegotiatedirectlywithtourismindustryrepresentatives.Theprojectsupportedtheopeningofa localtraditionalproductsshopthatserveslocalproducers,enablingthemtopresentandselltheir products.Theshop,openedintheZlatarResort,willpromoteandsell25productsthatarecertified elementsoftheMountainBreakfast.

DetailsonIMCsupportactivitiesandkeyresultsarepresentedinAnnexA,subsectionA.

B.NoviPazarIMC:NoviPazarͲEntrepreneurshipthatSells

ThisIMCareawasformedinJuly2011.In2013,theIMCandtheprojectlaunchedtheeconomic program“NoviPazar:EntrepreneurshipthatSells.”

ThisconceptaimedatincreasingtotalexportsofprojectͲassistedsectorsby10percent,in partnershipwiththeSandzakEconomicDevelopmentAgency.ThecityofNoviPazarandsmaller partneringmunicipalitiesofTutinandSjenicaaretraditionallyknownfortheircommercialand entrepreneurialspirit.Today,however,theyconstituteoneofSerbia’spoorestregions.Theactive sectorswithintheIMCregionaretextiles,footwear,furniture,andhusbandry(dairy,meat), consistingofentrepreneurialsmallͲandmediumͲsizedfirmsandfarms.Eachofthekeysectors experiencedclusterdevelopmentworkandidentifiedparticularconstraintsandgaps.Asastarting pointofprojectintervention,toincreasespecificsectorcompetitiveness,SLDPengaged internationalshortͲtermexpertisetoassessfirmͲlevelcapacitiesandtoprovidesetsof recommendationsforimplementationinfoursectors:(1)fashiontextiles(jeans);(2)furniture;(3) footwear;and(4)agriculture/herbs.

ThemaingoalofallactivitiesimplementedinthisIMCareawastostrengthenthecompetitiveness oftheprivatefirmsintheabovesectorsbyidentifyingspecificbuyersandspecificmarketsthat theseproducerscouldpenetrate.Theproject’sinternationalexpertssupportedclustermembersto increasetheirsalesandexpandtheiroperations.Theprojectsecuredthefullparticipationof relevantsectorfirms,publicadministrators,andotherlocalstakeholdersinimplementingthe

SLDPFINALREPORT Page|10 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT recommendationsandactivitieslaunchedundertheadviceofthesectorSTTAs.Allsectorexperts wereaskedtofindsalesarrangementsthatfirmscouldusetoengagetocontinueinternationalsales whentheprojectended.Inadditiontotradefairs,theProject`sfootwear,furniture,anddenim expertsbegannegotiatingtobringforeignbuyerstoSerbiaandlookingtoforgelinksbetweenthe mostsuccessfullocalcompaniesandtheseforeignfirms.Buyersthussawtheproductstheywere interestedinandwereabletovisitproductionfacilities,thusshorteningthetimeofnegotiation.The projectteamalsocooperatedwithotherdonorstosecureadditionalsupporttotheNoviPazar businesscommunity.Sucheffortsfocusedonresolvingsuchmattersasthechallengeofwastewater treatmentinthedenimsectorbyencouragingacquisitionofozoneͲbaseddryfinishingequipment, improvingthequalityofworkforceinallsectors,andencouragingtherationalusageoftheformer RaskatextilebrownfieldsitebylocalSMEs.

DetailsonIMCsupportactivitiesandkeyresultsarepresentedinAnnexA,subsectionB.

C.NisIMC:GrowSouth

TheIMCareawasformedinJuly2011.In2013,theIMCandtheprojectlaunchedtheeconomic program“GrowSouth.” ThegoalofthisconceptwastoincreasethedollarvalueofsalesoftheIMC’sprocessedfood productsbyatleast15percentbyNovember2015.SLDP’skeypartnerinthisendeavorwasthecity ofNis,primarilyitsAgricultureDepartmentandLEDoffice.Theproject’sactivitiescenteredon expandingtheIMC’sfoodprocessingsectorbyexpandingthemarketsandcapacitiesofexisting processors,attractingnewprocessorstothearea,andhelpingproducersorganizethemselvesinto efficientvaluechainvendorstotheregion’sprocessors.SLDPengagedinternationalandlocalshortͲ termtechnicalassistance(STTA)toanalyzethedemandforIMCprocessedfoods.TheBermanGroup undertookananalysisoftheinvestmentpotentialoftargetedsites,asthelackofmarketͲready propertywasidentifiedasoneofthebiggestobstaclesinattractinginvestmenttoNis.

TheprojectinitiatedthedevelopmentoftheregionalFoodProcessingSupportCenterinNis(the Center)andestablishmentoftheProductDevelopmentResearchPilotPlantattheFoodTechnology Park(“FTP”)inLeskovac.SLDP’sinternationalfoodprocessingconsultantfinalizedtheconceptand organizationalmodeloftheCenter,developeditsstrategy,actionplan,andtherangeofservicesto beprovidedtofoodprocessingclientsandproducers,andoutlinedthetrainingneedsofthestaff involvedinitswork.Theexpertalsoprovidedtrainingonhowtoorganizeservicedelivery,promote theCenter,andbetterunderstandfoodvaluechainsystemsandfoodprocessingoperationsinthe IMCregion.TheCenterishousedonthepremisesoftheDepartmentofAgricultureandRural Development(DARD)inthecityofNis,andeachIMCareapartnermunicipalityhasitsownlocal coordinator.Theprojectalsoapproveda$90,000granttotheLeskovacFTPtosupportthe establishmentoftheProductDevelopmentResearchPilotPlant,includingequipmentpurchaseand installation.Thenewfacilitywillsupportallstagesofproductdevelopment,fromideageneration throughconceptdevelopmenttotheproductionofsmalltrialsamples.Anaddedbenefitwillbein thedevelopmentofayouthworkforce,asstudentsandpostgraduatesfromtheFacultyofFood TechnologyinLeskovacwillusethepilotplantforinstructionalactivities.

DetailsonIMCsupportactivitiesandkeyresultsarepresentedinAnnexA,subsectionC.

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D.VranjeIMC:InvestonCorridor10

TheIMCareawasformedinJune2011.In2013,theIMCandtheprojectlaunchedtheeconomic program“InvestonCorridor10.” Thegoalofthisconceptwastoattractatlastfivenewinvestmentsingreenfieldorbrownfieldsites thatwould,inturn,createnewjobs.ThekeypartnersinthisendeavorweremunicipalLEDofficesof Vranje(astheIMCleader),Bujanovac,Presevo,VladicinHan,andConfindustria,anItalianͲSerbian businessassociation.Thiswasaninvestmentattractionprogram,andtheprojectsuppliedafull rangeofnecessarytechnicalassistance,includingconsultingoninvestmentpromotion,targeting investorsthatfittheIMC’sprofileofassets,traininglocalbusinessesandlocalgovernmentsto presentthebestsalespackagefortheIMCarea,andworkingtofillinvestorneeds,suchasfor adequatetrainedlaborandpreparedinvestmentsites.BermanGroupexpertsinitiatedanFDI coachingprogram,topresentthebestsalespackagefortheIMCarea.SLDPalsocooperatedwith ConfindustriaͲSerbiatodevelopatrainingneedsassessmentandstudyforthetrainingcenterin Vranjetofillinvestorneedgaps.VranjeIMCmunicipalitieswereactiveparticipantsintheProject’s FDIcoachingprogram.ThecityofVranjetookpartinaninvestmentroadshowinItaly,organizedin cooperationwithConfindustria.FDIcoachingactivitiesweresupportedwithdevelopmentof documentationforinvestmentlandinthePresevoindustrialzones.Theprojectalsofundeda demandstudyforestablishmentoftheworkforcedevelopmentcenterbasedontheneedsofthe existingbusinesssectorsandsupportedtheIMCinensuringavailabilityoflandforindustrialuseand thepresenceofqualifiedandavailablelaborthatmatchedinvestors’needs.

SLDPalsoassistedthefootwearandfurnituresectorsintheVranjeͲledIMCarea.AsintheNovi PazarͲledIMCarea,tohelpexpandthefootwearsector,theprojectcontinuedworkingwithan internationalfootwearsectorexpertwhoorganizedseveralvisitstoSerbianshoemanufacturersby internationalbuyers.Inpreparationfortheinwardbuyingmissionwhichbroughtforeignbuyersto Serbia,thefootwearsectorexpertvisitedSerbianshoemakerstopreparethemforthesevisits.The VranjeIMCalsobenefitedfromSLDP’stechnicalassistanceinthefurnituresector,includingto preparelocalproducersforinwardbuyervisits.

DetailsonIMCsupportactivitiesandkeyresultsarepresentedinAnnexA,subsectionD.

E.KraljevoIMC:CompetitivenessthroughInnovation

TheIMCareawasformedinDecember2011.In2013,theprojectlaunchedtheeconomicprogram “KraljevoIMCCompetitivenessthroughInnovation.”

Thisconceptfocusedonhelpinglocalinnovationcenterscreate50innovationsthatwouldleadto newSMEsalesinthemarketplace.TheKraljevoIMCarea'seconomicprofilerevealedagreatdealof manufacturingindiversesectors,mostlybySMEremnantsoflargestateͲownedenterprises,with pocketsofmoresophisticatedexportͲorientedcompanies.TospurinnovationandincreaseSME sales,theprojectworkedwiththeImPulsBusinessInnovationCenter,apartoftheFacultyof MechanicalEngineeringinKraljevo,toassistSMEsintheregioninapplyinginnovativesolutionsand becomingmorecompetitive.TheCenterprovided3Dscanningandprintingservicesusingadvanced designtechnologiesforawiderangeofmanufacturersofmetalandplasticproducts,fromfactories andindustrialdesignerstoscientificinstitutions.Withprojectassistance,theCentermorethan

SLDPFINALREPORT Page|12 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT doubledthenumberofcompetedorders.SLDPorganizedworkshopsthatbroughtscientific institutionsandbusinessestogether,whichledtheIMPulsCentertojointheVojdovinaMetal Cluster(VMC),expandingitsclientlistbytheVMC’smorethan100members.

DetailsonIMCsupportactivitiesandkeyresultsarepresentedinAnnexA,subsectionE.

F.ZrenjaninIMC:DiversificationofAgricultureͲNewJobsforRuralYouth

TheIMCareawasformedinDecember2011.In2013theProjectlaunchedtheeconomicprogram “DiversificationofAgriculture–NewJobsforRuralYouth.”

ThegoalofthisconceptwastoincreaseIMCproductionofvegetablesultimatelymarketedto processorsby20percent.KeypartnersinthisactivityincludelocalgovernmentsofZrenjanin, KikindaandNoviBecej,twoassociationsofagriculturalproducers(BanatskaLenijaandCarskaBasta) andtheextensionserviceoftheMinistryofAgriculture.Thisconceptdealtprimarilywiththe diversificationofagriculturalproductionthroughcropintensificationbyaddingnew,highͲvalue crops.Addingvegetablestoexistingcroppingsystems,forexample,improvedtheoverall productivityoffarmsandpromotedthecreationofnewfarms.Tocomplementthiseffort,the projectalsoassistedinthepromotionandstrengtheningofvegetableproductionandfood processinginruralareastoprovideemploymentopportunitiesforyouth.Tosynchronizeactivities, theprojectheldadditionalmeetingswiththeProvincialSecretariatforAgricultureandidentifiedthe potentialofexistingfoodprocessingcompaniesthroughademandanalysisandassessed opportunitiestointroducenewproducts.

In2014,SLDPenabledtheestablishmentofhorticultureincubatorsineachIMCmunicipalityby providingtechnicalassistancetolocalgovernmentsandunemployedruralyouthandpurchasing educationalgreenhousesforthebenefitoftenantsofincubators.Theactivitypromotedthe diversificationofagriculturalproductionandenhancedtheentrepreneurialandpracticalskillsof newyoungfarmersbyallowingthemtorunsmallfarmbusinessesandgrowvegetablesin greenhousesandopenfields,withreducedtimeandatalowercost.Thefarmincubatorprogram consistedoftwomainelements:aneducationalcomponentthatprovidedtrainingandmentorship infarmmanagementandvegetablecultivation,andaresourceͲbasedcomponentthatprovided land,infrastructure,equipment,andgreenhousesforqualifiedyoungpeoplewantingtostart farmingbusinesses.TheMinistryofYouthandSportsparticipatedinincubatorprogrambyproviding trainersinfarmmanagement.

DetailsonIMCsupportactivitiesandkeyresultsarepresentedinAnnexA,subsectionF.

G.SuboticaIMC:SuboticaIMCAgribusinessExpansion

TheIMCareawasformedinNovember2011.In2013,theIMCandtheprojectlaunchedthe economicprogram“SuboticaIMCAgribusinessExpansion.”

Thegoalofthisconceptwastoincreasedomesticandexportsalesofagriculturalproductsby10 percent.ThisconceptengagedtheLEDofficesofthreeIMClocalgovernmentsonthreespecific projects:(1)alaboratoryforagricultureproductsinSubotica;(2)alogistics/distributioncenterfor agriculturalgoodsinKanjiza;and(3)anagriculturaltrainingcenterinSombor.WithSLDP’s

SLDPFINALREPORT Page|13 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT assistance,theSuboticaIMCidentifiedtheneedtoincreaseagribusinessoperationstocreatejobs. TheprojectprovidednewequipmenttoexpandthelaboratoryinSubotica,togivetheregionthe capacitytotestformorevarietiesofpesticidespresentinfoodandcertifythatlocalagricultural productsmeetstrictexportmarketrequirements.Inaddition,theSuboticaPublicHealthInstitute laboratorynowhastheequipmentandcapacitiestotestforthepresenceofpesticidesand pollutantsinlinewithEUandothermarketregulations.Theprojectalsoequippedanagricultural trainingcenterinSombor,implementinganannualcurriculumaimedatenhancingtheknowledge andskillsoffarmersandagribusinessestoincreaseproductionefficiencyandproductquality, introducenewcropvarieties,andapplyinnovativecultivationtechnologies.

InApril2015,theSerbianunitofItalianconfectionerymakerFerreroGroup,Agriser,acquiredthe agriculturalassetsofSomborͲbasedfarmingcompany“AleksaSantic.”Theassetsinclude700 hectaresofagriculturallandwithfacilities.Ferreroinvestedinhazelnutproductionbysettingupa productioncenter,whileestablishingcooperationwithlocalproducers.DuringU.S.Ambassador MichaelD.Kirby’s2014visittoSombor,localofficialsemphasizedthatFerrero’sinteresttoinvestin theareawasboostedbytheexistenceoftheprojectestablishedAgricultureEducationCenter. BecausehazelnutcultivationisnotcommoninSerbia,Ferrero’sinvestmentwillrequiresignificant educationalsupporttolocalfarmersonnewtechnologiesandmethodsofgrowinghazelnut varieties.

DetailsonIMCsupportactivitiesandkeyresultsarepresentedinAnnexA,subsectionG.

H.NoviSadIMC:MetroNoviSad:FirstPlaceforBusiness

TheIMCareawasformedinJuly2011.In2013,theIMCandtheprojectlaunchedtheeconomic program“MetroNoviSad:FirstPlaceforBusiness.” ThegoalofthisIMCconceptwastoadd1,500newjobstotheIMCareaincollaborationwithkey partners,includingtheICTCluster,MetalCluster,LEDOfficeBeocin,andLEDofficesinNoviSad, TemerinandSremskiKarlovci.TheNoviSadIMCterritoryiseconomicallyvibrantwithgood infrastructure,aqualityuniversity,ahighͲtechculture,strongbusinesses,andphysicalbeauty.The projectcooperatedwiththeVojvodinaMetalCluster(VMC),agroupofmorethan116smalland mediumͲsizedmetalproducerswithaccesstoforeignandlocalmarkets.Theprojecthelpedthe Clusterprocurecustomerrelationshipmanagement(CRM)softwarethatallowedVMCmembersto connectwithpotentialforeignbuyersandtoinnovateanddiscovermorehighͲvalueproductsto offerthemarket.Asaresult,VMCmemberscouldconnectwithpotentialclientsmoreefficiently, cuttingthecurrentaverageof100daysresponsetimeforcustomerinquiriestonomorethan10 days.Inaddition,SLDPawardedagrantofapproximately$70,000totheVMCtoincreasethe competitivenessofitsmembersbyinvolvingthemintheproductionofaninnovative,clusterͲwide producttoincreasetheirsalesandexportsandtocreatenewjobs.Theresultingdeviceprovided computerͲcontrolledguidanceforplasmaweldingandcuttingmetalintocomplex,nonͲlinear shapes,enablingrepeated,exact,cutsatamuchfasterratethanhumanͲcontrolleddevices.The VMCestimatedthatwiththenewhardware,thenumberofcompaniesusingClusterserviceswould triple,whileproductioncostswoulddrop,makingVMCservicescheaperandmorecompetitive.

TofurthersupporttheexpansionofVMCmembersinfindingnewmarkets,theprojectcooperated withtheSwissexportpromotionagency,SIPPO,toassistinimplementingalargebusinessͲtoͲ

SLDPFINALREPORT Page|14 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT businessprogram.(SIPPOassistsSwissSMEsintheirinternationalbusinessventures.)Withthehelp ofSLDPshortͲtermtechnicalassistance,theprojectencouragedVMCmemberstoengagein collectiveprocurementtoachievemorefavorabletermsformembersthanwouldbepossiblefora singlecompany,developcollectiveoffers(thuscurbingcosts),andcreateinnovativeproductsthus increasingtheVMC’scompetitivenessonthemarket.

DetailsonIMCsupportactivitiesandkeyresultsarepresentedinAnnexA,subsectionH.

3.2SECTORSUPPORTFORSMALLANDMEDIUMͲSIZEDENTERPRISE DEVELOPMENT(ProjectComponent1)

3.2.1Textile–DenimProduction (NoviPazarͲledIMC)

FollowingananalysisofsectorsacrossprojectͲsupportedInterͲMunicipalCooperation(IMC)areas, SLDPfoundthatthetextile(denim)sector,whichconsistedofentrepreneurialsmallandmediumͲ sizedfirms,wasoneofthemostactivesectors.Theassessment,conductedoverathreeͲweek, multiͲvisitinternationalSTTAassignment,foundthatsupporttobusinessesandclustersinthis sectorcouldleadtoanincreaseinemployment,export,andrevenue.Themostcompetitivefirmsin thesesectors,withthemostpotentialforexpansionandsuccessonforeignmarkets,werefoundin theNoviPazarͲledIMCarea,consistingofthecityofNoviPazarandTutinandSjenicamunicipalities.

Aftertheinitialassessment,theprojectsupportedalaborgapanalysis,whichalsofoundthatnew skilledworkerswereneededinthedenimsector.Asaresult,SLDPactivitiesfocusednotonlyon expandingtherevenueof,andinvestments,inthesebusinessesbutalsoonbuildingtheskillsof futureworkerstoenablenewemployment.Inaddition,fromworkdoneinpreviousUSAIDprojects, SLDPnotedthatthedenimsectorinNoviPazarfacedseriousenvironmentalchallengesassociated withemittingunsafewaterintotheNoviPazarRiverasabyͲproductofwashingandfinishingits denimjeans.Finally,theNoviPazarjeanmanufacturers,owingtotheirlimitedsize,wereunableto competeinternationallywithinternationaljeansmanufacturersandneededtofindamarketniche forincreasedexportsbasedoncompetitiveadvantagesthathadtobediagnosedanddeveloped.

TheNPCadoptedforNoviPazarcalledforexpansionofexportstoWesternEuropeanmarkets. ProjectspecialistsdevelopedamarketͲdrivenplanthatinvolvedalterationstofirms’theproduction proceduresandaddressedtheenvironmentalchallengeofeliminatingharmfuleffluentsduringthe jeansfinishingprocess.TheexpertsguidedkeymanufacturerstouseanewozoneͲfinishing technology,whichwouldallowthemtotargetanecologicallyconsciousmarketnichethatismore forgivingonpriceandwillingtobuyinmorelimited,boutiquequantities.Theentireprocessof consultingandassistancecanbesummarizedasfollows:

TECHNICALASSISTANCE:

x Assessmentoftargetedinternationalmarketsanddemandanalysis x Recommendationsonhowtodrawattentionandmeetthedemandofinternationalbuyers x OneͲonͲoneconsultingonhowtoimprovekeyproductionandmarketingaspects

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x Preparationofindividualmarketingplans,includingsocialmediapromotion x Thewebsitewww.fashionserbia.com,whichpresentssixlocaldenimmanufacturerstothe RussianͲlanguagemarket. x Trainingsonbusinesscommunicationandnegotiationsatinternationaltradefairs x QualityͲcontroltraining(enablingtheintroductionofuniformqualityproceduresand standardizedproducts) x Linkingjeansproducerswithprospectiveinternationalbuyers

ASSISTANCEFORPARTICIPATIONATTRADEFAIRS:

x “BreadandButter”TradeFairinBerlin,Germany

Participatingcompanies:Maxers,Mikan,Denis,Exelit,SKKRHisExactJeans,Join,BigBoys,Classic Jeans,Zemax–allfromtheNoviPazarͲledIMC

ACCOMPLISHMENTS:

x SLDPsupportedtheeffortsofsixNoviPazardenimproducers,whichemploymorethan400 workersandexporttointernationalmarkets,toestablishanassociationcalledPROͲDENIM, andjointlyusetheozoneͲbasedtechnologyforjeansfinishing.Theprojectprocuredozone equipmentworth$280,650togiveNoviPazardenimmanufacturersacompetitive advantageandenablethemtoattracttheattentionofecologicallyconsciousbuyerswilling topaymoreforanecoͲfriendlyproduct.Thismodernequipmentbenefitstheenvironment, asitsignificantlyreducestheuseofwaterandenergy,andeliminatesharmfulbleaching agentsinthefinalstagesoftheprocessofjeansmanufacturing. x TheprojectalsosupportedthreeNoviPazar–ledIMCAreadenimcompanies,Brug,Classix, andExactJeans,toopenajointretailstore,“JeansFactory,”inBelgrade’s“Stadion” ShoppingMall,andcontributedtotheselectionofasuitablevenue,helpedestablishthe jointbrandcalledJeansFactory,andhelpedfurnishthestore,whichreflectsthenewbrand. In2015,JeansFactoryreportedatotalsalesof$155,000,whileinthefirstthreemonthsof 2016,thestoremademonthlysalesof$41,000onaverage,a25percentincreasecompared withthesamequarterin2015.Duringthelastthreemonths,thestoreserved1,340 customerseverymonth,eachspendingapproximately$30. x SLDPalsoworkedwiththeNoviPazarLeatherandTextileVocationalSchooltosharenew designandproductionconceptswithstudentswhowouldlaterjointhelocaljeanssector. Themanufacturerssupporteddevelopmentofnewcurriculumandinternshipprogramsto elevatethereadinessofstudentstocontributeeffectivelytotheindustryafterͲgraduation.

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NoviPazarDesignandTextileVocationalSchool studentstakepartinajeanfinishingtechniques TheozoneͲfinishingfacilityatProDenim trainingorganizedbytheProject’sexpert AssociationinNoviPazar

3.2.2FootwearSector (VranjeandNoviPazarͲledIMCs)

Followingabroadassessmentofthefootwearsectorliketheoneperformedforthejeansindustry, ourinternationalfootwearconsultantusedhisknowledgeoftheglobalmarkettoassisteighthighͲ qualitySerbianshoemakersinapproachinginternationalbuyers.WorkingwithSLDPfieldstaffin VranjeandNoviPazarIMCareas,theteamsetaboutimplementingacocktailofdeeperfirm capacityassessmentandanalysisleadingtoadviceaimedatparticipatingintargetedtradefairs,and B2Bcontactsandnegotiations,supportedbymanagerialassistanceonsampling,orderscheduling anddelivery.Inadditiontofirmsthatourteamdiscovered,thefirmswithwhichweworkedwere partsofaclusterorwerefirmsthatformerUSAIDprojectsassisted;theoneimportantcriterionwas thateachofthefirmsmetstandardsthat,toourexpert,suggestedthattheyhadpotentialfor growthandpenetrationintoEuropeanmarkets.

TheparticipatingcompaniesfromVranjewereStefiͲKomercandMinex;thecompaniesfromNovi Pazarwere4BrTref,Florida1994,Boša,Antilop,EuroScarpa,CecoLine

Becausetheneedsandcapacitiesoffirmsandbuyersdiffered,wehavechosentoprovidethis generalmenuofservicesprovidedratherthanspecificdescriptionsinthisfinalreport.Thefollowing isalistofactivitiesimplementedoverthecourseofSLDP’sassistancetothefootwearsector.

TECHNICALASSISTANCE:

x AnalysisoftheshoesectorintheVranjeandNoviPazarIMCareas x Assessmentoflocalproducers’productioncapacities,productquality,andexportpotential x OneͲonͲoneconsultingandrecommendationsonhowtoimproveproduction,selectproduct assortment,andmeetthedemandofinternationalbuyers x Selectionofproductportfolioandpreparationofcompaniesforinternationaltradefairs x Linkingshoeproducerswithprospectiveinternationalbuyers x Facilitatingmeetingswithbuyersabroad,organizingpresentationofsamplesandinitiating negotiations

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ASSISTANCEFORPARTICIPATIONATTRADEFAIRS:

x “GDS”InternationalTradeFairinDusseldorf,Germany x “Tagit”byGDSTradeFairinDusseldorf,Germany

ASSISTANCEINMARKETINGANDPROMOTION:

x CreationofSerbianShoesumbrellabrand,websitewww.serbian.shoes.comandmarketing materials

ACCOMPLISHMENTS:

x Conductedademandassessmentandidentifiedpossibleworkforcetrainingcentermodels bestsuitedtothelabormarketneedsofpresentandpotentialinvestorsintheVranjeregion throughagranttotheNGOConfIndustria,anItalianͲSerbiantradeintermediarywhoseclient was GEOX and other Italian investors interested in developing workforce potential in and aroundVranje. x EnabledanagreementbetweentheinternationalshoemakerGeox,whichopenedafootwear factoryinVranjeatanindustrialparkdevelopmenttothedevelopmentofwhichtheProject alsocontributed,andthelocalVocationalEducationandTrainingSchoolofChemistryand Technology(SCT)tojointlydefinecurriculathatwouldleadtomoreskilledandlabormarketͲ readystudents x Facilitated an agreement between Geox and the SCT to organize onͲtheͲjob trainings for studentsoftheschool,andteachthemhowtoworkwithleather x TheprojecthashelpedaVranjeͲbasedfootwearmanufacturerStefiKomerctopresentsample productstotheFrenchSoleCompany,alarge,UKͲbased,producerofballerinaͲflatshoesfor women, and to discuss the sale of several models. Representatives of the Vranje shoe producermetwiththeBritishcompany’sexecutivesattheirpremisesinBerkshire,London, presentedthemwithsamplesandagreedtoadvancenegotiations.

SLDPassistedcompanieswhichattended DuringSeptember2015,theprojectassistedtheSerbian theGDSTradeFairincreatingaShoes footwearproducerStefiKomerctopresentsampleproductsto fromSerbiabrandandacatalogueof representativesoftheFrenchSoleshoecompanyinLondonand theirfootwearproducts discussthesaleofseveralmodels

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3.2.3Wood/FurnitureSector (Uzice,Nis,Kraljevo,andNoviPazarͲledIMCs;countryͲwide)

FollowinganassessmentandanalysisofsectorsacrossSLDPͲsupportedIMCAreas,SLDP's internationalexpertandlocalteamfoundthatoneofthemostactivesectorsthatconsistedof entrepreneurialsmallandmediumͲsizedfirmswasthefurnituresector.Theassessmentconcluded thatowingtoChina’swithdrawalfromtheinternationalfurnitureexportsector,therewasa promisingopportunitytoexportSerbianͲsourcedfurnituretoEurope.Therealquestioniswhether furnitureproducedinSerbiaisofthequalitythatglobalbuyersdemand,andbecauseSLDPwasa regionalproject,thisquestionwasnecessarilyoneformanufacturersinourIMCareas.Ourinitial assessmentconcludedthatformanyreasons,itwillbehardforSerbianfurnituremanufacturersto achieveexportquality.Thisassessmentledtheprojecttoconcludethatitwouldbeharderto increaseexportsinthefurnituresectorthanineitherthejeansorfootwearsectors;however,two factorsjustifiedcontinuedeffort.First,IKEAwasbringingitsretailbusinesstoSerbia,andour expert'sconnectionswithIKEAledustobelievethatIKEAwashungrytosourcefromSerbian producers.Second,Serbiahasuntappedforestresourcesandtheglobalmarkethasanunlimited appetiteforwoodenfurnitureproducedinEurope.Theprojectdecidedtogoaheadandconcentrate onbothofthesefactors,owingtotheemploymentintensityandbenefitstopoorerregionsoffered byincreasedfurnituremanufacturing.

WithrespecttosupplyingIKEAandlikeͲmindedEuropeanbuyerseagertosourceinEuropeand Serbia,ourconsultantandourlocalregionalteamtraveledfarandwidetofindqualityproducers interestedinmeetingIKEA'shighstandardsandtransactingbusinesswithEuropeanbuyers.Starting inNoviPazarandVranje,theteamexpandedtosearchforsuppliersinNis,partsofVojvoidinawhere theprojectworked,andUziceandKrajlevo.Arosterofmanagerial,operational,andmarketing advicewasofferedincollectivetrainingandsingleͲfirmmeetings,andourexpertconsistentlysought tofindwilling,hardͲworking,andcapablefirms.Amongthefirmswithwhichourexpertworked continuouslywereAtlas,TamiͲTrade,GIR,Dallas,DasaNameštaj,Hersa,AvisExportͲImport,andStilͲ Jasen.Thegoalwastoconnectthesefirmswithrealbuyersandtoguidetheminnegotiations; despitesomewarmconnectionsandspecificationsampling,however,thesemanufacturerswere abletoclosenoharddealswithEuropeanbuyers.

AsasupplementtofirmͲlevelassistance,SLDPalsoworkedtomakeSerbiaasourceofEuropeanͲ sourcedgeneralfurniture.OurexpertledSerbianmanufacturerstointernationaltoursandfairs,for whichotherspaid,sothattheycoulddiscoverwhattheysimplydidnotyetknowaboutinternational standardsanddesign.Perhapsofgreatestlastingvaluewasproject'scontributiontotheBelgrade FurnitureFair,wherefortwoyears,ourconsultantworkedwiththefair'sleadershiptomakethefair moreofabuyerͲtoͲbuyerfair,whereattendancebyEuropeanbuyers,treatedcorrectly,waspivotal toenhancingtheinternationalreputationofSerbianofferings.

InthefinalyearͲandͲaͲhalfoftheproject,ourteamaddressedtheissueofSerbia’sopportunityto becomeasourceofwoodfurniturewithrenewedforce.Thisisacomplexidearequiringintense workatalllevels,butitisjustified,becausethedemandofglobalfurniturebuyersforwooden furnituremanufacturedinEuropeisdeepandexpanding,Serbia’sforestresourcesprovidea competitivecostadvantageunavailableinmostothernationsofEurope,andtheforestsare underutilizedfortheproductionofthetypeofhighͲvalue,exportablewoodproductsdemandedby

SLDPFINALREPORT Page|19 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT globalbuyers.Over10months,aftertestingtheideainseveralmeetingswithindustryandlocaland nationalgovernment,SLDPinitiatedseveralnationwideinitiativesforpositioningSerbiaasawood furnituresourcingcountry.Althoughthecoreofinterestintheseinitiativesisinterritoriesofour IMCactivities,forthisinitiative,wealsoincludedforestedcommunitiesoutsideourassigned geographicalreach.Thisisbecausetheopportunityisripewherevertherearehardwoodforestsin Serbia.

Below,wesummarizeourvariedactivitiesdesignedtoexpandtheexportsofthefurnituresectorin ourregionsandinSerbia.

TECHNICALASSISTANCE:

x AnalysisofthefurnitureindustryintheVranjeandNoviPazarIMCareas x Assessmentoflocalproducers’productioncapacities,productquality,andexportpotential x OneͲonͲoneconsultingandrecommendationsonhowtoimproveproduction,selectproduct assortment,andmeetthedemandofinternationalbuyers x Selectionofproductportfolioandpreparationofcompaniesforinternationaltradefairs x TrainingsandorganizationofbusinessͲtoͲbusiness(B2B)meetingswithpotentialbuyersat theBelgradeFurnitureFair x Linkingfurnitureproducerswithprospectiveinternationalbuyersandchains,includingIKEA x RecommendationsonproductͲandbusinessprocessimprovementsneededforacompany tofulfillthequalitystandardsandbecomeanIKEAsupplier x OrganizingbestͲpracticestudytoBosniancompanyNovaDIPO,alargemanufacturerofsolid woodchairsexclusivelyforIKEA

ASSISTANCEFORPARTICIPATIONATTRADEFAIRS:

x “InternationaleMöbelMesse”TradeFairinCologne,Germany x AssistingtheBelgradeFurnitureFairtoattractforeignbuyersandincludeaB2Bsegmentas partoftheFair

ACCOMPLISHMENTS:

WoodFurnitureInitiative:WiththesupportofUSAIDSustainableLocalDevelopmentProjectand EuropeanPROGRESProgram,representativesof46localgovernments*fromsoutheastand southwestSerbiaparticipatedintheactivitiesaimedtorevivetheproductionofsolidwood furniture.TheSerbianChamberofCommerce(PKS)andtheDevelopmentAgencyofSerbia(RAS) werepartnersineffortstorestartthewoodprocessingindustry.

Bytheproject'send,SLDPandtheEuropeanPROGRESprojecthadhelpedlocalauthoritiesand furnituresectorbusinessestodevelopanationalActionPlantoencompassshortͲtermandlongͲ termmeasuresneededtobuildawoodfurnitureproductionpowerhouseinSerbiabyimproving woodͲprocessingutilizationandproduction,increasingexportsofwoodfurniture,andcreatinga workforcetopopulatethenewjobsprofilesthatwillemerge.ActionPlanmeasuresinclude:

x allocatingforestresourcestosupporttheirhighestvalueͲaddedutilizationbywoodfurniture manufacturersthatexport x stimulatinginvestmentintowoodfurnituremanufacturingcapacity

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x improvingvocationaltrainingtobringadditionalskilledworkersintotheexpandingindustry x improvingthecompetitivenessandefficiencyofwoodfurnitureproductiontoworld standards x upgradingthedesigncapabilitiesofwoodfurnitureproducers x strengtheningcooperationamongpublicauthorities,forestmanagers,furnitureproducers, andothervalueͲchainactorsthroughappropriateforestindustrypolicyandregulatory reform.

ThisActionPlanwaspresentedbylocalgovernments*tothedirectoroftheSerbianDevelopment Agency(RAS),whocommittedtheGOStogoforwardandseetoitsimplementationwiththe assistanceofdonorsandallrelevantagencies.RepresentativesfromtheMinistryofEconomyand SrbijaSuma,thestewardagencyfornationalforestresources,alsomadeapubliccommitmentto pursuingimplementationoftheActionPlan.Regrettably,SLDPterminatedshortlyaftertheAction Planwaspresented,buttheprojecthashopethatallstakeholderswillmoveforwardwith implementationinadetermined,efficientway.

*LocalselfͲgovernmentsignatoriesoftheLetterofIntentcommissioningtheActionPlanand committingresourcestoitscreationandonwhosebehalfthePlanwaspresentedformallytothe GOSwere:Arilje,BajinaBašta,BelaPalanka,Boljevac,Bor,Brus,aēak,ajetina,iđevac,CrnaTrava, Despotovac,Dimitrovgrad,GadžinHan,Ivanjica,Knjaževac,Kosjeriđ,Kraljevo,Krupanj,Kruševac, Kuēevo,Kuršumlija,Leskovac,Ljubovija,Loznica,Majdanpek,MaliZvornik,Niš,NovaVaroš,Novi Pazar,Pirot,Priboj,Prijepolje,Raška,Ražanj,Sjenica,Surdulica,Svrljig,Trgovište,Trstenik,Tutin, Užice,VladiēinHan,Vranje,VrnjaēkaBanja,Žagubica,Zajeēar.

StudyvisittotheNovaDipoCompanyinBosniaandHerzegovinaͲ alargemanufacturerofsolidwoodchairsexclusively forIKEA

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LetterofIntent,supportedby46localgovernments,SDA(RAS),ChamberofCommerce,USAID/SLDP,EUPROGRES presentedattheForum:“PositioningSerbiaasawoodfurnituresourcingcountry”,March2016.Thisledtothecreation andformalpresentationofanationalActionPlantomakeSerbiaaEuropeanmanufacuturingsourceofwoodfurniture.

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3.2.4MetalProcessingSector (NoviSadͲledIMCandProvinceofVojvodina)

Theactivity’sobjectivewastoincreasecompetitivenessoftheVojvodinaMetalCluster(VMC) membersbyinvolvingthemintheproductionofthefirstinnovative,clusterͲwideproductto increasetheirsales,exports,preservetheexistingandcreatenewjobs.Theactivityalsocontributed toincreasedcapacityofVMCtoprovidetrainingandservicestoitsmembersandincreasing internationalvisibilityoftheclusterandenablebetterpositioningontheglobalmarket.

Inthisactivity,theprojectusedaninternationalmetalconsultantandaninternationalbusiness consultant.Thebusinessconsultantwasbyfarthemoreproductiveandimaginativewithregardto whatneededtobedonewithintheprescribedworkparameters.Becausetheprojectstartedwith theIMC,anentitywhosestartͲupwasfundedbyagenerousEUgrant,andbecausewepartnered withaSwissprojectthatwasobligatedtoworkwithclustersandorganizationalstrengthening,SLDP spentmostofitsallottedefforttryingtomaketheVMCanentitythatofferedrealservicestoits members.Thiswasanalternativeapproachtoothersectorworkontheproject,wherewewere focusedonthepenetrationbymultiplefirmsintonewmarkets.OurworkwithVMCrequiredour businessconsultant’sskillsinorganizationalchangemanagementandhelpingtoredirectVMC's missioninawaythatwouldincreaseefficiencyandrelevancy.

Inthisregard,theprojecthelpedtheClusterprocureCustomerRelationshipManagement(CRM) softwarethatallowsVMCmemberstoconnectwithpotentialforeignbuyersandtoinnovateand discovermorehighͲvalueproductstoofferthemarket.CRMelectronicallyfacilitateslinkages betweenprospectiveinternationalbuyersandtheVMCbyannouncingprocurementopportunities toClustermembersandfollowingupwithmemberswhoneedmoredetails.Theprojectalsofunded developmentofaninteractivemapofVMCmembers,procurementofaComputerNumerical Control(CNC)cuttingtable,anddevelopmentofanewClusterͲwideproduct.

Beyondthesespecificinterventions,theProjectalsoconvincedVMCtobeginformingadomestic supplychainnetworkthatwouldlinkdomesticanchorfirmsthatalreadyexportsophisticated productswithsmallerSerbianmetalfirmscapableoffabricatingcomponentsfortheexportchain. TheprojectcoachedVMCtoexpanditsmembershipbyaddinglargeproducersfromCacakandto initiateseveralactivitiesconcentratedonsupplychaindevelopment.Inallcandor,moremonitoring oftheseactivitiesandmoreassistancemaybenecessarytoensureprogress,andourmetal consultant,wholivesinSerbia,isactivelylookingforwaystosupportsuchadditionalconsulting.

Aspartofaprojectgrant,theVMCbegantesting InApril2015,theprojectdeliveredaCNCcutting prototypeundergroundwastecontainers.Once tabletotheVojvodinaMetalCluster,enabling installedthecontainerscanbeusedhandsͲfreeand clustermemberstobecomemorecompetitive servicedbyexistinggarbagetrucks

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3.3AGRIBUSINESSENHANCEMENT(ProjectComponent1)

3.3.1HorticultureIncubatorProgram (ZrenjaninͲledIMC)

TheprojectassistedtheZrenjaninͲledIMCAreatodevelopandimplementahorticultureincubator programtoexpandtheproductionofhighlyprofitablevegetablesintheregionandtoreducethe timeandcostofestablishingfarmstartͲuphorticulturalbusinesses.ThoughVojvodinahasgood potentialforsupplyinglargermarketsinEuropewithvegetables,itsagronomycentersonwheatand grains,andoneofthegoalsoftheregionalgovernmentistoencouragethediversificationof regionalproduce.Withprojectsupportandthestrongadvocacyoflocaladministrations, greenhouseswereinstalledatthreeIMClocations—Kikinda(12greenhouses),NoviBecej(4 greenhouses)andZrenjanin(15greenhouses)forusebyacompetitivelyselectedgroupofyoung farmers,whoattendedtrainingandperformancecoursesinadvanceoftheirselection.The municipalities,acknowledgingtheneedtotrainyoungfarmersinallͲseasonhorticulture,provided thelandplotsandassumedresponsibilityformaintainingthestructures.Fromtheverybeginning, ourlocalconsultantsconductedperiodicfieldvisitstoZrenjanin,NoviBecej,andKikindatoinspect theincubators,monitortheworkoftheincubatortenants,andadvisemunicipalofficialsand tenantsonhowtokeepincubatoroperationsrunningsmoothly.Theconsultantsalsoprovided recommendationsonthepotentialmarketsandsalesoffreshvegetableproducts.

Theinitiativecanbesummarizedasfollows.

TECHNICALASSISTANCE

x Aninternationalconsultantpreparedademandanalysiswithrecommendationsonhowto developpotentialbuyersandbuyernetworksforhorticulturalproductsgrowninVojvodina, andontheproductandserviceimprovementsnecessarytomeetthatdemand,including trainingfornewfarmersinnewtechniques. x Alocallyhiredconsultantguidedtheestablishmentoftheincubators,oncetheIMC's municipalleadershipagreedonthedesirabilityofdoingso.

MATERIALASSISTANCE

x TheProjectprocuredandinstalledtheequipmentfortheHorticultureIncubatorProgram, whilethemunicipalitiesprovidedtheground,utilityinstallations,andmaintenanceservices forthegreenhouses.

ACCOMPLISHMENTS:

x Morethan60unemployedyouthweretrainedinfarmmanagement,and31ofthese trainees,whodidthebestinthetraining,beganvegetableproductioningreenhouses themselves. x Thefirstseasoninthegreenhousesresultedin45tonsofproducesoldonthelocalmarket orexported,generating$40,000inincomeforyoungfarmers.LongͲtermrelationshipswere

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formedwithanumberoflocalprocessors,ensuringthecontinuedsuccessfulutilizationof thegreenhouses.

InNoviBecej,oneoftheHorticultureIncubatorProgram participantscheckshiscrops

TheProject’sHorticultureIncubatorProgramreceived positivemediaattentionandwashighlightedasabestͲ practiceexampleforemployingruralyouth

3.3.2ProducttestinglaboratoryservicesintheRegionalCenterforAgricultural Development(RCAD)inSjenica (NoviPazarͲledIMC)

TheRegionalCenterforAgriculturalDevelopment(RCAD)inSjenicawasestablishedin2011to provideconsultingservicestofarmersfromtheNoviPazarͲledIMCarea.Thecenterwasexpanded whenalaboratoryfortestinglocalfoodproductswasbuiltandequippedin2013and2014,with contributionsfromtheEUPROGRESProgramandtheCzechDevelopmentAgency.SLDPprovided technicalconsultingtothelaboratorystaffasitrampedupforcertificationandforprovisionof servicestolocalgrowers.

TECHNICALASSISTANCE

x WithUSAIDsupportandincooperationwithalocalpartnerTaurusAgroConsulting,the RCAD’sstaffwastrainedtointroduceandimplementISOstandards,toproperlysamplemilk andmeatproductsatlocalfarms,tocalibratelaboratoryequipment,andtoadvisefarmers onimprovingthesafetyandqualityoftheirproducts. x Theprojectalsotrained30dairyandlivestockfarmersandprocessorsonhowtoimprove productionpracticesandmeetlaboratorystandards. x Theprojectengagedalocalbackstoppingexperttoassistthelaboratorystaffduringcritical phasesoftheaccreditationprocess,includinginadjustingtestingproceduresinaccordance toISOstandards,basedonrecommendationsfromtheAccreditationBodyofSerbia(ATS).

ACCOMPLISHMENTS:

TheaccreditationprocessisitsfinalstageandisexpectedtobecompletedinAugust2016,when testingservicesforfarmersandprocessorswillalsobegin.Morethan10,000agriculturalhouseholds

SLDPFINALREPORT Page|25 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT anddozensoffoodprocessorsfromSjenica,Tutin,andNoviPazar,aswellasneighboring municipalities,willbenefitfromthelaboratoryservices.

3.3.3CenterforCollectionandProcessingofNonͲTimberForestProducts(NTFP)inTutin (NoviPazarͲledIMC)

Withprojectsupport,themunicipalityofTutin,amemberoftheNoviPazarIMC,developedaPPP conceptforpotentialinvestorstoestablishacenterforcollectionandprocessingofnonͲtimber forestproducts(NTFP),suchasforestfruits,mushrooms,andmedicinalandaromaticplants.The conceptambitiouslyenvisagedproductionofafinishedspecialtyfoodproduct–retailpackaged teabags.Themunicipalityplannedtoofferapotentialforeigninvestorlandandalocationpermitfor aprocessingfacility,thefirstofitskindintheregion.ThisPPPwasconceivedandpresentedunder theauspicesofagrantgiventoNALED,aUSAIDlegacyNGOlocatedinBelgrade,andwasoneofa numberofPPPconceptsthroughoutSLDP'spartnerterritoriesthatNALEDfacilitatedintofixed proposals.

TECHNICALASSISTANCE:

x ToassistTutinindefiningaproposedPPPconceptinregardtoitsrawmaterialsupply capacitiesandmarketdemandforNTFPproducts,theprojectbroughtinaninternational expertwithmorethan35yearsofexperienceinthisfield.Severalproductsshowedgreat potentialforcollectionandprocessingbothfromthesupplysideandmarketdemandside. TheprojectprovidedadditionalguidanceintheprocessofestablishingthePPP,suchas preparingthedryingfacilityandassistingpartnersinaccessingadditionalfundsfromtheEU PROGRESprogram’sgrantscheme. x Tocreateconditionsforinvestmentattraction,abusinessdevelopmentplanwasmade,with recommendationsforTutintoestablishadryingprocessingfacilitywithinthemunicipally ownedAgroͲTutinenterprise.

ASSISTANCEFORPARTICIPATIONATTRADEFAIRS:

x TheprojectintroducedTutinofficialsandotherstotheBiofachOrganicFoodFairin Nuremberg,Germany,heldinFebruary2015.

ACCOMPLISHMENTS:

x Tutinidentifiedavailablelandandallocated$62,000initsmunicipalbudgetforthe installationofafacilitythatwillaccommodatetheplannedprocessinganddrying operations.Themunicipalityissuedacompetitivetenderandselectedafirmtoclearand preparethesiteforthecenter’sbuilding.Italsoauthorizedandexecutedanaccelerated processtoissuethenecessarypermitsforthedryingfacility. x Oncethedryingcenterisupandrunning,threelocalentrepreneurswillstarttheirown processingbusinessandaddvaluetocollectedwildNTFPsbydrying,cleaning,andbundling. ThepickingseasonstartsinAugust,andsome100pickersfromtheregionalruralareaswill benefitfromthecenter,astheywillbeorganizedandcontractedfortheirservicesat definedamountsofcollectedmaterialsandmoreprofitableprices.Inthelongterm,the centerwillserveasadrivingforceforthedevelopmentofanentiresupplychainofskilled

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collectorsandincreasedcollection,processing,andsalesofNTFPsfromtheIMCArea. Consequently,dozensofsmallfamilybusinessesareexpectedtoinvestinprimary processing.

3.3.4FoodͲtestingequipmentforSuboticaLaboratorytoenableincreasedexport (SuboticaͲledIMC)

InMay2014,theprojectdeliveredequipmenttotheSuboticaPublicHealthInstitutelaboratory, upgradingtheInstitute’scapacityandmakingitpossibleforthelaboratorytoanalyzeregionalfood products.Thelaboratorynowhastheequipmentandcapacitiestotestforpesticidesandpollutants, inamannercompliantwithEUandothermarketregulations.Localfarmersandfoodprocessors throughouttheIMCareanolongerhavetotraveltootherregionsforpropertestingoftheircrops, whichsignificantlyreducesthecostofanalyzingandcertifyingtheirfoodforexport.InJune2015, thelaboratoryreceivedfullaccreditationfollowingarigorousevaluationprocessandseveralcontrol auditsconductedbytheAccreditationBodyofSerbia.

ASSISTANCE:

TheprojectprovidedthelaboratoryequipmentandhelpedtraintheInstitute’sstaffinhowtouseit effectively.

ACCOMPLISHMENTS:

FromOctober2015toMarch2016,theLaboratoryconducted82pesticideresidueanalyses.The Institutetestedproductsof18exportͲorientedagribusinessandfoodͲprocessingfirmsfromthe Suboticaregionandnearbydistricts.Theproductstestedwereprimarilyfromproducersoffrozen, dried,andcannedfruitandvegetables.TheInstitutehasalsobeenprovidingtestingservicesto importersofrawmaterialsandingredientsforfurtherprocessingintheIMCArea,suchasvarious cerealmashesmadeofrice,oats,corn,wheat,andbarley.Inaddition,thecertificationbodyfor organicproductionfromSubotica,"OrganicControlSystem,”usedtheInstitute’slaboratoryservices totestitsclients’productsandenablethesalesandexportoforganiccrops.

3.3.5SomborAgricultureEducationCenter (SuboticaͲledIMC)

TheProjectworkedwithSomborandneighboringSuboticaandKanjizamunicipalitiestoincreasethe region'scapacitytoassistitsfarmersonmattersofcommercialagriculture.InAugust2014,theCity ofSombor,theregionalAgricultureExtensionServiceandtheprojectjointlyestablishedan AgricultureEducationCentertohelpfarmersacquirenewskillsandknowledgenecessarytoincrease productivityandproductquality.TheinclusionoftheAgriculturalExtensionServiceinthiseffort provedinvaluable.Perhapspredictably,theAgriculturalExtensionService'scapacitiesareuneven throughoutthenation;however,theService’sdirectorinSomborisanactiveandintelligentperson whoguidedthecreationoftheEducationCenterfromstarttofinish,andremainsinvolvedinits programmingandactivities.TheAgriculturalExtensionService'sadjoiningfieldscomplementthe center'sworkbyprovidingcapacityforpracticalfieldexperimentationandinnovativepilotprojects.

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ASSISTANCE:

Theprojectdeliveredthedesignforthereconstruction,purchasedthenecessaryteaching equipment,andfurnishedthecenter.Thismoderneducationfacilityincludesanamphitheater,two classroomsandexperimentalfieldsfortestingnewcropsandpesticides.Morethan24,000 agriculturalhouseholdsfromtheIMCmunicipalitiesofSombor,Subotica,andKanjiza,aswellas neighboringmunicipalitiesinotherterritoriesbenefitfromthecenter’sservices.Agricultural producersarenowlearninghowtointroducenewcropvarietiesandapplymodernfarming technology.

ACCOMPLISHMENTS:

x In2014and2015,theAgricultureEducationCenterinSombordelivered115trainingevents andpresentations,attendedbyanestimated8,700persons,mostlyfarmers. x AtthetimeoftheAgricultureEducationCenter'sopening,Somborwasinnegotiatingwith theFerreroGroup,oneoftheglobalmarketleadersoftheconfectioneryindustry.TheItalyͲ basedcompanywaslookingtostrengthenitspresenceinthehazelnutmarket,toguarantee andfurtherimprovethequality oftherawmaterialthatgivesa uniquetastetoitspopular products,suchasNutella, “Ferrero decided to invest in Sombor FerreroRocher,andKinder because of the climate, land quality and Bueno.InApril2015,Ferrero location, but also the Agriculture Groupdecidedtomakean$8.8 Education Center and our determination millioninvestmentinthe to support farmer education,” said Mayor territoryandpurchased Sasa Todorovic. When the deal was approximately700hectaresin announced to the public, in addition to SombortoestablishahazelnutͲ initial 50 new jobs, Ferrero presented its growingoperation.Hazelnuts long-term plan to engage, educate and, havealonginvestmentcycle financially assist local farmers to start andneedseveralyearstobear growing this crop. fruit.TheEducationCenter, whichdemonstratesthe region'spubliccommitmentto agriculturalqualityandeducationplayedapartinFerrero'sdecisiontoinvest.

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3.3.6The‘MountainBreakfast’Brand (UziceͲledIMC)

TheUziceIMCareaconsistsoftherelativelylargeand prosperouscityofUzice,asuccessfultouristresortin Zlatiborandseveralsmaller,moreeconomicallyhardͲ hitmunicipalitiesonthewesternsideofthePeshtar mountainridge.Consciousofthedisparityinwealthin theregionandthediversityofterritorialpotential,the projectandtheleadersofallthemunicipalitiesagreed thataprogramneededtobefoundtohelpallIMC townsincreasejobsandrevenues.Theideathat emergedrecognizedthepotentialofthealready successfulZlatibortourismdestination,whichwas alreadyreceivingsupportfromEuropeandonors,to pullitsregionalneighborsintoitsvaluechain.The mostdirectwaytodosowastocreatesupplychains The‘MountainBreakfast’brand,createdby RDAZlatibor,throughaProjectgrant,was fromregionalvendorstotheultimatebuyersinthe presentedattheBelgradeTourismFairin Zlatibortourismcluster.AstheZlatibortourism February2015. destinationwasalreadytryingtocreatearegionalbrandtodifferentiateitselffromother destinations,theuseoflocalproductswasseenasanenhancementofthiseffort.

SLDPgaveagranttotheZlatiborRegionalDevelopmentAgency(RDAZlatibor),oneofthebestRDAs inthecountry,tocreateasupplychainforthetourismsectorinZlatibor.TheRDAwastaskedwith surveyingtheZlatiborhotelsandrestaurantsandshopstodeterminewhattheypurchasedandfrom where.ThegrantthencalledfortheRDAtoscantheIMCregionanddeterminetheofferingsfor goodsandservicesthatcouldbemadeavailabletofillZlatibortourismproviders’purchasingneeds. TheRDAwasthenrequiredtochooseamongapaletteofproductsandvendorsandpicktheone thatofferedthebestpotentialfordevelopingsupplyrelationshipsquicklyandinawaythat facilitatedtransactionswithanIMCͲwidearrayofvendors.Ultimately,theRDAdecidedtocreate andmarketalocalgastronomicalbrandandtopromoteitthroughregionaltourismagencies,hotels, andrestaurantsbyidentifyingregionalvendorsandproducersoflocalfoodproductsandhandicrafts toparticipateaspreferredproviders.TheactivitygatheredrepresentativesoftheRegionalChamber ofCommerce,associationsofhotelsandrestaurants,regionaltouristorganizations,andtravel agenciestojointlycreateuniqueculinarychoicesspecifictotheregionalmountainresortsof Zlatibor,Zlatar,andTara.Thebrand,called"MountainBreakfast"wascreated,buyersandsellers werelinked,andacateringproductwasofferedbyparticipatinghotelsandrestaurants.Inaddition, alocalshopinNovaVarosandanonlinemerchandisingplatformwereinaugurated,wherevendors couldpresentandsellfoodandhandicraftproductsundertheMountainBreakfastbrand.

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Ascanbeseenfromthephotosbelow,theprojectwonaprestigiousnationalawardforregional tourisminnovationandqualityandthestoreinNovaVarosisthrivingandhasbegunitssecond season.

InSeptember2015,theNationalTourism Topromoteanewregionalgastronomicbrand,a OrganizationofSerbiaawardedtheMountain shopsellingtraditionalproducewasopenedin BreakfastbrandwiththeTourismFlower May2015,attheZlatarresort award,thehighestnationalawardinthefield oftourism

3.4INNOVATION(ProjectComponent1)

3.4.1ICTAcademies (NoviSadandNis–ledIMCs)

InApril2014,tohelpyoungpeoplefind employmentquicklyandtohelp Speaking at the Academy launch companiesfindaqualifiedworkforce, ceremony, Nis Mayor Zoran Perisic said: USAIDandSLDPsupportedthe “We are glad to partner with USAID and establishmentoftwoICTCluster NiCAT on this initiative. The city of Nis Academies,oneinSouthSerbia,inNis, supports the opening of this Academy, andtheotherinVojvodinaProvince,in because the IT sector has been selected NoviSad.Tocreateanadequate as one of four pillars of the country’s curriculum,theprojectpartneredwiththe economic development in the forthcoming NisClusterofAdvancedTechnologies period.” (NiCAT)andtheVojvodinaICTCluster, bothNGOs.Thegrantswereawarded afterextensiveonͲgroundresearchabout thenatureoftheICTindustriesinbothNISandNoviSad.ThoughtheICTindustryinbothcitiesis thrivingwitheverͲincreasinginternationalanddomesticdemand,businessesperceivealackofwork forcesufficientlyqualifiedtogoimmediatelyintoproductivepositionsatfirms.Basiccomputerskills arehighamongpersonsseekingemploymentinthesector,butmorerefinedandnuancedskillsare simplynotavailableamongthepoolofcandidatesneededtoworkinthehighͲendICTsector.The curriculadevelopedandtaughtcollaborativelywiththeprivatesectorattheseAcademieswas gearedtothemoresophisticatedneedsofsuccessful,growingfirmsintheindustry.

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TheAcademies’accomplishmentsintheirinitialyearsaresummarizedbelow:

ACCOMPLISHMENTS:

x DuringasixͲmonthtrainingprogram,65unemployedyoungpeopleacquiredskillsin demandinthelabormarketpreparingthemforjobsintheITindustry.Theprogramalso includedintensivepracticalworkwithNiCATandVojvodinaICTClustermembercompanies. x 41trainingparticipantsfoundnewemploymentaftercompletingtheICTAcademyprogram.

ThesetwopilotprogramsinthenorthandsouthofSerbianowserveasbestpracticemodelsfor otherindustriesandregionstofollow.

(NiCAT)NisICTClusterAcademystudentsreceiveddiplomasataNovember25,2014graduationceremony

3.4.23DImPulsCenterinKraljevo (KraljevoͲledIMC)

TheProjectworkedwiththeImPulsCenter,apartoftheFacultyofMechanicalEngineeringin Kraljevo,toassistSMEsintheregiontouse3ͲDprintingfordesignandreverseͲengineering solutions.Thecenter,formedfromanEUgrantthatpaidfortheacquisitionofalargeItalian3ͲD printer,lackedcustomersandimpactwhenSLDPfirstinvestigateditspotentialasaforceof innovationcompetitivenessintheregion.Thatwasparticularlypainfulreality,becausetheregion, whichincludesthemunicipalitiesofCacak,NoviMladenivac,andKraljevo,withproximityto KragujevacandKrusevac,hostsseveralsmallandlargeindustrialproducersofmetalandplastic products,whichcouldbenefitfromusingtoolsforgreaterproductivity,suchas3ͲDprinting.A challengefortheCenterwastoswitchitscharacterfromanacademicnaturetoacommercially orientedonetoensureitssustainabilityasacommunityasset.

ThefollowingmenuofactivitiesandaccomplishmentsreflectourworkwiththeImPulsCenterasa contributiontothisIMCarea.

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ASSISTANCE:

x TheProjectfurnishedamultimedialaboratorytotheImPulsCenter.Thelaboratoryisused tohelpregionalfirmslearnabout3ͲDtechnology,improveproductandtechnicalknowledge andreduceproductioncosts. x AspartofamultiͲIMCactivitywiththeNišandNoviSadterritories,theprojectsponsoredan innovationstudytourtotheUKincooperationwiththeBritishCouncil.Thetourwas designedtoshoweducators,businessrepresentatives,scientists,andbusinessassociations howuniversitiespartnerwithbusinessinothercountriestofosterandpromotecommercial innovation.RepresentativesfromtheImPulsCenterwereactiveleadersinthisstudytour,as oneofSerbia'sbestexamplesofuniversityͲbusinesscooperationonpromotingandusing innovationforcommercialcompetitiveness. x Websitedevelopment. x TheProjectorganizedastudytourtotheCzechRepublictointroduceImPulsCenterstaffto Czechexperiencesinusing3ͲDprintingasatoolforinnovationandbusinessgrowth.This tourandrelatedconsultingwascoͲsponsoredbytheCzechInvestandtheCzech government. x ToimprovethecompetitivenessofSMEsintheIMCArea,theprojectengagedapartͲtime businessdevelopertosupportwideningthecustomerbasethatusesthe3Dprintingservices availableattheCenter.

ACCOMPLISHMENTS:

x SinceSLDPbeganworkingwiththeCenterin2013,thenumberofcommercialorders completedhasincreasedfrom25in2013to63in2014.In2015,theImPulsCenterhas garnered$62,000inbusinesstransactions,evenwiththecenterbeingclosedformostof 2015,whilethe3Dprinterunderwentmaintenance. x FollowingthethreeprojectͲorganizedworkshops(inNis,NoviSad,andKragujevac)thathave broughtscientificinstitutionsandbusinessestogether,theImPulsCenterbecameamember oftheVojvodinaMetalClusteraspartofprojecteffortstoexpandtheCenter’sclientlist.

3.4.3TechnologyandFoodͲProcessingParkinLeskovac (NisͲledIMC)

TheProject’sgoalintheNisͲledIMCAreawastoachievea15percentincreaseinsalesofprocessed foodproducts.ProcessedfoodproductionisahighervaluestageofagribusinessandisafullͲseason employerofsemiͲskilledlabor.Topursuethisgoal,SLDPandmunicipalleaderssupportedthe establishmentofaProductDevelopmentPlantattheTechnologyandFoodͲProcessingPark(TFP)in Leskovac.TFPwasanoldfoodprocessingparkthatwasconvertedbyprivateownersintoatypeof agribusinesscooperative,inwhichthevariousmemberssharedexpensesformanagement,grounds maintenance,andbrandpromotion.TFPwasformallyestablishedin2013asapublicͲprivate partnershipbetweensevenfoodprocessingcompanies,theCityofLeskovac,andtheLeskovac FacultyofTechnology.FoodprocessorsfromtheTFPhavecreatedacommonbrand,named“Top Food,”underwhichtheyjointlymarketproducts,primarilytobuyersinthecountriesoftheformer Yugoslavia.Inanefforttocreatenewflagshipproductsforthebrand,theTFPappliedforand

SLDPFINALREPORT Page|32 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT receivedagrantfromSLDPtoestablishthenewproductdevelopmentplant,whichallowslimitedͲ scaleexperimentationonnewrecipes.Theplant'sservicesandequipmentareopentootherfood processorsonacommercialbasis.StudentsandpostͲgraduatesfromLeskovac’sFacultyof Technologyalsohaveaccesstothefacilityfortraining,demonstration,andcreationofnew products.Throughaninternshipprogram,studentsareabletopracticewhattheyhavelearnedin theclassroomandtesttheirideaswiththeTFPmembercompanies.

ThesummaryofSLDP'sworkisasfollows.

ASSISTANCE:

InApril2015,theprojectfurnished equipmentfortheNewProduct “The innovations coming out of this DevelopmentPlant.Thisfacility research and development facility will supportsallstagesofproduct increase the food processing sector's development,fromideageneration competitiveness and boost sales,” said throughconceptdevelopmenttothe USAID/Serbia Mission Director Azza El productionoftrialsamplesinsmall Abd at the pilot plant opening. quantities. Only six months later, 20 new and 5 ACCOMPLISHMENTS: improved food products came out of the new facility. “Since opening in April, our x 20newproductswere member companies have signed five new developedandfiveexisting sales contracts with buyers from Serbia, oneswereimproved.Salesof Bosnia and Herzegovina, Macedonia, and thenewlydeveloped Iraq, with a total value of $110,000 worth in productsreached$94,000 monthly deliveries”, said TFP Director permonth.Therevenuesof sixTFPSMEsincreasedby8 Vladimir Kostic. The new products are also percentandemploymentby included in the deliveries to existing 23percentfrom2013 customers from Montenegro, Croatia, and through2015. Serbia. x Developmentofnew productshasbeenconstant sincetheProductDevelopmentResearchPlantwasestablished,andfivenewworkershave beenemployedbythepilotplant.Mostoftheworkhasfocusedoncreatingthebestrecipes andformulationsfordifferenttypesofhoneycakes(lowfat,glazed,vitaminrich, chokeberry,andcranberryflavored),icecreamcones,andvariousbakeryproducts(mixed grains,oat,rye,toastbread,Americanbread,baguettes,pastry). x TFPcontractedthefoodprocessingfirmPertufromPozarevactoprovideconsultingservices fornewproductdevelopment,mainlyforproductpackagingandexperimentalproduction. x TFPhasalsopartneredwiththeTechnologyFacultyfromLeskovacandtheSMEAgencyfrom Sofia,Bulgaria,todevelopaprojectproposalfortheEUBulgaria–SerbiaIPACrossͲBorder CooperationProgram.

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USAID/SerbiaMissionDirectorAzzaElͲAbd meetsstaffattheopeningofthePilotplantfor Duringthesummerof2015,thankstoaprojectgrant, newproductdevelopmentattheTechnology TFPLeskovacdeveloped20newfoodproducts, andFoodͲprocessingParkinLeskovac. improvedfive,andsignednewcontractswithbuyers

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3.5FOREIGNDIRECTINVESTMENT(FDI)ATTRACTIONACTIVITIES(Project Component1)

Thenationalgovernmentandlocaladministrationshavebecomeconvincedthat,incertain circumstances,inflowinginvestmentcanspurlocaleconomicgrowth.Regrettably,nationalpractices toattractforeigninvestmenthaveoftenbeenpoliticallymotivatedinSerbia,withverylittleanalysis giventothecostandbenefitsofaspecificinvestmentproject.Forlocalcommunities,similar practicescouldhavedireconsequences,asthecommunitycanbeleftwiththephysicalremainsand socialconsequencesofaninflowinginvestmentgonebad.Withtherightkindofinflowing investment,ontheotherhand,thatisinharmonywiththeresources,assets,culture,andvisionof thecommunity,localeconomicdevelopmentcanflourish.Recognizingthebenefitsandcautiousof thedownside,SLDPprovidedanintensivepackageofassistancetoall32participatingmunicipalities ontheproperwaytoattractanduseinflowinginvestmentasatoolofpositivedevelopment.The packageofassistanceconsistedofthefollowing:

a) DeliveryofamultiͲcyclecoachingprogramforFDIattraction. b) Assistedsitedevelopment,focusingononeofthefoundationalneedsofforeigninvestors— availableandsuitablelandplots.Projectspecialistsconsultedwithpartnermunicipalitiesto developpreͲfeasibilitystudiesandinfrastructureandguidanceplansforindustrialzone development. c) FacilitationoftheStandingConferenceofTownsandMunicipalities’eͲlearningplatformfor localeconomicdevelopmentprofessionals,whichincludedFDItrainingandotherconcrete toolsforlocaleconomicdevelopmentandgrowth. d) Technicalassistancetomunicipalitiesstrivingtoobtainbusinessfriendlycertification standards.Theproject'sassistancewascomposedofconsultingandtrainingonpractices vitaltolocaleconomicdevelopment,includingassetmanagementandcapitalinvestment planning,PPPusagesandmethodologies,andpublicservices. HighlightsamongthesegeneralFDIActivities werethefollowing: x SLDPsponsoredan“FDIInvestment Tour”ofmunicipalityleaderstoItaly, organizedbytheprojectand ConfindustriaSerbiainlateAugust2015. x AttheendofMay2015,theproject,in cooperationwiththeCzechandSerbian ChambersofCommerce,organizeda B2BForuminPraguefortheagro/food processing,textileandmetalprocessing LEDOfficestafftakepartinthefinalFDItraining sectors. workshop,heldonFebruary2015 x InDecember2014,theprojectsupported20LEDpractitionersandagriculturespecialists from11partnermunicipalitiestogoonastudytourtotheCzechRepublic,tolearnbestͲ practiceapproachesinattractingforeigninvestment.Theprojectsponsoredasimilartourto theCzechRepublicinOctober2013for24localeconomicdevelopment(LED)practitioners from13partnerlocalgovernments.

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x AspartoftheFDIcoachingprogram,theprojectsupportedtheparticipationofseven municipalitiesattheGlobalConnectForuminStuttgart,GermanyinNovember2014. x InNovember2015,theProjectpublishedacatalogueofSerbianinvestmentsuccessstories forfivefastͲgrowingsectors:metal/electronics,agriculture/food,construction,information technologyandtextile/leather.Thestoriesserveasexamplesofbestpracticesforinvesting inSerbiaandpromotebenefitssuchas:customsfreeaccesstomarketswithover800 millioncustomers,askilledworkforce,wellͲdevelopednetworkofsuppliers,andideal locationforjustͲinͲtimeproductionduetotheproximityofEUmarket.Thecataloguewas distributedtovariousSerbianconsulatesandpartnersthatpromoteSerbiaasaninvestment location,suchastheSerbianDevelopmentAgency(SDA),VojvodinaInvestmentPromotion Fund(VIP)andNationalAllianceforLocalEconomicDevelopment(NALED).

Sitedevelopment

WithintheFDICoachingProgramand thoughassistanceofSLDP’sComponent2 –PublicAdministrationReform,the followingactivitiescontributedto developmentoftheinvestmentsites:

Sitedevelopment:Inearly2015,aspartof thecoachingprogram,theprojectͲassisted selectmunicipalitiesmovedforwardwith plansforthedevelopmentofindustrial zones.BermanGroupexpertsassessed InNovember2014,theprojectsupportedtheparticipation ofsevenmunicipalitiesandtheVojvodinaInvestment proposedsitesinKraljevo,NoviBecejand Promotion(VIP)FundattheGlobalConnectForumin KanjizaanddevelopedpreͲfeasibility Stuttgart,Germany. studiesincollaborationwithLEDoffices.

x March2015:SLDPandDevelopmentConsultingGrouplaunchedaninternet platformtopromotebrownfieldlocationsinall32projectpartnermunicipalities. Theportal(http://www.brownfieldserbia.com)containsallrelevantfinancialand businessdataabouttargetedcompanies,helpingpotentialinvestorsdecidewhere toinvesttheircapital. x August2014:IncooperationwithLEDofficesandstaffofbankruptcompanies,an inventoryofbrownfieldinvestmentsforatleast15ofthemostattractivebrownfield projectswascompletedintheNisͲandKraljevoͲledIMCAreas,andbrochures published. x May2014:SLDPdelivereddetailedinfrastructuredevelopmentdesignsforanew industrialzonetotheVranjelocalgovernment.Thesedocumentswillenablethe futuredevelopmentoftheBunusevacindustrialzoneandwillhelpinattractingnew foreigninvestors. x April2014:BermanGrouppresentedlocalstakeholdersanalysesofinvestment locationsinPresevo,Merosina,andNis.Thereportsanalyzethefeasibilityof

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developingindustrialzonesineachofthesemunicipalitiesandlistpotential investorsforthezones. x January2014:SLDPsupporteddevelopmentofanindustrialzoneinBeocinby providingageotechnicalreportandtechnicalanalysiswithpreliminarycost estimatesforroads,watersupplyandsewagesystems,raindrainage,lowpressure gasdistributionnetworkandtelecommunication.

ACCOMPLISHMENTS:

DirectprivateandpublicsectorinvestmentsintotheProjectͲsupportedIMCareasareestimatedat $520,534,313,including$211,849,532ofrealizedprivateandpublicinvestments($192,779,212 fromprivateand$19,070,320frompublicsector)and$308,684,782ofcommittedinvestments, basedonnewcontractssignedbetweenprojectpartnermunicipalitiesandinvestors.(Seethe investmenttableattheendoftheannex).SLDPcontributedtotheseinvestmentsthroughsupport associatedwithinterͲmunicipaleconomicdevelopmentprojectsandimprovedlocaleconomic developmentcapacities.Theinvestmentsarebasedonsignedcontractsbetweenlocalgovernments andinvestors.

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3.6STRENGTHENINGPUBLICADMINISTRATIONTOENABLEINTERͲ MUNICIPALBUSINESSGROWTHANDINVESTMENTS(ProjectComponent2)

SLDP’sComponent2,PublicAdministrationReform,workedonimprovingthecapacityof municipalitiestoeffectivelymanageservicesandcapitalinvestmentprojectsofinterͲmunicipal significance.Asmentionedabove,Component2activitieswereultimatelyharnessedtotheNCP approachandconcentratedonspecificissuesblockingNCPimplementation.BeforetheNCP adjustments,however,Component2focusedonincreasinggeneralIMCcompetitivenessthrough effectiveassetmanagement,useofacquiredlocaleconomicdevelopmentmechanismsandtools, andimprovementofthelocallegalframeworkthataffectsinterͲmunicipalcooperationandlocal economicgrowth.

Component2operatedatthenationallevelmorethanotherprojectcomponentsandactivities. Throughthiscomponent,SLDPwasanactiveparticipantandcontributortonationalpolicy, providingtechnicalassistancetonationalͲlevelcounterpartsincreatingandmodifyingmajorlaws, policies,orregulationsrelatedtointerͲmunicipaleconomicdevelopment.

Finally,Component2hadspecificresponsibilityforidentifyingandacceleratinginfrastructure projectsofeconomicsignificancetoIMCsandseeingthatthoseprojectswereregisteredonthe nationalfundinglistforinfrastructureimprovement.

1.ElevationofIMCCapacities.

TheprojectconductedthefollowingactivitiestoincreaseIMCcapacities:

YearofImplementation FY FY FY FY FY FY Total 2011 2012 2013 2014 2015 2016 #of #of #of #of #of #of #ofIMCs CAPACITY IMCs IMCs IMCs IMCs IMCs IMCs IMCpartnershiphasbeenformed 4 8 8 8 8 8 8 CapacitiesoflocalselfͲgovernmentsformedintheareaof: AssetManagement 2 6 8 8 8 8 PublicUtilityCompanyManagement 1 3 7 7 7 7 Bettermanagedinventory,prioritization,and 3 7 7 7 7 commercializationofbrownfieldinvestments SupportprovidedtoIMCswhereLGsparticipateinBFC 5 8 8 8 8 8 certification Established/supportedbusinessͲrelatedservices/procedures 8 8 8 8 8 8 (includingagribusiness) Infrastructureprojectsdeveloped:1 5 5 6 6 Participatoryinitiativesandeventsthatinvolvedialogue 5 8 8 8 8 8 betweenthepublic,private,andcivilsectorsorganized Activitiesthatincreasethelevelofyouthemployability 7 8 8 implemented NewCriteriaPrograminitiatedtosupportprioritybusiness 8 8 8 8 8 sectors NCPactivitiesincreasedcapacityandcompetitivenessoflocal 8 8 8 8 privatesector NCPimplementationhasmeasurableresultsintermsofnew 1 8 8 8 employment PublicͲprivatepartnershipsestablished1 2 3 3 3

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FDIattractioncapacitiesareimproved 888 8 8 Newdirectinvestmentsimplemented4 6 7 7 7 Businesssectorinnovationsweresupportedbytheprojectand 5 7 7 7 improvedsectorcompetitiveness

Asecondkeyapproachtoincreasinglocalgovernments’capacitytopromoteeconomicgrowthwas thedevelopment,togetherwithourpartner,theStandingConferenceofTownsandMunicipalities (SCTM),ofadistanceͲeducationplatformforstrengtheningknowledgeaboutlocaleconomic development.InJanuary2014,SCTMcompleteditswebͲbaseddistanceͲlearningplatformand courseonlocaleconomicdevelopment(fundedthroughprojectassistance)andmadeitavailableto LEDpractitionersinlocaladministrations.Localgovernmentrepresentativeslearnedaboutthelegal andinstitutionalframeworkforLED,investmentattraction,privatesectordevelopment,publicͲ privatepartnershipsandothertopics.DistanceoreͲlearningisstillarelativelynewmethodofstudy forlocalgovernmentsinSerbia,butithasproventobeanefficientwaytoshareknowledge,making itpossibleforparticipantstostudyontheirowntime,whilehavingcontinuousmentorsupportand interactionwithotherstudygroupmembersthroughonlineforums.Theprogramconsistedofa combinationoftrainingsessions,coaching,andinternetͲbaseddistanceͲlearning.Participants learnedaboutthelegalandinstitutionalcontextoflocalgovernmenteconomicresponsibility, instrumentsformanagingLED,privatesectordevelopment,investmentattractionandpublicͲprivate partnerships.

LocalGovernmentOfficialsafterreceivingtheirdiplomasfor successfullycompletingtheSCTM’sDistanceLearningeconomic developmentcourseattheendofJune2014

StandingConferenceofTownsand Municipalities’eͲlearningplatformfor localeconomicdevelopment professionalswentonlineinJanuary 2014

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2.ImprovementofNationalPolicyandLegislation.

Component2supportedthefollowingnationalpolicyactivitiesbyparticipatinginworkinggroups and/orwritingmemosandanalysestogetherwithourpartners:

x LawonInvestments x DecreeonCriteriaandConditionsforSupporttoInvestments x DecreeonAmendingDecreeonLocationConditions x RulebookonClassificationofObjects x RulebookonOneͲStopͲShops x RulebookonExchangeoftheDocumentsinOneͲStopͲShopProcedure x RulebookonTechnicalSurveillance x LawonPublicCompanies x DraftLawonPublicUtilityCompanies x LawonSpatialPlanningandConstruction x RestitutionLaw x LaborLaw x LawonLocalSelfGovernment x LawonUtilityServices x LawonPPPsandConcessions x LawonPublicProperty x LawonAmendingtheLawonLocalGovernmentFinances x DraftLawonLaborRelationsinLGAdministration x DraftLawonSalariesinPublicAdministration x NALED’s“OutͲofͲtheͲMaze”campaign(NisandVranje–ledIMCs) Inaddition,aspartofComponent2'spolicywork,SLDPsponsoredthefirstdataͲbasedreportin SerbiaonSMEcompetitivenessintherealeconomy.Theprojectcommissionedthecenterfor AdvancedEconomicStudies(CEVES)towritearealcompetitivenessanalysisofvariousSMEsectors acrosstheproject'sIMCterritoriesandthenationasawhole.Thereport,whichhasbeenpresented anddiscussedatGOSpolicyforums,highlightsthecurrentstateofSerbia’sSMEperformanceacross almostalltradablesectorsoftheSerbianeconomyanddiscussestheprospectsofprivatesector competitiveperformanceintheyearstocome.Thereportalsoexaminesseveralkeyeconomic vectorssuchasmarketconcentrationandmarketdynamicstodeterminethegrowthpotentialof differentsectorsandthelikelyperformanceofSerbianfirms.Suchdataandanalysisallows policymakerstomakeinformeddecisionsaboutwhichsectorsinSerbiatosupportwithspecific interventionsandwhichtoabandontotheirowndevices.Intheyearsincethereportwaspublished, theSerbianChamberofCommerceandtheMinistryofEconomyhaveretainedCEVEStoassemble morerefinedandricherdataͲbasedanalysesinsupportofdataͲbasedeconomicpolicyͲmaking.SLDP isproudtohavesetCEVESonitswayandtohavecontributedtoamorelogicalfoundationfor nationaleconomicdecisionͲmaking.AnaddedbonuswasthattheCEVESanalyticalresultssupport thewisdomofSLDP'soriginaldecisionstoworkinthesectorsithelpedstrengthen.

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3.SupporttoInfrastructureDevelopment

ThefollowingSLDPͲassistedinfrastructureprojectsreceivedfinancingorweresuccessfullyentered intotheSystemofLongͲListedAdvancedInfrastructureProjects(SLAP)database,asthecontract requires:

IntheVranjeͲledIMCArea:

1. EnvironmentalprotectionoftheSouthMoravaRiver.Basedontechnicaldocumentation developedbytheproject,theEU/PROGRESprogrampurchasedeffluentmeters.Vranjebuilt awatereffluentsmeasurementstationandhasbegunusingthemetersinVranjskaBanja, butPresevo,Bujanovac,andVladicinHanhavenotyetbuiltmeasurementstations.Vranje hassignedacontractinNovember2013withKfWfor€15.2milliontobuildaWasteWater Facility.ThatprojecthasbeenenteredintotheSLAPdatabase. 2. “Meteris”regionallandfillwithrecyclingfacilities.Withtheassistanceofprojectexpertsand theEUPROGRESprogram,municipalauthoritiesdevelopedaregionalsolidwaste managementplan,whichwasapprovedbytheMinistryofEnvironmentalProtection. BujanovacaddedthetransferstationprojecttotheSLAPdatabaseinMarch2015aspartof thisregionalsolidwastemanagementproject. 3. BunusevacIndustrialZonebypassroad.Theprojectfundeddevelopmentofatopographic planforabypassroad,whichhasbeenenteredontotheSLAPdatabase.TheEUPROGRES programfundedthemajorconstructionplan.Atthetimeofreporting,Vranjecityofficials areworkingoncompletingthedocumentation.Constructionworkhasnotyetstarted. 4. BunusevacIndustrialZone.Theprojectfundedseveraldetailedinfrastructuredesignsforthis industrialzone.Designsofroads,watersupplyandfireprotectionsystems,sewerage,rain drainage,electricitysupply,andtelecommunicationsweredeveloped.Project documentationfortheindustrialzonewasdeliveredtoVranjeinJune2014,andtheproject hasbeenenteredintotheSLAPdatabase.Thisdocumentservedasablueprintforthe developmentofthecompleteinfrastructureonthis32hasite,whereGEOXbuiltitsfactory andanothertwoinvestorsstartedtheirinvestments. 5. CukarkaIndustrialZone.InPresevo,theprojectcompletedapreͲfeasibilitystudyforan industrialzone.WhiledevelopingthepreͲfeasibilitystudy,theprojectdiscoveredthatan unresolvedlandpropertyissuethreatensthewholeactivity.TheMinistryofEconomyhas appropriatedapproximately$95,000totheMunicipalityofPresevofortheconstructionofa powernetworktoCukarkaindustrialzone.TheprojecthadpreviouslyprovidedPresevowith legaladviceandonͲtheͲjobassistanceonresolvingtheseproprietaryhurdlesrelatedto transferoftheownershiponlandfromthe“mesnazajednica”(submunicipallevelof government)totheMunicipalityofPresevo.

IntheNisͲledIMCArea:

6. WaterSupplySystem“Pustareka.”AfeasibilitystudywascompletedtohelptheDoljevac Municipalityplanasecureandcontinuoussupplyofpotablewaterfortheentirepopulation intheprescribedquantityandquality.Basedonthestudy,themunicipalitywillsubmita projectproposaltotheSerbianGovernmenttoreconstructtheregionalwatersupply system.TheprojecthasbeenenteredintotheSLAPdatabase.

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IntheSuboticaͲledIMCArea:

7. AgriculturalEducationalCenterinSombor.Theproject’sinvestmentinthedevelopmentand reconstructionofthecenterwascompletedinFebruary2014.Thetechnicalcontrol assessmentofprojectdocumentationwascompletedinMarch2014.TheAgricultural TrainingCenterreconstructionwascompletedinAugust2014,andthecenterhasbeen completelyfurnishedandequipped.Intheperiod2014Ͳ2015,thecenterorganized115 trainingcoursesandpresentations,inwhich8,700peopleparticipated,mainlylocalfarmers.

TheNoviSadͲledIMCAreahastwoindustrialzonesonwhichSLDPworked:

8. BeocinBusinessPark.Theprojectsupportedthedevelopmentofanewindustrialzonein Beocin.Thegeotechnicalreportandtechnicalanalysiswithpreliminarycostestimatewere completedinJanuary2014,anddetaileddesignsweredevelopedforallproject components:roads,watersupplysystem,sewagesystem,raindrainage,lowpressuregas distributionnetwork,andtelecommunication.Constructionworkintheindustrialzoneis eligibleforsupportbyProvinceofVojvodinaorGoSstatefunds,andthecityisactively engagedinsolicitingthissupport.ThisprojectwasenteredintotheSLAPdatabasein October2014.ThankstothedocumentationandthepublicͲprivatepartnershipagreement betweentheLaFargecementfactory,thelocalselfͲgovernmentofBeocin,andtheproject, twonewinvestorscametothebusinesspark:MarsGroup(metalprocessing)andAgrogrnja (agribusiness). 9. TemerinIndustrialZone.Alocationpermithasbeenissuedforanaccessroadtothissite. Theprojectfinanceddevelopmentofafeasibilitystudyandpreliminarydesign,whichwas formallysubmittedtotheTemerinadministrationinDecember2014andadopted,together withamaindesignanddesignoftemporarytrafficsignalsattheendofMarch2015.The projectwasdulyenteredintotheSLAPdatabase.

InJune2014,theprojecthandedoverdetailedinfrastructuredevelopmentdesignsforthisnewindustrial zonetotheVranjelocalgovernment.

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ACCOMPLISHMENTS:

x 2,877locallyelectedandappointedofficials,membersofCSOs,media,andthebusiness communityparticipatedinprojectͲfundedtraining.

x 70eventsandinitiativesorganizedtopromotedialoguebetweentheprivate,public,and civilsectors.

x 9municipalandinterͲmunicipalinfrastructuredevelopmentprojectssupportedindifferent stagesofdevelopment.

x 7publicͲprivatepartnershipssupported.

x InMarch2015,theMinistryofEconomyappropriatedapproximately$1.3millionto18cities andmunicipalitiesforinfrastructuralprojectsdesignedtoattractFDI.Outofthese18local governments,sevencitiesandmunicipalitiesbelongtoSLDP’sIMCAreas.Thoseseven governmentshavereceivedmorethan$500,000formassiveinfrastructureprojectslikethe constructionoftwopowertransformerstationsinthe“South”industrialzoneinVladicin Han,constructionofthesewagecollectorintheDonjeMedjurovoindustrialzoneinNis,and constructionofanelectricalpowernetworkintheCukarkindustrialzoneinPresevo.Similar projectswillbefinancedinVranje,NoviSad,Subotica,andNoviBecej.

3.7INTEGRATINGYOUTHEQUITABLYINTOLOCALECONOMIES(Component 3)

Bytheproject'send,Component3concentratedonworkforcedevelopmentforprivatesector employmentandhadtwomajorobjectives:

1.FosterentrepreneurshipamongyouthandcreatelongͲtermemploymentforyoung innovators,firstͲtimejobseekers,adolescents,andyoungadultswhohaveacquiredlabor marketskills.

2.Provideschoolsandvocationaleducationtrainingcenterswithaccreditedcurricula tailoredtothelocalresourcesandneeds,sothatthestrengthenedrelationshipbetween localgovernments,schools,andbusinessesreducestheoutͲmigrationofyoungpeople.

Asstatedinthebeginningofthisreport,however,Component3activitieswereultimatelyswitched tosupporttheNCPs.Atthebeginningoftheproject,youthactivitiesweremoregeneralizedand involvedworkwithmunicipalityyouthofficestoempoweryouthtobecomeactiveparticipantsin thelifeoftheircommunities.Youthactivitiesintheearlydaysoftheprojectalsoaddressedwork forcedevelopment,butaimsweremoregeneralizedanddidnotsingleoutkeysectorstopopulate orspecificskillstonurturesothattheindustryneedswouldbefilled.Rather,thefocuswason preparingyouthforwork.Theactivitieswerenotableandbenefitedtheyouthwhoparticipated.But thistypeofdiffuseassistancecouldnotadvanceeconomicgrowthinlocalcommunities.

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OurlistofactivitiesbelowalsoindicateswhethertheworkwasguidedbytheNCPapproachtogrow sectorsorbytheinitialefforttoempoweryouth.Inourachievementssectorbelow,however,we havecombinedtheresultsofbothphasesofourapproachtoyouthparticipationintheworkforce, asthatiswhatiscalledforinourcontractualdeliverables.Itwouldbeveryinterestingtoperforma longitudinalanalysisofyouthemploymentandeconomicimpacttoseewhichapproachtoassisting youthtoentertheworkforce,i.e.,sectorͲspecificorgeneralempowerment,hasgreaterimpacton economicgrowthandsocialstability.

ACTIVITIES

x DevelopmentofCareerGuidanceandCounselingStructureandServicesthroughtheInter MunicipalCooperationinSerbia—NoviPazar,Vranje,Zrenjanin(withBelgradeOpen School)—EmpowermentofYouth x Internshipprogram—Nis,NoviPazar,Kraljevo,NoviSad,SuboticaandUziceIMCs(with SmartKolektiv).Theactivitysupportedyouthtoacquireskillsandgainworkexperience throughinternshipandentrepreneurshipdevelopment.—EmpowermentofYouth x TechnicalguidanceinestablishingAssociationofYoungEntrepreneursofSerbia(AYES),an associationthatthrivestodayandcontinuestogrowowingtheservicesitofferstonew members.Severalofitsmembershavewoninnovationcompetitions.—NCP x Laborskillsgapassessment,withtheNationalEmploymentServiceofSerbia.— EmpowermentofYouth x Developingacompetitiveyoungworkforcethroughcooperationwiththeprofessional diaspora—Uzice,NoviPazar,NisIMCs(withGroup484)—EmpowermentofYouth x NAPOR—NationalAssociationofNonͲformaleducationpractitioners—Thepurposeofthe grantactivitywastoreducethegapbetweenyoungpeoples'existingcompetenciesand labormarketneedsbydevelopingandboostingnonͲformaleducationservicesforyouth employabilitythatareinlinewithemployers’needs.Thegrantbuiltthecapacityof35youth officecoordinatorsandCSOrepresentativesfrom20municipalitiestoprovidenonͲformal educationservicesforyouthemployment,throughwhich270youngpeoplelearned employableskillsinlinewithUSAIDͲSLDPNewCriteriaProjects.—EmpowermentofYouth x OnͲtheͲJobtraining,withCromerGroup,wasaprogrambasedonmatchingyoungjob seekerswiththeopenedpositions,toovercomethemismatchbetweenworkforcedemand andsupply.ͲͲNCP x Supportingvocationaleducationandtraining(VET)schoolstobecomeleadersoflocal economicdevelopment—Uzice,Vranje,SuboticaIMCs,withtheBelgradeOpenSchool.The aimoftheactivitywastoincreasethedialoguebetweenbusinessesfromthewood processing,furniture,textiles,footwear,andagribusinessindustrieswithVETschoolsto bettermatchworkforcesupplyanddemandandtobuildthecapacityofVETschoolsto attractmorestudentsandofferbettereducationalcontent.—NCP x ThetextilesectorinNoviPazarworkedcloselywiththeLeatherandTextileVocational SchoolundertheguidanceofSLDP'sdenimteam.Inadditiontoaddingnewcurriculaand equipmenttotheschool,thiscooperationhasresultedinarobustinternshipprogramand practicalclasseswithlocalfirms. x ICTClusterAcademiesinNisandNoviSadͲledIMCs.—NCP

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ACCOMPLISHMENTS:

x Sincethebeginningoftheproject,782youthshaveparticipatedinSLDPͲsupported educationalprograms,and452internshipswereimplementedwiththeProjectsupport. x ThemostsuccessfulYouthDevelopmentcomponentactivitieswereimplementedthrough grantassistancetotheSmartKolektivCSO,wheretheprojectcreatedinternshipand entrepreneurshipopportunitiesforyoungpeopleacrosstheNis,NoviSad,Kraljevo,and SuboticaͲledIMCareas(covering17municipalities);theGroup484CSO,totrainandhelp youthfindemploymentandstarttheirownbusinessesin12municipalitiesintheNoviPazar, Vranje,andUziceͲledIMCareas;onͲtheͲjobtrainingimplementedwithCromerGroup, duringwhich166internswereplacedin36companiesacross14municipalities;andICT ClusterAcademiesinNisandNoviSad,whereoverasixͲmonthtrainingprogram,65 unemployedyoungpeopleacquiredskillstopreparethemforjobsintheITindustryand41 participantsfoundnewemploymentaftercompletingtheICTAcademyprogram. x Intotal,657youthsparticipatingintheseprojectͲfundedactivitiesfoundnewemployment.

OnSeptember25,2014,31youthofficeandyouthcivilsociety OneoftheonͲtheͲjobtrainees,whoworkedina representativeswereaccreditedaftercompletingaprogram clothingfactoryinsouthernSerbia,poseswith conductedbytheNationalAssociationofYouthWorkPractitioners hermentor.In2014,internswereplacedin33 (NAPOR)andsupportedbytheproject.ThenineͲmonthprogram companiesfromIT,foodprocessingand coveredtopicssuchasyouthwork,leadership,volunteerism,and clothesproduction(fashion)sectors. projectmanagement.

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4.LESSONSANDCONCLUSIONS

SLDPwasathinkingperson'sproject.Owingtooriginaldesignassumptionsthatprovedunrealisticor unmanageableorsimplylesssignificanttotheactualitiesofthepoliticaleconomy,USAIDand projectmanagementcollaboratedaspartnersintheexcitingchallengesofreͲtargetingandreͲ invention.Naturally,muchlearningwasinvolved,andthefollowingisourlistofimportanttakeͲ awaymessagestoinformfuturedecentralizeddevelopmentinSerbiaand,possibly,inmanyother locales.

1. InterͲmunicipalcooperation(IMC)isausefulandsophisticatedtoolforlocaleconomic development,butforittowork,circumstancesonthegroundmustapproximatethe conditionsnecessarytoIMCsuccess.InSerbia,IMCis,atbest,anadhocsolution,useful forcollectiveprojectsthatmakesenseandpossesseconomiclogic,butnotasasteady, continuousplatformtowhichmunicipalitiesmustcontributeforthesakeofmaintaining theIMCconstruct.SLDPsufferedfromhavingtoidentifyfixedIMCareasanddelivera fixedrosterofresults,regardlessofwhethertheinhabitantsoftheIMCwereatall interestedinsuchresults.IMCissimplyoneofmanylocaleconomicdevelopmenttools. Whenitisthebesttool,itshouldbeusedflexibly,andnotwhenothertools,suchas sectorcompetitivenessdevelopment,betterfittheneedsofcommunitieswithsharp, immediateeconomicproblemslikechronicunemployment.Thewoodfurnitureinitiative isaterrificexampleofhowtheIMCtoolcanbeused,incombinationwithasector competitivenesstool,among47municipalitiesandthenationalgovernment.Inthe future,thesemunicipalitiesmaynothingtodowithoneanotherinanyotherchallenge; butforthemoment,theyconstituteanIMCandmustcoordinatetheiractivitieswiththe nationalgovernmenttobuildanindustrythatwilladdjobstomostoftheireconomies. TheMountainBreakfastbrandisanotherexamplewheremanymunicipalitieshadto contributetomakethebrandwork.ManyofSLDP'sotherinitiatives,however,were singleͲmunicipalityprojectsthatcouldandwillbenefittheentireregion.Regional impact,suchasthatofagribusinesslaboratoriesandtraininginitiatives,isextremely valuable,buttheconstructofIMCisnotnecessarywhereonlyonelocalityinvestsand encouragesdevelopmentthatwillrewardnotonlytheparticipationofitsownpopulace, butalsothepopulationsofneighboringcommunities.TheIMCtoolisnottheonlyway tobringabouteffectiveregionaldevelopment.Ultimately,SLDPwasaregional developmentprojectthatconcentratedoncompetitivenessasatooltobuildprivate sectorgrowthtoaddjobs.WeusedtheIMCtoolwhenitwasuseful. 2. Institutionalstrengtheningindecentralizeddevelopmentworkiscertainlyimportant, butinacountrylikeSerbia,whichhasbeeninatransitionperiodformorethanadecade andwherecommunitiesandpeoplearehurtingfromeconomicdegradation,itmaynot bethemostusefulwaytospendscarcedonorresources.SLDP,whichwasasuccessor to12yearsoflargeUSAIDdecentralizationprojects,incorporatedtwoinstitutionalͲ strengtheningcomponentsatthebehestofUSAID'sRFP:publicadministrationreformto encourageeconomicgrowth(Component2)andcreationofmechanismsforyouth developmentandparticipationineconomicgrowthandpolicyͲmaking(Component3). Initsinitialyears,SLDPproceededtostrengtheninstitutionsinwaysexplicitlycalledfor

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inUSAID'sworkorder.Manypeopleweretrained,manypracticeswerealteredforthe better,butlocalcitizens,localleaders,andUSAIDitselfperceivedlittleevidenceofreal changeoreconomicgrowth.Thetrainings,thoughexcellent,weretoodiffuseand scattershottoproduceeconomicchange,andtheveryideathatinstitutional strengtheningcanhealtheimmediate(orevenmidͲterm)economicneedsofan impatientcitizenryremainsunproven.SLDP'ssolutionwastocontinuetouse institutionalstrengtheningasadiscretetoolforthegreater,moreimmediategoalof expandingprivatesectorgrowth.Aswesaidatthebeginningofthisreport,thatmeant channelingallofourinstitutionalstrengtheningworktowardimpactgoals,ratherthan continuingtopursueitasanendinitself.Theactoftrainingbecamelessimportantthan theresultthetrainingwasdesignedtoachieve.Peoplewilldisagreeoverthisapproach toinstitutionalstrengthening,butwherethepoliticaleconomyiserodingyearly,visible impactismorevaluablethanabstractcapacitybuilding,whereresultsaredistantand notcertain.Thisisparticularlytrueindecentralizedcommunitiesfilledwithhuman beingsstrugglingtofindrealͲlifestrategiesforanextremelyuncertainfuture.We believethatinstitutionalstrengtheningforitsownsakeisineffectiveasaninstrumentof concreteeconomicchange,unlessitiscloselyrelatedtoahardandimmediateimpact goalincommunitiesthathavingbeenwaitingyearsforanimprovedeconomy,asthey haveinSerbia. 3. Businessesmustbethekeypartnerforprojectsthatwishtodeliverpalpableeconomic growthimpactinadecentralizedproject.Initsinitialyears,SLDPattemptedtocreate economicprojectsthroughtheIMCtoolbypartneringwithlocaladministrations,civil society,NGOs,andbusinessassociations.Itwasaformulaforbusinessenvironment improvementcommoninmanyUSAIDcontractsnominallyintendedtobolster decentralizedeconomicgrowth.Theproject'smanagementfelleasilyintothe managerialpitfallstheformulaimplies.Havingnopartnersorconnectionsamongreal businessfirms,whentheprojectwascalledontoshoweconomicimpact,itcouldnot.It wasadoublypainfullessonforSLDP'smanagement:USAIDwillalwaysaskforeconomic impactineconomicprojects,regardlessofthewhetherthattheyarewrittenasprocess andbusinessenvironment(orevendialogue)programs;iffirmsarenotatthecenterof aproject'swork,itwillbeimpossibletodeliverconcreteeconomicimpactthatis attributabletotheproject'sactivities.Thereasonforthisisdeceptivelysimple—a marketeconomysucceedsandgrowsonlyifthefirmsinthateconomymakeproducts thatbuyersdesiremorethantheydesiresomeoneelse'sproducts.SLDPdiscovered almosttoolatethatitcanbefataltorunaneconomicprojectwhosegoalisimpact withoutworkingintensivelywithbusinessesthemselves.Industryassociations,NGOs, civilsociety,andgovernmentadministrationsmaydomanythings,buttheydonotmake productsofacostandqualitythatthefreemarketwillbuy.Andwithoutsuchproducts, marketeconomiesdonotgrowinasustainableway. 4. TomakeworldͲclass,competitiveproducts,firmsmusthaveworldͲclassmanagerialand operationalknowledge.Initsinitialyears,SLDPshiedawayfrominterventionsthat calledontheskillsofinternationalconsultants.Therewereseveralreasonsforthis reluctance,buttheyallstemmedfromtheideathatlocaltalentandlocalknowledge

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wassufficientlyskilledandmorecostͲeffectivethanforeignconsultantsindoingthe thingsnecessarytohelpSerbiansbuildaneconomy.Whenanewchiefofpartycameon boardtointroducetheideaofNCPprograms,heruffledfeathersbothinsideSLDPand atlowerlevelsofUSAIDbyadvocatingforforeignexpertise.Localconsultingtalent,no matterhowhardprecedingdonorprojectstriedtodevelopit,wassimplyinadequateto growbusinesssuccessinkeysectorsofSDLP'srosterofcommunities.TrainͲtheͲtrainer programs,usingfacultymemberstoteachbusinessmen,andestablishingbusinessand clusterassociationswereinterventionsthatsimplydidnotproduceworldͲclass consultantswhocouldhelprealSerbianbusinessesproduceworldͲclassproductsinthe manufacturingsectorscriticaltojobͲgrowthandeconomicdynamisminour communities.Fortunately,USAID'stopmanagementagreedtoallowustoreprisethe oldͲtimedevelopmentmodelofbringinginworldͲclassforeignconsultantstohelp businessesinselectedsectorselevatetheircompetitivegamebyintroducingdifficult managerialandoperationalchangesinthefundamentalsofbusinesscompetitiveness— productionefficiency,productionquality,targetedmarketing,andsalesapproachesto meetandsatisfydiscerningmarketdemand.SLDPcouldandshouldhaveuseditsforeign specialistsinaslightlybetterway,andwediscussthatbelow,butthereisnoquestion thattheintroductionofforeignconsultantswhoweresectorexpertsexposed,andin somecases,corrected,problemsthatimpededtheabilityofourpartnerbusinessfirms toexpandandpenetratenewmarkets.Theseproblemswereendemictofirm operationsandmanagement,andnoamountofgovernmentsubsidiesornew equipmentcouldhavemadethesefirmscompetitive.Basicskillsandknowledge fundamentaltomakingandsellingacompetitiveproductweremissing,andonly experiencedconsultants,withyearsofhandsͲonworkinthesectors,couldcapably assistinfillingthegapsthatcrippledsustainablegrowthinoursectors. 5. Foreignconsultantsneedclearmarchingorders.SLDP'ssectorworkbegantwoyears intotheprojectandcarriedanurgencytoshowsalesresults.Thisurgencyskewedour consultants’workmoretowardcreatingsalesthantoimprovingoperationalefficiencies inoursectors.Sustainabilityoffirmgrowth,however,dependsonafirm’sabilityto buildacompetitiveproductintermsofqualityandprice.Weshouldhavecontributed moreconsultantresourcestofirmͲlevelproductivityenhancementandfocusedlesson doingdeals.Thechiefofpartyshouldhaveresolutelyinstructedtheinternational consultantstodevoteseriousefforttolegitimatelyincreasingthefactoryͲlevel productivityoftheplayersinourvarioussectors,ratherthantomarketinglessͲthanͲ competitiveproductsthat,withconsultantadvice,ourfirmscouldtweaktolookmore worthy.Marketingandsalesareimportant,particularlyforfirmsinSerbiathatare completelyoffbuyers’radar,buttheremustbeagenuinelygoodproducttosellif successistocontinueandsectorsaretogrow.Thatsaid,resourcesmustalsobe allocatedtomarketingandsalesefforts. 6. Competitivenessactivitiesandgrantmechanismslackharmony.SLDPinitiallyhadalarge grantcomponentthatfollowedUSAID'segalitariangrantproceduresforitsyouth activities.Thisworkedwell,becauseyouthworkiswellͲknowninSerbiaandthereare severalorganizationsthat,applyingdifferentkindsofmethodologies,canperform

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usefullyandadmirably.Astheprojectbecamemorefinelyhonedtoprivatesector expansionprojectsundertheNCPs,however,webegantogivesoleͲsourcegrantsto provenandrarecandidates,justifyingtheselectionthroughevidenceofpast competenceandachievement.Thereasonforthisisthatweneededtomakesurethat theimplementergaveusanswersandsolutionsthatfitaccuratelyintootherpiecesof ourwork.Then,asworkbecamemoreparticularizedtotheexigenciesofsectorsand business,itwasclearthatthegrantprocess,evensoleͲsourced,wascumbersomeand inefficientcomparedwithcontractmechanisms.Asaconsequence,USAIDagreedto decreaseSLDP'sgrantcomponentandshiftthemoniesintoacontractcategory.The realityofcompetitivenessworkfavoredthisswitch,becausewewerelookingfor implementerstogiveuscertaintypesofdeliverablesusingcertaintypesof methodologies.Forinstance,ahighlysuccessfulsoleͲsourcegrant,whichcouldaseasily havebeenaservicecontract,wasissuedforarealcompetitivenessanalysisofthe Serbianeconomy,undertakenbyCEVES,athinktank.Ateverystepinthecreationof thisreport,projectstaffandCEVESprofessionalsmettoagreeonmethods,purposeand meaningofthedatauncovered.Theproject'sinputwasmorestringentandconstant thanwhatoccurswithmostgrants,evensoleͲsourced,andCEVESwasgracefultoaccept it.Butourcontrolwasstillsubjecttothegoodwillofthegrantee.Insimilarcasesof assistingwiththetargetingandimplementationofcompetitivenessactivities,wealso usedgrants,thoughcontractswouldhavebeenamoresuitablewaytosuperviseour partner'swork.Grantsareusefulinsomeareas,butbythetimeourNCPͲbasedwork began,wehadalreadylearnedthatthegrantmechanism,withitsproceduresandits monitoringapproaches,wasaninefficientandburdensomewaytoensureperformance ofwhattheprojectreallyneededfromitslocalpartners.

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ANNEXA.INTERͲMUNICIPALCOOPERATIONAREASUPPORT A.UziceͲledInterͲMunicipalCooperation(IMC)Area TheIMCareawasformedinDecember2011.SinceMarch Inter-Municipal Cooperation 2013,theIMCandtheProjectimplementedthe”UziceIMC RegionalValueChain”newcriteriaprogram. Partners IMCAreaActivities: UZICE CITY Population: 78,018 Unemployment: 21% x Stimulatedemandforlocalfoodproductsandhandicrafts ofthedestinationsofTara,Zlatibor,andZlatarby Economic Base: metal and machine industry, textile and wood processin connectingthehotelindustryandothertourismͲrelated industry businesseswithspecificvendorsinatleastthree categoriesofproducts. x Furnituresectorassistance. x AssessmentofFDIlocationpotential. CAJETINA MUNICIPALITY x BusinessͲFriendlyCertification. Population: 14,726 x SupporttoplannedPonikveAirport. Unemployment: 16% x Developmentofademandassessmentonestablishment Economic Base: tourism, agriculture, ofanintegrateduniversityinUzice. craftsmanship x OnͲtheͲjobtrainingprogramforyouths. x PublicUtilityCompany(PUC)monitoringactivity. Results: NOVA VAROS MUNICIPALITY Population: 16,758 • RepresentativesoffurniturecompaniesintheIMCarea Unemployment: 47%

learnedaboutefficientmarketingstrategies,latestsales Economic Base: tourism, agriculture trends,andbestpracticesintheinternationalfurniture sectorandparticipatedattheIMMfurniturefairin Cologne. • LocalEconomicDevelopment(LED)practitionersandthe ZlatiborRegionalDevelopmentAgency(RDA) representativeslearnedhowtopresentlocalpotential PRIJEPOLJE MUNICIPALITY Population: 36,713 andattractinvestments,retainandgrowexisting Unemployment: 51% businesses,manageLED,evaluatethepotentialof brownfields,andtoprioritizeandredevelopthesesites. Economic Base: textile and wood processing industry, agriculture •WithSLDPsupport,theZlatiborRDAdevelopedand launchedalocalgastronomicbrand,“Mountain Breakfast,“toexpandthelocal,tourismͲbased,economy

andhelplocalproducerssustainablyconnectwiththe regionaltourismindustry.Aspecializedlocalstorefor PRIBOJ MUNICIPALITY homeͲmadefoodproductswasopenedinZlatarandan Population: 27,127 Unemployment: 50% onlineplatformcreatedtopromotethe“Mountain Breakfast“conceptandproducts.TheSerbianTourism Economic Base: automotive industry Organizationawardedthe“Mountainbreakfast“concept agriculture, tourism

withtheTourismFlower,thenation’shighestawardin thefieldoftourism. •Tohelpequiplocalyouthwithskillsthatregional employersdemand,astudywasdevelopedtoguidetheestablishmentofaUniversityinUzice.

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•PrijepoljeandNovaVaroswereassistedtodevelopandpresenttoinvestorsapublicͲprivate partnership(PPP)actionplantobuildaregionalcoldstorageandcogenerationbiomassheating facility,respectively.PPPtoolkitsforlocalinfrastructuredevelopment,energyefficiencyand parkingservicesweredeveloped,andaGuidefordevelopmentofsuccessfulPPPswas published. •Aguideforbuildingpermittingwascreated,andtheinvestordatabaseinNovaVaros municipalitywasupdated,aspartoftheefforttoachieveBusinessͲFriendlyCertification. •EightyouthteamswereawardedbusinessstartͲupgrants(€1,200each)aspartofprojectͲ supportedCSO“Group484”activities. • Publishedguidetoimprovecooperationbetweenvocationalschoolsandprivatesector;it examineslabormarketsupplyanddemandandlaborneedsofkeysectors. •Afterparticipationintheproject'stwoͲmonthonͲtheͲjobtrainingprogram,sixyouthshave foundjobs.

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B.NoviPazarͲledInterͲMunicipalCooperation(IMC)Area TheIMCareawasformedinJuly2011.SinceMarch2013,the IMCandtheProjectimplementedthe“NoviPazar: EntrepreneurshipthatSells”newcriteriaprogram. Inter-Municipal Cooperation IMCAreaActivities: Area Partners •DenimSectorassistance. •AgricultureSectorassistance. •FurnitureSectorassistance. •FootwearSectorassistance. NOVI PAZAR CITY Population: 117,084 •AssisttheRegionalCenterforAgriculturalDevelopment Unemployment: 53% (RCDA)inSjenicatoestablishaproducttestinglaboratory. • RegionalAgriculturalCompetitivenessAnalysisas Economic Base: textile, road PreconditionandToolforFDIAttractionͲTutin,Sjenica, construction, trade NoviPazar. • Providetechnicalassistancetoagribusiness(herbssector) •BuildingSMEcompetitivenessinSandzak. • PublicUtilityCompany(PUC)monitoringactivity. TUTIN MUNICIPALITY •AssetManagementandBrownfieldReͲDevelopment. Population: 36,054 Unemployment: 59% • StudyonRegionalBiomassUtilization. •Youthdevelopmentactivities. Economic Base: furniture production, trade, agriculture, Results: forestry •Ozonejeansfinishingequipmentpurchasedtogivelocal denimmanufacturersacompetitiveadvantageandenable SJENICA MUNICIPALITY themtoattractecologicallyͲconsciousbuyerswillingtopay Population: 27,970 moreforanecoͲfriendlyproduct.Thismodernequipment Unemployment: 47% significantlyreducestheuseofwaterandenergyand eliminatesharmfulbleachingagentsinthefinalstagesof Economic Base: agriculture, jeansmanufacturing. textile, food industry • ProDenimassociationofproducersestablished.

• Providedrecommendationsforexpandingthedenimsector

andattractinginvestors;trainedlocalproducersontopics rangingfromtheuseofsocialmediainmarketingtojean finishingtechniquesandenvironmentallyfriendly technologies.Denimandshoeproducersimprovedtheirproduction,assortment,andmarketing andparticipatedininternationalshoeanddenimtradefairs.Denimqualitycontroltrainingheld andmanualpublished.Assistedinopeningofaretailstore“Jeansfactory”inBelgrade,asajoint ventureofthreeNoviPazarͲbasedcompanies.In2015,JeansFactoryreportedatotalsalesof $155,000,whileinthefirstthreemonthsof2016,thestoremademonthlysalesof$41,000on average,a25percentincreaseoverthesamequarterin2015.Duringthelastthreemonths,the storeserved1,340customerseverymonth,eachspendingapproximately$30. •Tentextileproducersparticipatedat“BreadandButter”TradeFairinBerlin,Germany. • ProjectexpertstrainedtheRegionalCenterforAgriculturalDevelopment(RCAD)staffon developmentandapplicationoflaboratoryprotocolsforfieldsamplingofmilkandmeat accordingtointernationalfoodsafetyandqualitystandards.RCADstaffalsolearnedhowto

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interprettestresultsandprovidecustomerswithrecommendationstoimprovemilkandmeat quality. • LocalEconomicDevelopment(LED)practitionerslearnedhowtopresentlocalpotentialand attractforeigndirectinvestments,retainandexpandexistingbusinesses,manageLED,evaluate potentialsofbrownfields,andtoprioritizeandredevelopthesesites. • ProjectassistedTutinandalocalagribusinessdevelopmentcompanyinestablishinglinkswith investorsandbuyersattheBiofachOrganicFoodFair. •AvaluechainAnalysisandamarketingplanwasdevelopedwithrecommendationsonhowto improvedairyproductionandincreaseregionalcompetitiveness. •TutinwasassistedtodevelopandpresenttoinvestorsapublicͲprivatepartnership(PPP)action planfortheconstructionofacenterforthecollection,processing,andsaleofforestfruitand medicinalherbs.AguidefordevelopmentofsuccessfulPPPswaspublished. •InpartnershipwithSEDA,sectorbrochurespublishedtopromotelocalcompaniesandattract investorsinthetextile,furniture,footwear,andfoodindustries. •Tosupportworkforcedevelopment,purchased3DmodelingsoftwareandplotterfortheNovi PazarDesignandTextileVocationalSchool. • FouryouthteamswereawardedbusinessstartͲupgrants(€1,200each)aspartofprojectͲ supportedCSO“Group484”activities.

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C.NisͲledInterͲMunicipalCooperation(IMC)Area TheIMCareawasformedinJuly2011.SinceMarch2013,the Inter-Municipal Cooperation IMCandtheprojectimplementedthe“GrowSouth”new Partners criteriaprogram. IMCAreaActivities: NIS CITY Population: 255,479 Unemployment: 36% •Establishaproductdevelopmentresearchlaboratoryatthe FoodTechnologyParkinLeskovac. Economic Base: Electronic industry, machine industry, • TechnicalassistancetotheFoodProcessingSupportCenterin textile, agriculture, transport thecityofNis. • Investmentpromotion–comprehensiveFDIcoaching program;businessmissions/studytourstoItalyandthe CzechRepublic. LESKOVAC CITY • DevelopmentofpreͲfeasibilitystudiesforselectedindustrial Population: 156,252 zonesinNisandMerosina. Unemployment: 43%

• FacilitationofSerbianFDIMissiontoGlobalConnect Economic Base: Chemical ConferenceinStuttgartonpresentinginvestment industry, agriculture, food opportunitiesandattractinginvestments. industry, textile, wood •OrganizationofthestudyvisittotheIMMFairinCologne. processing industry

• RegionalAgriculturalCompetitivenessAnalysisas PreconditionandToolforFDIAttractionͲNis,Doljevac,

GadzinHan,Leskovac,Merosina. MEROSINA •ICTClusterAcademy. MUNICIPALITY • SME/InnovationͲdevelopingtiesbetweenthescienceand Population: 14,812 businesscommunities. Unemployment: 55%

•InnovationStudyTourtotheUKͲDevelopinginnovationand Economic Base: Agriculture knowledgebasedeconomythroughpartnershipbetween education,business,civilsocietyandgovernmentsectorͲin cooperationwiththeBritishCouncil(partofamultiͲIMCarea activitywithKraljevoandNoviSad). GADZIN HAN MUNICIPALITY •AssetmanagementandbrownfieldreͲdevelopment. Population: 10,464 •EstablishmentofFoodProcessingSupportCenter(FPSC) Unemployment: 43% (BuildingaSustainableModelofManagementandOperation Economic Base: Agriculture, ofFoodProcessingSupportCenter). food industry •Agriculturaldemandanalysis. • Technicaldocumentationforwatersupplysystem. •Agriculturalsupplyanalysis. • AssessmentofFDIlocationpotentials. DOLJEVAC • BankruptcyandLiquidationͲSupportingthecityofNisto MUNICIPALITY Population: 19,561 shapeitsrole,asamaincreditor,inthebankruptcycaseof Unemployment: 59% theNisBrewery. Economic Base: Agriculture, food processing industry Results: x LocalEconomicDevelopment(LED)practitionerslearned howtopresentlocalpotentialsandattractforeigndirectinvestment,retainandexpandexisting businesses,manageLED,evaluatethepotentialofbrownfields,andtoprioritizeandredevelop thesesites.

SLDPFINALREPORT Page|54 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT x ThisIMCareaisbyfartheleadingIMCregioninattractingnewinvestmentsinthelastthree years.Atotalof$64.4millionofforeignanddomesticinvestmentswerecompletedinMerosina, Leskovac,andNis,andadditional$116millionisexpectedinthenextonetothreeyears,based oncontractssignedbetweeninvestorsandlocalgovernmentsofNis,Leskovac,andDoljevac. x RegulatoryandadministrativebarrierstobusinessgrowthintheIMCareaanalyzedbyNALED and21recommendationsadvancedforimprovement.ExpertassistanceprovidedtoMerosinato implementrecommendations. x ICTClusterAcademywaslaunchedinNis,toequipyoungandunemployedpeoplewiththe knowledgeandskillsrequiredbyITsectoremployers.24graduatescompletedthefirstyear,and morethan50percentofthemhavealreadyfoundjobs. x ProjectassistedintheestablishmentoftheFoodProcessingSupportCenter.AnewwebͲportal “GrowSouth”waslaunchedtohelpgrowtheregionalagribusinesssector. x ApilotplanfornewproductdevelopmentwasopenedattheFoodTechnologyParkinLeskovac, toenablefoodprocessorstodevelopnewandimprovedproductsinacostͲefficientway,andto increasetheircompetitivenessandboostsales.20newproductsweredevelopedandfive existingonesimproved.Salesofnewlydevelopedproductsreached$94,000permonth. RevenuesofsixTFPSMEswereincreasedby8percent,andemployment,by23percentfrom 2013through2015. x Investorteaserspreparedtoassistthepublicsaleoftheremainingsocialenterprises. x RepresentativesoffurniturecompaniesfromtheIMCarealearnedaboutefficientmarketing strategies,latestsalestrends,internationalfurnituresectorbestpractices,andparticipatedin theIMMinternationalfurniturefairinCologne. x NisandDoljevacwereassistedtodevelopandpresentpublicͲprivatepartnership(PPP)action planstoinvestors;AguidewaspublishedfordevelopmentofsuccessfulPPPs,andPPPtoolkits (localinfrastructuredevelopment,energyefficiency,parkingservices)werecompleted. x ThreePublicUtilityCompanies(PUC)institutedastandardizedfinancialandtechnical performancereportingtomunicipalities,withthegoaltoimprovePUCefficiency,thusenabling localgovernmentstofocusmoreonoveralleconomicdevelopmentandjobcreation. x TwelveyounginternsemployedontheProjectͲsupportedYouthBusinessSerbiaprogram;three businessstartͲupideasreceivedfavorablecredit;16youthsfoundjobsafterparticipatinginthe project'stwoͲmonthonͲtheͲjobtrainingprogram.

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D.VranjeͲledInterͲMunicipalCooperation(IMC)Area TheIMCareawasformedinJune2011.SinceMarch2013,theIMCandtheprojectimplementedthe “InvestonCorridor10”newcriteriaprogram. IMCAreaActivities: x Furnituresectorassistance Inter-Municipal Cooperation x Footwearsectorassistance Area Partners x Investmentpromotion–comprehensiveFDIcoaching program;businessmissions/studytourstoItalyandtheCzech VRANJE CITY RepublicandFDIMissiontoGlobalConnectConferencein Population: 87,228 Stuttgartinpresentinginvestmentopportunities. Unemployment: 29% x DevelopmentofpreͲfeasibilitystudiesforselectedindustrial zones. Economic Base: Textile, furniture producing, leather and x RegionalIndustrialWorkforceContinuousDevelopment shoe industry, machine industry CenterVranjeOperationalModelStudy. x PreparationofthemaindesignforinfrastructureintheVranje IndustrialZone"Bunuševac". x Preparationoftechnicaldocumentationforinteriortraffic BUJANOVAC MUNICIPALITY roadintheIndustrialZone. Population: 43,302 x AssetmanagementandbrownfieldreͲDevelopment. Unemployment: 36% x AssistingcityofVranjeandMunicipalityofBujanovacin Economic Base: Agriculture, reviewingBFCstandards. food processing, wood x DevelopmentoftheRegionalWasteManagementPlanfor processing PēinjaRegion x Creationoftechnicaldocumentationforinstallmentof effluentmetersincityofVranjeandthemunicipalitiesof Presevo,Bujanovac,andVladicinHan. PRESEVO x Tailoredtechnicalassistanceprovided,allowingBujanovacto MUNICIPALITY obtainlandforaplannedeconomicfaculty Population: 34,904 Unemployment: 47% x ExpertassistanceandonͲtheͲjobtrainingprovidedfor Economic Base: Wood preparationofcrossͲbordercooperation(CBC)projects processing industry (BulgariaͲSerbia). x Regulatoryandadministrativebarrierstobusinessgrowthin theIMCareaanalyzedbyNALEDand21recommendations advancedforimprovement.Expertassistanceprovidedto VladicinHantoimplementrecommendations. VLADICIN HAN x Youthdevelopmentactivities. MUNICIPALITY Population: 23,703 Unemployment: 52% Results: Economic Base: Fruit x Tailoredtechnicalassistanceprovided,allowingBujanovacto processing, wood processing, production of paper packaging obtainlandforaplannedeconomicfaculty. x Shoeproducersimprovedtheirproduction,assortment,and marketingandparticipatedat"GDS”and“TagIt!” internationalshoetradefairs. x Detailedinfrastructuredevelopmentdesignsandacadaster topographicplanforanewregionalindustrialzone

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“Bunusevac”delivered,enablingfurtherdevelopmentoftheIZandattractingnewinvestors. x 10ͲyearRegionalWasteManagementPlan(RWMP)forPcinjaregiondeveloped($40,000grant); theplananticipatesthedevelopmentoftransferstationsinBujanovacandPresevoand expandingtheexistinglandfill“Meteris,”locatedinVranje. x ExpertassistanceandonͲtheͲjobtrainingprovidedforpreparationofcrossͲbordercooperation (CBC)projects(BulgariaͲSerbia).$235.000ofEUCBCfundswasawardedforimprovementof competitivenessofregionalfurnituremanufacturers. x RegulatoryandadministrativebarrierstobusinessgrowthintheIMCareaanalyzedbyNALED and21recommendationsadvancedforimprovement.ExpertassistanceprovidedtoVladicin Hantoimplementrecommendations. x LocalEconomicDevelopment(LED)practitionerslearnedhowtopresentlocalpotentialand attractforeigndirectinvestments,retainandgrowexistingbusinesses,manageLED,evaluate thepotentialofbrownfields,andtoprioritizeandredevelopthesesites. x Investorteaserspreparedtoassistthepublicsaleoftheremainingsocialenterprises. x RegionalWastewaterTreatmentSystemalongtheSouthMoravaRiver:Theprojectdeveloped technicaldocumentationfortheconstructionofwasteͲwatermeasuringpointsatseweroutfalls andinstallmentofeffluentmetersineachIMCmunicipality.10ͲyearRegionalWaste ManagementPlanforthePcinjaregionwasalsodeveloped. x CompletedandpresentedpublicͲprivatepartnerships(PPP)toolkitsforlocalinfrastructure development,energyefficiencyandparkingservices.InpartnershipwithNALED,publisheda GuidefordevelopmentofsuccessfulPPPs. x ItalianshoemakerGEOXandlocalvocationalschoolsignMoUaligningschoolcurriculumwith privatesectorneedsthusimprovingstudents’skillsforthelabormarket.Publishedguideto improvecooperationbetweenvocationalschoolsandprivatesector. x ThreeyouthteamsawardedbusinessstartͲupgrants(€1,200each)aspartofprojectͲsupported CSO“Group484”activities.

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E.KraljevoͲledInterͲMunicipalCooperation(IMC)Area TheIMCareawasformedinDecember2011.SinceMarch Inter-Municipal Cooperation 2013,theIMCandtheprojectimplementedthe“Kraljevo IMCCompetitivenessthroughInnovation”newcriteria Area Partners program. KRALJEVO CITY Population: 124,554 IMCAreaActivities: Unemployment : 34% x IncreasethebusinessͲorientedfocusofthe3DImPuls Economic Base: agriculture, trade, CentertoensuretheCenter’ssustainabilityand processing industry

increaseinnovationthroughwiderexploitationofthis uniqueresourcebySMEsbymakingthebusiness communitymoreawareoftheCenter’sresourcesand establishingcontactswithnewcustomers.The CACAK CITY Population: 114,809 assistanceincludedtwostudytours(totheCzech Unemployment: 28% RepublicandtheU.K.),websitedevelopment,and procurementofequipment. Economic Base: agriculture, industry, x Technicalassistanceforalargefurnitureproducerin trade, tertiary sector of the economy

Kraljevo. x Investmentpromotion–FDImissiontotheCzech RepublicandacomprehensiveFDIcoachingprogram. x FacilitationoftheSerbianFDIMissiontotheGlobal GORNJI MILANOVAC MUNICIPALITY ConnectConferenceinStuttgarttopresentinvestment Population: 44,438 opportunitiesandattractinvestments. Unemployment: 23% x DevelopmentofpreͲfeasibilitystudiesforselected industrialzones. Economic Base: industry, mining, x manufacturing DevelopmentofabusinessplanTechnologyParkin Cacak–“CompetitivenessthroughInnovation”Ͳwhich includesanactionplanforthefirstyearofoperation andorganizationalmodelforthePark. VRNJACKA BANJA x AssistancetotheCityofKraljevoandtheMunicipality MUNICIPALITY Population: 27,332 ofVrnjackaBanjatocomplywithbusinessͲfriendly Unemployment: 36% certificationrequirements. x RegionalAgriculturalCompetitivenessAnalysisas Economic Base: tourism PreconditionandToolforFDIAttractionͲRaska. x InnovationinagriculturalproductionͲpossibilitiesfor introducingnontraditionalcropsthathavemarket potentialinRaskaandVrnjackaBanja. RASKA MUNICIPALITY x AssetManagementandBrownfieldReͲDevelopment– Population: 24,680 assessment,gapanalysis,studyvisittoUziceasa Unemployment: 42%

mentorcityforassetmanagement,TAtoselectedlocal Economic Base: agriculture, tourism governmentstoresolvekeyproprietarychallenges neededforimplementationoftheactivitiesthathaveaspatialcomponent. Results: x MultimedialaboratorywithinKraljevo’sImPuls3Dprintingandinnovationcenterfurnishedto helpentrepreneursacquirenewskills,improveknowledge,reduceproductioncosts,andapply innovation.WithbusinessdevelopmentassistancefromSLDP,thenumberofclientorders increasedfrom25in2013to63in2014.

SLDPFINALREPORT Page|58 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT x RepresentativesoffurniturecompaniesfromtheIMCarealearnedaboutefficientmarketing strategies,latestsalestrends,andinternationalfurnituresectorbestpracticesandparticipated atinternationalIMMColognefurniturefair. x LocalEconomicDevelopment(LED)practitionerslearnedhowtopresentlocalpotentialand attractforeigndirectinvestment,retainandgrowexistingbusinesses,manageLED,andevaluate thepotentialofbrownfields,andtoprioritizeandredevelopthesesites. x TohelpKraljevoattractinvestors,apreͲfeasibilitystudyincludingdetailedconceptualdesign waspreparedforthelocalindustrialzone(IZ);thestudyindicateswhatthecityhastodoto maketheIZinvestorͲready. x Aninnovationstudytourwasorganizedforbusinessclustersandscience/technologycenters. Participantslearnedofbestpracticesinconnectingacademicandbusinesscommunitiesto enhancebusinessinnovationandexpandtheprivatesector;completedanalysisofopportunities forlinkingR&DinstitutionswithSMEsector. x Investorteaserspreparedtoassistthepublicsaleoftheremainingsocialenterprises. x RaskawasassistedtodevelopandpresenttoinvestorsapublicͲprivatepartnership(PPP)action planforconstructionofarecyclingyard;PPPtoolkitsforlocalinfrastructuredevelopment, energyefficiencyandparkingserviceswerecreated;aGuidefordevelopmentofsuccessfulPPPs waspublished. x CreateddatabaseofinvestorsandbrownfieldlocationsinKraljevoandVrnjackaBanjato advancestepstoBFCachievement. x EightyounginternswereemployedwithintheProjectͲsupported“YouthBusinessSerbia” Program;twobusinessstartͲupideasreceivedfavorablecredittermsfromErsteBank(lower interestrateandnocollateral). x Afterparticipatingintheproject’stwoͲmonthonͲtheͲjobtrainingprogram,30youthshave foundjobs.

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F.Zrenjanin–ledInterͲMunicipalCooperation(IMC)Area TheIMCareawasformedinDecember2011.SinceMarch2013, theIMCandtheProjectimplementedthe“Diversificationof Agriculture–NewJobsforRuralYouth”newcriteriaprogram. Inter-Municipal Cooperation IMCAreaActivities: Area Partners x TheHorticultureIncubatorPrograminallthree municipalities. x RegionalAgriculturalCompetitivenessAnalysisas PreconditionandToolforFDIAttractionͲKikinda,Novi Beē ej,Zrenjanin ZRENJANIN CITY Population: 122,714 x DevelopmentofpreͲfeasibilitystudiesforselected Unemployment: 22% industrialzones. x AssistanceinBusinessͲFriendlyCertification. Economic Base: agriculture, food x AgriculturalDemandAnalysis. processing, textile, metal and x AssetManagementActivityͲRulebookonAdministration chemical industry

forAssetInventoryingandManagementandaRulebookon DisposalofMunicipalProperty;organizedstudyvisitto UziceasaMentorCityforassetmanagement;TAto KIKINDA MUNICIPALITY selectedlocalgovernmentstoresolvekeyproperty Population: 59,329 challenges. Unemployment: 27% x PromotionofinterͲmunicipalcooperation(IMC)and initiativesinBanatRegion. Economic Base: agriculture, food x AssistancetoRDABanatinprojectpreparationforEU processing, metal and chemical funds. industry

Results: NOVI BECEJ MUNICIPALITY Population: 23,847 x Morethan60unemployedyouthtrainedinfarm Unemployment: 40% management,while31beganvegetableproductionin greenhousesprovidedforbesttrainingparticipants;thus Economic Base: agriculture, far,morethan45tonsofproducehavebeensoldonthe tourism localmarketorexported,generating$40,000foryoung farmers. x AssistancetoRDABanatinprojectpreparationforEUfundsresultedinfundingof225,000euros approvedforthe“EducationtoEasierEmployment(E3)“project. x LocalEconomicDevelopment(LED)practitionerslearnedhowtopresentlocalpotentialand attractforeigndirectinvestment;retainandexpandexistingbusinesses;manageLED;evaluate potentialsofbrownfields,andprioritizeandredevelopthesesites;trainingandprojectͲ organizedparticipationatGlobalConnectinvestmentfairhelpedZrenjaninattractItalianand Russianinvestmentstoitsindustrialzone. x ZrenjaninwasalsoassistedtodevelopandpresenttoinvestorsapublicͲprivatepartnership (PPP)actionplanforthemodernizationoftheRusandaspacenter;aGuidefordevelopmentof successfulPPPswaspublished;PPPtoolkitsforlocalinfrastructuredevelopment,energy efficiencyandparkingserviceswerecreated. x DatabaseofinvestorsandbrownfieldlocationswascreatedinKikindaandNoviBecej,assteps towardachievingBusinessͲFriendlyCertification. x TohelpNoviBecejattractinvestors,apreͲfeasibilitystudyincludingdetailedconceptualdesign waspreparedforthelocalindustrialzone(IZ);thestudyindicateswhatthemunicipalityhasto dotomaketheIZinvestorͲready.

SLDPFINALREPORT Page|60 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT x 10municipalrepresentativesweretrainedtopreparetermsofreferenceforinfrastructure projects. x 18youthserviceprovidersweretrainedincareerguidanceandcounselingandstartedproviding servicestoyouthintheZrenjaninͲledIMCarea. x Tocurbunemployment,theZrenjaninYouthOfficewasassistedtopublisha“GuideforFuture Students.”

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G.SuboticaͲledInterͲMunicipalCooperation(IMC)Area

TheIMCareawasformedinNovember2011.SinceMarch Inter-Municipal Cooperation 2013,theIMCandtheprojectimplementedthe“Subotica Partners IMCAgribusinessExpansion”newcriteriaprogram. IMCAreaActivities: SUBOTICA CITY x ExpandingtheservicesoftheLaboratoryforTesting Population: 140,358 QualityofAgricultureProductsandExportCertification. Unemployment: 23.53% x InterͲmunicipalAgriculturalEducationalCenterinSombor Economic Base: agriculture, food –designandequipment. processing industry, tertiary sector x RegionalAgriculturalCompetitivenessAnalysisasa of the economy, tourism PreconditionandToolforFDIAttractionͲSubotica, Sombor,KanjižaͲanalyzedthreeindicatorsthathavethe mostinfluenceonthelevelofcompetitivenessand attractivenessforinvestors:existingresources,sector SOMBOR CITY competitivenessandothercomparativeadvantages. Population: 85,569 Unemployment: 26.88% x SupporttoestablishmentoftheKanjizalogisticscenterͲ

KanjizawasassistedtodevelopapublicͲprivate Economic Base: agriculture, food partnership(PPP)actionplan. processing industry, tourism x Investmentpromotion–TheprojectorganizedaSerbian BusinessMissiontoCzechRepublicandacomprehensive FDIcoachingprogram. x ParticipatedintheSerbianFDIMissiontotheGlobal KANJIZA MUNICIPALITY ConnectConference. Population: 24,995 x DevelopmentofpreͲfeasibilitystudiesfortheindustrial Unemployment: 30.50%

zoneinKanjiza. Economic Base: agriculture x AssistanceinBusinessFriendlyCertification. x AgriculturalDemandAnalysis,withrecommendationsfor accessingnewmarkets. x AgriculturalSupplyAnalysis–mappingtheneedsoffoodprocessorsinSubotica,Sombor,and Kanjiža. x ProtectionofGeographicIndicationͲStudyonprotectedproductsinaccordancewiththe regulationoftheInstituteforIntellectualPropertyandMinistryofAgriculture,Water ManagementandWatery–AppleproducedonSubotickoͲHorgoskasand. x DatabaseofinvestorsandbrownfieldlocationswascreatedinSomborasasteptoward achievingBusinessͲFriendlyCertification;SomborwasawardedtheBFCcertificateonDecember 4,2012. x ThreepublicͲprivatepartnershipstoolkits(forlocalinfrastructuredevelopment,energy efficiencyandparkingservices)werepresentedataregional“PublicPrivatePartnerships” ConferenceinNoviSad x “BusinessEnablingEnvironment–Brownfield“trainingconductedonevaluatingthepotentialof brownfieldlocations,theirprioritizationandredevelopment x RegionalDevelopmentAgencyforEasternSerbia(RARIS)conducted($39,000nationalͲlevel grant)ananalysisofavailablenonͲfinancialservicesforsmallandmediumsizedenterprisesand maderecommendationsonhowtheycouldbestandardizedandimproved x InpartnershipwiththeSerbianIntellectualPropertyOfficeandtheMinistryofAgriculture,a workshopwasorganizedtoexplainandpromotegeographicbrandingtoregionalagricultural producersandprocessors

SLDPFINALREPORT Page|62 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT x Thestudy„Diversificationoftheagriculturalproduction”anditsrecommendationswere presentedtorepresentativesofIMCagricultureandruraldevelopmentworkinggroupmembers, producerassociations,regionaleducationalandhealthinstitutions,andlocalgovernments x Topromoteregionalcompetitivenessandinnovationthroughimprovedbroadband infrastructure,aconferencewasheldwithhighofficialsfromtherelevantMinistry,Provincial andlocalgovernments x NationalAssociationofYouthWorkers(NAPOR)heldfivetrainingsforLocalYouthOffice workersfromSombortostrengthentheirrole,servicesandcapacities x 4youngentrepreneursselectedforbusinessmentorship;4companiesappliedtoreceive8 interns,withpossibilityforemployment;inthesecondround9internswereengagedby5 companies x WithintheYouthBusinessSerbiaprogram,fourbusinessstartͲupideaswereselectedand recommendedtoreceivefavorablecredittermsfromErsteBank(lowerinterestrateandno collateral) Results: x Tofacilitateexportofregionalfoodproducts,$95,000worthoflaboratoryequipmentwas purchasedfortheSuboticaPublicHealthInstitute,andstaffweretrainedtoperformcomplex analysisofpesticideresidue,foodsafetyandquality;theInstitutewasassistedtoreceiveofficial governmentaccreditationforitsnewfoodtestingservices.IntheperiodOctober2015–March 2016,82pesticideresidueanalyseshavebeenconducted. x Detaileddesignsdelivered,reconstructioncompletedandIMCAreaAgricultureEducation CenterinSomboropened.Thishelpedmunicipalityattract$8.5millionininvestmentfrom FerreroGroup,anItalianconfectioner.In2014and2015,theAgricultureEducationCenterin Sombordelivered115trainingeventsandpresentations,withanestimatedparticipationof 8,700persons,mostlyfarmers. x KanjizawasassistedtodevelopapublicͲprivatepartnership(PPP)actionplanforsettingupa logisticsanddistributioncenterforagriculturalgoodsandpresentittoinvestors;PPPtoolkits (forlocalinfrastructuredevelopment,energyefficiencyandparkingservices)werepreparedand aguidefordevelopmentofsuccessfulPPPswaspublished. x LocalEconomicDevelopment(LED)practitionerslearnedhowtopresentlocalpotentialand attractforeigndirectinvestment;retainandgrowexistingbusinesses;manageLED;evaluate potentialsofbrownfields;andprioritizeandredevelopthesesites. x TohelpKanjizaattractinvestors,apreͲfeasibilitystudy,includingdetailedconceptualdesign, waspreparedforthelocalindustrialzone(IZ);thestudyindicatedwhatthemunicipalityneeded todotomaketheIZinvestorͲready. x AdatabaseofinvestorsandbrownfieldlocationswascreatedinSombortoadvancesteps towardBusinessͲFriendlyCertification;Somborwasawardedthiscertificationin2012. x Publishedguidetoimprovecooperationbetweenvocationalschoolsandprivatesectorthat examineslabormarketsupplyandthedemandandlaborneedsofkeysectors. x ElevenyounginternsemployedontheProjectͲsupportedYouthBusinessSerbiaProgram;two businessstartͲupideasreceivedfavorablecreditfromErsteBank(lowerinterestrateandno collateral).

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H.NoviSadͲledInterͲMunicipalCooperation

(IMC)Area Inter-Municipal Cooperation Area Partners TheIMCareawasformedinJuly2011.SinceMarch2013,the IMCandtheProjectimplementedthe“MetroNoviSad:First PlaceforBusiness”newcriteriaprogram. NOVI SAD CITY IMCAreaActivities: Population: 381,388 Unemployment: 18.90% x DevelopmentofanInnovativeClusterͲWideProductto increasecompetitivenessoftheVojvodinaMetalCluster Economic Base: tertiary sector (VMC)membersbyinvolvingthemintheproductionofthe of the economy, processing firstinnovative,clusterͲwideproducttoincreasetheirsales, industry exports,preserveexistingjobs,andcreatenewones. x VMCInnovationandBusinessDevelopmentCenter– InnoBuddy. x Investmentpromotion–FDIcoachingprogramandBusiness SREMSKI KARLOVCI MUNICIPALITY MissiontoItalytargetedatpresentinginvestment Population: 8,839 opportunitiesandattractinginvestments(with Unemployment: 46.14% Confindustria). x FacilitationofSerbianFDIMissiontoGlobalConnect Economic Base: agriculture, ConferenceinStuttgartinpresentinginvestment tertiary sector of the economy opportunitiesandattackinginvestments x ICTClusterAcademy. x InnovationStudyTourtotheUKͲDevelopinginnovation BEOCIN MUNICIPALITY andknowledgebasedeconomythroughpartnership Population: 16,086 betweeneducation,business,civilsocietyandgovernment Unemployment: 34.29% sectorͲincooperationwithBritishCouncil(partofmultiͲ IMCareaactivitywithNisandKraljevo) Economic Base: industry, x Metalsectorvaluechaindevelopment–recommendations tourism, mining

onhowtobuildtheVMCintoanorganizationthatwould provideservicestoanetworkofmetalcompaniesin northernSerbia,helpingthembecomemorecompetitive TEMERIN andeventually,abletooperateintheinternationalmarket MUNICIPALITY formetalfabrication. Population: 28,275 x Preparationofthetechnicaldocumentationforthenew Unemployment: 30.80% industrialzoneinBeocin. x Preparationofthetechnicaldocumentationforthenew Economic Base: industry, craftsmanship, agriculture industrialzoneinTemerin. x PreparationofFeasibilityStudyforRegionalFiberOptic Network. x TechnicalassistanceforreachingBusinessFriendlyCertificationstandards. x CareerGuidanceͲtechnicalsupportforeducationalinstitutionsandyouthofficesfortheirrole oftheimplementationofCareerGuidanceStrategy. x DevelopmentofYouthBusinessSerbiaProgram Results: x TheprojectprovidedtechnicaldocumentationfortheBeocinIndustrialZone,legaladviceand supportforestablishmentofpartnershipbetweenLafargeandBeocin,tocreateanewbusiness parkonlandownedbythemunicipality,tomeetthedemandofnewinvestorsforadequate

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businessspaceandgeneratenewjobsintheregion.Thankstothedocumentationandthe publicͲprivatepartnershipagreementbetweenLaFarge(acementfactory),thelocalselfͲ governmentofBeocinandtheproject,twonewinvestorscametothebusinesspark:Mars Group(metalprocessing)andAgrogrnja(agribusiness). x A“BusinessEnablingEnvironment–Brownfield“trainingwasconductedonevaluatingthe potentialofbrownfieldlocationsandtheirprioritizationandredevelopment.Theprojectcreated adatabaseofinvestorsandbrownfieldlocationsinBeocinandNoviSadaspartoftheprocessof BusinessFriendlyCertification–NALED;NoviSadwasawardedthiscertificationinJune2012 andenteredintothereͲcertificationprocessinthesummerof2016. x LocalEconomicDevelopment(LED)practitionerslearnedhowtopresentlocalpotentialsand attractforeigndirectinvestments,retainandgrowexistingbusinesses,manageLED,evaluate potentialsofbrownfields,andprioritizeandredevelopthesesites. x TheprojectenabledVojvodinaMetalCluster(VMC)memberstobecomemorecompetitiveby providingtheClusterwithcustomerrelationshipmanagementsoftwareandmodernequipment (aCNCplasmacuttingtable).VMCmemberscannowlowertheirproductioncosts,connect moreefficientlywithpotentialforeignbuyers,andquicklyprocessinquiriesfromnewclients. From2013through2015,28VMCmembersincreasedtheirrevenueby11.6percent($9million) andhired3.2percentmoreemployees(63employees). x AnICTClusterAcademywaslaunchedinNoviSadtoequipyoungandunemployedpeoplewith theknowledgeandskillsrequiredbyITsectoremployers;45graduatescompletedthefirstyear, andmorethan25percentofthemhavealreadyfoundjobs. x ArchitecturaldesignpreparedfortheregionalEducationalTrainingCenterforProfessionaland WorkingSkillsinNoviSad,totraingraduatesinskillsinhighbusinessdemand. x 25younginternsemployedwithintheProjectͲsupportedYouthBusinessSerbiaProgram;two businessstartͲupideasreceivedfavorablecredittermsfromErsteBank(lowerinterestrateand nocollateral) x Afterparticipatingintheproject'stwoͲmonthonͲtheͲjobtrainingprogram,15youthshave foundjobs.

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ANNEXC–FINALPERFORMANCEMONITORINGREPORT ThisAnnexprovidesstatusoftheproject’sperformanceindicatorsasofJuly31,2016.Itcoversthe projectimplementationfortheperiodDecember22,2011–July31,2016.ThestructureofthePMP fortheSustainableLocalDevelopmentProjectandthecurrentstatusoftheindicatorsarepresented inthetablebelow: Table1.StatusofSLDPIndicators # Indicator target actual 1 NumberofbusinessͲsectorjobscreatedinparticipating Y1 Ͳ Ͳ municipalitiesasaresultofProject’sIMCactivities Y2 Ͳ Ͳ Y3 300 479 Y4 700 3,975 Y5 1,000 928 Y6 Ͳ 1,576 LOP 2,000 6,958 2 Dollarvalueofdirectinvestment,bothrealizedandthosethat Y1 Ͳ Ͳ arecommitted Y2 Ͳ Ͳ Y3 $40M $0.00M Y4 $80M $218M Level Y5 $118M $241M Y6 $30M $60.9M LOP Impact (M=million) $268M $520M 3 Dollarvalueofincreasedrevenuesofcompaniesinsectors Y1 Ͳ Ͳ supportedbytheproject Y2 Ͳ Ͳ Y3 Ͳ $0.00M Y4 $1.3M $1.3M Y5 $21.1 $21.1M Y6 1 Ͳ $2.9M LOP (M=million) Ͳ $25.3M

4 NumberofinterͲmunicipaleconomicdevelopmentprojects Y1 Ͳ Ͳ implemented,whichmeetthecriticalpathmilestones Y2 Ͳ Ͳ Level Y3 8 12 Y4 8 20 Y5 4 21

Output 2 Y6 (7) 13 / LOP 20 26 5 NumberofbusinessͲfriendlymunicipalities Y1 2 0 Y2 Ͳ 8

Outcome Y3 10 11 Y4 5 6 Y5 0 Ͳ Y6 Ͳ Ͳ LOP 17 25

1 Targets for increased business revenues are not set for FY 2016. In previous years, business revenues were counted as part of the overall economic impact of the project, together with investments. 2 Indicator #4 counts active IMC projects in a year. By the end of FY2015, SLDP supported 21 IMC projects. The target set for FY 2016 includes 7 projects that were already started in previous years. In addition, SLDP initiated 5 new projects in FY 2016, related to wood processing sector. The list of active IMC projects in FY 2016 is available below, under section on Indicator #4.

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# Indicator target actual 6 Numberofmunicipalitiesthathaveestablishedorimproved Y1 Ͳ Ͳ managementpractices. Y2 9 7 Y3 8 6 Y4 8 15 Y5 7 3 Y6 (16) 19 LOP 32 31 7 NumberofpublicͲprivatePartnershipsestablishedwith Y1 Ͳ Ͳ projectsupport Y2 1Ͳ Y3 2 3 Y4 2 2 Y5 2 2 Y6 Ͳ Ͳ LOP 7 7 8 Numberofyouthwithincreasedcompetitivenessinthelabor Y1 Ͳ Ͳ market Y2 130 225 Y3 320 702 Y4 330 307 Y5 270 Ͳ Y6 Ͳ Ͳ LOP 1,050 1,234 9 NumberofmajorinfrastructureinterͲmunicipalprojects Y1 Ͳ Ͳ assistedinapplyingfortheEUandGOSfinancing Y2 1Ͳ Y3 1 2 Y4 1 4 Y5 2 3 Y6 Ͳ Ͳ LOP 5 9 10 Numberoflocallyelectedandappointedofficials,CSO Y1 Ͳ Ͳ members,media,andthebusinesscommunitytrained Y2 955 955 Y3 250 655 Y4 300 857 Y5 250 341 Y6 Ͳ 69 LOP 1,750 2,877 11 Corporatesocialresponsibilityinitiativessupported Y1 Ͳ Ͳ Y2 Ͳ Ͳ Y3 Ͳ 2 Y4 2Ͳ Y5 2 2 Y6 Ͳ Ͳ LOP 4 4 12 Numberofinitiativesinvolvingdialoguebetweenthepublic, Y1 0Ͳ privateandcivilsectors Y2 21 21 Y3 10 12 Y4 14 13 Y5 13 18 Y6 3 6 LOP 61 70

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DetailedReportontheStatusofIndicators Indicator EndofProject EndofProject target status 1.NumberofbusinessͲsectorjobscreatedinparticipating 2,000 6,958 municipalitiesasaresultoftheProject’sIMCactivities Definition:Businesssectorjobscreatedinpartnercities/municipalitiesasaresultofprojectefforts todevelopandimplementbusinessopportunitiesandtoengageprivateandpublicsectors.The indicatorwillcapturethefollowing: (a)Jobscreatedasaresultoftheprivatesectorinvestmentsandjobscreatedasaresultof increasedrevenuesoftheprivatesector,duetoprojectassistance. (b)Jobsfoundbyyoungpeopleassistedbytheproject.Theprojectwillprovideintensive assistancetoapproximately1,050youngpeople,anditisexpectedthat450ofthemwillbe hiredbytheendofprojectimplementation. Status:Atotalof6,958newjobswerecreatedsincethebeginningoftheproject,whichfallintothe followingsubcategories: x 5,772newjobswerecreatedbynewinvestmentsattractedandimplementedinthe projectpartnermunicipalitiesintheperiod2013Ͳ2016. x 529newjobswererecordedin69projectpartnercompaniesintheperiod2013Ͳ2016. x 657youthswhoparticipatedintheprojectͲsponsoredactivitiesfoundnewemployment intheperiod2012Ͳ2016. CommentsandProject’scontribution: Ͳ Foreigndirectinvestmentattractioncoaching,businessretentionandexpansiontraining, brownfieldredevelopment,andassetmanagementguidancehelpedpartnerIMCareasto attractandimplement$211.8millionofinvestmentsfrom2013to2016andcreate5,772 newjobs.Another$308.7millionofdirectinvestmentprojectsareinvariousstagesof preparationand,oncefinalized,theywillbringapproximately14,000newjobsintheyears tocome. Ͳ Anincreaseinemploymentof529wasrecordedin69Serbiancompanies.Theproject’s assistancewastailoredtotheirneedsofpartnercompaniesforimprovingproductionand marketingcapacities. Ͳ Theprojectwasalsofocusedonincreasingemployabilityofyoungpeopleand,though provisionoftrainingandinternshipprograms,contributedtotheemploymentof657 youths. Indicator EndofProject EndofProjectstatus target 2.DirectprivateandpublicsectorinvestmentsintoprojectͲ $268million $520.5million supportedIMCareas Definition:Theindicatormeasuresallinvestmentsundertakenwiththeproject’ssupportassociated withinterͲmunicipaleconomicdevelopmentprojectsandimprovedlocaleconomicdevelopment capacities.Theinvestmentsarebasedonsignedcontractsbetweenlocalgovernmentsandinvestors.

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Greenfieldandbrownfieldinvestment,andinvestmentsintoexpansionofcapacitiesofanypartsin valuechainssupportedbytheprojectwillbecounted.Bothinvestmentsfromtheprivateandpublic sectorswillbecounted. Statusofnewinvestments:SincethebeginningoftheProject:$520,534,313,including $211,849,532ofrealizedprivateandpublicinvestments($192,779,212fromprivateand $19,070,320frompublicsector),and$308,684,782ofcommittedinvestments,basedonnew contractssignedbetweentheprojectpartnermunicipalitiesandinvestors. CommentsandProject’scontributiontoinvestments: Toestimatethelevelofprojectcontributiontoinvestmentsinpartnercitiesandmunicipalities,the projectmadethreecategories,eachwithaproposedpercentageofattribution: Ͳ 20percentattributabletotheproject,forinvestmentsthattookplacebeforetheFDI coaching;wheremunicipalLEDofficesplayedsignificantroleandwheretheproject workedonbuildingmunicipalcapacityforLED. Ͳ 50percent,forinvestmentsthattookplaceinthepreviousthreeͲyearperiod,orfor whichtheinvestorsmadecommitmentsbysigninglandleaseorlandpurchase contracts,wheretheprojectcontributedbyprovidingnecessarytechnical documentationforindustrialzones,whereLEDofficestaffattendedFDIcoaching,or whereotherindirectsupportwasprovidedtothesectorsofeconomywherethe investmentstookplace. Ͳ 100percent,forinvestmentsthatarecommittedandrealizedduringandafterthe project’sdirectassistanceforincreasingmunicipalFDIcapacities(FDIcoaching)and targetedsectors,andwheretheproject’scontributionandqualityofassistancehas beenhighlyvaluedbymunicipalLEDoffices. Detailsaboutinvestmentsareavailableinthetableattheendoftheannex. Indicator EndofProject EndofProjectstatus target 3.Volumeofrevenuesofcompaniesinsectors $Ͳ3 $25.3million supportedbytheproject. Definition:TheindicatormeasuresthechangeinannualrevenueofbusinessesinIMCareas,sectors andsubͲsectorsofeconomythatparticipateinandbenefitfromtheProjectͲsupportedactivities. BusinessesarelegalentitiesregisteredintheRepublicofSerbia.Theycanbelongtocategoriesof entrepreneurs,agricultureproducers,smallandmediumenterprises,orlargeenterprises,asdefined bylocalcategorization. Increaseofbusinessrevenues:$25,325,000sincethebeginningofprojectimplementation. AsoftheendoftheProjectimplementation(August2016),theofficialstatisticaldataon2015 businessrevenuesarenotyetavailableonthewebsiteoftheAgencyforBusinessRegistries (Agencijazaprivredneregistre–APR).Datapresentedinthisreportarebasedoninputscollected fromSLDPpartnerfirmsandassociations,suchastheVojvodinaMetalClusterandtheTechnology 3 Targets for increased business revenues are not set for the FY2016. In previous years, business revenues were counted as part of the overall economic impact of the Project, together with investments.

SLDPFINALREPORT Page|70 SUSTAINABLELOCALDEVELOPMENTPROJECT FINALREPORT andFoodͲProcessingParkinLeskovac.Atotalof45companiesprovideddataandreportedatotalof growthofrevenuesby$2.9millioninthecalendaryearof2015.Thecollecteddataareavailableat theendofthisannex. CommentsandProject’scontribution: Projectexpertsworkedwith69individualcompaniesandwithninesectorclustersorassociationsof producers,assistingtheminimprovingtheirproduction,expandingtheirproductoffer,modernizing promotionalactivitiesandmaterials,andestablishingcontactwithpotentialbuyersabroad. Targetedsectorswere:textileͲdenim(9companiesinNoviPazarandtheProDenimandASSTEX associations),metalprocessing(28companies,membersoftheVojvodinaMetalCluster),ICT(9 companies,NiCATͲNisClusterofAdvancedTechnologiesandtheVojvodinaICTCluster),furniture(8 companies),footwear(8companies),foodͲprocessing(7companiesandTechnologyandFoodͲ processingParkinLeskovac). Indicator EndofProject EndofProject target status 4.NumberofinterͲmunicipaleconomicdevelopmentprojects 20 26 implementedthatmeetthecriticalpathmilestones Definition:AninterͲmunicipaleconomicdevelopmentprojectisdefinedasabusinessopportunity identifiedandimplementedinprojectͲsupportedIMCareasthatengagetheprivate,public,andcivil sectorstocreatejobs.(FormoreontheindicatordefinitionseeRevisedPMP,datedApril15,2013) Status:WithineightNewCriteriaPrograms,thereare21IMCeconomicdevelopmentprojectsin differentstagesofimplementation. Comments:ThelistofIMCeconomicdevelopmentprojectsisasfollows: VranjeͲledIMC: Project1. Investmentattraction Project2. IncreasingsalesandexportsoffootwearsectorSMEs Project3. ActionplanningforpositioningSerbiaasasolidwoodfurnitureͲexportingcountry NisͲledIMC: Project4. BuildingcapacityoftheNisFoodProcessingSupportCenter Project5. LeskovacTechnologyandFoodProcessingCenter Project6. InvestmentattractioninNisͲledIMCarea Project7. ICTAcademy Project8. ActionplanningforpositioningSerbiaassolidwoodfurnitureexportingcountry UziceͲledIMC: Project9. Valuechaindevelopmentbetweentourismindustrybuyersandpotentialvendorsin theIMCarea Project10. InvestmentattractionintheIMCarea Project11. ActionplanningforpositioningSerbiaassolidwoodfurnitureͲexportingcountry SuboticaͲledIMC: Project12. AlaboratoryforagricultureproductsinSubotica Project13. AnagriculturaltrainingcenterinSombor Project14. Investmentattraction(FY2014)

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ZrenjaninͲledIMC: Project15. EstablishingAgricultureBusinessIncubator Project16. Investmentattraction(FY2014) NoviPazarͲledIMC: Project17. IncreasingsalesandexportsofdenimsectorSMEs Project18. IncreasingsalesandexportsoffurnituresectorSMEs Project19. IncreasingsalesandexportsoffootwearsectorSMEs Project20. Acollectioncenterforherbsandforestfruitproducts Project21. ActionplanningforpositioningSerbiaassolidwoodfurnitureexportingcountry NoviSadͲledIMC: Project22. MarketexpansionofVojvodinaMetalCluster Project23. Investmentattraction Project24. ICTAcademy KraljevoͲledIMC: Project25: SupporttoImpulsCenterKraljevoandTechnologyParkCacak Project26. ActionplanningforpositioningSerbiaassolidwoodfurnitureexportingcountry Indicator–completedinFY2015 Endof Project EndofProject target status 5.NumberofbusinessͲfriendlymunicipalities 17 25 Definition:NumberofmunicipalitieswithNALED’sbusinessfriendlycertificateattheendofthe projectimplementation,includingthefollowing: (a) Atleast17participatinglocalgovernmentsassistedinachievingbusinessͲfriendlystandards bytheproject.ThismeansthattheprojectprovidedtechnicalassistanceandtheLG successfullyrespondedtoatleastoneNALED’srecommendation,resultinginmeetingat leastoneadditionalBFCcriterion. (b) Atleast17localgovernmentsinSerbiaarecertifiedand/orreͲcertifiedafterproject completion.CertificationandreͲcertificationattainedthroughNALED'sBusinessͲFriendly Certificationprogram. Status:CompletedinFY2015.25municipalitieswereassistedbytheProjectinBFCprocesssincethe beginningoftheProjectimplementation. CommentsandProject’scontribution TheProjectprovideddirecttechnicalassistanceforachievingBFCstandardsandFDIcoachingto25 partnermunicipalities. Indicator EndofProject EndofProject target status 6.Numberofmunicipalitiesthathaveestablishedorimproved 32 31 managementpractices. Definition:Thenumberoflocalgovernmentsthatmanageassetsmoresustainably,practicegood governancetechniques,andhaveintegratedbusinessͲrelatedserviceinitiativesintoIMC developmentplansandprojects.

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Inpractice,anymunicipalitythatmadeatleastthreeofthefollowingimprovementswillbecounted: 1) improvedassetmanagement(ifalocalgovernmentreplicatedUzicebestpracticesthrough mentoring) 2) improvedmanagementandmonitoringofpublicutilitycompanies 3) inventory,prioritization,andcommercializationofbrownfieldinvestments 4) improvementsmadebymunicipalitiesinaccordancewiththeBFCstandards(ifthereisatleast oneimprovedcapacity,measuredbytheBFCcriteria) 5) established/supportedbusinessrelatedservices/procedures(includingagribusiness)(ifalocal governmentsupportedtheestablishmentofamechanismthathelpsbusinesssectortogrow). Status:Atotalof31localgovernmentswereassistedintheireffortstoimproveatleastthreeofthe abovelistedmanagementpractices.GornjiMilanovacistheonlymunicipalitythathasconsistently beenuninterestedinparticipatinginprojectactivitiesdesignedtoimprovemanagementpractices. ThemunicipalityparticipatedonlyinoneTAactivity,whichfocusedonstrengtheningcapacitiesof theLEDOandmunicipalofficialsininvestmentattractionandretentionthroughSCTMtrainingand distancelearningtraining. CommentsandProject’sContribution: Theprojectteamworkedonimprovingcapacityofmunicipalitiestoeffectivelymanageservicesand capitalinvestmentprojectsofinterͲmunicipalsignificance.MainfocuswasonincreasingIMC competitivenessthrougheffectiveassetmanagement,utilizinglocaleconomicdevelopment mechanismsandtoolsandadvancinglegalframeworkthatspursinterͲmunicipalcooperation.The progressofIMCcapacitiesduringtheprojectimplementationispresentedinthetablebelow:

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Indicator–CompletedinFY2015 EndofProject EndofProject target status 7.NumberofPPPscreatedinthedeliveryofpublicservices 7 7 Definition:APublicͲPrivatePartnership(PPP)isacooperativeventurebetweenthepublicand privatesectorsthatmeetsclearlydefinedpublicneedsthroughanappropriateallocationof responsibilities,resources,risksandrewardsamongthepartners.APPPmustinvolvesome measurableprivatepartnercontributiontothecooperativeventureintermsofcashcontributions, monetizedinͲkindcontributions,and/ornonͲcashleverage. Status:CompletedinFY2015.SevenPPPswereinitiatedsincethebeginningoftheproject. CommentsandProject’sContribution: SevenPPPswerereported:APPPmodelofProDenimassociationinNoviPazartojointlyutilize ozonejeanͲfinishingequipment;PPPbetweentheMunicipalityofBeocinandLaFargecompany, aimedatinfrastructuredevelopmentandexpandingoftheBeocinindustrialzone;twoPPPswere establishedwithinYouthDevelopmentcomponentthroughpartnershipswithbanksforsubsidized startͲuploans;threePPPswithintheYouthHorticultureIncubatorProgramsinZrenjaninͲledIMC. IndicatorCompletedinFY2015 EndofProject EndofProject target status 8.Numberofyouthwithincreasedcompetitivenessinthelabor 1,050 1,234 market Definition:Youngmenandwomen,age15to30,participatinginoneofthetwoprojectͲsupported activities,aimedatincreasingtheircompetitivenessonthelabormarket: (a) Atleast250youthinternshipspilotedandsuccessfullyimplemented,whereat least30percentoftargetedinternsareinvolvedintheIMCnewcriteriaprograms. (b) Atleast800youthprogramparticipantsinprojectͲsupportededucational programs. Status:Sincethebeginningoftheproject,atotalof782youthsparticipatedinprojectͲsupported educationalprograms,and452internshipswereimplementedwithprojectsupport. CommentsandProject’sContribution ThemostsuccessfulYouthDevelopmentComponentactivitieswereasfollows: Ͳ GrantassistancetotheCSOSmartKolektivͲinternshipandentrepreneurship opportunitiesforyoungpeopleacrosstheNis,NoviSad,Kraljevo,andSuboticaͲledIMC areas(covering17municipalities). Ͳ CSOGroup484trainedyouthtofindemploymentandstarttheirownbusinessesin12 municipalitiesintheNoviPazar,Vranje,andUziceͲledIMCareas. Ͳ OnͲtheͲjobtraining(OJT)implementedwithCromerGroup,duringwhich166interns wereplacedin36companiesacross14municipalities. Ͳ ICTClusterAcademiesinNisandNoviSad,whereduringasixͲmonthtrainingprogram, 65unemployedyoungpeopleacquiredskillsindemandinthelabormarket,preparing themforjobsintheITindustry;41participantsfoundnewemploymentaftercompleting theICTAcademyprogram.

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Indicator–CompletedinFY2015 EndofProject EndofProject target status 9.NumberofmajorinfrastructureinterͲmunicipalprojectsassistedin 5 9 theprocessofapplyingfortheEUandGOSfinancing. Definition:Amajorinfrastructureprojectisdefinedas"heavyinvestments,i.e.basicinfrastructure, waterandwastewatersystems,solidwastemanagement,orroadinfrastructure.”Italsoincludes businessenablinginfrastructure,suchasbrownfields,greenfields,powersupply,andgas infrastructure.TheprojectwillprovidetechnicalsupporttoatleastfivesuchprojectsoninterͲ municipallevel,inordertoimprovestatusoftheirtechnicalpreparednessandincreaseprobability oftheirfinancing. Status:TheprojectassistednineinfrastructureinterͲmunicipalprojectsintheprocessofapplyingfor EUandGOSfinancing. CommentsandProjectcontribution: IntheVranjeͲledIMCArea: 1.EnvironmentalprotectionoftheSouthMoravaRiver.Basedontechnicaldocumentation developedbytheproject,theEU/Progresprogrampurchasedeffluentmeters.Vranjeconstructeda watereffluentsmeasurementstationandhasbegunusingthemetersinVranjskaBanja,while Presevo,Bujanovac,andVladicinHanhavenotyetconstructedmeasurementstations.However, VranjehassignedacontractwithKfWfor€15.2millionontheconstructionofawastewaterfacility; thecontractwassignedinNovember2013.TheprojecthasbeenenteredintotheSLAPdatabase. 2.“Meteris”regionallandfillwithrecyclingfacilities.Withtheassistanceofprojectexpertsandthe EUProgresprogram,aRegionalSolidWasteManagementPlanwasdevelopedandobtainedan approvalfromtheMinistryofEnvironmentalProtection.Bujanovicaddedthetransferstation projecttotheSLAPdatabaseinMarch2015aspartofthisRegionalSolidWasteManagement Project. 3.BunusevacIndustrialZonebypassroad.Theprojectfundedthedevelopmentofatopographic planforabypassroadthathasbeenenteredintotheSLAPdatabase.TheEUProgresprogram fundedthemajorconstructionplan.Atthetimeofreporting,thecityofficialsofVranjeworkon completingthedocumentation.Constructionworkshavenotstarted. 4.BunusevacIndustrialZone.Theprojectfundeddetailedinfrastructuredesigns.Designsofroads, watersupplyandfireprotectionsystem,sewerage,raindrainage,electricitysupply,and telecommunicationweredeveloped.ProjectdocumentationfortheIZwasdeliveredtoVranjein June2014,andtheprojecthasbeenenteredintotheSLAPdatabase.Thisdocumentpresenteda basisforthedevelopmentofthecompleteinfrastructureonthis32hasite,whereGEOXbuiltits factoryandanothertwoinvestorsstartedtheirinvestments. 5.CukarkaIndustrialZone.InPresevo,theprojectcompletedapreͲfeasibilitystudyforanindustrial zone.WhiledevelopingthepreͲfeasibilitystudy,theprojectdiscoveredthatanunsolvedland propertyissuethreatensthewholeactivity.TheMinistryofEconomyhasappropriated approximately$95,000totheMunicipalityofPresevofortheconstructionofapowernetworkto CukarkaIZ.TheprojecthadpreviouslyprovidedlegaladviceandonͲtheͲjobassistancetoPresevoon resolvingtheabovementionedproprietaryhurdlesrelatedtotransferoftheownershiponlandfrom the‘mesnazajednica’(submunicipallevelofgovernment)totheMunicipalityofPresevo.

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IntheNisͲledIMCArea: 6.WaterSupplySystem“Pustareka.”AfeasibilitystudywascompletedtohelptheDoljevac Municipalityplanasecureandcontinuoussupplyofpotablewaterfortheentirepopulationinthe prescribedquantityandquality.Basedonthestudy,themunicipalitywillsubmitaprojectproposal totheSerbianGovernmenttoreconstructtheregionalwatersupplysystem.Theprojecthasbeen enteredontotheSLAPdatabase. IntheSuboticaͲledIMCArea: 7.AgriculturalEducationalCenterinSombor.Theprojectsupportedthedevelopmentand reconstructionoftheCenter,whichwasdeliveredinFebruary2014.Thetechnicalcontrol assessmentofprojectdocumentationwascompletedinMarch2014.TheAgriculturalTraining CenterreconstructionwascompletedinAugust2014,andtheCenterhasbeencompletelyfurnished andequipped.Intheperiod2014Ͳ2015,theCenterorganized115trainingcoursesand presentations,withanestimatedparticipationof8,700people,mainlylocalfarmers. TheNoviSadͲledIMCAreahastwoindustrialzonesassistedbytheproject: 8.BeocinBusinessPark.TheProjectsupportedthedevelopmentofanewindustrialzoneinBeocin. Thegeotechnicalreportandtechnicalanalysiswithpreliminarycostestimatewerecompletedin January2014,anddetaileddesignsweredevelopedforallprojectcomponents:roads,watersupply system,sewagesystem,raindrainage,lowpressuregasdistributionnetworkand telecommunication.Thetotalvalueofprojectdocumentationis$58,000;thisdocumentationwas developedbySAFEGEengineeringcompany.ConstructionworkontheIndustrialZoneiseligiblefor supportbyProvinceofVojvodinaorGoSstatefunds,andthecityisactivelyengagedinsolicitingthis support.ThisprojectwasenteredintotheSLAPdatabaseinOctober2014.Thankstothe documentationandthepublicͲprivatepartnershipagreementbetweenLaFarge(cementfactory), thelocalselfͲgovernmentofBeocinandtheproject,twonewinvestorscametothebusinesspark: MarsGroup(metalprocessing)andAgrogrnja(agribusiness). 9.TemerinIndustrialZone.Alocationpermithasbeenissuedforanaccessroad.AGeotechnical ReportandGeodeticSurveyweredeveloped,andapreliminarydesignandafeasibilitystudywas beencompletedandsubmittedtotheTechnicalRevisionCommitteeoftheVojvodinaProvince Government.Afterthreemonths,theSerbianMinistryofConstruction,TransportandInfrastructure providedcommentsandsuggestionsthatneedtobeadoptedandincludedinthepreliminarydesign andfeasibilitystudy.Anewversionofthestudyandpreliminarydesignwaspreparedandsubmitted inDecember2014.Afterfinaladoptionofthenewstudyandpreliminarydesigns,themaindesign anddesignoftemporarytrafficsignalswerecompletedattheendofMarch2015.Theprojectwas enteredintotheSLAPdatabaseinFebruary2015. Indicator–CompletedinFY2015 EndofProject EndofProject target status 10.Numberoflocallyelectedandappointedofficials,CSO 1,750 2,877 members,mediaandthebusinesscommunitytrained Definition:Locallyelectedandappointedofficials,membersofCSOs,mediaandbusiness communityparticipateinanyprojectͲsponsoredtrainingand/orhavetheirskills/knowledge improvedthroughthetechnicalassistanceprovidedbytheproject. Status:SincethebeginningofProjectimplementation,totalparticipationinProjectͲsponsored trainingshasbeen2,877.Outofthatnumber,1,258werefemaleparticipants(44percent).

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Indicator–CompletedinFY2015 EndofProject EndofProject target status 11.Numberofcorporatesocialresponsibilityinitiativessupported 4 4 Definition:NumberofCSRinitiativessupported,demonstratingasustainablemechanism(s)to monitorandimprovelocalbusinessenvironment. CorporateSocialResponsibility(CSR)isacompany’ssenseofresponsibilitytowardthecommunity andenvironment(bothecologicalandsocial)inwhichitoperates.ThegoalofCSRistoembrace responsibilityforthecompany'sactionsandencourageapositiveimpactthroughitsactivitiesonthe environment,consumers,employees,communities,stakeholders,andallothermembersofthe publicspherewhomayalsobeconsideredasstakeholders.Companiesexpressthiscitizenship through,forexample(1)theirwasteandpollutioneducationprocessesand(2)bycontributing educationalandsocialprograms. Status:FourCSRinitiativescompletedsincethebeginningoftheproject’simplementation. CommentsandProject’scontribution 1) ERSTEBankestablishedacreditlineforyouthentrepreneursanddistributedapproximately 100,000eurosunderspecialconditionsthatincludelowerinterestrateswithnocollateralor guaranteesneeded.Additionallywithinthisprogram,called“SuperStep,”thebankprovides adviceandmentorshipforbusinessplanning. During2013,theprojectworkedtocreateinternshipandentrepreneurshipopportunitiesfor youngpeopleacrosstheNis,NoviSad,Kraljevo,andSuboticaͲledinterͲmunicipalcooperation areas(covering17municipalities).TogetherwithimplementingpartnerandSLDPgranteeSmart Kolektiv(SK),theprojectsupportedyouthtoacquirebusinessskillsandgaininternshipand entrepreneurshipexperiencethusenablingyoungpeopletosuccessfullyenterthelabormarket. Thisinternshipandentrepreneurshipassistanceprogram,carriedoutinpartnershipbetween SmartKolektiv,ErsteBank,andtheNationalEmploymentService,withsupportfromthe MinistryofYouthandSports,demonstratesthatcooperationbetweenthepublicandtheprivate sectorsisawinningcombinationfortacklingyouthunemploymentinSerbia. 2) UnicreditBankprovidedfinancialassistanceandactivelyparticipatedintheactivities organizedbytheCSOGroup484andtheprojectin2012and2013.Thisinitiativeaimedat trainingandhelpingyouthsfindemploymentandestablishcompanieswithmentorship guidancebylocalandinternationalexpertswhotransferredknowͲhowacquiredintheforeign labormarket.Withintheprogram,Group484providedentrepreneurshipassistancefor19youth teamswhoworkedondevelopingbusinessideas,15ofwhichreceivedinͲkindstartͲupgrants. Theprogramcovered12municipalitiesintheNoviPazar,Vranje,andUziceͲledinterͲmunicipal cooperationareas.UnicreditBankawarded12grants,eachvaluedat1,200euros,andthe projectprovidedthreegrantsofthesamevalue. 3Ͳ4)TheconceptofICTAcademywassuccessfullypilotedinNisandNoviSadICTClusters, wheremembercompaniesinvestedresourcesintoaneducationalbaseforyounginternsand trainees,aswellastheircompanymembershipduesforthetwobusinessassociations,the VojvodinaICTClusterandtheNisClusterofAdvancedTechnologies(NiCAT).ThesetwoCSR initiativesresultedwith65studentssuccessfullygraduatedfromtheprogram,and41ofthem foundnewemployment.

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Indicator EndofProject EndofProject target status 12.Numberofinitiativesinvolvingdialogue betweenthepublic, 61 70 privateandcivilsectors Definition:Thisindicatormeasuresinitiativestodialoguewiththepublic,includingthosenot orientedtowardjobcreation.However,asthisisanimportantindicatorofLGtransparencyand accountability,theprojectwillcontinuetoreportandfollowsignificantattemptstodialoguewith thepublic(conferences,publichearings,etc.).Thereisachallengeincapturingallinitiativesto dialoguewiththepublic,forexample,inͲofficevisitsareveryhardtogatherduetolimitedproject andLGresources. Status:70initiativessincethebeginningofprojectimplementation.

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OverviewofInvestmentsintheProjectPartnerCitiesandMunicipalities (andLeveloftheProject’sattribution) # City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public Vranje DitreItalia Italy Furnitureproduction greenfield 13,800,000 410 Orion Russia Mechanicalindustry greenfield 200 ImmofinanzGroup Austria Trade greenfield TBD TBD SLDP'scontributionto 100% 13,800,000 610 Vranje: (FDIcoaching;technical documentationforIZ Bunusevac;TAto furnituresector;grant toConfindustria; supporttoworkforce developmentin accordancetothe needsoftheinvestor) Vranje Landpreparationin EU/GoS Infrastructurefor other 869,565 IndustrialZone Ministryof IndustrialZone Bunusevac,forthe Finance needsofGeox investment SLDP’slevelof 50% 434,783 attribution Vranje GEOX Italy Shoeproduction greenfield 15,000,000 1,250 SLDP’slevelof 50% 7,500,000 625 attribution Vranje ORION Russia Metalsector greenfield 8,400,000 200 SLDP’slevelof 50%4,200,000 100 attribution Beoēin J&J France/Serbi Metalindustry greenfield 2,000,000 50 100 a

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# City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public (TAforcreationof 20% 400,000 10 20 businessͲfriendly environment) Beoēin PrimaEnergy Slovakia Solarpowerplant greenfield 1,800,000 210 SLDP'slevelof 50% 900,000 1 5 attribution: (FDIcoaching;technical documentationforNew industrialzone;TAfor creationofbusiness friendlyenvironment) Beoēin Deltatehnik Serbia Mechanicalindustry brownfield 300,000 305 SLDP'slevelof 20% 60,000 61 attribution: (TAforcreationof businessfriendly environment) Beoēin Hengert Serbia Agribusiness brownfield 50,00010 SLDP'slevelof 50% 25,0005 attribution: (FDIcoaching;technical documentationforNew industrialzone;TAfor creationofbusiness friendlyenvironment) Technicalprojectfor USA other 50,000 industrialzone equipping InoBacka Serbia Realestate greenfield 2,000,000 10 SLDP'slevelof 50% 1,000,000 5 attribution: (FDIcoaching;technical documentationforNew industrialzone;TAfor

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# City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public creationofbusiness friendlyenvironment) Beoēin DOOMars Serbia Mechanicalindustry greenfield 1,000,000 25 SLDP'slevelof 100% 1,000,000 25 attribution: (FDIcoaching;technical documentationforNew industrialzone;TAfor creationofbusiness friendlyenvironment; TAforbusiness retentionand expansion) Doljevac Fenixsting Serbia Foodprocessing greenfield 800,000 50 SLDP'slevelof 20% 160,000 10 attribution: (LEDofficecapacity building) Doljevac LEONIWiringSystems Germany Electriccable greenfield 21,000,0001,500 Southeast production SLDP'slevelof 100% 21,000,000 1,500 attribution: (NisLEDOffice guidance,mentoring andpractical assistance,allthrough IMC;FDIcoaching; technical documentationfor regionalwaterworks) NoviSad K314 Italy Electricequipment brownfield 2575 production SLDP'scontributionwas 50% 1337 indirectandconsisted of:

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# City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public Subotica Calcedonia,Gordon Italy greenfield 15,000,000 1,000 doo AssistancetoSubotica: 50% 7,500,000 500 LEDofficecapacity building;FDIcoaching; Brownfield developmenttraining; equippingagriculture laboratory;interͲ municipalcooperation withKanjizaand Sombor;eͲlearningon LEDwithSCTM; technicalguidancefor PPPs Subotica Lidl,Quontera Austria Trade greenfield 10,000,000n/a TechnologyParkfor Germany Automotiveparts greenfield 1,700,000 150 automotiveindustry, Dunkermotoren Swarovskid.o.o. Austria jewelry,home,and greenfield 15,000,000 600 fashionaccessories SLDPcontribution: 50% 8,350,000 5,000,000375 Subotica Jovanovicandsons Serbia Poultry,food greenfield 4,700,000 150 production ContitechFluidSerbia Germany Tireproduction greenfield 17,000,000550 SLDPcontribution: 100% 21,700,000700 NoviBeēej AgroͲincubator Local Agriculture greenfield 10,000 60,000 12 8 government, USAID Omniapack Serbia Plastic brownfield 20,000 20 25 BrodogradnjaMCI Serbia Nautical brownfield 30,000 2520 BiserKumaneDOO Serbia Chemical privatization 150,000 10010 Industrijamesa Serbia Foodproduction other 100,000 10 10 Matijeviđdoo Knezpetrol Serbia Oiltrade other 150,000 55

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# City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public NEXUSline Serbia Textile other 250,000 10045 Agroglobe Serbia Agribusiness brownfield 10,000 52 Dijamantagrar CroatiaͲ Agribusiness other 200,000 4035 Serbia PharmaceuticalBalkans Ukraine Pharmaceuticals other 7,000,000 2130 DOONoviBeēej SLDPcontribution: 100% 7,920,000 319290 Merošina MlinTimotijevicd.o.o.Ͳ Serbia storage 70,000 1 Merošina JugotermͲproizvodna Serbia Metalprocessing 1,300,000 10 halazanovuliniju ēeliēnihpanelnih radijatoraͲ Aleksandrovo privrednodruštvoza Serbia Transport 50,000 1 transportrobeAS PREVOZͲTRANSPORT d.o.o.BuēiđMerošina DANITRANSPORTDOO Serbia Transport 41,000 1 Merošina Altinad.o.o. Serbia Production 100,000 12 2 MesserTehnogas Serbia Production 30,000 1 SUPERPELLETSDOO China Woodprocessing 50,000 20 NIŠͲOGRANAKSUPER PELLETSDOO MEROŠINA STRBUCAIJOCA Serbia Foodprocessing 50,000 11 SLDPcontributionto 100% 1,691,000 2732 Merosina:LEDoffice capacitybuilding;FDI coaching;asset management) Zrenjanin Sitip Italy Textile 12,000,000300 Gomex Serbia Trade 500,000900,0004075

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# City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public Jollytextil Turkey Textile 70120 FulgarEast Italy Textile 800,000 60 AvivArlon Israel Retailpark 30,000,000 30570 Rakicplast Serbia Plasticbags 200,0005 Kraun Russia Foodprocessing 1,200,000 180 , Technostrutture Italy Mechanicalindustry 900,000 160 Triumpf Serbia Food 300,00015 processing/honey Idea Croatia Trade 500,000 50 Jugodom Serbia Trade 300,00020 Agrounija Serbia Agricultural 200,00010 equipment Aksa Serbia Trade 150,000 10 LKArmature Sweden Metalindustry 150,000 3 ACE Serbia Services 200,000 12 Levi9 Serbia Services 100,000 30 PeritninaPtuj Slovenia Foodprocessing 200,000 40 SLDPcontributionto 100% 33,000,00015,600,0004551,345 Zrenjanin:LEDoffice capacitybuilding;FDI coaching;asset management;PPP concepts;agriculture development;BFC standards) Niš JohnsonElectric HongKong Production greenfield 15,000,000 500550 Mikkelsenelectronics Denmark Production brownfield 1,000,000 22 78 Nišekspres Serbia Logistics greenfield 500,000 LIDL Germany/ Trade greenfield 1,000,0009,000,000100 Serbia DIS Serbia Trade brownfield 5,000,000 100 Teren/Cons Italy/Serbia Energysector other 2,000,000 LMBSOFTdoo Germany/ Electronics greenfield 1,000,000500,000100 Serbia

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# City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public CleanEarthCapital USA Realestate greenfield60,000,000 (Vulkan)Krasnij Russia Rubber brownfield 4,000,000 1,000,000 280 treugoljnjik RobnakuđaBeograd Serbia Trade brownfield10,000,000200 (VeranoMotors/Marfin fond) VolvoServiceCenter Serbia Services other1,000,00015 StopShop/Immofinanz Austria Trade greenfield10,000,000150 YuraCorporation SouthKorea Electricalequipment other 400 production Kirey Italy IT 100,000 10 MeVCorporationHpm Italy/Serbia Mechanicalindustry JohnsonElectric(2nd HongKong Production greenfield50,000,0002,400 phase) Ladas Greece Foodprocessing brownfield 1,500,000 1,000,000 150 Ergomade Denmark/ Furniture greenfield1,500,00045 Serbia Astertextile Turkey Textile greenfield5,000,0002,000 TerenCons Italy Hydropowerplant greenfield3,500,000 SLDPcontributionto 100% 35,600,000 152,500,000 1,020 6,088 Nis:FDIcoaching;study tourtoCzechRepublic; TAforremovalof administrativebarriers fordevelopmentof businesssector; trainingonbrownfield development;PPP concepts;asset management;interͲ municipalcooperation withLeskovac, Merošina,GadžinHani Doljevac;supportto regionalfood

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# City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public producers;Italian"road show"Ͳinvestment attractionmission. Niš Benetton Italy/Serbia Production brownfield 35,000,0008,000,0001,700300 20% 7,000,000 1,600,000 340 60 Priboj Heatingplant,biomass Serbia Energysector brownfield2,500,000 (Austrianpartnerleft negotiations,andlocal governmentplansthe projectsolelyfrom publicresources) SLDPcontributionto 50%1,250,000 Priboj:LEDoffice capacitybuilding;FDI coaching;asset management; InternationalSTTA providedin marketizationofthe largestbrownfield potentials) Leskovac Elektrifikacijapolja– Serbia Infrastructure greenfield556,387556,000 Rehabilitacijasistema zanavodnjavanjeI odvodnjavanje BimͲtex Serbia Manufacturing brownfield 1,774,646 40 Falke Germany Manufacturing greenfield 9,207,770 2,400,000 503 110 4Mdoo Serbia Furniture other 117,030 15 Jura SouthKorea Electricalequipment greenfield 3,000,000 10,500,0001,5001,000 production Jeanci Turkey Textile brownfield 3,000,000 65,0003201,000 Blanddoo Serbia Woodproduction other 56,896 16 SZTRMita Serbia Woodproduction other 106,034 40 Bebisnovi Serbia Furniture other 212,703 40 AutoStopInteriors Greece Textile brownfield 1,000,000 2,000,000 51 100

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# City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public SLDPcontributionto 100% 18,535,079 13,521,387 2,000,000 556,000 2,5252,210 Leskovac:FDIcoaching; Analysesofthe opportunitiesfornew investmentsonland lotsusedbythree companiesinfinancial difficulties;TAforBFC certification;assistance toFoodTechnology Park;interͲmunicipal cooperationwithNis, Merošina,GadžinHani Doljevac;supportto regionalfood producers. Leskovac FungoJug Serbia Foodprocessing other 10,000 March2015Ͳ March2016 DrvopreradaKociđ Serbia Woodprocessing other 500,000 DrvoproduktPešiđ Serbia Woodprocessing other 8,000 ZdravljeActavis Serbia Pharmaceuticals other 3,000,000 MakiPlast Serbia Construction greenfield 550,000 Grafopen Serbia Services other 25,000 Jugotrans Serbia Transport other 50,000 Orion Serbia Trade brownfield 558,490 Bavka Serbia Hotels greenfield 200,000 BrađaApostoloviđ Serbia Woodprocessing other 18,650 6,0006 Bata Serbia Woodprocessing other6,0006 Vin Serbia Woodprocessing other 6,000 6 Mita Serbia Woodprocessing other5,0005 Matex Serbia Textile other5,0005 VuleKomerc Serbia Agribusiness greenfield 380,000 IGMMladost Serbia brownfield 660,000

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# City/ Companyorproject Company’s Company’stypeof Typeof Investments(€) #JobsCreatedasResultofInvestment Municipality name countryof activityortypeof Investment origin project Actual Committed Created Expected Private Public Private Public Private Public Private Public MoravacZZ Serbia Agribusiness greenfield 850,000 Enmondoo Serbia Trade greenfield 2,000,000 GrandeAdriaticFood Serbia Foodprocessing greenfield 192,300 BonesGroupDOO Serbia greenfield 91,090 StatovackomercDOO Serbia greenfield 140,500 GumaPrometDOO Serbia Electricpower greenfield 734,600 production MetalGalantGradnja Serbia Construction other 1,606,444 DOO DOOPobedaPredejane Serbia Electric/solarplant greenfield 291,300 StrelaKlajiđ Serbia 216,000 SLDPcontribution: 100% 12,082,374 28,00028 Kanjiza GenezaLtd.Ͳlogistic Serbia Trade/logistics brownfield 1,500,000 center KeramikaPlusKanjiža Serbia Production/ceramic brownfield 1,000,000 tile SLDPcontributionto 50% 1,250,000 Leskovac:FDIcoaching; BusinessRetentionand Expansion;interͲ municipalcooperation withSuboticaand Somboronagriculture capacities. NoviPazar PanamaNuovo Serbia Shoeproduction brownfield 150,000 12 Reconstructionof Serbia Publicheating other380,000 districtheatingsystem SLDPcontribution: 100% 150,000 380,000 12 Sombor FerreroGroup Italy Foodprocessing greenfield 7,950,000 50 SLDPcontribution: 100% 7,950,000 50 VladicinHan Teklasautomotive Turkey Automotiveparts greenfield11,350,000400 Nectar Serbia Foodprocessing greenfield 7,000,000 SLDPcontribution: 100% 7,000,00011,350,000

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StatusofRevenueandEmploymentinBusinessesSupportedbytheProject

Businessrevenues Growthofrevenues Growthof Employment Growthof Growthof revenues Employment # MB PIB Nameofthecompany IMC City Industry 2013Ͳbaseline 2013Ͳ2015 2013Ͳ Employment Datasource 2013Ͳ2015 2013Ͳ2015 (000RSD) (000RSD) (%) baseline 2013Ͳ2015 (%)

1 20165260 104436502 PrimaNova NI Leskovac Food 3,880,195 289,838 7.5% 332 138 41.6% TFPLeskovac 2 20274182 104953265 MoravkaPro NI Leskovac Food 1,117,910 19,472 1.7% 109 9 8.3% TFPLeskovac 3 17017802 100412047 DCPHemigal NI Leskovac Food 318,914 31,268 9.8% 99 0 0.0% TFPLeskovac 4 Arena NI Leskovac Food 180,403Ͳ 10,261 Ͳ5.7% 13 4 30.8% TFPLeskovac 5 20408081 105535248 TomacoLine NI Leskovac Food 135,336 5,573 4.1% 45 Ͳ4 Ͳ8.9% TFPLeskovac 6 7968167 101909967 Jugprom NI Leskovac Food 1,143,862 369,001 32.3% 125 0 0.0% APR 7 20414626 105597453 BontaItaliane NI Leskovac Food 50,663 34,702 68.5% 624400.0% APR Subtotal,FTPLeskovacFoodSector: 6,827,283 739,593 10.8% 729 171 23.5% 8 20338709 105197730 4BrTref NP NoviPazar Footwear 100,744Ͳ 20,162 Ͳ20.0% 25 17 68.0% APR 9 20788372 107367352 Florida1994 NP NoviPazar Footwear 61,449 28,202 45.9% 35 5 14.3% APR 10 56273468 103175414 Boša NP NoviPazar Footwear 34,793 233 0.7% 12 1 8.3% company 11 51484991 102166801 Antilop NP NoviPazar Footwear 15,998 7,003 43.8% 8 Ͳ3 Ͳ37.5% APR 12 6854834 100547808 StefiͲKomerc VR Vranje Footwear 87,361 87,379 1.0 83 97 1.2 APR 13 20794089 107397833 EuroScarpa NP NoviPazar Footwear 84,197Ͳ 29,295 Ͳ0.3 19 Ͳ4 Ͳ0.2 APR 14 17127829 100546908 Minex VR Vranje Footwear 68,402 1,623 0.0 131 1 0.0 APR 15 20424168 105633379 CecoLine NP NoviPazar Footwear 35,048Ͳ 20,796 Ͳ0.6 9161.8 APR Subtotal,FootwearSector: 487,992 54,187 11.1% 322 130 40.4% 16 N/A N/A Atlas UE Užice Furniture 387,215 30,273 7.8% 120 47 39.2% company 17 7953712 101859133 TamiͲTrade NI Niš Furniture 182,805Ͳ 16,431 Ͳ9.0% 74 Ͳ2 Ͳ2.7% APR 18 7416601 102132199 Dallas NP NoviPazar Furniture 138,717Ͳ 103,774 Ͳ74.8% 100.0% APR 19 N/A 101255820 GIR KV Kraljevo Furniture 655,235 250,992 38.3% 45 APR 20 20160942 104408450 DasaNameštaj NP NoviPazar Furniture 129,846 14,535 11.2% 61 1 1.6% APR 21 6121543 101787466 Hersa NP NoviPazar Furniture 41,993 2,520 6.0% 24 1 4.2% APR 22 6123694 100745603 AvisExportͲImport NP NoviPazar Furniture 99,266 481 0.5% 25 1 4.0% APR 23 17390112 101345500 StilͲJasen NP NoviPazar Furniture 114,930 13,928 12.1% 38 0 0.0% APR Subtotal,FurnitureSector: 1,750,007 192,524 11.0% 343 93 27.1%

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24 17343530 100616033 LmbSoft NI Niš ICT 217,556 57,766 26.6% 71 11 15.5% APR 25 7360746 100666575 HarderDigitalSova NI Niš ICT 121,381 85,609 70.5% 63 8 12.7% NiCAT 26 20054751 103946100 Fazi NI Niš ICT 51,898 35,853 69.1% 18 0 0.0% APR 27 6957749 101153402 Proxima NI Niš ICT 12,735Ͳ 432 Ͳ3.4% 300.0% APR 28 17156748 100339185 IrvasInternational NI Niš ICT 7,782 4,370 56.2% 8 Ͳ1 Ͳ12.5% APR 29 20684585 106806493 PhotonOptronics NI Niš ICT 22,569Ͳ 16,760 Ͳ74.3% 32 5 15.6% NiCAT 30 20683309 106799256 AtesSoft NI Niš ICT 70,042Ͳ 18,046 Ͳ25.8% 33 Ͳ22 Ͳ66.7% APR 31 20480424 105876353 EtonDigital NI Niš ICT 53,934 13,292 24.6% 46 2 4.3% APR 32 7389965 100617132 FeniksBb NI Niš ICT 84,724 15,920 18.8% 31 3 9.7% APR Subtotal,ICTSector(NiCAT): 642,621 177,572 27.6% 305 6 2.0% 33 8023646 101633239 Novkabel VMC NoviSad Metal 3,231,910 22,097 0.7% 588 4 0.7% APR 34 8579954 100239404 Dip VMC NoviSad Metal 994,789 3,061 0.3% 39 2 5.1% APR 35 8790523 102937888 Unimet VMC NoviSad Metal 611,399 313,613 51.3% 248 7 2.8% APR 36 8144249 102299763 TermoventSc VMC NoviSad Metal 615,674 204,651 33.2% 136 7 5.1% APR 37 8061840 101449599 TermoventScͲLivnicaVMC NoviSad Metal 628,701 75,188 12.0% 201 14 7.0% APR 38 8059098 101444473 SilaAd VMC NoviSad Metal 529,400 33,959 6.4% 186 6 3.2% APR 39 8066205 101642135 DesURestrukturiranju VMC NoviSad Metal 282,299 219,442 77.7% 192 3 1.6% APR 40 20241039 104797507 VosͲSystem VMC NoviSad Metal 226,824 71,698 31.6% 25 4 16.0% APR 41 20096152 104114596 Tehnolink VMC NoviSad Metal 251,163 61,058 24.3% 23 1 4.3% APR 42 20695455 106867044 Agroferocoop VMC NoviSad Metal 211,844Ͳ 52,857 Ͳ25.0% 15 0 0.0% APR 43 8176094 100582258 Sigma VMC NoviSad Metal 161,788Ͳ 7,684 Ͳ4.7% 30 11 36.7% APR 44 8677590 101092034 Berko VMC NoviSad Metal 162,109 25,376 15.7% 18 Ͳ1 Ͳ5.6% APR 45 8554129 101092987 Narcissus VMC NoviSad Metal 104,731Ͳ 6,681 Ͳ6.4% 17 0 0.0% APR 46 8247978 101047429 UtvaMilanPremasunacVMC NoviSad Metal 97,885 1,903 1.9% 64 Ͳ4 Ͳ6.3% APR 47 8682445 101162202 Tehnoradionica VMC NoviSad Metal 96,773Ͳ 2,295 Ͳ2.4% 45 Ͳ7 Ͳ15.6% APR 48 20240989 104845575 Idas VMC NoviSad Metal 90,370 34,471 38.1% 37 8 21.6% APR

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49 8291462 101800686 MiniͲInženjering VMC NoviSad Metal 66,849Ͳ 5,591 Ͳ8.4% 16 1 6.3% APR 50 20688521 106830765 FSD VMC NoviSad Metal 40,169 1,981 4.9% 78114.3% APR 51 8655146 100450341 ElmerProfesional VMC NoviSad Metal 24,494 506 2.1% 3 Ͳ1 Ͳ33.3% APR 52 51937457 101418594 Dukareli VMC NoviSad Metal 41,721 16,177 38.8% 36 Ͳ1 Ͳ2.8% APR 53 8290164 101438266 GumilKomerc VMC NoviSad Metal 26,682 330 1.2% 17 2 11.8% APR 54 20241586 104813419 Citronix VMC NoviSad Metal 27,052Ͳ 10,965 Ͳ40.5% 3133.3% APR 55 20211725 104685001 CastingTrade VMC NoviSad Metal 8,357 640 7.7% 200.0% APR 56 61587055 101417614 Pyrotherm VMC NoviSad Metal 7,217 3,257 45.1% 400.0% APR 57 8433747 101100841 Diex&Val VMC NoviSad Metal 3,304 1,906 57.7% 300.0% APR 58 8359156 100263437 Terming VMC NoviSad Metal 1,545 2,585 167.3% 02 APR 59 8160112 101454555 Energomont VMC NoviSad Metal 549 2,031 3.7 60 8270112 101424898 Livprodukt VMC NoviSad Metal 20,485Ͳ 19,444 Ͳ0.9 5 Ͳ4 Ͳ0.8 APR Subtotal,MetalSector(VMC): 8,566,083 990,413 11.6% 1,960 63 3.2% 61 20558245 106222660 Maxers NP NoviPazar Textile 272,900Ͳ 54,203 Ͳ19.9% 93 13 14.0% APR 62 17047574 101788602 Mikan NP NoviPazar Textile 169,626Ͳ 18,758 Ͳ11.1% 49 17 34.7% APR 63 17101714 101788442 Denis NP NoviPazar Textile 79,933Ͳ 13,193 Ͳ16.5% 83 Ͳ6 Ͳ7.2% APR 64 20167998 104526369 Exelit NP NoviPazar Textile 15,384 11,083 72.0% 9888.9% APR 65 N/A N/A SKKRHisExactJeans NP NoviPazar Textile 15,080 13,418 89.0% 28 0 0.0% company 66 17270290 100748226 Join NP NoviPazar Textile 98,387 57,409 58.4% 37 18 48.6% APR 67 20714301 106960194 BigBoys NP NoviPazar Textile 7,589Ͳ 4,407 Ͳ58.1% 5 Ͳ4 Ͳ80.0% APR 68 20482265 105897036 ClassicJeans NP NoviPazar Textile 74,714 45,779 61.3% 43 26 60.5% APR 69 17005634 101788821 Zemax NP NoviPazar Textile 49,566 6,989 14.1% 26 Ͳ6 Ͳ23.1% APR Subtotal,TextileͲDenimSector: 783,179 44,117 5.6% 373 66 17.7% GRANDTOTAL(RSDcurrency,000): 19,057,165 2,198,406 11.5% 4,032 529 13.1% GRANDTOTAL(USDcurrency,000): 212,218 24,035 Note:ThebusinessrevenueoffourdenimproducersinNoviPazarwereincreasedby$1.29millionin2013andthatfigureisnotpresentedinthetable above.Withthisnumber,thetotalgrowthofrevenueinSLDPͲsupportedcompaniesis$25.3millionduringthelifeofproject.

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ANNEXD.INDEXOFPROJECTREPORTSANDPRODUCTS

ReportsandAssessments SerbiaSLDPAnnualDOIRReportNo.1–September2011 SerbiaSLDPAnnulalDOIRReportNo.2–September2012 SerbiaSLDPAnnulalDOIRReportNo.3–September2013 SerbiaSLDPAnnulalDOIRReportNo.4–September2014 SerbiaSLDPAnnulalDOIRReportNo.5– September2015 SerbiaSLDPSemiͲAnnualReportNo.1–October2011 SerbiaSLDPSemiͲAnnualReportNo.2–April2012 SerbiaSLDPSemiͲAnnualReportNo.3–October2012 SerbiaSLDPSemiͲAnnualReportNo.4–April2013 SerbiaSLDPSemiͲAnnualReportNo.5–October2013 SerbiaSLDPSemiͲAnnualReportNo.6–April2014 SerbiaSLDPSemiͲAnnualReportNo.7–October2014 SerbiaSLDPSemiͲAnnualReportNo.8–April2015 SerbiaSLDPSemiͲAnnualReportNo.9–October2015 SerbiaSLDPSemiͲAnnualReportNo.10–April2016 StudyoftheImpactofNFEinYouthWork– April2014 Privatization:FiveCaseStudiesandKeyConclusions–November2014 Privatization:CaseStudySummary–November2014 MappingStudyonEUPracticesinRecognitionofNFEforEmployability LocalProductsandRegionalTourismValueChain–February2014 AgricultureCompetitivenessAnalysis–February2015 Serbia’sRealSectorPerformanceReport–December2014 GuideforNetworkingofYoungPeopleatLocalandRegionalLevel–August2012 DemandStudyforSpaTourismImprovementProject – April2014 ProgramManualforICTAcademy–October2014 HowtoBuildaGoodPPPProject–February2014 BestPracticesinSectorSupportforSMEDevelopment–July2016 ActionPlanforSupportingExportofHighAddedValueProductsoftheSerbianWoodIndustry – July2016

FinalGranteeReports Grantee Report Date NAPOR BuildingSystemofNonͲFormalEducationServices October2014 NALED EstablishingPublicͲPrivatePartnershipasaKeyPillartothe February2014 SustainableDevelopment TFPLeskovac EstablishmentofProductDevelopmentResearchCenter July2015 (PilotPlant)atTFPLeskovac AmberSoftware FeasibilityStudyforRegionalFiberOpticNetworkfor July2012 Temerin,BeocinandSremskiKarlovci SEDA FeasibilityStudyonBiomassUtilizationinSandzakRegion September 2012 ICTCluster ICTClusterAcademySerbianCaseProjectGuideline October2014 Vojvodina BermanGroup IndustrialZoneConceptDevelopmentPlanforVranjeIMC March2012 Vojvodina InnovativeClusterͲWideProductGrantFinalReport June2015 MetalCluster

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SCTM LEDERLocalEconomicDevelopmentEducationalResponseͲ August2014 GranteeFinalReport Centerfor PcinjaDistrictRegionalWasteManagementPlan September Developmentof 2012 Jablanica& PcinjaDistrict Confindustria FeasibilityStudyoftheRegionalIndustrialWorkforce May2014 Serbia ContinuousDevelopmentCenterVranje RDAS EconomicPotentialsofSandzakRegion–FoodIndustry June2014 RDAS EconomicPotentialsofSandzakRegion–FurnitureIndustry June2014 RDAS EconomicPotentialsofSandzakRegion– ShoeIndustry June2014 RDAS EconomicPotentialsofSandzakRegion–TextileIndustry June2014 Group484 TogetherforDomesticDevelopment–EvaluationReporton July2013 theProjectResultsandAchievements RDAZlatibor UziceIMCRegionalValueChainͲPHASE2 July2015 SCTM EͲlearningCourseonLocalEconomicDevelopmentͲSectoral June2016 ApprachtoIndustrialRecoveryandJobCreation

ToolkitofTechnicalAssistance MaterialsforeͲlearningcourseforlocalgovernmentofficialsandstaff,USAIDSLDPandSCTM (http://elearning.skgo.org) MethodandProcedureforManagementofthePublicAssetRegistration,USAIDSLDP,MarchͲJuly 2012 ImprovementofLocalPropertyTaxAdministrationinSouthEastEurope,GuidelinesonLocal PropertyTaxAdministration,NALAS,March2009 GuidelinesforLocalGovernmentFinancing,USAID,2003 HowtoPrepareaGoodQualityPublicͲPrivatePartnershipProject,USAIDSLDP/NALED2012 DevelopmentoftheLocalInfrastructurethroughPublicͲPrivatePartnershipProjects,USAIDSLDP 2012 DevelopmentoftheEnergyEfficiencyProjectsthroughPublicͲPrivatePartnerships,USAIDSLDP 2012 PPPsinParkingServices,USAIDSLDP2012 PreparationoftheInfrastructureProjectsinSerbia,GuideforLocalGovernments,MSPͲNE,2012 ToolkitforPreparationandFinancingoftheLocalProjects,2011 GuidelinesforLocalGovernmentBorrowing,NALAS,2011 ToolkitforLocalRevenueMobilization,RTIInternational TransformationofthePUCsintheRepublicofSerbia,StandingConferenceofCitiesand Municipalities,2007 StrategiesforReform,ToolkitforLocalWaterCompaniesinCentralandSoutheastEuropean Countries,July2009 CostEstimationofMunicipalServicesinSouthEastEurope,NALAS,July2009 Analysisofthefunctionalityoflocalgovernmentwebsites,USAIDSLDP,February2012 TrainingMaterials–TowardsImprovingPUCPerformance,USAIDSLDP,Kovilovo,2011 StrategyofHumanResourceDevelopment,CityofUzice,February2010 TrainingProgramfortheLocalGovernmentOfficials,MinistryforStateAdministrationandLocal SelfͲGovernment,CARDS,2009

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ANNEXE.TABLEOFCOOPERATINGNGOS

NGO NGODescription RelatedProgram Strengths Areasfor Components Continued Cooperation NAPOR Establishedin Component3: Gathersyouth Capacity 2009andfocused Youth organisationsin buidlingof onpromotionof Developmentand Serbia;leading youth youthrightsand Participatory organizationin organizations profesionalisation Mechanism– professionalization ofyouthwork GrantActivity: ofyouthwork, QualityYouth settingstandards, service–step developing toward programsforyouth sustainablelocal work developmentͲ Proactive Establishedin Component3: Experiencein SLDP’s 2010inNis, Youth implementing cooperation focusedon Developmentand activitiesthat withthe decentralisation, Participatory promotecitizens organization participationof Mechanism– participation waslimitedonly citizens,youth GrantActivity:The toit’s capacitybuilding. PowerofCitizens, participationin implementedin theCSO“sfocal FY2013 pointsprogram thatwas implemented through9grants issuestoleading CSOsinSLDPͲ supportedIMC areas.The activitywasnot expandeddue toproject’s focusonjob creation. Sandzak Establishedin Component3: Extensive SLDP’s Committeefor 1991inNovi Youth experiencewith cooperation Protectionof Pazar,focusedon Developmentand protectionof withthe HumanRights protectionof Participatory humanrightsin organization andFreedoms individualand Mechanism– Sandzakregion waslimitedonly collectivecivil GrantActivity:The toit’s rights Roleand participationin Importanceof theCSO“sfocal CivilSocietyfor pointsprogram Developmentof thatwas Democracyatthe implemented LocalLevel, through9grants implementedin issuestoleading FY2013 CSOsinSLDPͲ

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NGO NGODescription RelatedProgram Strengths Areasfor Components Continued Cooperation supportedIMC areas.The activitywasnot expandeddue toproject’s focusonjob creation. European Establishedin Component3: Experiencein SLDP’s Movementin 1992,advocates Youth project cooperation SerbiaͲ forpeaceful, Developmentand managementand withthe Kraljevo democraticand Participatory technicalexpertise organization fullEuropean Mechanism– withexperiencein waslimitedonly integrationof GrantActivity: implementationof toit’s Serbia ICMResource development participationin Centerfor programs. theCSO“sfocal Developmentof pointsprogram Participatory thatwas Democracy, implemented implementedin through9grants FY2013 issuestoleading CSOsinSLDPͲ supportedIMC areas.The activitywasnot expandeddue toproject’s focusonjob creation. Initiativefor Component3: SLDP’s integrationsͲ Youth cooperation Inicijativaza Developmentand withthe integracije Participatory organization Mechanism– waslimitedonly GrantActivity: toit’s Guideformore participationin transparentLocal theCSO“sfocal Selfgovernments, pointsprogram implementedin thatwas FY2013 implemented through9grants issuestoleading CSOsinSLDPͲ supportedIMC areas.The activitywasnot expandeddue toproject’s

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NGO NGODescription RelatedProgram Strengths Areasfor Components Continued Cooperation focusonjob creation. PalgoCenter Establishedin Component3: Aprominentthink SLDP’s 1998,activein Youth tankexperiencedin cooperation thefieldofpublic Developmentand research, withthe administration, Participatory education, organization localgovernment Mechanism– implementationof waslimitedonly andpublic GrantActivity: interdisciplinary toit’s policies,a Introducingnew studiesand participationin prominentcivil crossͲsector organizationof theCSO“sfocal society communication internationaland pointsprogram organizationin mechanismfor regional thatwas thisfieldof greater conferencesand implemented expertactionin accountabilityof roundtables, through9grants Serbia local issuestoleading governments, CSOsinSLDPͲ implementedin supportedIMC FY2013 areas.The activitywasnot expandeddue toproject’s focusonjob creation. BalkanFund Foundedin1999, Component3: Alocalfoundation SLDP’s forLocal alocal Youth workingonlocal cooperation Initiatives– foundationthat Developmentand community withthe nowTrag promotesactive Participatory development organization Foundation participationof Mechanism– waslimitedonly citizensinsocial GrantActivity: toit’s changesin Coordinationand participationin Serbia. SupporttoFocal theCSO“sfocal pointCSOsfor pointsprogram increasedpublic thatwas participationin implemented policydecision through9grants makingprocesses issuestoleading atlocalandinterͲ CSOsinSLDPͲ municipallevels, supportedIMC implementedin areas.The FY2013 activitywasnot expandeddue toproject’s focusonjob creation. SmartKolektiv Establishedin Component3: Extensive SLDP’s 2004,the Youth experienceinyouth cooperation organizationis Developmentand workand withthe focusedon Participatory promotionof organization

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NGO NGODescription RelatedProgram Strengths Areasfor Components Continued Cooperation promotionofCSR Mechanism– entrepreneurship waslimitedonly conceptinSerbia. GrantActivity: amongyoung toit’s Itoperates YouthInternship people. participationin throughfourkey and theCSO“sfocal programmes: Enterprenuership pointsprogram corporatesocial thatwas responsibility, implemented socialinnovation, through9grants youth issuestoleading entrepreneurship CSOsinSLDPͲ andsocial supportedIMC marketing.It areas.The administratesthe activitywasnot BusinessLeaders expandeddue ForumSerbia. toproject’s focusonjob creation. Group484 Foundedin1995 Component3: Astrongnetwork Improving toprovide Youth accrossSerbiaand opportunities supportto Developmentand extensive forvulnerable immigrantsand Participatory experienceinwork groups othervulnerable Mechanism– withimmigrants groupsthrough GrantActivity: andvulnurable selfͲemployment, Developing groups. social Competitive cooperativesand YoungWorkforce associations. trhough Cooperationwith Professional Diaspora BelgradeOpen Aneducationa Component3: AleaderinnonͲ Modernization School civilsociety Youth formaleducation, ofeducation organization Developmentand developmentof programs, foundedin1993. Participatory innovative fostering BOSstrengthens Mechanism– educationprograms connections humanresources, GrantActivity: forstudents, between improvesworkof Developmentof professors,public business publicinstitutions CareerGuidance servants,experts, communityand and andCounseling etc. education organisations, Structureand institutions developsand Servicesthrough advocatespublic theInter policiesinorder Municipal todevelopbetter Cooperationin societybasedon Serbia freedom, knowledgeand innovation.

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NGO NGODescription RelatedProgram Strengths Areasfor Components Continued Cooperation SerbianUnity ASerbian Component1: CongresSerbia diaspora InterͲMunicipal international Cooperation organizationthat Programming. promotesSerbian GrantActivity: andAmerican DemandStudyfor culture.Working SpaTurism onvariousissues Improvement inSerbiasuchas Project restitution, rehabilitation, antiͲcorruption. Sandzak Establishedasan Component1: Experiencedinlocal Regional Regional AgencyforSME InterͲMunicipal economic economic Development Developmentin Cooperation developmentissues development AgencyͲSEDA 2002and Programming. inSandzakregion andincreasing transformedinto GrantActivity:(1) andproviding competitiveness RDAin2009. StudyonRegional servicestolocal ofSandzak Workinginthe Biomass SMEs.Substantial region. areaofregional Utilization,(2) project economic Analysisto management developmentof increase experienceand NoviPazar, competitiveness cooperationwith SjenicaandTutin. oftextile, variousdonors. footware, furnitureandfood production. RDABANAT Anorganization Component1: Whilethegrant focusedonsocioͲ InterͲMunicipal activitywas economic Cooperation successfully developmentin Programming, complatedinearly Vojvodina Grant yearsofSLDP,the Activity:Promotion projecthadno ofInterͲMunicipal additional cooperation(IMC) cooperationwith andinitiativesin thisorganization BanatRegion National Foundedin2006 Component2: Leaderin Defining Alliancefor asanasociation Public promotingdialogue regulatory Local ofbusinesses, Administration betweenthepublic solutionsto Economic local Reform.In andprivatesectors; reformpublic DevelopmentͲ governmentsand additiontoregular excellentcapacity administration NALED civilsociety cooperationand toproducestudies andpromote organizations coordinationof andanalysisin business workingtogether activities,grant supportofpolicy activity, onSerbia’s activitiesincluded: measures; promoting economic (1)Revamping extensive dialoguewith development. PublicͲPrivate experiencein the

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NGO NGODescription RelatedProgram Strengths Areasfor Components Continued Cooperation Thelargestand Partnershipsasa creatingvarious Government, amongmost KeyPillartothe initiativesto assessmentof influentalpublicͲ Sustainable increase performanceof private Development, competitiveness state associationand (2)Effectsof andreduce administration, leaderin Privatizationon administrative highͲlevel monitoring Local burdento studiesand regulatory Governments’ businesses. assessments, activityand FiscalBalanceͲ etc. measuring CaseStudies.(3) performanceof Enhacementof public BusinessFriendly administration. CertificationBFC Vojvodina Establishedin Component1: InͲdepthknowledge Workin MetalCluster 2011,with InterͲmunicipal ofthemetalsector increasing supportofEU’s programming. inVojvodina, competitiveness RSEDP2project, Technical experiencein ofthemetal asaclusterof assistance workingon sector. companiesactive includeda innovative inVojvodina combinationof initiativestoboost metalsector international competitiveness, workingon consultant’swork experiencein increasing andgrantsto obtainingdonors competitiveness growinternal support andcreating capacityof innovation organizationto capacity. workon Functioning competitiveness independently ofthesector. since2013. Grantactivities: (1)VMC Innovationand Business Development Centre,(2) Innovative ClusterͲWide Product NisClusterof Gathering29 Component3: Veryactiveand Localeconomic Advanced successful Youth successfulcluster, growthinthe Technologies companiesdoing Developmentand excellentcapacity areaof businessinthe Participatory tocreateinitiatives advanced electricaland Mechanism– andpromote technologies, electroͲ GrantActivity: internationalization, stimulating mechanical ICTCluster increase dialogue industryaswell Academy competence, betweenscience asintheICT encourage andbusinesses, industrywiththe innovationandR&D harmonization

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NGO NGODescription RelatedProgram Strengths Areasfor Components Continued Cooperation objectiveto ofeducation increase programswith opportunitiesfor needsof theregioninthe businesses areaofadvanced technologies Regional Establishedin Component1: AmongRDAswith Localeconomic Develoment 2002asa InterͲmunicipal highestcapacityto developmentof Agency RegionalCenter programming. designand Zlatiborregion Zlatibor forSMESupport, GrantActivity;(1) implementprojects thoughtEU UziceIMCValue intheareaof technical ChainPhaseI economic assistance,and (analysisof development,inͲ transformedinto prospects).(2) depthknowledgeof RDAin2008.The UziceIMC theregion, missionisto RegionalValue extensive support ChainͲIIphase experiencein sustanablesocioͲ implementing economicgrowth successful ofZlatiborregion development projects Standing Establishedin Amongthemost Stronginstitutional Allareasoflocal Conferenceof 1953,SCTMis important capacityto economic Townsand focusedon partnersofthe representinterests development Municipalities discussing project. oflocal (SCTM) commonissues Cooperation communities, andformulating mainlyconnected providecapacity andrepresenting toComponent2– buildingservicesto jointinterestsof Public municipalitiesand municipalities, Administration supportoverall advocatingfor Reformbutalso developmentof theinterestsof spreadtoother localadministration municipalities projectactivities. andrepresenting GrantActivitity: municipalitiesin (1)LEDERͲLocal theprocessof Econmic definingstrategic Development directionsand Educational regulations, Response,(2) exchangingbest eLearningCourse practicesamong onLocalEconomic municipalities DevelopmentͲ SectoralApproach toIndustrial RecoveryandJob Creations Centerfor Anindependent Component1: AprominentthinkͲ Advanced Advanced thinkͲtank InterͲmunicipal tankfor macroeconomic

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NGO NGODescription RelatedProgram Strengths Areasfor Components Continued Cooperation Economic foundedin2004 programming. macroeconomic, analysisand StudiesͲ andfocusedon GrantActivity: socialinclusionand research, CEVES advanced Serbia'sReal employment identificationof macroeconomic Sector research economic andpolicy Performance: development analysisinSerbia Exhibited and andresearchof Competitiveness employment areasrelevantfor bySize,Industry opportunities, sustainableand andRegion formulationof inclusive nationaland economicgrowth sectoral development strategies 3DImpulse Ascientific Component1: Uniquetechnology Promotionof Center researchunitof InterͲmunicipal andcapacityto innovationand theFacultyof programming. stimulate useof Mechanicaland GrantActivity: innovationand innovative CivilEngineering Procurementof competitivenessby technologiesfor inKraljevo,which equipmentforthe applyingdigital product dealswiththe Laband technologiesfor development applicationof developmentof newproduct digital thewebsite development. technologiesto developnew products.The laboratorywas establishedbyan EUprojectin 2011Ͳ2013

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