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PARTNERSHIPS FOR DEVELOPMENT FINAL REPORT Kosovo’s Ranking in the World Bank Doing Business Report November 29, 2018 This report was produced for review by the United States Agency for International Development. It was prepared by USAID Partnerships for Development implemented by Chemonics International, Prime Contractor, and Crimson Capital Corp. and Policy and Management Consulting Group, Subcontractors. PARTNERSHIPS FOR DEVELOPMENT FINAL REPORT Consortium Members: Crimson Capital Corp. Policy and Management Consulting Group Award No.: AID-OAA-I-12-00035 Task Order No.: AID-167-TO-14-00002 Contracting Officer’s Representative: Dardane Peja Chief of Party: Hajdar Korbi DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. CONTENTS EXECUTIVE SUMMARY ................................................................................................ 1 KEY HIGHLIGHTS ......................................................................................................... 5 PROJECT INTRODUCTION ......................................................................................... 8 Component 1: Business Environment Improvement ..................................................................... 9 Component 2: Improved Implementation Of Construction Reforms ....................................... 9 Component 3: Enhanced Macro-Economic Stability And Public Financial Management (Pfm) At The Central And Local Levels .....................................................................................................10 PARTNERSHIPS FOR DEVELOPMENT RESULTS FRAMEWORK .................................. 11 PROJECT ACTIVITY SUMMARY ........................................................................................... 13 Component 1: Business Environment Improvement ...................................................................15 C1-1: Improved Economic Policy Coordination And World Bank Doing Business Improvement ........................................................................................................................................................................... 16 C1-2: Improved Legal Transparency, Policy Development, And Legislative Drafting At The Central And Local Level .............................................................................................................................. 23 C1-3: Streamlining Legal And Regulatory Requirements And Operations In Key Priority Areas ........................................................................................................................................................................... 29 Component 2: Improved Implementation Of Construction Reforms .....................................36 C2-1: Support Implementation Of Streamlined Construction Permitting Process And Facilitate Adoption And Implementation Of En Eurocode Construction Standards ..................................... 37 C2-2: Support Implementation Of Law On Spatial Planning .............................................................. 45 C2-3: Support Implementation Of Gok Program For Treatment Of Constructions Without Permit .............................................................................................................................................................. 50 Component 3: Enhanced Macroeconomic Stability And Public Financial Management (PFM) At The Central And Local Level .......................................................................................................55 C3-1: Improve Government Of Kosovo Capacity To Manage Macro- Fiscal Stability ................ 56 C3-2: Enhance National And Municipal Public Financial Management ............................................. 61 C3-3: Support For Improved Tax Compliance And Administration ................................................ 68 C3-4: Support For The Brezovica Resort Development Project Inter-Ministerial Steering Committee (Brdp Isc) ................................................................................................................................ 755 Crosscutting Support To Implementation Of The Usaid Government-To-Government Program ..................................................................................................................................................77 Coordination With Donors ...............................................................................................................78 Challenges Encountered And Lessons Learned .............................................................................80 Recommendations for Follow-On Activities ......................................................................81 ANNEX 1: PERFORMANCE-BASED MANAGEMENT SYSTEM RESULTS ..................... 83 ANNEX 2: FINANCIAL REPORTS ........................................................................................ 99 ANNEX 3: COOPERATION WITH NON-GOVERNMENTAL INSTITUTIONS ........... 103 ANNEX 4: INDEX OF REPORTS AND INFORMATION PRODUCTS ........................... 106 ACRONYMS AI Administrative Instruction AIS Agency for Information Society ASYCUDA UN Automated System for Customs Data BEEP USAID Business Enabling Environment Program BIA Budget Impact Assessment BRDP Brezovica Resort Development Project CDCS USAID Kosovo Country Development Cooperation Strategy 2014-2018 CFO chief financial officer CLE USAID Contract Law Enforcement Program CoA Chart of Accounts COFOG United Nation Classification of the Functions of Government DEMI USAID Decentralized Effective Municipalities Initiative DEMOS Decentralization and Municipal Support DO Development Objective DRP Detailed Regulatory Plans DSPCH Department of Spatial Planning, Construction, and Housing EC European Commission ERP Economic Reform Program ESTAK USAID Efficient and Sustainable Tax Administration of Kosovo EU European Union GDP Gross Domestic Product GCS-OPM Government Coordination Secretariat in the Office of the Prime Minister GFS Government Finance Statistics (as per the IMF Manual) GFSI USAID Growth and Fiscal Stability Initiative GIZ German Federal Enterprise for International Cooperation GNI Gross National Income GoK Government of Kosovo G2G USAID Partnerships for Development Local Capacities Activity GRB Gender Responsible Budgeting ICGFM International Consortium on Governmental Financial Management ICMM Independent Commission on Mines and Minerals IFC International Finance Corporation IMF International Monetary Fund IRuSP Implementation and Enforcement of Rural Spatial Planning ISC Inter-Ministerial Steering Committee ISP Institute of Spatial Planning IR Intermediate Result JRC Joint Research Centre JSC joint-stock company KBRA MTI Kosovo Business Registration Agency KCA Kosovo Cadastral Agency KEDS Kosovo Electrical Distribution Company KIESA Kosovo Investment Enterprise Support Agency KSA Kosovo Standardization Agency KWN Kosovo Women’s Network LLC limited liability company LOPM Legal Office of the Prime Minister LPFMA Law on Public Financial Management and Accountability MAFRD Ministry of Agriculture, Forestry and Rural Development MBRC Municipal Business Registration Center MED Ministry of Economic Development MESP Ministry of Environment and Spatial Planning MEI Ministry of European Integration MDP Municipal Development Plan MLGA Ministry of Local Government Administration MOC Monitoring and Oversight Committee MPA Ministry of Public Administration MTBF Medium-Term Budget Framework MTEF Medium-Term Expenditure Framework MTI Ministry of Trade and Industry MZM Municipal Zoning Map NA National Annexes NCED National Council for Economic Development NDP National Determined Parameters NDS National Development Strategy OGDB Official Gazette Database OPM Office of the Prime Minister OPOG Office of Publication of the Official Gazette OSCE Organization for Security and Co-operation in Europe OSS One Stop Shop PBMS Performance Based Management System PEFA Public Expenditure and Financial Accountability PFM Public Financial Management PTS Permit Tracking System PTD Ministry of Finance Property Tax Department RFP Requests for Proposals SAA Stabilization and Association Agreement SBA Stand-By Arrangement SIDA Swedish International Development Cooperation Agency SPAK Spatial Planning Application for Kosovo SPK Spatial Plan of Kosovo SQL Structured Query Language TAK Tax Administration of Kosovo UBT University of Business and Technology UN United Nations USAID United States Agency for International Development USAID PRP Property Rights Program USAID JSSP Justice System Strengthening Program USG United States Government VAT Value Added Tax ZMK Zoning Map of Kosovo WBDB World Bank Doing Business EXECUTIVE SUMMARY USAID Partnerships for Development (“the project”) supported Kosovo government institutions at the central and local level to create a business-friendly and competitive environment that will attract foreign investments, while maintaining macroeconomic stability. The project had the following objectives: (1) to improve the business environment, (2) to improve implementation of construction reforms, and (3) to enhance the country’s macroeconomic stability and public financial management (PFM) at the central and local level. This report covers the project’s entire period of performance from January 2014 through August 2018. During this period, the project successfully implemented its scope of work and achieved contract objectives by completing significant
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