Italian Cooperation in the country

The Italian Development Cooperation has been in Albania since 1991. In nearly three decades, it has allocated 800 million euros, supporting the country's socio-economic development through programs aimed to consolidate the productive systems, to connect with regional infrastructure networks, to foster sustainable management of resources, and to strengthen institutional capacities as well as social, educational and health services. Currently, it has 41 ongoing projects for a total ammount of more then 300 millions of euros. 260M soft loans, 20M grants, 40M debt swap.

Many results have been achieved, working side by side with the National Institutions. ltaly has been and still is a privileged partner for Albania. It has always been at the forefront in supporting the Albanian government during its transition to democracy and open market economy, up to the present firm advocacy to Albania's EU integration.

Strategic development document in the country

The second National Strategy for Development and Integration (NSDI-II) presents Albania’s vision for its national social, democratic and economic development over the period 2015-2020, and its aspirations for European integration. The NSDI-II explains how this vision will be achieved through government policies and strategies aimed at:

• Transforming Albania into a country worthy of membership in the European Union,
• Achieving standards that serve citizens, increase their welfare and ensure the safeguarding of their rights, and
• Establishing policies that enhance competition and economic prosperity in Albania, as well as competition with countries in the region and beyond.

The NSDI-II is a key component of Albania’s Integrated Planning System (IPS). The IPS constitutes a set of operating principles to ensure that government policy planning and implementation take place in a coherent, efficient and integrated manner. The IPS has evolved to comprise two cornerstones for strategic planning and policy coordination at the national level in Albania:

• The medium to long term NSDI-II strategic planning process, combined with sectoral strategies, which guide high level policy making in the establishment of national strategic priorities and goals, and
• The medium-term budgeting process, or Medium-Term Budget Plan (MTBP), which requires each ministry and government agency to develop a three-year plan within a specified expenditure ceiling to achieve policy objectives as intermediate steps to the achievement of NSDI-II.

In addition to being a key component of the IPS, the development of the NSDI-II (2015-2020) is a requirement of the budget law and it is a requirement of the EU assistance program for IPA 2014-2020. The NSDI-II also guides annual budget allocations by providing policy objectives which are included in the Ministry of Finance's instructions for budget preparation by all Ministries and agencies. Finally, the NSDI-II serves as an important reference document for Albania’s development partners in terms of aligning their own country strategies and programs to the country’s national development and EU integration strategies, and also reporting on progress.

The Italian strategy and the areas of intervention

The bilateral Development Cooperation Protocol for the years 2014-2016 will mainly address the following NSDI pillars and strategic priorities:

1. Sustainable Growth through improved competitiveness and efficient use of resources, with particular regard to increasing Competitiveness and Innovation for Growth in key economic sectors including Agriculture and Rural Development. Furthermore, the significant residual funds still available from DCP 2002-2004 allow for additional support to Infrastructure for Growth as regards Energy and Water and Sanitation. It is acknowledged, however, that IDC is phasing out from direct support to Infrastructure Development.
2. Investing in People and Social Cohesion will mainly focus on human resources development, social inclusion and territorial cohesion actions. This pillar will be addressed through a further: 1) Debt for Development Swap programme (subject to approval by the Italian Ministry of Economy and Finance). This instrument has proven to be highly flexible, effective and responsive to social development priorities and local needs, enhancing human resources development, promoting social inclusion and cohesion, gender equality, enforcing ownership and strengthening local authorities’ capacities. Furthermore, new resources will be allocated in support to: 2) Vocational and Education Training (VET) to better incorporate market needs into lifelong learning perspective.
3. Good Governance, Democracy and Rule of Law. Both sides recognize the value of the European principles of subsidiarity and proximity in public sector service delivery. With this in mind, IDC will support the Albanian government’s territorial administrative reform under way with the goal to consolidate Local Government Units (LGUs), ease the way to greater regulatory and fiscal decentralization and strengthen local autonomy. It is acknowledged the importance that the territorial administrative reform process follows international standards for analytical objectivity, transparency and inclusiveness. IDC’s support to Albanian territorial administrative reform will use multi-donor pooling funds mechanisms.

Alignment with the local government strategy and harmonization with donor community interventions

The Albanian Government and the Development Partners present in the Country are progressively aligning themselves with cooperation strategies inspired by intervention modalities based on the sector based budget support to the reform processes of the priority sectors for the development of the ountry. The Italian Cooperation supports this approach, aligning its intervention with the support provided by the European Union and other donors, through a shared and synergistic formulation of the planned initiatives.

Albania has a rather structured donor coordination system guided by the Government, which finds its moment of plenary coordination during the annual high-level Coordination Table between Government and Donors (Government-Donor Roudtables - GDR), in which strategic coordination issues and the country's progress on aid effectiveness are discussed, and represents the privileged forum for dialogue between the Government and international donors on critical issues, such as the country's strategic development framework.

The GDR is co-chaired by the Deputy Prime Minister, delegated to the coordination of External Aid, and by the current president of the Donor Technical Secretariat (DTS), the technical secretariat created by donors present in Albania with the aim of facilitating the exchange of information between local authorities and international donors (Development and Integration Partners - DIPs), and improve the effectiveness of aid and development policies and practices.

The DTS is formed by the European Union Delegation in Albania, World Bank, OSCE, the UN system, represented by UNDP, and two bilateral rotating donors, representing the various bilateral donors present in the country. For the year 2015, Italy represented bilateral donors at the DTS.

The DTS Committee organizes monthly coordination meetings with the Department for Planning Development, Financing and Foreign Aid - DPSFAE during which operational and strategic aspects of the planning and monitoring process of development and integration policies are discussed and the relevant issues emerged in the GDR are followed. The DTS also organizes periodic technical coordination meetings between the DIPs and the DPSFAE, during which issues related to Integrated Planning System - IPS, national strategies and donor coordination are dealt with.

At the technical-operational level, the priority sectors of government policy intervention, defined in the NSDI, are reflected in homonymous Sector Working Groups (SWGs), where the relevant line ministries and donors active in the specific sector meet, and sector based policies / strategies, and funding sources are discussed, possible areas of collaboration are identified and local needs analyzed, in terms of capacity development. The SWGs provide the necessary infrastructure to implement the IPS and follow up the commitments set out in the Paris Agenda and Busan.

Given their strategic role, the SWGs architecture is currently under review to adapt its organization and goals to the new government context, also with a view to adopting a sector-based approach and budget support in cooperation practices to development and integration. The new mechanism, approved in 2015, envisages the so-called Integrated Policy Management Groups (IPMGs), led by the Albanian Government, with supervisory functions on the integrated management of the entire policy cycle, which must be conducted in a transparent and efficient manner. The composition of the IPMGs includes, in addition to the relevant line Ministry that chairs the group, members of other line ministries relevant to the sector, the Gender focal points at the various line ministries, a representative of civil society organizations and local governments , and DIPs active in the sector, convened according to the needs of the agenda.

The IPMG are assisted by a Secretariat (IPMG Secretariat) that holds technical, managerial and administrative support roles, takes care of the organization of IPMG activities and carries out analysis and information activities. The Integrated Policy Management Group approved by the Government are: i)Integrated Water Management, ii)Competitiveness & Innovation (for which the Italian Cooperation function as Lead Donor) and iii)Employment, Skills and Social Policy, iv) Public Administration Reform.

Italy actively participates in the process of harmonization and alignment in Albania, strongly supporting the principles of aid effectiveness and development as how it evolved from Monterrey (March 2002) to Busan (December 2011).

Italy has been and continues to be one of the main bilateral donors in Albania and an important interlocutor in the various donor coordination instances. During 2009, in the role of "facilitator donor" as part of the "Fast Tracking Division of Labor" European initiative (FT-DoL), Italy assisted the Albanian Government in implementing the European Code of Conduct on Aid effectiveness, concluded with the signing of a Memorandum of Understanding that the main EU donors present in the country have joined.

Albania is among the pilot countries where the United Nations launched the Deliver as One (DaO) initiative. In line with this approach, the United Nations Development Program in Albania - UN Cooperation Program 2012-2016 - defines in a single and common program framework for all the UN agencies present in the country.

The sectors of intervention identified are: fair and sustainable development, strengthening of good governance and the rule of law, economy, environment, regional and local development and inclusive social policies.

Goals and expected results

The Italian Cooperation in Albania has the following general objectives:

• Promotion of sustainable and inclusive social and economic development;
• Support to the process of European integration of the country.

The Italian support is therefore aimed at the achievement of the following policy objectives:

• Strengthening of democracy and the rule of law;
• Ensuring competitive and sustainable economic development through an efficient use of resources;
• Support to social inclusion, widespread prosperity and to the labor market;
• Development of a society based on knowledge, innovation and digital technologies.

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