North Macedonia’s Minister of Finance Fatmir Besimi and UNDP Resident Representative Narine Sahakyan signed on Monday a memorandum for advancement of fiscal decentralization, public finance reform and economic development.
“The UNDP supports implementation of reforms aimed at promoting fiscal decentralization in North Macedonia and strengthening the capacities of local authorities, as well as establishing a better public finance system,” the Ministry of Finance said in a press release.
The memorandum entails support for implementation of public finance and fiscal decentralization reforms, as well as ones aimed at strengthening fiscal autonomy, the local self-government’s revenue collection capacities and exchange of good fiscal decentralization practices. Moreover, it includes activities focused on combating the grey economy and offers support for development and liberalization of the finance market.
“Implementation of reforms aimed at establishing a better public finance system and fiscal decentralization are among the Finance Ministry’s top priorities. Support from international partners through exchange of experiences and expert advice for designing and enforcing reforms has crucial importance. The memorandum signed on Monday promotes cooperation between the Ministry of Finance and the UNDP and covers an ambitious plan of activities, including granting municipalities better access to funds,” said Finance Minister Fatmir Besimi.
He added that the memorandum entails activities aimed at combating the grey economy and establishing a digital platform, as well as efforts to strengthen capacities for implementation of the new Law on Budgets.
UNDP Resident Representative Narine Sahakyan underlined that the UNDP will support the advancement of fiscal decentralization through expert assistance and pilot mechanisms for funding public services at local level.
“We reaffirmed today our joint effort to speed up progress in achieving Sustainable Development Goals by implementing inclusive policies, increasing the accountability of public institutions and intensifying implementation of reforms on public finances management and fiscal decentralization. Giving communities more power by strengthening the fiscal power of local authorities is crucial for achieving the Sustainable Development Goals. Therefore, the UNDP will support the establishment of a legal framework for fiscal decentralization through expert assistance and pilot mechanisms for funding public services at local level,” Sahakyan noted.
The plan for cooperation between the Ministry of Finance and the UNDP consists of 13 activities, most of which are focused on fiscal decentralization advancement.
“Activities also include setting up indicators for monitoring fiscal decentralization, more efficient collection of local taxes, improving the efficiency and profitability of public enterprises at municipal level, as well as increasing the transparency and accountability of municipalities,” the press release read.
The Finance Ministry and the UNDP, it added, reaffirmed that establishment of better public finance system, through implementation of reforms in multiple areas, will contribute to increased economic growth, which in turn will lead to better living standards for all citizens.