MOLDOVA – Country Strategy 2011 - 2015Presentation, 27 October 2011

Stefan Weidinger, Department for Development Cooperation, Austrian Federal Ministry for European and International AffairsMichael Schieder, ADA Coordination Office Chisinau

Austrian Development Cooperation

Ministry for European and International Affairs

(BMeiA)

Department for Development Cooperation

Austrian Development Agency (ADA)

The Operational Unit of Austrian Development

Cooperation

Austrian Development Cooperation

Ministry for European and

International Affairs

(BMeiA)

Overall-coordination of the

Austrian public development

cooperation

Formulation of development

cooperation strategies and

policies

Policy-dialogue in Austria and at

international level

ADA

Implementing Austrian

development cooperation

strategies and programmes

Management of bilateral

development cooperation budget

Policy dialogue in Austria and

partner countries

Advising BMeiA

References & legal basis

International commitments

Development Cooperation Act

Three-year-Programme on Austrian Development Policy

Bilateral Development Cooperation Agreements

International commitments

Millennium Summit, Millennium Development Goals (MDG) 2000

Monterrey Consensus 2002 (EU Council Conclusions 2005)

World Summit on Sustainable Development (2002)

Declaration of Paris on Aid Effectiveness (2005)

European Consensus on Development (2005)

Code of Conduct on Complementarity and Division of Labour in Development (2007)

Accra Agenda for Action (2008)

Geographical priorities

Programmes and projects in 7 key regions

Central America

West Africa / Sahel

Southern Africa

Eastern Africa

Himalayas/Hindu Kush

South Eastern Europe/Western Balkans

Black Sea Region/Southern Caucasus

Priority Countries

Nicaragua

(Cape Verde), Burkina Faso

Ethiopia, Uganda

Mozambique

Bhutan

Palestinian Territories

(Bosnia and Herzegovina, Macedonia, Montenegro), Serbia, Albania, Kosovo, Moldova

Armenia, Georgia

History of ADC in SEE DC in Southeastern and Eastern Europe was part of the Federal Chancellery from 1989 until 2000 when it was moved to the Ministry for Foreign Affairs.

Early 90ies - First humanitarian cooperation activities

1993 - creation of a department for DC in Southeastern and Eastern Europe in the Federal Chancellery

1995 – first DC cooperation office opened in Tirana, followed by offices in Sarajewo (1996), Skopje (1998), Belgrade (2002), Pristina (2005), Chisinau (2005) and Podgorica (2007)

2003 – SEE is declared ADC priority region

ADC in Moldova in retrospect Humanitarian Aid since 1991 (small projects; medical supplies) 2003 first bilateral project (heating system in dermatologic clinic)

Priority country since 2004 Opening of cooperation office in 2005 in close cooperation with Swiss Development CooperationAccreditation as an Embassy with Chargé d‘affaires since 2007

2008 signing of a bilateral DC Agreement Country Strategy

Country Strategy 2011-2015 (continuity)

Total bilateral assistance imbursed: 9m € Annual budget 2011; 2m€ Total ODA: 20m €

DC Coordination with new Member States

DC Coordination with former transition countries makes sense and is of mutual benefit.

Regional Partnership Programme (RPP) pilot project fund: 58 projects with 53 organizations

MoU 2009-2011with SlovakAid; 2 projects in SerbiaMoU with Czech Development Agency; water/waste water project in Moldova

Increasing contacts with other new MS/development agencies (CZ, SLO, HON, RO, BG, LIT, PL)

Political and economic environment

Political challenges: Political participation/culture, lack of trust among the populationDemocratic fragility (presidential elections, constitutional crisis)Education, health; environment, infrastructure; migrationTransnistriaEU integration (negotiations of a new PAA)Economic/social challenges: Unemployment, social exclusion, poverty; economic crisisInvestment climate, corruption„Old mentality“; management, skills, institutional deficitsInefficient use of transfers (consumption, unproductive inv.)Lack of economic diversificationLack of counter-cyclical monetary instruments due to Euro peg

Moldova in regional comparisonEconomist Democracy Index MD 65. as SER, better than all WB countries [ARM (109), GEO (103); AZ 135., Ö 13.; NOR1.]

TI Corruption Perceptions Index MD 105. [ARM (123), GEO (68); AZ 134., Ö 15.; DK 1.]

GINI Index MD 24. [ARM (35), GEO (47); AZ 34., BuH (90), MK (40); Ö 6.; S 1.]

Human Development Index (UNDP) MD 99. [ARM (76), GEO (74); AZ 67., Ö 25.; NOR1.]

BIP/cap (WB) MD 119. [ARM (94), GEO (97); AZ 69., Ö 11.; Q 1.]

Doing Business (WB) MD 94. [ARM (43), GEO (11); AZ 38., BuH (116), Ö 28.; SGP 1.]

DC Challenges in Moldova

Transition is one form of development as a comprehensive process of economic, social and political improvement.

Goals of this process correspond broadly with the Copenhague criteria (indicators of successful transition/development):

political (democracy, RoL, human/minority rights; Democracy-Index, TI-Index) economic (open competitive market economy; GDP/cap, HDI, Gini-Coefficient) aquis communautaire (legal adaptation) absorption capacity

ADC strategic goals in MoldovaADC Overarching goals acc. to Development Cooperation Act

- Poverty reduction- Peace and security - Ecological and social sustainable development

Support for transition process and implementation of GoM 5 pillar reform programme (Rethink Moldova: Donor Coordination Meeting March 2010):European Integration (Copenhagen Criteria, European Council 1993)Economic growth (sustainable economic development)Governance (strengthening democratic institutions)Decentralization (administrative und fiscal)Reunification (Transnistria: reconciliation)

Donor coordination State Chancellary of the Republic of Moldova; EU,EBRD, WB, UN; CH, S, AUT, GIZ, CDA, USA etc. Sector Donor Coordination; EU Donor Coordination

Country Strategy 2011-15 Priorities

Water and sanitation Vocational training Governance (Non-focal area) Cross-cutting issues: Gender und Environment

Strategic goal: Poverty reduction and rural development

Planning documents: National Development Strategy (law) und National Development Plan 2008-11 (action plan); MTEF 2009-11;EU-Moldova Action Plan (2005)

Priority Sector Water and Sanitation (WSS) GOALS

Modernisation of WSS Rehabilition of WSS infrastructure: essential for economic development Capacity development for communal water suppliers Contribution to increase sustainable access to safe drinking water from 31 % to 65 % and to waste water treatment from 42 % to 72 % by 2015 Contribution to implementation of National Water Strategy (NWS) Contribution to development of financial WSS strategy Priorisation of investments (action plan, GIZ project based on OECD/ADA intervention: regional development plans)

PROJECTS WSS rehabilitation in Nisporeni ApaSan (cooperation with SDC in 15 municipalities) Investment/action plan for WSS investments/NWSTA for rehabilitation of waste water treatment in Cantemir

Priority Sector Vocational Training (VET)

GOALS Modernization and adaptation of curricula and teaching methods to the needs of the labour market Support for labour market oriented vocational training Promotion of entrepreneurship (training firms) Strengthening of competitiveness and mobility

PROJECTS Curricula Reform in agricultural schools as competence centres for regional development ; Curricula Reform in economic VET schools Modernization of education in public vocational schools in the field of water and sanitation related professions (link to WSS) Superior training for doctors and medical personnel at the children‘s cancer clinic in Chisínau

Governance (Non-focal sector)

GOALS

Rule of Law, democracy, transparency, accountability Conflict prevention Integration of returnees (migration management, mainstreaming migration) Social inclusion Strengthening of civil society

PROJECTS Capacity building for MFAEI staff (PAA etc.) Reintegration support for voluntary returnees International Summer School: Centre for Peace Initiatives, Democracy and Conflict Resolution

Cross-cutting issues Gender and Environment

GOAL Increased consideration given to gender und environment issues in project planning and implementation

PROJECTS Gender and environment as integral part of WSS and VET projects

Other ADA Instruments REGIONAL PROJECTS

EcoNet (training firms and fairs; Kulturkontakt) Support for/consolidation of social dialogue (ILO) Training for civil servants (DAK) Reparis (WB)

NGO-COOPERATIONS Day care centres for elderly people in Straseni Social centre in Tirnova Care centres for socially disadvanged children (Tiraspol) Inclusion of mentally handicapped people

BUSINESS PARTNERSHIPS Feasibility study for the cultivation of bio vegetables

Other Austrian Ministries/Institutions OeEB MD is a priority country; by 2015, 15 % of project funds are to go to SE/EE.

Needs Assessment Study for private sector development Assessment study Remittances from Austria BSTDB Trust Fund for joint financing opportunities

Soft Loans (OeKB)In 2010, MD was included in the list of target countries (Black Sea region is one of 5 target regions).

EU TwinningsSupport to the Implementation and Enforcement of Competition and State Aid Policy in the Republic of Moldova (BWB JP)

Thank you for your attention.