Municipal Environmental and Economic Governance Project (MEG)

Improving water services and creating business friendly environment

Municipal governance is directly responsible towards citizens and has a great development potential. Municipalities and their leaders are the most dynamic government actors, sensitive for the needs of citizens, their better living conditions and employment. However, political deadlocks and complex constitutional arrangements have resulted in a slow pace of administrative reforms, lack of investments, high levels of unemployment and growing social inequalities. The effect of poor governance in BiH was seen during the catastrophic floods in 2014, which showed low resilience and capacities to cope with the consequences of natural disasters.

Municipalities as key drivers of change in BiH

The MEG project supports municipalities to improve their governance and provide public services in an inclusive, effective and efficient manner. By supporting the economic and environmental sectors, where municipalities invest the most of their budget funds, the Project positively affects municipal development as a whole. To start collective actions and ensure a countrywide best practice exchange, the Project will also contribute to regulatory changes at relevant higher government levels.

The project creates new and supports existing synergies between municipalities, businesses, ministries at the entity and cantonal levels, associations, and professional thematic networks. Around 700’000 citizens, including 40’000 socially excluded, will benefit from the improved local services, employment opportunities or improved business environment.

Strengthening municipalities to provide good quality services in the environmental and economic sectors

The MEG project will operate in 20-25 municipalities – working with mayors, local administration and municipal councils – to develop capacities, provide support to capital investments, and improve economic framework. Citizens, businesses and civil society participate in policy design and management of projects, but also monitor service delivery. Strengthening the public-private dialogue should unlock their potential and contribute to development and growth. The municipalities will be able to increase access of socially excluded to public services, enable equal employment opportunities and jobs. 
Within the environmental sector, the focus is on improving the water services and technical and management capacities of water utilities. Regular maintenance of the water supply systems and expansion of the existing networks, along with cost reductions and improved water supply, will ensure better quality drinking water for citizens, with optimum costs of services.
In the economic sector, the focus is on creating a business-friendly environment, one that would encourage investments and development, and improving administrative services. This will result in a stronger economic development and new jobs at the local level.

Advocating for municipalities interests and improving regulatory framework at higher government levels

Entities, cantons and municipalities are supported in developing new or revising existing laws, by-laws, methodologies and procedures to achieve a more inclusive and effective local service delivery. The MEG project consults and cooperate with the Association of Municipalities and Cities serving as a voice of municipalities’ interests. Municipalities will be additionally empowered through national thematic professional networks, such as Aquasan, which advocate for improved legislation and public services, and provide best practices exchange. Such countrywide proactive networking and exchange will widen the outreach and contribute to building bridges across regions and entities.

Previous successes created momentum

The MEG project is a follow up of the Governance Project in Municipal Water and Environmental Development (GOV-WADE) that supported practicing of good governance principles in the provision of water and environmental services. GOV-WADE confirmed that it is worth to invest in the improvement of municipal development capacities and practices. From 2016 to 2020, the MEG project will focus on 18 advanced municipalities (grouped in two clusters in northern BiH), who have previously demonstrated capable municipal leadership and basic capacities to undertake this development process. However, support for additional less developed municipalities is also possible.

MEG is gradually building a base for new successes

MEG partner municipalities are in the process of implementing performance management systems in their local administrations, which will improve local development management and deliver of public services. They achieved noteworthy progress in the realization of the annual plans for the implementation of their development strategies and involvement of citizens in the public consultation processes for decision-making.

In the environmental sector, 18 water utilities have improved the financial and operational performance and they have been better equipped to reduce water losses in networks. More accurate base of the consumers of water services has been created, while the overall citizens’ satisfaction with public services and infrastructure has increased. Public Service Agreements in 17 municipalities have clearly defined responsibilities of water utilities and municipal administrations, and introduced subsidies schemes for water services for the most vulnerable or socially excluded citizens, as well as the implementation of tariff-setting procedures for water and services.

In the economic sector, MEG supports municipalities in establishing effective grant schemes for local businesses and improving the value chains relevant for local economies. The Network of Economic Development Professionals has been created to advocate for the regulatory reform towards a business-friendly environment and better services to businesses.

The MEG Project has provided the technical and expert assistance to the relevant Ministries in drafting laws, e.g. Law on Incentives for Small Businesses and Law in Income Tax in the Federation of BiH, based on its Advocacy Strategy, which has set priority legislative reforms related to municipal environmental and economic services.