Cooperation Strategy Serbia 2010 - 2013 - Deza - admin.ch

COOPERATION 

STRATEGY 

SERBIA 2010–2013

Editors and Publishers 

Federal Department of Foreign Affairs 

Swiss Agency for Development and Cooperation (SDC) 

Freiburgstrasse 130 

3003 Berne 

www.deza.admin.ch 

Federal Department of Economic Affairs 

State Secretariat for Economic Affairs (SECO) 

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3003 Berne 

www.seco-cooperation.admin.ch 

Swiss Cooperation Office Belgrade 

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11000 Belgrade 

www.swiss-cooperation.admin.ch/serbia/ 

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United Nations Development Programme 

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Swiss Cooperation Office Belgrade 

An electronic version is available via Internet 

Organisational Units in Charge 


Cooperation with Eastern Europe 

Western Balkans Division 


Economic Cooperation and Development Department 

Private Sector Development Division 

© SDC 2010

SERBIA 2010-2013 

The Swiss Agency for Development and Cooperation (SDC) and the State Secretariat for Economic 

Affairs (SECO) have together drawn up the Cooperation Strategy Serbia 2010-2013 in association 

with development partners in Serbia and with various interested parties from the Swiss government. 

The Strategy represents Switzerland’s commitment to supporting Serbia’s transition towards a functioning 

democracy and a sustainable market economy. 

The Cooperation Strategy has been prepared in line with relevant national documents, such as the 

National Programme for Integration with the European Union, the Needs of the Republic of Serbia for 

International Assistance, social inclusion policies, and selected sector policies and strategies. It is further 

based on the experiences gained and lessons learned by Swiss Cooperation partners in the past. 

This is the third Cooperation Strategy for Serbia. Switzerland has been supporting Serbia since 1991. 

The initial focus on humanitarian aid activities has shifted to a support for the transition process. The 

present Strategy sets the framework and broad directions of Switzerland’s cooperation in Serbia from 

2010 to 2013. 

The document contains six main parts. The first is concerned with how the context has developed and 

the current situation. The second focuses on a review of the cooperation from 2007 to 2009, and the 

third part outlines strategic orientations. The fourth part gives an overview of strategic principles, the 

fifth addresses budget and programme management, and the sixth part describes the monitoring 

and controlling system. 

While both SECO and SDC will work together closely on the implementation of the Strategy, each 

institution fulfils a specific role and remains responsible for the financing and execution of its part of 

the Swiss portfolio and for the achievement of the corresponding objectives and results. 

The Cooperation Strategy Serbia 2010-2013 was approved in December 2009. 

Swiss Agency for Development 

and Cooperation, SDC 

State Secretariat for Economic 

Affairs, SECO 

Martin Dahinden 

Director-General 

Jean-Daniel Gerber 

State Secretary 

I

ACRONYMS 

CG 

EBRD 

EIB 

EFSE 

EU 

FIAS 

FOM 

GDP 

GI 

GLOBALGAP 

HEKS 

ICTY 

IDP 

IFC 

IMF 

IPA 

MoE 

MoJ 

NCC 

NGO 

PRS 

PSD 

REF 

RPP 

RRPP 

SAA 

SCO 

SCOPES 

SCP 

SCTM 

SDC 

SECO 

SIFEM 

SIPPO 

SME 

TENT B 

tbd 

WB 

WTO 

WTO-TRIPS 

Corporate Governance 

European Bank for Reconstruction and Development 

European Investment Bank 

European Fund for Southeast Europe 

European Union 

Foreign Investments Advisory Service 

Federal Office for Migration 

Gross Domestic Product 

Geographical Indication 

European retailers’ programme for good agricultural products 

Hilfswerk der Evangelischen Kirchen der Schweiz (Swiss NGO) 

International Criminal Tribunal for the former Yugoslavia 

Internally Displaced Person 

International Finance Corporation 

International Monetary Fund 

Instrument of Pre-Accession Assistance 

Ministry of Education 

Ministry of Justice 

National Control Centre 

Non-Governmental Organization 

Poverty Reduction Strategy 

Private Sector Development 

Roma Education Fund 

Regional Police Programme 

Regional Research Promotion Programme in Social Sciences 

Stability and Association Agreement 

Swiss Cooperation Office 

Scientific Cooperation Programme between Eastern Europe and Switzerland 

Swiss Cultural Programme 

Standing Conference of Towns and Municipalities 

Swiss Agency for Development and Cooperation 

State Secretariat for Economic Affairs 

Swiss Investment Fund for Emerging Markets 

Swiss Import Promotion Programme 

Small and Medium Enterprise 

Nikola Tesla Thermal Power Plant B 

to be defined 

World Bank 

World Trade Organization 

WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights 

II

TABLE OF CONTENTS 

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i 

Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii 

Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii 

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv 

1 Context and Develovment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

1.1 Political developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

1.2 Economic developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 

1.3 Social developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 

1.4 International aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 

2 Review of Switzerland’s cooperation 2007-2009 . . . . . . . . . . . . . . . . . . . . . . . . 4 

2.1 Education (SDC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 

2.2 Public Infrastructure (SECO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 

2.3 Local Governance (SDC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 

2.4 Private Sector Development PSD (SECO/SDC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 

2.5 Major lessons learned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

3 Strategic orientation 2010-2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

3.1 Overall strategic framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

3.2 Objectives framework and programme structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

3.3 Economic Development (SECO and SDC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

3.4 Rule of Law and Democracy (SDC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 

3.5 Education (SDC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

3.6 Energy Efficiency and Renewable Energy (SECO). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

3.7 Regional programmes, Swiss NGO programmes and Migration . . . . . . . . . . . . . . . . . . . 14 

3.8 Transversal themes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

4 Strategic principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 

5 Budget and programme management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

6 Monitoring and controlling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

List of Annexes: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 

Annex 1 – Swiss Cooperation Strategy for Serbia 2010-13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 

Annex 2 – Budget details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 

Annex 3 – Map of Serbia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 

Annex 4 – Monitoring system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 

Annex 5 – Serbia at a glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 

III

SWISS COOPERATION 

Executive Summary 

Serbia has experienced considerable economic 

growth in recent years and is now a country 

with a clear European orientation and strong 

will to take the social inclusion agenda forward. 

The Cooperation Strategy 2010-2013, therefore, 

builds on past programme experience and 

makes use of new opportunities to align itself 

with Serbia’s policies and strategies. While the 

Strategy thus has elements of continuity, it is 

also designed to adjust to emerging challenges, 

including the repercussions of the global economic 

crisis on Serbia. 

Serbia has begun defining and implementing 

reforms in many sectors, with the aim of improving 

state effectiveness and fulfilling the criteria 

for becoming a European Union (EU) candidate 

country. However, overall progress with modernizing 

the judiciary, combating corruption and 

implementing decentralization has been slower 

than expected. Respect for human rights and 

the integration of minorities remain challenges, 

despite the fact that minorities are officially 

recognized and an anti-discrimination law has 

recently been passed. 

From 2006 to 2008, annual real Gross Domestic 

Product (GDP) growth rates ranged from 

5.5% to 7.5%, while poverty rates decreased 

from 8.8% to 6.6% of the population. GDP per 

capita reached USD 7,000 in 2008, placing 

Serbia firmly in the upper bracket of middle-income 

countries. The official unemployment rate 

in 2008 remained at a high 14%, with vulnerable 

sections of society such as young people 

and minorities especially badly hit. As a consequence 

of the global economic crisis, Serbia’s 

economy has contracted by an estimated 3% 

in 2009 and it is anticipated that growth will 

resume in 2010. 

After years of positive trends, poverty has recently 

increased again to 7.9%. This affects the elderly, 

young people and children in particular. In addition, 

as many as 20% of the population live 

just above the poverty line and are vulnerable 

to external shocks. As in other countries in the 

region, the Roma population and the other 20 

recognized “national minorities” are in a difficult 

situation, both economically and socially. As 

a response to these social challenges, the government 

has decided to draw up and implement 

social inclusion policies as well as a comprehensive 

migration management strategy. Both are 

essential to the EU integration process. 

Switzerland established a humanitarian aid programme 

in Serbia in 1991. This was phased out 

only recently. In 2001, an emergency assistance 

programme was launched to support the incoming 

democratic government. This was followed 

by the development of a medium-term cooperation 

programme for 2002 to 2006. In addition, 

the Federal Office for Migration (FOM) financed 

significant return assistance and reconstruction 

programmes throughout this period. The 

last Cooperation Strategy covered the period 

from 2007 to 2009. Its relevance with regard to 

national priorities was high, and implementation 

effective. Switzerland consequently continues to 

enjoy an excellent reputation, owing to its focus 

on achieving results, its flexibility of approach 

and its strong partnership orientation. 

The overall goals of the Cooperation Strategy 

2010-2013, related to European integration, 

and the four domains (Economic Development, 

Rule of Law and Democracy, Education, Energy 

Efficiency and Renewable Energy), are well in 

line with the government’s priorities, as formulated 

in several strategic documents. 

IV


1. Context and development policies 

The evolution of the context in Serbia was encouraging 

in recent years, after the difficult period in 

the nineties and the political changes in 2000. 

Between 2007 and 2009 – the time-frame of the 

previous Cooperation Strategy – the country made 

good progress in its transition process and placed 

itself firmly on the path to European integration. 

That said, two major developments – the secession 

of Montenegro and Kosovo’s unilateral declaration 

of independence – significantly changed 

Serbia’s geo-political environment. During this 

period, Serbia was generally on track with the 

implementation of essential reforms. These resulted 

in high economic growth rates and a decrease 

in poverty – factors which are now endangered by 

the global economic crisis. 

The Western Balkans region in general, and Serbia 

in particular, will continue to be of strategic priority 

for the Swiss foreign policy for reasons of proximity, 

closeness of interaction and a significant diaspora 

living in Switzerland. Bilateral relations between 

Serbia and Switzerland intensified in 2009 with a 

series of high-level visits, after a slow-down in 2008 

when Serbia recalled its ambassadors from countries, 

including Switzerland, which had recognized 

Kosovo’s independence. Cooperation between the 

two countries, which are in the same constituency 

within the Bretton Woods Institutions, has evolved 

very positively in recent years. 

1.1 Political developments 

The prospect of integration into the EU clearly 

remains the major driving force behind political 

and administrative reforms. However, while the 

Serbian parliament has ratified the Stabilization 

and Association Agreement (SAA), the EU has 

not yet done so, on grounds that Serbia’s cooperation 

with the International Criminal Tribunal 

for the former Yugoslavia (ICTY) is still not fully 

satisfactory. Serbia’s accession to the Schengen 

“White List” in December 2009 – enabling visafree 

travel to Europe – was an essential step 

towards Serbia’s European integration. 

Early elections in May 2008 brought a pro-European 

coalition government to power. It seems 

to be solid, but the opposition continues to block 

important reforms in parliament and regularly 

calls for new elections. The stability of the government 

will depend largely on the effects of the 

global economic crisis on the country, and the 

response by the authorities. 

Serbia has begun defining and implementing 

reforms in many sectors, with the aim of improving 

state effectiveness and fulfilling the criteria 

for becoming an EU candidate country. Overall 

progress with modernizing the judiciary, combating 

corruption and implementing decentralization 

is slower than expected. Respect for human 

rights and the integration of minorities are still 

challenges, despite the fact that minorities are 

officially recognized and an anti-discrimination 

law has recently been passed. 

It remains to be seen how far the prevailing “distributive” 

political discourse – on the fair allocation 

of economic and social resources – will win 

over the previously dominant “symbolic” discourse 

aimed at uniting the people under the flag of a 

strong Serbia, including Kosovo. Serbia’s plea to 

refer Kosovo’s unilateral declaration of independence 

to the International Court of Justice has 

been accepted by the United Nations. The advisory 

opinion of the Court is expected in 2010. 

1.2 Economic developments 

From 2006 to 2008, annual real GDP growth 

rates ranged from 5.5% to 7.5%, while poverty 

rates decreased from 8.8% to 6.6% of the population. 

GDP per capita reached USD 7,000 in 

2008, placing Serbia firmly in the upper bracket 

of middle-income countries. The official unemployment 

rate in 2008 remained at a high 14%, 

with vulnerable sections of society such as young 

people and minorities especially badly hit. 

As a consequence of the global economic crisis, 

the Serbian economy has contracted in 2009 with 

an estimated 3% decline in GDP. An International 

Monetary Fund (IMF) stand-by arrangement (EUR 

3 billion in 2009-10), new loans from the World 

Bank (WB) and the use of EU IPA (Instrument for 

Pre-Accession Assistance) funds in 2009 are all 

1

2 

SWISS COOPERATION


means of assistance that are required to stabilize 

the economy. These will most probably help 

maintain the relative stability of the domestic currency. 

The public sector must revert to a rigorous 

austerity policy, which includes lowering public 

spending, as well as reducing transfers to local 

governments. Efforts to increase revenue levels 

are ongoing, but require measures in the politically 

sensitive issue of taxation. The private sector 

has been faced with a drop in demand and 

in foreign direct investment, leading to declines 

in production, imports and exports, as well as an 

increased unemployment. 

Despite significant withdrawals of domestic savings 

and foreign credit funds, the banking system has 

remained relatively stable, owing to the National 

Bank of Serbia’s discipline. Compared with neighbouring 

countries, Serbian banks have appropriate 

capital adequacy ratios and are not facing solvency 

problems. The government has set up a package 

of measures aimed at providing incentives to boost 

economic activity. Evidently, much will depend on 

whether the current global crisis abates soon, or 

the recession drags on. 

1.3 Social developments 

After years of declining trends, poverty has recently 

increased again to 7.9%, affecting the elderly, 

young people and children in particular. In addition, 

as much as 20% of the population live just 

above the poverty line, and are vulnerable to 

external shocks such as the current global crisis. 

Regional disparities are pronounced, with rural 

areas (in the south-west and south) having the 

highest poverty rates. Serbia shows an accelerated 

process of demographic ageing, with a rural 

exodus emptying entire villages. 

As in other countries of the region, the Roma 

population and the other 20 recognized “national 

minorities” are in a difficult situation, both 

economically and socially. Exclusion and discrimination 

persist, in particular with regard to 

housing and access to basic services such as 

health and education. The global crisis is likely 

to worsen the living conditions and prospects of 

marginalized groups. 

Overall, the civil society in Serbia is not very 

strong, and the well-established NGOs are 

mostly concentrated in Belgrade. Social dialogue 

and partnerships are advancing slowly, with difficulties, 

especially at the national level. Migration 

constitutes an important issue, as many refugees 

and internally displaced persons (IDPs) are still 

not really integrated in the society. The number 

of returnees from Western Europe is increasing. 

As a response to these social challenges, the 

government has decided to draw up and implement 

social inclusion policies, as well as a comprehensive 

migration management strategy. Both 

are essential to the EU integration process. 

1.4 International aid 

Serbia currently receives around EUR 400 million in 

international aid annually, with IPA funding expected 

to increase over the next years. Covering only 

4% of overall public expenditures, this aid is marginal, 

but its importance is increasing in the light of 

the current budgetary problems. In fact, the global 

crisis has further exposed the need to strengthen 

dialogue between the Serbian government and its 

international development partners. 

Serbia has signed the Paris Declaration on Aid 

Effectiveness and developed a National Aid 

Effectiveness Agenda. In cooperation with other 

ministries, the Ministry of Finance – through its 

Sector for the Programming and Management 

of EU Funds and Development Assistance – has 

made a significant effort in the implementation 

of the National Agenda. Nevertheless, many 

donors continue to pursue diverse priorities and 

approaches, leading to a fragmentation of aid. 

The government intends to align donor activities 

more closely with national priorities by means of 

the recently updated Needs Assessment of the 

Republic of Serbia for International Assistance. 

The document is focused on priorities linked to 

EU accession. The main instrument, the IPA funds 

(50% of international aid), are routed first and 

foremost through the government, while the local 

levels do not have direct access to them. Another 

effort undertaken by the Ministry of Finance is to 

provide support to line ministries in the process 

of planning and prioritizing international aid, as 

capacity in this area is still weak. 

Donor harmonization includes periodic coordination 

meetings and information sharing between 

multilateral and bilateral agencies, as well as the 

co-financing of projects to an increasing degree. 

Donors and the government all agree that sector-related 

policy dialogue and sector-based 

approaches should increase. However, in order 

to progress along this track, national capacities 

need to be improved to allow the government to 

assume full leadership. Existing sector coordination 

groups are mainly donor-driven and do not 

yet work at a strategic level. The programming of 

IPA funds for the 2007-2013 period provides an 

excellent opportunity to enhance the administrative 

capacities of state institutions and to improve 

aid effectiveness in Serbia. 

3


2. Review of Switzerland’s 

cooperation 2007-2009 

Switzerland established a humanitarian aid programme 

in Serbia in 1991. This was phased 

out only recently. In 2001, an emergency assistance 

programme was launched to support the 

incoming democratic government, followed by 

the development of a medium-term cooperation 

programme for 2002 to 2006. In addition, during 

this period the Federal Office for Migration 

financed significant return assistance and reconstruction 

programmes. The last Cooperation 

Strategy covered the period from 2007 to 2009. 

Its main achievements are discussed below. 

The overall effectiveness of the projects has been 

mixed, however, owing to the low status of education 

among national priorities and the ensuing 

lack of continuity at the political level. Examples 

of results are: a) Accreditation and professional 

teacher training system established, with 45,000 

teachers trained in 2008; b) 12,000 beneficiaries 

(Roma, children with disabilities, parents) 

supported in inclusive education in over 60 

municipalities, resulting in a 20% increase in 

enrolment rates and almost 100% graduating to 

the next grade. 

2.1 Education (SDC) 

SDC began to support the education sector in 

2000. Since 2006, it has concentrated efforts on 

three areas: (i) institutional support for the Ministry 

of Education to develop international and 

EU-compliant policies and standards; (ii) direct 

system development for the professional training 

of teachers in compulsory education; and 

(iii) the community-based inclusion of Roma and 

marginalized children in the formal education 

system. 

SDC’s activities in this domain have contributed 

significantly to the reform process at national, 

regional and local levels by improving the legal 

framework, strengthening institutions and directly 

supporting beneficiaries. Across the portfolio 

of projects, a steady and coherent evolution is 

evident. It has progressed from internal ministry 

reforms to sector reforms, from pilot models 

to their being anchored in educational systems 

and rolled out. Consequently, the support to 

education for Roma children has been redesigned, 

shifting from a project to a programme 

approach. This is expected to position inclusive 

education better on the political agenda, and to 

increase harmonization between implementing 

partners. Related to this is the need for a more 

active role of the ministry in sector coordination. 

As the recognized lead donor in education, SDC 

is able to enhance joint policy dialogue, as well 

as alignment and the attainment of agreed milestones. 

2.2 Public Infrastructure 

(SECO) 

Since 1999, SECO’s main investments have 

been in the electricity infrastructure, through 

various projects linked to emergency needs and, 

between 2003 and 2007, the renewal and modernization 

of the National Control Centre (NCC). 

The project made the high-voltage transmission 

system in Serbia more secure, optimised and 

efficient. It also enabled the establishment of a 

regional electricity market, by enabling accurate 

measurements of the energy exchanged between 

neighbouring countries. The pioneer nature of 

the project, in terms of both its state-of-the-art 

technology (mostly of Swiss origin), and its central 

status, ensured high visibility. It ran in parallel 

with the modernization of the telecommunications 

network for data transmission, funded by 

the Economic Bank for Reconstruction and Development 

(EBRD) and the European Investment 

Bank (EIB), which gave it a stamp of approval as 

an international effort. 

Based on the success of the NCC project, a followup 

project was developed with the same partner 

institution, the Electric Power Industry of Serbia. 

The modernization of the monitoring and control 

system at the largest thermal power plant, Nikola 

Tesla B (TENT B), was approved in 2008 and will 

be implemented over the next years. With mostly 

Swiss equipment, the project is expected to stabilize 

the electricity supply while improving environmental 

conditions around the power plant. 

4


In addition to energy, SECO organized the supply 

of trams from the city of Basel to the public 

transport system of Belgrade. Accompanied by 

workshop modernization and staff training, this 

project met with high approval rates from passengers 

and continues to give good visibility. 

Among the results achieved in this area are the 

acquisition of data about all electricity flows in 

Serbia and the reconnection of Serbia to the 

south-eastern European energy grid. While relevant 

and effective, interventions in public infrastructure 

have resulted in limited policy dialogue. 

In the future, these measures must be more firmly 

embedded in a defined energy sector strategy. 

2.3 Local Governance (SDC) 

SDC has been supporting decentralization and 

democratization processes at the local level 

since 2000. An initial project involved seven 

municipalities in central Serbia, where local 

capacities were assessed and improved. Successes 

were replicated in eight municipalities in 

south-western Serbia, in a co-funding arrangement 

with the EU. Effectiveness was satisfactory 

and achievements are encouraging. Results 

are mainly related to the improved quality of 

public services (e.g. opening of 14 one-stop 

shops), the introduction of citizen participation 

mechanisms (e.g. new municipal statutes 

in six municipalities and draft laws on popular 

initiatives and referenda), the setting up of 

inter-municipal cooperation mechanisms (e.g. 

support for the establishment of three Regional 

Development Agencies), and the improvement 

in strategic planning at local and regional levels. 

However, the programme is still infrastructure-driven 

(significant infrastructure projects 

implemented in 15 municipalities), and works 

only partly within the public financial and 

administrative systems. 

The main lesson for the future is to reinforce 

capacity-building in municipal administrations 

in order to increase the efficiency and effectiveness 

of public spending at the local level. 

Specific topics such as the cooperation between 

local governments, civil society and the private 

sector, and the preparation of project proposals 

for external funding (especially EU funds) 

will be even more important in the context of 

the economic crisis. Also, a strong need has 

emerged to strengthen advocacy and lobbying 

for the interests of local governments at central 

government level and to foster a better integration 

of local and central state levels. Finally, 

the global crisis has revealed the need to help 

municipalities raise their own funds and economize 

on resources. 

2.4 Private Sector 

Development (SECO/SDC) 

Economic development, based on the enhancement 

of private sector activity, has been one of 

the pillars of Switzerland’s cooperation with Serbia 

since 2000. Within the framework of a trade 

promotion programme, SECO has successfully 

supported Serbia in its WTO negotiations, bringing 

the country close to accession. In collaboration 

with the Swiss Import Promotion Programme 

(SIPPO), it has also boosted the export of products 

in traditional sectors of the economy. Some 

elements of the trade programme, such as trade 

efficiency measures, produced mixed results and 

were discontinued. 

Switzerland’s aid has been expanded, from 

access to finance for Small and Medium Enterprises 

(SMEs) and financial intermediaries to 

broader financial sector support, including the 

restructuring and privatization of banks and 

insurance companies, the strengthening of system 

stability, and the provision of access to insurance. 

A critical mass has been reached in terms 

of sector portfolio size and contributions were 

made to financial sector deepening, but also to 

employment creation. 

SECO has also been engaged in improving 

corporate governance (CG) and the business 

enabling environment. It has done so through the 

introduction of CG principles, as well as through 

legal and regulatory reforms – thereby moving 

from the regional and national level to the subnational 

level, with an increased focus on policy 

implementation rather than policy advice alone. 

SDC has concentrated on promoting SME startups. 

However, the envisaged shift to a more systemic 

and more easily scalable approach did 

not materialize. This showed that reorienting 

programmes is time consuming. As a result, the 

SDC part of the portfolio was never in full swing. 

Therefore, innovative ways for reaching more 

scalability are being explored. 

Overall, the PSD portfolio has been comprehensive 

and well-balanced, but there is a need 

to reduce the number of individual projects, to 

increase scale and to ensure full government 

ownership. Specific examples of results are: 43 

companies accompanied to trade fairs, over 

EUR 3 million in exports contracted, CG manual 

published and a post-graduate CG course introduced, 

and several hundred SME start-ups initiated 

or supported. 

5


2.5 Major lessons learned 

Overall, the Swiss portfolio displayed considerable 

relevance in the light of national priorities, 

and implementation was effective. Switzerland’s 

cooperation consequently continues to enjoy an 

excellent reputation, owing to its focus on achieving 

results, its flexibility and its strong partnership 

orientation. 

There is still some work to be done concerning 

aid effectiveness. National systems and joint aid 

implementation arrangements should be utilized 

to the extent possible, and parallel project structures 

avoided wherever feasible. 

Alignment with national and sector policies and 

strategies should be clearly defined and monitored, 

with a strong emphasis on support for the 

implementation of reforms. Serbia has recently 

drafted and passed many new laws, policies 

and strategies, but implementation often lags 

behind. 

Switzerland is one of the major bilateral donors, 

but does not have sufficient visibility. The potential 

that exists to increase visibility and position 

Switzerland’s cooperation in policy dialogue 

should be utilized more effectively through more 

vigorous efforts to communicate results and success 

stories. 

6


3. Strategic orientation 2010-2013 

The overall goal of European integration and 

the four domains of the Cooperation Strategy 

2007-2009 (see chapter 2) remain well in line 

with current government priorities, as formulated 

in several strategic documents and confirmed by 

the Serbian Ministry of Finance. This, along with 

long-term partnerships yielding tangible results 

and a relatively stable context, provides a sound 

basis for the future. Consequently, there is no 

need for the programme to be reoriented substantially. 

What is required is rather a refinement 

of thematic priorities and certain adjustments in 

approaches and work modalities. 

Europe provides the legal basis, and funding 

derives from the frame credit on the Continuation 

of Cooperation with Eastern Europe and the 

Commonwealth of Independent States approved 

in 2007. 

Finally, the international points of reference are 

the Millennium Development Goals and the Paris 

Declaration on Aid Effectiveness, with the related 

Accra Agenda for Action. 

Based on these parameters, the Cooperation 

Strategy 2010-2013 has been designed with the 

following objectives framework and related programme 

structure. 

3.1 Overall strategic 

framework 

Serbia has experienced considerable economic 

growth in recent years and is now a country with 

a clear European orientation and a strong will 

to take the social inclusion agenda forward. This 

and the Swiss programme experience are strong 

assets on which to build the Cooperation Strategy 

2010-2013, making use of new opportunities 

for alignment with Serbia’s policies. While the 

new medium term programme thus contains elements 

of continuity, it is also designed to adjust 

to emerging challenges, including the repercussions 

of the global economic crisis on Serbia. 

Key national references are the National Programme 

for Integration with the European 

Union, the Needs of the Republic of Serbia for 

International Assistance, social inclusion policies 

– which are to replace the Serbian Poverty 

Reduction Strategy (PRS) – and selected sector 

policies and guidelines. A “selective” alignment 

approach will help to focus on topics where 

Switzerland has a comparative advantage, and 

to keep a distance where no agreement can be 

reached on basic concepts or methods. Selective 

alignment may also refer to programmes of other 

partners than the central government. 

On the Swiss side, the objectives of the Strategy 

for the Western Balkans of the Federal Council 

continue to provide the overall frame of reference. 

The Law on Cooperation with Eastern 

3.2 Objectives framework 

and programme structure 

Overall goal 

Switzerland will support Serbia’s efforts towards 

European integration, by contributing to (1) 

improving social inclusion and reducing poverty, 

and (2) increasing the competitiveness of its 

economy. 

3.3 Economic Development 

(SECO and SDC) 

National priorities 

Within the Serbian government’s numerous economic 

priorities, SECO and SDC will align with 

the following: maintaining macroeconomic sta- 

7


Sub-domain: business environment 

reform (SECO) 

Economic competitiveness depends on a conducive 

business environment. SECO will continue to 

promote new reforms, especially at the sub-national 

level in medium-sized municipalities, with 

an emphasis on implementing policies, enforcing 

the regulatory framework and building related 

capacities. Ten out of twenty leading municibility, 

improving the competitiveness of SMEs, 

employment creation and regionally-balanced 

economic development. 

Domain objectives (SECO/SDC) 

SECO and SDC’s domain portfolio contributes 

to (i) a functioning public and commercial financial 

sector, (ii) a conducive business environment 

and regulatory framework, (iii) strengthening the 

export potential of private enterprises, and (iv) 

SME-driven pro-poor market growth. 

Interventions in this domain will build on emerging 

needs and potentials in order to address the 

impact of the global economic crisis in a flexible 

manner. 

Sub-domain: financial sector support 

(SECO) 

The current macroeconomic imbalances impact 

directly on the public sector’s fiscal position, as 

well as the private sector’s access to finance. 

In the public domain, activities relate first and 

foremost to improving public financial management 

in order to optimize the use of increasingly 

scarce budgetary resources. It is expected 

that the resulting changes will have a positive 

effect on the country’s management of public 

finances – as monitored by Public Expenditure 

and Financial Accountability (PEFA) indicators 

– in terms of improved fiscal discipline, allocative 

efficiency, and operational performance. In 

addition, opportunities to help improve stability 

and integrity through regulatory measures will 

be explored. 

In the commercial domain, a sustained access 

to finance and related services for SMEs must be 

ensured. The main activity lines are (i) expanding 

financial intermediation in the banking and 

non-banking sectors and (ii) ensuring a greater 

depth of the financial sector and a stronger market 

infrastructure, in particular by restructuring 

the banking and insurance sectors. Measures to 

enhance the efficiency and effectiveness of payment 

transfers to Serbia will be explored further 

as opportunities arise. The specific contribution 

made by projects in this sub-domain will 

be measured in terms of employment creation, 

leverage, and the effects on the local economy. 

The government’s commitment to continue macro-economic 

stability policies and to restructure 

the banking and insurance sectors will be the 

crucial context variables to be monitored. 

8


palities will be targeted in the short to medium 

term. Complementary activities will be explored 

at the national level. 

Interventions to enhance economic governance 

will include support for international standards 

and codes aimed at a sound institutional and 

market infrastructure. 

This sub-domain is aimed at producing direct 

improvements to generate competitive, transparent, 

and reliable regulatory environments at 

national and local levels, thereby allowing SMEs 

to formalize their operations, do more and better 

business, and create new jobs. The regular Foreign 

Investments Advisory Service/International 

Finance Corporation (FIAS/IFC) sub-national 

“Doing Business” surveys in selected benchmark 

municipalities will assess progress in relevant 

performance indicators. These surveys are co-financed 

by SECO. In addition, the government’s 

progress in implementing strategies such as the 

“regulatory guillotine” will be a core context 

development to be monitored. 

Sub-domain: trade cooperation (SECO) 

Serbia’s traditional, large current account deficit 

calls for growth in sectors with export potential, 

hence an increased competitiveness of exports. 

To allow Serbia to capitalize on its WTO membership 

– expected in 2010 and for which 

SECO’s support has been essential – trade-related 

deficiencies and opportunities are being 

addressed to increase the export potential of private 

enterprises. Main lines of intervention are (i) 

intellectual property rights through the enforcement 

of geographical indications (GIs); these are 

related to WTO-TRIPS and intended to designate 

product quality, highlight brand identity and preserve 

cultural traditions; (ii) the European retailers’ 

programme for good agricultural products 

(GLOBALGAP) quality standard for export-oriented 

commercial agriculture; and (iii) export promotion 

for specific traditional agricultural products 

(in cooperation with SIPPO), as well as commodities 

and services with a high technological 

value (development of specific export clusters). 

Expected outcomes are directly related to these 

activity lines. Exports by commercial entities 

which introduce GIs and quality standards should 

increase measurably. The wider context must be 

monitored in terms of government policies and 

regulations that impact on the export industry. 

Sub-domain: making markets work for 

the poor/M4P (SDC) 

A systemic SME-focused market development 

approach is relatively new to Serbia. Consequently, 

the potential for alignment with existing 

policies and strategies is limited. SDC has 

begun rolling out the innovative “Making Markets 

Work for the Poor” (“M4P”) concept, which 

intends to develop market systems so that they 

function more effectively and, in particular, also 

9


10 

benefit the poor. To reduce regional imbalances, 

the focus of activities is to be in the southern and 

south-western regions, where five markets are to 

be developed. Cooperation with SDC and SECO 

activities in these regions – related to decentralization 

and local governance, as well as sub-national 

competitiveness – will be actively sought. 

This new SDC programme thus complements the 

SECO programme. 

The expected outcome is that systematic 

approaches to market growth will be introduced, 

with local facilitators in five markets in southern 

and south-western Serbia. This will, in turn, result 

in substantial growth in terms of job creation, 

SME turnover, and fiscal revenue generation. 

3.4 Rule of Law and 

Democracy (SDC) 


From the many priorities of central and local 

governments, SDC will selectively align itself with 

the following: the introduction of social inclusion 

policies, local-level institutional capacitybuilding, 

regional development, decentralization 

(including fiscal decentralization and municipal 

property divestment), municipal advocacy and 

lobbying capacities at the central government 

level, institutional capacity-building in the judiciary. 

Domain objectives (SDC) 

SDC’s domain portfolio contributes to (i) fostering 

vertical integration between municipal and 

central state levels and promoting popular rights, 

as well as municipal support programmes, 

increasing the absorption capacity for decentralized 

responsibilities and competencies while 

respecting good governance principles and ii) 

drafting and implementing the social inclusion 

agenda and judicial reform. 

Sub-domain: decentralization and local 

governance 

Municipal development remains the focus of the 

programme, which will support the implementation 

of the recently-passed laws on municipalities, 

local self-government and regional development. 

Strategically, the programme will concentrate on 

(i) vertical integration and advocacy for municipalities’ 

interests in central government and, (ii) 

strengthening management capacities and good 

governance practices of municipalities in line 

with their increasing tasks and responsibilities in 

the course of the current progressive decentralization 

in Serbia. 

SDC will provide an institutional support to the 

Standing Conference of Towns and Municipalities 

(SCTM), the association of Serbian municipalities, 

with a view to contribute to improving 

interactions between the local and central levels


of government, by enabling the SCTM to develop 

its advocacy function and implement its strategies 

and priorities. 

At the level of individual municipalities, the 

approach of working directly through local systems 

will be emphasized. The current level of 

harmonization with other donors must be maintained 

at least. 

Relevant context variables are i) the level of government 

commitment to decentralization, in particular 

related to a conducive legal framework, 

fiscal decentralization, as well as the transfer of 

municipal property and ii) the political willingness 

of municipalities to team up with the SCTM 

to advocate their interests at central level. 

Sub-domain: judicial reform and social 

inclusion 

While Serbia has already developed a national 

judicial reform strategy, implementation has not 

progressed in earnest, and there is a continued 

lack of public trust and confidence in the judiciary. 

The Ministry of Justice (MoJ) is aware of 

these shortcomings and has requested that the 

donor community supports the updating and 

implementation of the reform strategy. SDC has 

agreed to co-finance a World Bank multi-donor 

trust fund. The expected outcome is a national 

judicial reform action plan for implementation. 

At the explicit request of the government, SDC 

has agreed to provide institutional support to the 

Social Inclusion Unit, which is responsible for 

drafting and implementing social inclusion policies 

jointly with line ministries, local governments 

and civil society. This follows on from the success 

of mainstreaming the poverty reduction strategy 

as part of the regular activities of all relevant 

governmental and non-governmental institutions. 

As a means of lifting marginalized groups 

out of poverty, social inclusion complements 

SDC’s domain portfolio, and progress monitoring 

in this regard is essential for EU candidate 

countries and member states alike. 

3.5 Education (SDC) 


From a broad range of government priorities, 

SDC will selectively align itself with the following: 

an enhanced quality of education, the inclusion 

of the vulnerable population (minorities and persons 

with special needs), and reforms to enhance 

the efficiency and relevance of education. 

Domain objectives (SDC) 

SDC’s domain portfolio contributes to (i) 

strengthening the capacities of the Ministry of 

Education (MoE) with regard to drafting and 

implementing EU-compatible, equality and quality-driven 

reforms and policies; it also supports 

the full integration and formalization of all components 

of in-service teacher training in the Serbian 

compulsory education system, and (ii) the 

implementation of the national Roma inclusion 

action plan in education, through system development 

and lobbying for better integration in the 

government agenda. 

11


12 

Sub-domain: education system 

development 

SDC will provide further institutional support 

to the MoE in building a system to improve 

the quality of compulsory schooling in Serbia. 

Within the framework provided by the new law 

on basic education and the general education 

strategy, the MoE is being supported in its 

drafting and coordination of reform initiatives 

related to capacity building, the integration of 

quality standards and the decentralization of 

the education system, as well as planning, budgeting 

and monitoring. 

In compulsory education, SDC will continue to 

support the institutionalization of a nationwide 

in-service teacher training system at the regional 

and national levels. Main activity lines are (i) 

consolidating the network of regional centres, 

(ii) finalizing the relevant legislative frameworks 

and support for their full application, (iii) 

designing a system for professional teachers’ 

career development, and (iv) the vertical and 

horizontal strengthening of system monitoring 

and evaluation. 

Key context variables to be monitored are the 

political willingness to start decentralizing education 

systems to a certain extent and to adhere 

to key principles such as quality and efficiency in 

education and lifelong learning. 

Furthermore, an existing programme of scholarships 

for Serbian students will be expanded, 

thereby contributing to improve Serbia’s international 

integration and access to international 

good practice. 

Sub-domain: Roma education 

The inclusion of minorities in general and the 

Roma in particular in the public education system 

is a recurring challenge in most countries of the 

region. In Serbia, SDC can build on substantial 

experience and expertise. As part of the government’s 

Roma action plan, models for pre-school, 

primary and secondary levels have been successfully 

developed and tested, and are now being 

implemented in 50 municipalities. The time is 

thus right to institutionalize and mainstream the 

system nationwide. 

Main activity lines are: (i) the strengthening of


national and local capacities to implement the 

models, (ii) the introduction of best practices in 

regular curricula, (iii) ensuring skills development 

that is relevant to the job market, and (iv) designing 

reliable monitoring and evaluation tools. 

Activities are aligned directly with the education 

part of the government’s Roma action plan, and 

are harmonized effectively in the joint implementation 

plan. 

The government’s commitment to the social 

inclusion agenda is the key context variable to 

be monitored leading to a sustainable inclusion 

of minorities, and in particular the Roma, into 

the education system. 

3.6 Energy Efficiency and 

Renewable Energy (SECO) 


Serbia’s electricity generation and distribution 

systems are outdated. Generation relies heavily 

on fossil fuels (mainly coal), and there is no 

functioning incentive system for customers to 

save energy. Consequently, Serbia is one of 

Europe’s least energy efficient economies, requiring 

4-6 times more energy than EU countries 

for an equivalent output. Serbia is committed to 

address this situation and has passed legislation 

to this effect. Furthermore, in the process of EU 

integration, the government is carrying out regulatory, 

organizational and technical preparations 

for Serbia’s inclusion in regional and European 

energy networks. 

Domain objectives (SECO) 

SECO’s domain portfolio corresponds to the 

reform effort undertaken by the Serbian authorities 

by supporting projects that i) modernize 

power generation and improve energy efficiency 

and ii) introduce – as pilots – the use of renewable 

energy sources. 

Sub-domain: energy production and 

efficiency 

SECO will explore integrated approaches to 

increased efficiency in power generation, distribution 

and use. Demonstration projects are 

expected to comprise technology transfers, financial 

incentives and information campaigns and 

may be accompanied by a policy dialogue with 

the authorities in charge, in order to increase 

their sustainability. 

Activities in this sub-domain will focus primarily 

on the electricity sector and, more specifically, on 

the modernization of the monitoring and control 

system at Serbia’s largest thermal power plant, 

as a part of a wider upgrade effort. Opportunities 

for further demonstration projects in this subdomain 

will also be explored. 

13


The expected outcome, in terms of measurably 

more reliable and efficient energy generation, 

distribution and/or use, is contingent on the government’s 

willingness to implement tariffs that 

reflect production and distribution costs, and 

the Electric Power Industry of Serbia’s ability to 

collect revenues from its consumers and reduce 

non-technical losses. 

Another focus in this sub-domain will be an 

increase in energy efficiency in the transport sector. 

SECO will continue to consider assisting the 

provision of second-hand trams to public transport 

companies should such vehicles become 

available in Switzerland. 

3.7 Regional programmes, 

Swiss NGO programmes and 

migration 

In addition to the bilateral portfolios described 

above, SDC supports the following regional programmes: 

(1) the Swiss Cultural Programme (SCP); 

(2) the Scientific Cooperation Programme between 

Eastern Europe and Switzerland (SCOPES); (3) the 

Regional Research Promotion Programme in Social 

Sciences (RRPP); (4) the Regional Police Programme 

(RPP); (5) the Roma Education Fund (REF) and (6) 

in micro finance the European Fund for Southeast 

Europe (EFSE). 

Some SECO projects are explicitly designed as 

regional programmes and implemented by 

international agencies such as IFC concurrently 

in Serbia and other western Balkan countries. 

Partners of SDC’s co-funding scheme for Swiss 

NGO programmes in Serbia are HEKS, the 

Pestalozzi Children’s Foundation and Swiss 

Labour Assistance. 

Given the importance of migration from the 

Western Balkans, Switzerland maintains migration 

partnership relations with several countries 

in the region, and SDC implements operational 

programmes funded by the FOM. The Serbia 

migration programme concentrates on (i) institutional 

support at central government level to 

draw up migration management policies and 

build up related capacities, and (ii) the social 

and economic integration of vulnerable groups 

in southern and south-western Serbia in order to 

reduce irregular migration from these areas. 

14 

Sub-domain: renewable energy 

As part of a multi-donor approach, SECO will 

explore options for an innovative renewable 

energy demonstration project. This will make use 

of Serbia’s untapped renewable resources. Since 

hydropower has been known in Serbia for a long 

time, the focus will be on other renewable sources 

such as wind, biomass or solar energy. 

The expected outcome is the sustainable generation 

of energy from a renewable source, demonstrating 

one way that energy sources in Serbia 

might be diversified. 

3.8 Transversal themes 

The Cooperation Strategy observes the two 

transversal themes of gender equality and good 

governance. 

A key element in gender is to address structural 

inequalities and the imbalance of power as both 

an aim and an essential part of development. 

Equal access to resources and services is to be 

promoted across all programmes to reduce existing 

discrepancies between the social inclusion of 

women and men. 

Good governance aims to create an environment 

in which constitutionality and human rights, an 

appropriate division of power and macroeconomic 

stability are strengthened. Core good governance 

principles that must be implemented in the 

programmes are accountability, transparency, the 

right to information, non-discrimination and participation. 

These are likewise suitable “vehicles” to 

induce specific Swiss values into the portfolio.


4. Strategic principles 

Aid arrangements: The Swiss cooperation programme 

will continue to align itself with the 

government’s national and sector-related strategies. 

An active role will be played in specific 

thematic coordination groups, and alliances 

will be sought with like-minded donors to 

contribute to the implementation of the Accra 

Agenda for Action. Synergies between bilateral 

and multilateral donors will be used to achieve 

a greater leverage in policy dialogue. Programmes 

will increasingly be implemented via 

national systems, and aid arrangements such 

as on-budget support and management for 

results will be promoted. In sectors like education, 

where Switzerland is the designated lead 

donor, SDC will be particularly active and play 

a strategic role. 

Complementary approach: A particular importance 

is attached to the coordination and selective 

harmonization with EU programmes, in 

order to ensure a complementary approach and 

to identify where Switzerland can provide an 

added value. The existing experience with joint 

SDC / EU programme financing in the Rule of 

Law and Democracy domain is an asset. In general, 

complementarity with the bi- and multilateral 

cooperation programmes of other donors 

helps to leverage limited Swiss funds. It enhances 

the potentials for synergies at a strategic level 

(policy influence) and for scaling up innovative 

operational approaches. 

Levels of intervention and geographic focus: 

Interventions are complementary at the central 

and local levels, and include policies, strategies, 

system development and implementation. A specific 

emphasis is given to the vertical integration 

between local and central programmes. Where 

local-level activities are concerned, SDC’s geographical 

focus remains on south-western and 

southern Serbia owing to these regions’ remoteness 

and relative underdevelopment. Both areas 

are also the origin of a substantial diaspora living 

in Switzerland. SECO`s instruments and 

interventions at the sub-national level will, whenever 

possible and feasible, also focus on these 

disadvantaged regions. 

Inclusion of minorities: The EU accession process, 

in particular the Lisbon and Copenhagen 

agendas, is the main incentive for integrating 

minorities more effectively and for increasing 

social inclusion in Serbia. With specific minorityfocused 

activities, and by concentrating on the 

south-western and southern regions, with their 

relatively important minority populations, Switzerland 

intends to sharpen its profile and use 

its particular expertise in this field. At the central 

government level, this intention translates into 

support for the social inclusion strategy. Locallevel 

instruments include, first and foremost, a 

focus on Roma education and efforts towards 

inclusive municipal services. 

15


5. Budget and programme 

management 

The overall Swiss programme budget for the 

period from 2010 to 2013 is approximately 

CHF 63 million. SDC plans with an annual 

budget of around CHF 7 million (without the 

contingent scholarship project). The envisaged 

distribution of the operational budget is 

approximately 45% for Education, 35% for Rule 

of Law and Democracy, and 20% for Economic 

Development. A separate budget is provided to 

SDC by the FOM to cover activities related to 

migration partnerships. 

SECO has allocated an annual budget of 

approximately CHF 8 million for Serbia. This 

does not include the financing of regional (e.g. 

SIFEM) and global programmes (e.g. the SECO 

Start-Up Fund) which also target Serbia. Of its 

operational budget, some 60% are provisionally 

earmarked for Energy Efficiency and Renewable 

Energy and 40% for Economic Development. 

The following table provides an overview of the 

agencies’ budgets from 2010 to 2013. Further 

details are given in Annex 1. 

The envisaged slight budget increase over the 

period as compared to the Cooperation Strategy 

2007-2009 and new demands to improve 

the effectiveness and efficiency of programme 

management indicate that the current level of 

expatriate and local staff must be maintained, at 

least. Management staff, in particular, in charge 

of policy dialogue, the supervision of operations, 

and financial and human resources, should be 

kept at the current level. The delegation of additional 

tasks from head office to the field, as proposed 

in the SDC reorganization process, would 

require the corresponding human resources. 

Annual bilateral budgets 

(estimated disbursements in CHF million) 

By agency 2010 2011 2012 2013 Total 

SDC 7.0 7.0 7.0 7.0 28.0 

SECO 7.1 8.1 9.1 9.1 33.4 

FOM (SDC) 1.0 0.5 tbd tbd 1.5 

Total 15.1 15.6 16.1 16.1 62.9 

16


6. Monitoring and controlling 

The monitoring and controlling system has three 

components and levels of observation: 

The first component monitors the general development 

of the country context. Its tasks are (1) 

to assess the development of the economic crisis 

and its effects on the social and political situation; 

and (2) to monitor the government’s activities 

in the selected domains and sub-domains. 

The second component monitors the actual 

programme implementation to assess whether 

(1) the desired outcomes have actually been 

achieved in the sub-domains; (2) this has contributed 

to the country’s priorities being met; and 

(3) the programme is thus contributing to the 

Cooperation Strategy’s objectives. 

The third component monitors the efficiency and 

effectiveness of programme management, as well 

as the overall visibility and positioning of Switzerland 

in the donor and government context. 

Strategic steering is effected mainly through 

annual monitoring, reporting and planning, as 

well as operational reviews and evaluations. 

17


Annex 1: Swiss Cooperation Strategy 

for Serbia 2010-13 

Overall goal 

Switzerland will support Serbia in its efforts towards European integration, by contributing to (1) improving 

social inclusion and reducing poverty, and (2) increasing the competitiveness of its economy 

Domains 

Economic 

Development 

Rule of Law and 

Democracy 

Education 

Energy Efficiency 

and Renewable 

Energy 


– (macro-economic 

stability) 

– economic competitiveness 

– regional 

development / 

decreasing disparities 

– SME promotion 

strategy 

– (fiscal) de centra lization 

& regional 

develop ment, municipal 

property 

manage ment 

– democratic participation 

& popular rights 

– judicial reform 

– social inclusion 

policies (SIP) 

– quality of education 

(teach ing and 

learning) 

– equal access to 

education 

(Roma Action Plan) 

– EU-compatible 

reforms 

– SIP 

– construction and 

modernization of 

energy infrastructure 

SDC / SECO portfolio contributions 

SECO/SDC SDC SDC SECO 

Economic competitiveness 

enhanced and 

regionally 

balanced 

Municipal management 

and lobbying 

and selected central 

capabilities increased 

Quality and inclusiveness 

of education 

improved 

Sustainable energy 

generation and environmentally-conscious 

consumption 

enhanced 

– public and private 

financial sector 

strengthened 

– business environment 

& regulatory framework 

improved 

– trade and export 

potential increased 

– SME-driven pro poor 

domestic market 

growth in troduced 

– vertical integra tion 

of municipal and 

central state levels 

improved 

– municipal management 

and governance 

practices 

enhanced 

– judicial reform designed 

and action 

plan underway 

(co-financing) 

– social inclusion 

policies drafted and 

implementation underway 

(co-financing) 

– capacities for the 

design and implementation 

of reforms 

and professional 

de velopment system 

consolidated 

– inclusiveness of 

education system 

improved 

– reliable energy 

generation improved 

– energy efficiency 

increased 

– solutions for renewable 

energy supply 

introduced 

Transversal themes: gender & governance 

18


Annex 2: Budget Details 

Planned disbursements (CHF millions) 

2010 2011 2012 2013 Total 

SDC Economic Development 1.0 1.2 1.2 1.2 4.6 

SECO Economic Development 3.5 3.5 3.5 3.5 14.0 

SDC Rule of Law and Democracy 2.0 2.2 2.2 2.2 8.6 

SDC Education 2.9 2.5 2.5 2.5 10.4 

SECO 

Energy Efficiency and 

Renewable Energy 

3 4 5 5 17.0 

FOM via SDC Migration (inter-sector) 1.0 0.5 tbd tbd 1.5 

SDC SCO and Small Actions 1.1 1.1 1.1 1.1 4.4 

SECO SCO 0.6 0.6 0.6 0.6 2.4 

Total 15.1 15.6 16.1 16.1 62.9 

Bilateral Domain Budgets (CHF millions) 

Economic 

Development 

Rule of Law 

and 

Democracy 

Education 

Energy 

Efficiency 

and 

Renewable 

Energy 

Migration SCO Total 

SDC 4.6 8.6 10.4 4.4 28.0 

SECO 14.0 17.0 2.4 33.4 

FOM via 

SDC 

1.5 1.5 

Total 18.6 8.6 10.4 17.0 1.5 6.8 62.9 

19


Annex 3: Map of Serbia 

20


Annex 4: Monitoring System 

The Cooperation Strategy (CS) is subject to a systematic, 

ongoing Monitoring, basically serving a 

double purpose: (i) keeping on track the effectiveness 

and relevance of the Swiss portfolio (steering); 

(ii) accounting for results (reporting), mainly 

between Swiss Cooperation Offices and head offices, 

indirectly vis-à-vis external stakeholders as well. 

The applied monitoring concept basically consists 

of three levels of observation. 

a) country outputs and outcomes in fields relevant 

for the CS; 

b) Swiss portfolio outputs and outcomes; 

c) portfolio management by the Swiss Cooperation 

Office (SCO). 

Additionally, an observation of changes in the 

wider development context (MERV) in [Serbia] is 

carried out, supporting an ongoing risks assessment 

for the Swiss portfolio. 

Monitoring of Country outputs and outcomes 

means verifying whether: 

• [Serbia] is moving towards the set objectives 

relevant for defined components of the CS 

(country level outputs and outcomes); 

• these objectives keep their validity or need to 

be revised (from the donor’s point of view); 

• the observed status of country outputs and 

outcomes provides a basis for a possible correlation 

with the Swiss portfolio outputs and 

outcomes. 

Monitoring of the Swiss portfolio outputs and outcomes 

means verifying: 

• whether the portfolio is evolving in line with 

the set objectives 

• whether the expected portfolio contributions to 

the country level keep their validity or need to 

be revised 

• if and how observed portfolio outputs and outcomes 

relate to country outputs and outcomes 

as possible contributions. 

Levels of observation for CS monitoring 

Contribution 

SCO 

Portfolio 

Management 

Swiss 

Portfolio 

Outputs & 

Outcomes 

Country-level 

outputs & outcomes 

(including specific context 

elements relevant to 

Swiss Portfolio) 

Wider Country 

Context 

(MERV/scenarios) 

Harmonisation 

Alignment 

21


Monitoring of the Portfolio Management by the 

SCO means verifying: 

• whether portfolio management supports result 

achievement in the following dimensions: 

— approaches and strategies, including crosscutting 

issues; 

— relationship management; 

— aid modalities; 

— human resources; 

— learning and knowledge management; 

— allocation of financial resources 

— to what extent portfolio management 

relates to national processes 

— whether portfolio management is sensitive 

to risks and context/scenario development 

Assessing results and Reporting: The monitoring 

process for the CS is tied to the annual 

reporting and planning process and is under 

the responsibility of the SCO. As far as possible 

country outputs and outcomes are assessed jointly 

with the main stakeholder groups of the Swiss 

Cooperation. Project and programme implementing 

partners are included for the assessment 

of the Swiss portfolio outputs and outcomes. 

The monitoring is structured according to the 

main components of the CS. The key product 

of the monitoring process is the result statement, 

i.e. a critical overall assessment both on 

the extent and how the results are achieved with 

an emphasis on plausible “output and outcome” 

and “portfolio to country level” contributions. 

Reporting on CS monitoring, overall assessment 

of performance, and steering decisions are done 

by the means of the Annual Report delivered by 

the SCO to SDC and SECO head offices. 

The Monitoring of the CS will be done against 

the following Result Framework (in synopsis), 

more detailed result frameworks per component 

or sub-component of the CS being elaborated 

separately. 

22


Annex 5: Serbia at a Glance 

Europe & Upper 

Key Development Indicators Central middle 

Serbia Asia income 

( 2008) 

Population, mid-year (millions) 7.4 445 823 

Surface area (thousand sq. km) 77 23,972 41,497 

Population growth (%) -0.3 0.0 0.6 

Urban population (% of total population) 56 64 75 

Age distribution, 2007 

Male 

75-79 

60-64 

45-49 

Female 

GNI (Atlas method, US$ billions) 41.6 2,694 5,750 

GNI per capita (Atlas method, US$) 5,650 6,051 6,987 

GNI per capita (PPP, international $) 10,220 11,116 11,868 

GDP growth (%) 5.6 6.8 5.8 

GDP per capita growth (%) 5.7 6.7 5.1 

(most recent estimate, 2003–2008) 

30-34 

15-19 

0-4 

10 

5 0 5 10 

percent 

Poverty headcount ratio at $1.25 a day (PPP, %) .. 5 .. 

Poverty headcount ratio at $2.00 a day (PPP, %) .. 11 .. 

Life expectancy at birth (years) 73 69 70 

Infant mortality (per 1,000 live births) 7 23 22 

Child malnutrition (% of children under 5) .. .. .. 

Adult literacy, male (% of ages 15 and older) 97 99 94 

Adult literacy, female (% of ages 15 and older) 96 96 92 

Gross primary enrollment, male (% of age group) 99 98 112 

Gross primary enrollment, female (% of age group) 99 96 109 

Under -5 mortality rate (per 1,000) 

60 

50 

40 

30 

20 

10 

Access to an improved water source (% of population) 99 95 95 

Access to improved sanitation facilities (% of population) .. 89 83 

0 

1990 1995 2000 2006 

Serbia 

Europe & Central Asia 

Net Aid Flows 19 8 0 19 9 0 2000 2008 

(US$ millions) 

Net ODA and official aid .. .. 1,134 1,586 

Top 3 donors (in 2006): 

European Commission .. .. 471 334 

.. .. .. .. 

.. .. .. .. 

Aid (% of GNI) .. .. .. .. 

Aid per capita (US$) .. .. .. .. 

Long-Term Economic Trends 

Consumer prices (annual % change) .. .. 70.0 11.7 

GDP implicit deflator (annual % change) .. .. 79.3 13.5 

Exchange rate (annual average, local per US$) .. .. 44.4 55.7 

Terms of trade index (2000 = 100) .. .. .. .. 

15 

10 

5 

0 

-5 

-10 

-15 

-20 

-25 

-30 

-35 

1980–90 1990–2000 2000–08 

(average annual growth %) 

Population, mid-year (millions) 7.7 7.6 7.7 7.4 .. 0.1 -0.5 

GDP (US$ millions) .. .. 8,963 50,061 .. -4.7 5.4 

(% of GDP) 

Growth of GDP and GDP per capita (%) 

1995 2005 

Agriculture .. .. 20.6 10.8 .. .. .. 

Industry .. .. 31.4 23.7 .. .. .. 

Manufacturing .. .. .. .. .. .. .. 

Services .. .. 48.1 65.5 .. .. .. 

Household final consumption expenditure .. .. 88.7 78.1 .. .. .. 

General gov't final consumption expenditure .. .. 18.9 21.3 .. .. .. 

Gross capital formation .. .. 8.4 23.4 .. .. .. 

Exports of goods and services .. .. 23.0 29.7 .. .. .. 

Imports of goods and services .. .. 39.1 52.4 .. .. .. 

Gross savings .. .. 3.7 6.2 

GDP 

GDP per capita 

23


Balance of Paymenta and Trade 

2000 

2008 

Governance indicators, 2000 and 2007 


Total merchandise exports (fob) 

Total merchandise imports (cif) 

Net trade in goods and services 

Current account balance 

as a % of GDP 

1,645 

3,227 

-1,441 

-153 

-1.7 

10,842 

21,997 

-11,404 

-8,557 

-17.1 

Voice and accountability 

Political stability 

Regulatory quality 

2007 

2000 

Workers’ remittances and 

compensation of employers (recepts) 

1,132 

4,579 

Rule of law 

Control of corruption 

Reserves, including gold 

Central Government Finance 

(% of GDP) 

Current revenue (including grants) 

Tax revenue 

Current expenditure 

524 

32.4 

29.1 

29.8 

11,477 

40.9 

35.8 

39.0 

Source: Kaufman Kraa Mastruzzi, World, NY Bank 

0 25 50 75 100 

Country's percentile rank 0-100 

(higher values implay better ratings) 

Overall surplus/deficit 

-0.2 

-2.5 

Technology and Infrastructure 

2000 

2007 

Highest marginal rate (%) 

Individual 

Corporate 

External Debt and Resource Flows 

.. 

.. 

15 

10 

Paved roads (% of total) 

Fixed line and mobil phone 

subscribers (per 100 people) 

High tecnology exports 

(% of manufactured exports) 

62.7 

4 

9 

3.2 

.. 

107 

4.3 


Total debt outstanding and disbursed 

Total debt service 

Debt relief (HIPC, MDRI) 

10,830 

-65 

− 

30,708 

-4,927 

− 

Environment 

Argicultural land (% of land area) 

Forest area (% of land area) 

Nationally protected areas (% of land area) 

.. 

.. 

.. 

.. 

.. 

.. 

Total debt (% of GDP) 

Total debt sevice (% of exports) 

120.8 

-1.9 

63.6 

-24.2 

Freshwater resources paer capita (cu. meters) 

Freshwater withdrawal (% of internal resources) 

.. 

.. 

.. 

.. 

Foreign direct investment (net inflows) 

Portfolio equity (net inflows) 

145 

.. 

2,717 

-132 

CO2 emission per capita (mt) 

.. 

.. 

Composition of total external debt, 2008 

Short-term, 

3,417 

IBRD, 

2,237 

IDA, 

650 IMF, 

0 

GDP per unit of energy use 

(2005 PPP $ per kg of oil equivalent) 

Energy use per capita (kg of oil equivalent) 

World Bank Group portfolio 

.. 

.. 

2000 

.. 

.. 

2007 

Other mulilateral, 

1,665 


Private, 

19,578 

Bilateral, 

3,161 

IBRD 


Disbursements 

Principal repayments 

Interes payments 

1,538 

− 

− 

104 

2,364 

− 

2 

302 

US$ millions 

Private Sector Development 

2000 

2008 

IDA 


Disbursements 

Total debt service 

0 

202 

1 

627 

94 

5 

Time required to start a business (days) 

Cost to start a business (% of GNI per capita) 

Time required to register property (days) 

Ranked as a major constraint to business 

(% of managers surveyed who agreed) 

n.a. 

n.a. 

Stock market capitalization (% of GDP) 

Bank capial to asset ratio (%) 

− 

− 

− 

2000 

.. 

.. 

4.6 

18.3 

2 

73.6 

111 

2007 

.. 

.. 

59.7 

15.9 

IFC (fiscal year) 

Total disbursed and outstanding portfolio 

of which IFC own account 

Disbursements for IFC own account 

Portfolio sales, prepayments and 

repayments for IFC own account 

MIGA 

Gross exposure 

New guarantees 

− 

− 

− 

− 

− 

− 

249 

249 

8 

525 

− 

− 

24

Cooperation Strategy Serbia 2010 - 2013 - Deza - admin.ch

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