Local/Regional Economic Development in South ... - Value Chains

92 development process. The direct benefit is that relevant
business stakeholders implement measures for economic
development together. Increasing income and creating
jobs are an indirect benefit.
Examples for direct and indirect benefits – Serbia:
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Setting up a tourist information center in Subotica
Origin protection (according to Serbian standards) of
a local variety of cherry in Mali Idjos
Creation of income opportunities in farming for refugees
in cooperation with the Food and Agriculture
Organization (FAO)
Application of the PACA method in other municipalities
with the support of other projects and donor
organizations (American Development Fund – ADF/
United States Agency for International Development
– USAID)
Examples for direct and indirect benefits – BiH:
• Implementation of a business plan competition in
combination with a CEFE course (Competencybased
Economies through Formation of Enterprise)
in Prijedor
• Networking firms that are jointly planning, producing,
selling, and installing solar systems in Doboj
Istok
• Change in the restaurant and bar opening hours in
Doboj Istok by the municipal council after the restaurant
and bar owners had agreed on the details as part
of a workshop
• Introducing advisory services for new business founders
at the municipal office in Usora
Lessons learned
Partner organizations/contact persons:
At the beginning of a PACA process, the question arises as
to who has been mandated and has the time to steer the
process as members of a municipal team.
Mesopartner emphasizes that PACA does not necessarily
have to be initiated by the municipality. The experience
with organizations that are independent of the municipality,
such as promotional agencies for small and medium-sized
enterprises (SMEs) in Serbia has shown, however,
that they are unable to support PACA processes on
a fee-free basis, because they need to take in revenue from
their services. The project in Doboj (BiH) had a similar
experience. Here also, setting up a PACA team consisting
of representatives of the local regional chamber, an
active non-governmental organization, and the municipal
administration failed because the administration was
unable to provide suitable personnel and to create a business
enabling environment due to budgetary constraints.
Without the participation of the municipality, however,
the other partners were not prepared to commit to activities
other than those that had already been planned at the
beginning. The reason for this, they explained, was that
they did not have the political weight or the resources for
a comprehensive economic development process.
In larger municipalities in BiH local economic development
agencies that are financed by the municipal budget
are increasingly being created that can combine the management
of a development process with the conventional
responsibilities of municipal economic development.
These units employ neutral experts, funding is guaranteed,
and their mandate is economic development. Thus
they are ideal for implementing PACA. Still it does not
make a great deal of sense to make a standard practice of
setting up this type of economic development agency at
the beginning of any and every activity associated with
economic development. On the one hand, developing
institutional structures takes too long, and on the other
hand, smaller municipalities have neither the budget nor
the business foundation to do so.
In small municipalities, the business experts were the responsible
contact persons for the PACA process. While
they know the relevant local business stakeholders, they
sometimes lack the initiative and understanding for economic
development. In addition, they often do not have
extra time at their disposal, and are not given the twoweek
leave that a PACA team needs. For municipal government
workers, PACA means additional work on top of
all their other responsibilities. Implementing PACA as it is
outlined in the manual in two weeks is unrealistic under
such conditions.
It goes without saying that PACA can only be implemented
with people who are committed to their jobs. This
is often a limiting factor. In addition, there is the danger
that business experts in the municipality may be replaced
after the next election, which can negatively impact sustainability.
Public relations work:
PACA requires intensive PR work. Mayors, municipal
council members, and the private sector all need to understand
what PACA can manage and what it cannot. For
instance, the head of an economic development agency in
Serbia complained that the municipal council expected
him to create several hundred jobs in one year. He was
aware of the fact that the municipal council members had
limited knowledge about economic development, but was
not able to meet their expectations with PACA.
Change management:
An additional obstacle to introducing PACA is often the
fact that a participatory approach generally requires the
municipal administration to have a new view of its role. In
the economies that were formerly organized on the basis
of a planned economy, government stakeholders need to