Municipal Services and Craft Associations Act as the First Link in Developing Local Economy and Women's Entrepreneurship

More than two investments a year are attracted by only one in eight municipalities in Serbia, while less developed environments do not recognize their own potentials as an opportunity to compensate the lack of investments. A solution for better results should be sought in strengthening the role of local economic development offices (OLED) and empowerment of local craft associations.

These are some of the conclusions of NALED’s research performed within the project supported by the Development Agency of Serbia in order to develop recommendations for capacity building and to create measures for fostering local development. The data shows that as many as 88% of municipalities and cities have LED offices, but they do not possess a strong enough position and autonomy in the administration, nor an appropriate role because they are significantly more involved in the preparation of donor projects than in fostering economy and investments.

Furthermore, the local authorities are insufficiently communicating with the private sector. Only a half of local governments have a business council, with only one in four interviewing businesses to investigate their needs. This is a particularly noticeable problem in the case of determining the level of local taxes, where 61% of municipalities did not consult the businesses on this issue or even did not know whether they were consulted.

“For all of us who do business here, our first contact with the state is performed via municipalities. This is why we need expert services that will serve as our contact with the state and helps us find labor or expand our business. For this reason, NALED provides concrete proposals to empower these municipal departments. The recommendation for local governments is to strengthen the position of LED offices as economic services, entrust them with designing and implementing the development strategy and coordinating the Business Council, as well as to involve them in making strategic decisions and provide training to employees. This was in large part succeeded by our Champions of Local Development and today we are awarding them with special recognition” - said the President of NALED Executive Board Dejan Đokić at the national conference ‘Champions of Local Development’.

According to him, the strengthening of these offices can also be assisted by the state by delegating jurisdiction in the domain of awarding incentives, spatial planning and education, while an important signal to local governments would be to appoint a State Secretary for Local Economic Development within the Ministry of Economy, and launch a national competitiveness index for cities and municipalities.

In addition to investment promotion and strengthening local economy, the research has shown that great untapped potential also lies in the cultural heritage and skills of unemployed women who know traditional handmade techniques. There are over 500 craft associations in Serbia, which lack systemic support to become centers of economic activity at the local level.

Whereas the production of traditional products is the second largest income of agricultural households in the EU, in our country, more than half of women in rural areas are formally unemployed and 60% do not have the right to retirement compensation. With adequate training and branding of tourist offers, the associations that participated in the research could employ more than 500 families in the work of making handicrafts. The most common support by municipalities includes providing space without compensation, but only half of the associations receive such assistance. Less than 5% associations have a channel for placing their products through a store, 30% do not even have an e-mail contact, while only one in ten associations have a website. Only 43% of their members went through training, so most of them are engaged on these jobs occasionally or at an amateur level.

Local governments should provide space for the work of associations, help with their training purchase of equipment, materials and packaging, protection of designated origin and sales - the purchase of handicrafts for the mayor’s protocol, as suggested in the NALED’s recommendations.

The state can also help by establishing a national ethno gallery in Belgrade, placing handicrafts through state protocols, or providing incentives for launching cooperatives and self-employment of women who produce handicrafts. The support policy should be completed with the adoption of the Law on Crafts and the establishment of the Serbian Chamber of Crafts, as well as support programs such as the initiative for the employment called ‘1,000 women’ launched by the Coordination Body for Gender Equality, Ethno Network and NALED, which generated 8,000 days of work engagement for rural women.

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