November 03, 2016
Ten years after DAI helped Serbia launch its National Association for Local Economic Development (NALED), NALED stands as an example for local institution building and deep-rooted development that endures. Now well established with myriad accomplishments to its credit, NALED celebrated its 10th anniversary in September 2016 with a gala in Belgrade that attracted more than 600 political and business leaders, mayors, representatives of state institutions and international organizations, and diplomats.
For “10 Years of NALED: Celebrating Reform,” NALED interviewed Steven Rosenberg, pictured below left with former U.S. Ambassador to Serbia Michael Polt. Called the “creative father” of NALED, Rosenberg served as DAI’s Chief of Party on the U.S. Agency for International Development (USAID)’s Serbia Local Government Reform Program (2001–2005) and Serbia Municipal Economic Growth Activity (MEGA, 2005–2008, subcontracted to Urban Institute). Rosenberg, who lives in Bethesda, Maryland, reflected on the association’s launch, success, and prospects for the future:
What was the original idea of NALED and how was it inspired?
Rosenberg: [We wished] to form a public-private partnership to serve as a voice for the business community, local government, and civil society as there was no such voice in existence.
Could you tell us more on its beginnings: how and why NALED was established, who participated in its founding, what kind of support it received, and what were its first steps?
Rosenberg: NALED was established to create a voice for the combined actions and interests of business community—both foreign and domestic—local governments, and civil society. These groups, acting alone, had found it very difficult to convince the central government to adopt the reforms needed to enable Serbia to successfully compete in the 21st century. Many such groups were, and I believe still are, controlled by political parties, making them hesitant to challenge the decisions of party leaders, even when those decisions are not in the interest of their members.
The two people who played the most important role in NALED’s founding were Mijat Damjanovic and Violeta Jovanovic. Dr. Damjanovic convinced the initial members to join NALED. His excellent reputation as a public administration reform specialist was key to providing NALED with the credibility to attract its initial base of support. Violeta Jovanovic was NALED’s first executive director. She took NALED from being an organization largely run out of USAID’s Municipal Economic Growth Activity (MEGA) project to being an independent organization supported by its members and activities.
The first major project, led by Dusan Petrovic, was the “business-friendly municipality” certification program. Another early initiative, managed by Dusan Vasiljevic, was the organization of seminars and roundtables concerning pending legislation that affected local government and the business climate. These first steps were devised and supported by MEGA. Both these initiatives were successful and helped cement the credibility of NALED as an organization that could play an important role in promoting local economic development.
Was it hard to introduce such a revolutionary idea in Serbia, and are there some similar organizations in other countries in the world?
Rosenberg: It was difficult at first to get people to believe that such an organization could work or function. But this effort had a lot of credibility from the start, as it was managed out of MEGA project, the successor to Serbia Local Government Reform Program (SLGRP), another USAID-funded project implemented by DAI. Our staff in both these projects had an excellent reputation of being helpful and providing meaningful support to municipalities and the private sector. That goodwill carried over and gave people a willingness to see if NALED could be similarly successful. As it succeeded, success bred more success and more interest from people. I am not aware of similar organizations from other countries.
Steve Rosenberg with Ana Brnabic, former DAI staff member and currently Serbia's Minister of State Administration and Local Government.
What was your vision for NALED at the beginning, back in 2006 when you were leading USAID MEGA program, and how much does it differ from what NALED is and stands for today?
Rosenberg: My vision for NALED was basically the way it turned out, except I didn’t imagine it would be as successful. Part of the reason for its success is the government’s willingness and desire to listen to other voices in society, besides the political parties. In Serbia most of the organizations that represent civil society and business community are political party-oriented. Creating an independent voice that the government can listen to and get feedback from on various proposed activities was revolutionary, so a lot credit goes to the current government.
Could you ever imagine that people from NALED would become ministers in the Government of Serbia? Do you consider that good for NALED and its future?
Rosenberg: I didn’t directly think they will become ministers but it is not surprising to me given the quality of the team. What’s surprising to me is that this government acted so wisely and is obviously trying to widen its leadership base to obtain input and support for its activities from all segments of society and not just political parties. This is an important step for organizations such as NALED and the Standing Conference of Municipalities, as well as the parties and the governing structure of Serbia.
Why do you think it is important that the public, private, and civil sectors work together on fostering economic development? Is that dialogue and cooperation functional in developed countries, and what are the key challenges for its sustainability?
Rosenberg: These economic development activities can only be successful when there is support from local governments and business institutions and each have a role to play. By working together they can understand each other’s limitations and interests and work toward a common point of view that is beneficial for all parties. Such dialogue and cooperation is functional in developed countries. For example, in the United States we have an active Chamber of Commerce and a very active Conference of Mayors as well as other organizations that are able to represent the interests of their members. As long as organizations like NALED stay relevant and look out for and promote the interest of their members they will continue to be sustainable.
What is the role of NALED and other civil society organizations in the society? What are the biggest threats and challenges for CSOs and how to overcome it?
Rosenberg: Groups like NALED are advocates for local government, businesses, and civil society organizations which they represent. By pulling together resources as well as their political clout, these organizations are capable to accomplish much more than they would on their own. So as long as NALED is able to play that role, it will survive and flourish. A key challenge to its sustainability is if the government stops listening to such organizations and including them in their deliberations.
“The National Association for Local Economic Development is a model throughout the region and other countries can learn a lot from it.”
You led, as many knowledgeable people in our country think, one of the most successful USAID projects that worked on fostering local economic development in Serbia. What are your impressions on Serbia and the development potentials that we have? And what are the key obstacles for doing business in our country?
Rosenberg: Serbia has excellent development potential. It located at the crossroads of Southeastern Europe, has a hard-working, reasonably priced, and educated work force and a government that appears to be committed to adopting many of the reforms called for by NALED.
The key obstacle for making progress is the over-politicization of the various institutions in the country. Most institutions are controlled by one party or another and when elections are over the various assets of the country and municipalities are divided up amongst the political parties. Coalition agreements are made. Jobs and contracts are awarded based on party affiliation and not competence.
One of the flagship initiatives you started with NALED is the business-friendly certification of municipalities, which become regionally recognized by institutions and local governments in Southeast Europe. How do you see this program, and why is it important for municipalities in Serbia and beyond? Is it all about the certificate or about the process of certification?
Rosenberg: This certification provides municipalities with a standard against which they can measure the way their local government functions and understand what they need to improve in order to be more attractive for foreign and local investments. Economic development was not a local government function until the last 10-15 years and as such local governments didn’t have the capacity to promote local economic development. Municipal leaders knew that they had to do something, but didn’t know what to do. Thanks to NALED, local governments now have the information on what they need to do and specifically what help is available to help them be and stay business-friendly.
The region is competing for investments internally, as well as globally. Potential investors are attracted to communities where they are assured of honest and timely actions by the local and central governments. The business-friendly municipality program gives investors certainty as to how they will be treated while providing municipalities with guidance as to what they need to do to make their municipality more attractive to investment.
Presentations at the September 2016 event in Belgrade celebrating the 10th anniversary of the founding of Serbia's National Association for Local Economic Development.
Recently we had elections in Serbia and new local leaders are in place. You have observed our local elections from 1998 to 2009. Do you have any thoughts about how we elect our local officials?
Rosenberg: One critical action that I believe that the government should take is to reinstitute the direct election of mayors. In the 2002 local elections, mayors were elected for the first time directly by their citizens but this right was taken away for the following election. As such these mayors aren’t accountable to the citizens but to the political parties which selected (and can fire) them. Corrupt behavior has been tolerated because to report it would lead to the collapse of a governing coalition. I hope and trust that with the election of Ana Brnabic, as Minister of State Administration and Local Self Government, the Government of Serbia will again provide for the direct election of mayors.
I also believe that coalition agreements should be made public as they deal with the disposition of public property.
What do you see as the greatest achievement of NALED?
Rosenberg: The effectiveness of the staff speaks for itself. The organization has become a respected interlocutor with the government and a recognized voice that the government considers when deliberating various legislative and policy matters.
What is the future of NALED, and in what areas should it grow and develop? Should it ever change?
Rosenberg: The role of NALED will evolve as the needs of its members change. As long as it stays in touch with its members’ needs and is responsive to them the organization will continue to develop. When members focus on their own individual interest and try to take advantage of the organization, or if a political party will take over its leadership, its effectiveness and role will diminish.
Being its “creative father,” what would be your message to NALED on its 10th anniversary? What would you like to say to its members and partners and people working in the Executive Office?
I would like to say how impressed I have been with the work of the staff and executive board and the willingness of the government to see NALED as a partner. This bodes well for the future of Serbia and for the government’s ability to work in partnership with NALED and other groups that represent the interests of civil society and business community. There was a lot done to get NALED underway but its actual success occurred after I left. People like Violeta Jovanovic and Jelena Bojavic and Ana Brnabic deserve the lion’s share of the credit for seeing this institution become relevant and meaningful. I may have been there at its birth but they are the ones who brought the baby to adulthood and I am very proud of them and this organization. I wish you all well. NALED is a model throughout the region and other countries can learn a lot from it. I look forward to hearing about your success in the future and I hope I am able to come by soon and visit with you and see first-hand a lot of the progress you’ve made.
Steven Rosenberg is an attorney with 35 years of experience in municipal governance. He worked for the city of New York serving as General Counsel of the city’s economic development agency. He also served as Chief of Party for five USAID funded public administration reform projects in Central and Eastern Europe and Director for DAI’s democracy and governance projects in the CEE region. He is responsible for successfully implementing several innovative practices including Business Improvement Districts, Citistat and the National Alliance for Local Economic Development.
At the DAI-hosted lab at this year’s European Development Days, participants were challenged to come up with creative ways of economically empowering women in developing countries.Read More