started to reform their institutional frameworks, they both share many of the same problems.
1. Public sector
The key public sector institutions for housing are the governments and municipalities of the two republics. Many reports have pointed to their inadequate capacity. The World Bank Progress Report on Structural Reforms (November 2003) concluded that “In both
republics, the need to improve the efficiency and transparency of the public sector is a high priority. A decade of politicization and centralization of authority, combined with economic collapse and the outflow of educated and skilled people have left most public institutions in a very poor state. Frequent changes in regulations and institutions through non-transparent processes, little strategic planning, widespread corruption, and misuse of state institutions for political purposes all made public administration highly inefficient and a serious impediment to private sector growth.”46
A UNDP report47 also identified governance and government concerns with respect to human rights issues, and noted that all assessments of the public administration pointed to weak organization, inadequate structure, and limited policy-making and implementation capacity.
Current inefficiency in public institutions is at least partly the result of the capacities, practices and culture of the old authoritarian regimes. Despite a variety of new challenges, they still have not acquired the appropriate human, organizational or financial capacities.
The political system in Serbia has produced coalition governments, and policy-making remains fragmented. The practice is to divide
46 World Bank, Serbia and Montenegro - Recent Progress on
Structural Reforms, November 2003.
47 UNDP, Country Assessment for Serbia and Montenegro,
ministries among coalition partners, with a new minister bringing in new officials, and this makes continuity in policy development difficult to achieve. There is a tendency for ministries to address their own concerns, to the extent that co- ordination and co-operation within Government becomes difficult. Although the Government of Serbia is committed to reforms, the legacy of the former socialist and more recently the Milosevic government persist throughout the public sector.
In Serbia, the Housing Affairs section of the Ministry of Capital Investments is the key driving force in housing policy at Central Government level, but it must work with a number of other ministries to achieve real change. The development of a social housing policy means that there is a much clearer vision, but implementation will need both stability and priority within Government. The nature of the political system means that it may be difficult to achieve stability, and the current concern for social housing may not be found should a different party provide a future Minister. In the overall priorities of the Republic, an enabling approach was adopted in the 1990s, and since 2000 housing has appeared largely as a consequence of refugee resettlement. The recognition of a need for social housing is quite recent. The proposal to create a separate National Housing Agency has the potential to introduce stability into housing policy, it needs long-term support from a number of key ministries.
The work of SIRP has proved to be a valuable catalyst in the development of a framework for social housing at national level and in seven municipalities.
Because of Montenegro’s small size, it is crucial to improve the efficiency of public administration, as a large civil service would be unaffordable. A public administration reform strategy was adopted in 2003, including a legal framework allowing far reaching reforms. The development of a Montenegro Housing Action Plan represents a clear attempt to create a housing strategy together with an implementation plan which supported by international assistance, brings knowledge of housing practice in western Europe.
The development of new housing policies in both republics has involved the participation of stakeholders and the four housing working groups in Montenegro have included representatives from the private and civil sectors.
Structures and capacity issues also apply to local government. Municipalities, especially in Serbia, are led by coalitions, with a tendency to share secretariats along party lines. Legislation on decentralisation, which was introduced earlier in Serbia, cannot be effectively implemented due to the limited capacity of the municipal administration. Many municipalities have poor equipment and outdated methods of work.
In both Serbia and Montenegro, local government is a one-tier structure with the exception of Belgrade and Nis, which have two- tier municipal structures. The average municipality serves a population of around 45,000 in Serbia and 30,000 in Montenegro, but very few are close to this average. Local government must seek to be responsive to local needs, which is easier in smaller municipalities, but it is easier to achieve economies of scale and employ specialist staff in larger municipalities. The SIRP project has concluded that the administration of larger Serbian municipalities was better developed than that of small municipalities, with some of the latter having difficulty exercising all their legal responsibilities. Larger municipalities also use information and communication technologies, GIS and E-government linkages, but generally these activities are not supported by the appropriate organizational structures or regulations, and they are not well co- ordinated.
The issue of funding is particularly critical for local governments, with the scale of demands exceeding current resources. Reliance on donor- funded projects makes the need for sustainable local funding more important. Humanitarian assistance projects are being phased out, as are many which focus on capacity development. The Municipal Housing Agencies that are being developed by SIRP have the potential to play a crucial role in the process of housing reform in Serbia and could be examples of innovation and good practice. The delivery of many services,
38 Country Profiles on the Housing Sector - Serbia and Montenegro such as apartment maintenance, is carried out by
enterprises that are working for, but not directly controlled by, municipalities. Though a directly elected municipality can expect to be criticised for poor performance, the system and number of people available for monitoring the activities of these enterprises are often inadequate.
The cadastral service is a problem in both Republics. The compilation of complete cadastral information is hampered by lack of financial resources and inadequate education and training of personnel (see chapter VII).
2. Private sector
The legacy of a centrally planned economy is not conducive to a functioning private sector, but there are many organizations with the potential to adapt to a market approach. There are many companies with the capacity and expertise to undertake construction projects, including large firms which are currently building apartment blocks. Despite international isolation during the 1990s, some are able to compete for projects abroad.
Construction accounts for a significant proportion of employment. The completion of new dwellings per head of population in Serbia is low compared to that of most EU countries, and an increase would have a significant multiplier effect on the economy and employment. The maintenance sector now includes a range of local maintenance companies, with the proportion of the work undertaken by private sector companies varying considerably between different locations. Real estate agents have become established to meet a market need but a significant number of them are found in the informal sector. This is likely to continue while regulations are lacking.
There are mixed views within Government about the potential of the cooperative housing sector to meet future housing needs. In both Serbia and Montenegro housing cooperatives have a well-established record for organizing the production of new housing, though usually not for those in the greatest need. Existing housing cooperatives have the expertise and capacity to construct new housing but they are losing tax and other advantages and feel that they will not be able to compete with the private sector.
3. Civil Society
Professional training
The education system, with its links to professional societies, has a history of providing a high standard of training for architecture, engineering and allied professions, but it has yet to complete the transition from a centrally planned to a market economy. Urban planning remains an adjunct of architecture and may therefore still rely on construction type skills rather than those more suited to an enabling approach.
Government skills, such as the use of modern financial management, which ensures continuous improvement, or working with stakeholders and the private sector, are poorly developed.
There is little recognition of the need for training or the development of professional standards in housing management. The new Serbian law on social housing anticipates the introduction of non-profit housing organizations. These will require both efficient delivery of a housing service and sound financial management.
NGOs and owners
NGOs in Serbia and Montenegro are at an early stage of development and require support to act as effective intermediaries between the public sector and civil society. They are generally limited in capacity and rely on international donors for funding.
Owners’ associations in privatized apartment blocks appear to be widespread in Serbia and have the potential for influencing decisions about their housing services. Some may currently be involved in decisions concerning maintenance, but as the buildings age, they will have to plan also for the organization and funding of major investment. There seems to be no systematic approach to training residents in the exercising of their responsibilities.
Representative bodies of owners or tenants at Republic, or even city, level, are few, though there have been some attempts to involve NGOs in the development of a national housing policy. Owners have been, and will
remain, important in the construction and upgrading of housing, especially in rural areas. While the housing mortgage system remains poorly developed, and public confidence in banks is low, households will rely on informal methods of raising funds for housing investment.
Managing the process of legalization will require effective working relationships between municipalities and the owners of illegal housing and any NGOs working on their behalf. Residents, and the organizations they work with,
would benefit from capacity building and an approach that values their contribution.
4. International organisations Though many international donor organizations have been active in Serbia and Montenegro since 1999, few of their activities have focused on housing as a primary aim. SIRP has made a valuable contribution to the housing sector, but the wider replication of the experience requires more extensive donor support.