Moldova Country Strategy 20112015

Imprint: Federal Ministry for European and International Affairs Directorate-General for Development Cooperation Minoritenplatz 8, 1014 Vienna, Austria phone: +43 (0)501150-4454 fax: +43 (0)501159-4454 abtvii4@bmeia.gv.at www.entwicklung.at
The country strategy was written by:

Federal Ministry for European and International Affairs, Directorate-General for Development Cooperation, Vienna Austrian Development Agency, Vienna Coordination Office for Technical Cooperation, Chisinau

Vienna, December 2010: Reprint July 2012 Order information: Austrian Development Agency (ADA), the operational unit of the Austrian Development Cooperation Information and Communication Zelinkagasse 2, 1010 Vienna, Austria oeza.info@ada.gv.at; www.entwicklung.at Cover: Coordination Office for Technical Cooperation, Chisinau

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Contents
Abbreviations 1.
1.1 1.2 1.3 1.4 1.5

2 3
3 3 4 5 6

Framework of partnership
EU and Austrias strategic objectives of cooperation Moldovas development strategy Development partners coordination Trends and issues in aid effectiveness Lessons learned and comparative strengths

2.
2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.2 2.3 2.4

Country strategy 20112015

Strategic considerations for Austrias support Focal area: Water and Sanitation Focal area: Vocational Education and Training (VET) Non-focal area: Governance Cross-cutting issues: Gender Equality and Environment Fighting poverty and vulnerability: Austrias contribution Budget scenario Other financing instruments

6
6 6 8 9 9 10 11 11

3. Annex

Programme implementation

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Abbreviations
ADA ADC CzDA DfID EAP EBRD EC EGPRSP EIB ENPI ETF EU EU-FTI EUWI FMEIA GDP IDA IFAD IFI ILO IMF IPA IWRM JAS MDG MEY MSIF NDP NDS OECD OeEB OSCE PFM PIU PPIP SDC SIDA SME UNDP VET WB WHO WSS Austrian Development Agency Austrian Development Cooperation Czech Development Agency Department for International Development Environmental Action Programme (of OECD) European Bank for Reconstruction and Development European Commission Economic Growth and Poverty Reduction Strategy Paper European Investment Bank European Neighbourhood Policy Instrument European Training Foundation European Union European Union Fast Track Initiative European Water Initiative Federal Ministry for European and International Affairs Goss Domestic Product International Development Association International Fund for Agricultural Development International Finance Institution International Labour Organization International Monetary Fund Instrument for pre-Accession Integrated Water Resource Management Joint Assistance Strategy Millennium Development Goal Ministry of Education and Youth Moldova Social Investment Fund Moldovas National Development Plan 20082011 National Development Strategy of Moldova 20082011 Organisation for Economic Co-operation and Development Austrian Development Bank Organization for Security and Co-operation in Europe Public Finance Management Project Implementation Unit Partnership Principles Implementation Plan Swiss Development Cooperation Swedish International Development Agency Small and Medium-sized Enterprises United Nations Development Programme Vocational Education and Training World Bank World Health Organization Water and Sanitation Sector

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1.

Framework of partnership

The Republic of Moldova is one of seven priority countries of Austrian Development Cooperation (ADC) in South-Eastern/Eastern Europe, which in turn is among the seven ADC priority regions worldwide. Bilateral cooperation with Moldova began in 2001. Since 2004, Moldova has been a priority country of ADC. In 2005, the Austrian Development Agency (ADA) opened a cooperation office in Chisinau which was upgraded to an Embassy in 2007 with an Ambassador resident in Bucharest and the ADC coordinator as Charg daffaires in Chisinau. Poverty reduction, peace and security, and environmentally and socially sustainable development are defined as strategic objectives of ADC in the Austrian Development Cooperation Act. Austrias Three-Year Programme 20102012 and the bilateral Agreement on Development Cooperation define, in accordance with Moldovas goals and policies, particular priorities of bilateral cooperation. ADC activities are aligned with international commitments including the MDGs and the Paris Declaration on Aid Effectiveness. In the period of 2004 to 2009, 6.8 million were spent by ADC in Moldova1.

1.1

EU and Austrias strategic objectives of cooperation

The European Union (EU) has been negotiating a new Partnership and Association Agreement with Moldova since 2010. EU cooperation focuses on democracy, governance, human rights, judicial reform, environment, gender, conflict prevention, economic development, growth and employment, sustainable regional and rural development, and poverty reduction (see EU Moldova Action Plan). ENPIs (European Neighbourhood Policy Instrument) National Indicative Programme 20072010 specifies that out of an overall 209.7 million, 25 to 35% will be used for the Support for Democratic Development and Good Governance, 15 to 20% for the Support for Regulatory Reform and Administrative Capacity Building and 40 to 60% for Support for Poverty Reduction and Economic Growth. Moldova is also eligible for Twinning and TAIEX programmes, the ENPI Governance Facility and EBRD and EIB programmes. The EC provides sector budget support for energy as well as justice and home affairs. ADC in Moldova focuses on water/waste water management and labour-market oriented vocational training, primarily in rural areas. Other important areas of intervention are governance (capacity building in public administration), conflict prevention and reintegration of returning migrants. ADC activities are conceived to support the implementation of Moldovas National Development Plan 20082011 (NDP) and the EU/Moldova Action Plan. ADC programmes also aim at contributing to the Millennium Development Goals (MDGs), especially Target 7C (Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation) and Target 1B (Achieve full and productive employment and decent work for all, including women and young people).

1.2

Moldovas development strategy

The National Development Plan (NDP) 2008-2011 forms the basis of Moldovas development policy. It is aimed at strengthening Moldovas alignment with European

Without regional projects that are related to Moldova.

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standards. Monitoring and evaluation of the strategys implementation shall be coordinated by an inter-ministerial committee which will meet at least twice a year. The NDP and the Medium Term Expenditure Framework (MTEF) jointly form a basis for allocation of public resources according to national priorities. Line ministries are responsible for the implementation of the NDP and individual sector policies. The Strategy of Water Supply and Sewage in Communities of the Republic of Moldova2 as well as the Moldova Water Act are the basis for water sector policy and all support rendered by ADC in this sector. The Ministry of Local Public Administration (policy and planning for WSS on local/municipality level in cooperation with the central level), the Ministry of Construction and Territorial Development (infrastructure and construction works), and the state agency for water management Apele Moldovei which is responsible for the operational implementation of the Moldovan Water Strategy are strategic partners of ADC in this sector. To fulfil its assigned tasks and duties, it will be essential to address Apele Moldoveis current deficiencies and lack of resources, in order to contribute to further improvements in the WSS sector. VET in Moldova is mainly governed by the Consolidated Strategy for the Education Sector Education for all and its corresponding action plan, by the Education Law 547 of 1995 and by a number of parliamentary and government decisions.3 The Ministry of Education and Youth (MEY) is in charge of the education sector and has its own VET department. This department deals, among other issues, with public VET reform processes, including curricula reform and the adaptation of the Moldovan VET system to EU standards. Recently, several new public structures have been created (National Council on Occupational Standards, Republican Centre of VET, and Institute of Educational Science) to bring VET closer to the labour market, occupational and educational standards, adult education etc. The National Employment Agency acts as an intermediary between jobseekers and enterprises, and organises VET courses for unemployed people.

1.3

Development partners coordination

The Donor Coordination Unit in the Prime Ministers office is responsible for the coordination of all external aid flows to Moldova. It also manages relations between the Government and international and bilateral donors. Donor meetings take place on a regular basis and are intended to improve coordination and harmonisation between the Government of Moldova and its partners. In various formats, multilateral organisations4 and bilateral donors5 meet with Government institutions.

2 3

Nr. 662 from 13.06.2007 Decision of the Parliament of Moldova Nr. 253-VX of 19.06.2003 on the adoption of a concept of vocational orientation, preparation and formation of human resources; Decision of the Government Nr. 1541 of 21.12.2003 on the adoption of a strategy for the youth; Decision of the Government Nr. 1224 of 09.11.2004 on the structuring of continuing VET; Decision of the Government Nr. 1334 of 3.12.2004 on the adoption of a programme for the development of secondary vocational education; Decision of the Government Nr. 863 of 16.08.2005 on the adoption of a programme for the modernisation of the educational system of Moldova. 4 Such as EU, UN, WB, OSCE, IMF, Council of Europe. 5 Such as ADC, SDC, Sida, DFID, Czech Development Agency, USAID and representatives of all embassies. The Russian Federation is an important political and economic factor in the country, especially in Transnistria, but is not a donor according to OECD definition. In Transnistria Russia is the biggest investor and provider of economic and support.

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The Partnership Principles Implementation Plan (PPIP), signed in March 2010 between the Government, the World Bank and other relevant donors (European Union, United Nations, as well as many bilateral donors), lays out the principles of international cooperation. The Promotion of ownership by strengthening capacities of Moldovan partners is considered to be crucial for enhancing the effectiveness of foreign assistance. In the water sector, the European Water Initiative (EUWI) via the OECDs EAP Taskforce has set up a structured National Policy Dialogue since 2006 for the financing of water supply and sanitation in Moldova. This dialogue involves all major government and civil society stakeholders and is led by the Ministry of Environment. In addition, the Donor Coordination Council (monthly), headed by the Minister of Environment and supported by the OECD, convenes regularly with all relevant donors (EU, SDC, ADC, WB, EBRD, TICA and others). SDC supports this process as lead donor in the WSS sector. Regular Donor Coordination Council meetings, chaired by the Minister of Education with all relevant donors (currently ADC, Liechtenstein, GTZ and UNICEF), ensure coordination and harmonisation in the VET sector. The Republic of Moldova is a focus country for the EU Fast-Track Initiative (FTI) of Division of Labour (DoL). The purpose of this initiative is to help implement the EU Code of Conduct on Division of Labour6. It aims at supporting a selected group of partner countries in the process of implementing in-country division of labour, in order to achieve better development results through more effective aid and to implement the principles enshrined in the Paris Declaration (see chapter 1.4 Trends and issues in aid effectiveness). Austria acted as Lead Facilitator for the FTI, with Sweden, Romania, Lithuania, UK and the Czech Republic as co-facilitators, before handing over the lead to Sweden. Strengthening the Government of Moldova while reducing external Project Implementation Units and in turn transaction costs for the Government are two of the most important issues to be tackled in Moldova. To ensure alignment of Moldovas EU commitments with the goals set out in the Partnership Principles Implementation Plan, the FTI and the "European dimension" were incorporated into the PPIP.

1.4

Trends and issues in aid effectiveness

In view of the large number of donors as well as local stakeholders operating in Moldova, implementation of the Paris Declaration principles Ownership, Harmonisation, Alignment, Result Orientation and Mutual Accountability is of crucial importance. Ownership: Due to the large number of national donor documents and priorities, implementation of policies has been difficult and constrained by limited financial resources and administrative capacity. Donor sector strategies have not always been consistent with Moldovan priorities. Responsibilities among various ministries need to be more clearly defined and greater participation of civil society encouraged. Alignment: Despite some progress since the 2006 baseline survey, donors still rely heavily on parallel project implementation units when they could benefit from domestic structures/country systems. Unclear responsibilities within the Public Finance
6

adopted by the Council of Ministers in May 2007

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Mechanism (PFM) systems on a central level and corruption7 represent further obstacles in this process. Harmonisation: The Paris Declaration survey encourages donors to use sector-wide approaches, budget support and delegated co-operation to reduce overlaps and duplications, and to align with national budget cycles.8 Sector budget support is mainly used by the EC. Other donors still hesitate to make wider use of this instrument due to weak PFM, corruption, and limited implementation and monitoring capacities. Managing for Results: There is a need to improve the quality of national statistics across government agencies, in particular those related to poverty issues. Mutual accountability: The Harmonisation Group with government and donor representatives monitors progress on aid effectiveness. Evaluations of individual donor programmes take place on an ad-hoc basis. Inter-ministerial commissions monitor and evaluate implementation of the national strategy. Sector performance is also monitored by mixed groups (consisting of donors, government and civil society). In general terms, the strategic and legal framework of development cooperation improved in recent years, in particular with respect to ownership, harmonisation and alignment. Further progress is needed with regard to project implementation, impact and sustainability of interventions, and the gathering of reliable data.

1.5

Lessons learned and comparative strengths

State authorities are understaffed, lack qualified personnel and fluctuations are high. Responsibilities between line ministries are not always clear, and competences frequently shift between ministries and outsourced agencies. Particular attention is paid to capacity building and exchange of experiences with local project partners and stakeholders from municipalities, districts, councils and mayors as well as civil society and local or national experts. This is especially important in a strongly hierarchic society such as Moldova. Local ownership is strengthened by the requirement that project partners make own contributions. This requirement helps to improve payment behaviour, and to detect and avoid potential financial difficulties at an early stage.

2.
2.1

Country strategy 20112015

Strategic considerations for Austrias support

2.1.1 Focal area: Water and Sanitation

Modernisation of the water and sanitation sector (WSS) is a priority of the Moldovan Government. The Strategy of Water Supply and Sewage in Communities of the Republic of Moldova specifies the key objectives and priorities in this sector: Increase the share of people with permanent access to safe piped water from 31.3% in 2002 up to 65% in 2015. Increase the number of people with access to sanitation systems from 41.7% in 2002 up to 71.8% in 2015.9

Moldova ranks 109th out of 180 countries in Transparency Internationals 2008 corruption perception index with a score of 2.9 out of 10. 8 A Development Partnership Framework. Co-ordination and Harmonization of Government and Donor Practices for Aid Effectiveness in the Republic of Moldova. Chisinau 29 May, 2006. 9 See National Development Plan 20082011, Goal 7.

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The strategy lists five specific medium-term objectives (20082012): Decentralisation of public water supply and sanitation services; Promotion of market economy principles (e.g. by strengthening competition among service providers); Improving access to WSS services (incentives for foreign investors); Promotion of sustainable development and environment protection measures; Promotion of social partnerships (of social partners, civil society, consumers). These ambitious goals partly go beyond the targets of the NDP which forms the basis for national budgetary allocations. Existing policies have been lacking sufficient prioritisation, realistic action and implementation plans and a coherent financing strategy. ADC considers financing the elaboration of such strategy under the framework of EUWI, following recommendations of a 2007 study (Facilitating Policy Dialogue, and Developing a National Financing Strategy for Urban and Rural Water Supply and Sanitation in Moldova). Financing for water sector projects comes mainly from the National Environmental Fund, Local Environmental Funds and the Moldova Social Investment Fund (MSIF). The main donors and International Financial Institutions in WSS in Moldova are EC, WB, EBRD, Switzerland, Austria, Czech Republic and Turkey. Kuwait, Poland and IDA provide loans for WSS projects. ADC lends financial support to SDCs ApaSan project and coordinates its activities with the World Bank and the EBRD. ADA has the lead in an EU water supply programme in Nisporeni district in the framework of the Indirect Centralised Management (ICM), which is co-financed by EU, SDC and ADC. In this context ADA signed agreements with EU and SDC in 2010. With the Czech Development Agency (CzDA) ADA signed a memorandum of understanding on development cooperation in Moldova in 2008. Cooperation with OECD to develop a WSS investment and action plan to help implement the new water strategy of the Government of Moldova started in 2010. Key local partners are national and local government institutions involved in policy formulation and implementation, line ministries, Apele Moldovei and NGOs (e.g. Regional Environmental Centre in Moldova, Environmental Movement of Moldova and Eco-TIRAS). ADC focuses on interventions in the Prut watershed (including South, Southwest and Central Moldova), aimed at consolidating WSS improvements in upstream areas. ADCs engagement in WSS is expected to contribute significantly to accelerating the implementation of the Moldovan Water/Sanitation Strategy, improving access of the Moldovan population to safe drinking water and sanitation infrastructure, in line with MDG and NDS goals (65% of population by 201510). ADCs holistic approach, based on detailed analysis of the sector environment and lessons learned, focuses on WSS infrastructure, sector policy reform and institutional capacity building programmes, linking up hardware (infra-structural improvements) and software measures (e.g. capacity and institution building, awareness raising, metering, billing, payment behaviour, legal framework). Cost efficiency, longterm planning, sustainability and better use of local markets for procurement are important aspects of ADC interventions.

10

See National Development Strategy (NDS) 20082011, p.26

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2.1.2 Focal area: Vocational Education and Training (VET)

Moldovas National Development Plan 20082011 (NDP) and the Strategy for the Education Sector Education for all identify the following priorities: Modernisation of curricula and teaching methods; Adaptation of VET to the needs of the labour market; Closer cooperation of public VET systems with private business, especially SMEs; Provision of modern equipment and teaching material; Establishment of public-private partnerships; Promotion of academic mobility of teaching staff and students; Inclusion of civil society actors; Equitable VET access for disadvantaged people; Impartial evaluations, including participation of international evaluators.

In line with its VET sector programme11, ADC response focuses on the relation of professional education and employment in the private sector. Gross enrolment and retention rates are both goals and indicators of success of Moldovas VET policy. ADC addresses both supply side (administrative capacities, school equipment, job descriptions and curricula, teacher training, teaching materials, etc.) and demand side (private sector expectations, labour markets needs, etc.) aspects of VET. ADC supports VET reforms both on a systemic (matching of occupational and educational standards) and on an operational level (cooperation with VET schools). ADCs VET cooperation strategy focuses on three areas: 1. Strengthening capacities at the micro level (improving quality of input resources); 2. Improving cooperation between VET and the productive sector; 3. Improving strategic planning and implementation capacity on central and local administrative level (ministries, National Employment Agency, social partners). Interventions of ADC are expected to contribute to the creation of a modern and flexible VET system, adapted and adaptable to the needs of a competitive labour market. Result-based indicators of ADC interventions are the number of persons enrolled in the Moldovan VET project partner institutions of ADC and the number of persons directly benefitting from specific advanced training and/or adult education. ADC will support development of VET school as regional centres of expertise which provide training for students and advanced training for adults, unemployed, workers, vegetable growers and winemakers. At least one VET centre should function as a centre of regional development and expertise. ADC is also committed to support improvement of qualifications and capacities needed for adequate maintenance and sustainability of infrastructure investment. In the VET sector ADC cooperates with SDC, Liechtenstein, the World Bank and the European Training Foundation (ETF) which participate in monthly Donor Coordination Council meetings with the Ministry of Education. GIZ is committed to become active in the VET sector, too. SIDA elaborated a VET Strategy for Moldova, but closed its other VET activities in Moldova end of 2009. SDC financed a project to elaborate occupational standards for VET schools as part of the labour market orientated curricula reform process.

11

Sector Programme of the Austrian Development Cooperation: Moldova Private Sector and Employment Vocational Education and Training, November 2007

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ADCs activities in the VET sector are coordinated with the Ministry of Education (VET department) of the Republic of Moldova. Curricula reforms shall be adopted and implemented in the public VET school sector (at least in seven economic VET schools, two agricultural schools and two water and sanitation related VET schools) by the Ministry of Education.

2.1.3 Non-focal area: Governance

Measures to support good governance, including conflict prevention and reintegration of voluntary returnees and strengthening civil society, are designed to complement ADCs activities in focal areas. Public and private institutions need to incorporate governance principles and modern transparency and accountability standards on national, regional and municipal levels. Special attention will be paid to the support of NGOs, educational institutions, municipalities etc. on both sides of the Dniestr.12 Solving the Transnistrian conflict is a precondition for sustainable development in Moldova. Austria is committed to the territorial integrity of Moldova and will continue to support the reintegration process. ADC has financed the reintegration component of a voluntary return programme of the Ministry of the Interior covering university or college fees, procurement of professional equipment, business training for small businesses, as well as VET courses and will support a similar programme from July 2011 onwards.

2.1.4 Cross-cutting issues: Gender Equality and Environment

Gender equality and empowerment of women Gender mainstreaming, based on ADC policy guidelines for Gender Equality and Empowerment of Women, is an integral aspect of ADC in Moldova. The National Action Plan on Gender Equality 20062009 aims at eliminating gender discrimination on the labour market,increasing public awareness of gender issues, developing national institutional mechanisms to promote gender equality, protecting women's health and preventing violence against women, men and children. With reference to VET, ADC will support curriculum reform to eliminate gender stereotypes in school books and promote equal school attendance for girls and boys at all education levels. On the labour market, ADC-supported employment programmes focus on non-discriminatory recruitment policies, equal pay and job promotion programmes. In WSS, special attention will be paid to domestic needs for clean water and appropriate sanitation. The non-focal area governance includes support for womens organisations. Monitoring and reporting will use sexdisaggregated statistics. All project proposals have to undergo thorough gender assessment. Environment All interventions of ADC are in line with its Strategic Guideline on Environment and Development. In the Water Sector ADC will apply the principles of Integrated Water Resource Management. Raising environmental awareness is part of all water related activities. Environmental education is integrated in VET curricula.

EC intends to support common Civil Society Initiatives with approximately 1.7 million euros between 2009 and 2010. The programme will be implemented by UNDP.

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ADC will perform environmental screening for every project activity, in order to avoid or minimise a potential negative impact on the environment. Environmental concerns are included in all stages of the project cycle, from project design to monitoring and evaluation.

2.2

Fighting poverty and vulnerability: Austrias contribution

Poverty reduction is a central concern and an over-arching goal of ADC13 as well as a primary objective of the EU/Moldova Action Plan. Moldova is the poorest country in Europe, with a per capita income of less than 900 per year. It ranks 111th in UNDPs 2008 Human Development Index, behind other countries in transition such as Ukraine (76th), Macedonia (69th), Albania (68th) or Bosnia and Herzegovina (66th). While poverty levels fell sharply after 1999, less progress was made in recent years. One third of the population continues to live below the poverty line.14 Approximately one quarter of the population lives and works abroad. Their remittances about 30% of GDP, which is slightly less than Moldovas state budget (37% of GDP) are vital for the national economy. The exodus among the most productive people (it is mainly children and old people who stay behind) constitutes a social problem as children are growing up without parents, sometimes becoming orphans. Moldovas NDP envisages a reduction of the absolute poverty ratio to 24% until 2011, and to 20% by 2015. This goal will hardly be achievable, however, without external help. Poverty reduction has been an important selection criterion for ADC priority sectors and areas in Moldova. 65% of chronic poverty15 can be found in rural areas. ADC therefore focuses on improving living conditions and perspectives in rural areas and small towns, where water and sanitation systems in particular are often in a deplorable state. In some regions only 3 to 4% of houses have a sewage connection. ADCs support in the VET sector aims at enhancing employability mainly of the rural population and in smaller towns through VET system reform, and alignment with labour market needs and European standards. ADC interventions in general, and VET/adult education in particular, recognize that out-dated structures and the private sectors lack of initiative are important causes of poverty as well as serious constraints for much needed social and economic reforms in the country. According to the Human Development Report 2011 for the Republic of Moldova, the poverty rate is very high in the country around 26.3% of the population lives in poverty.16 In the central, western and southern regions, including also Nisporeni Region (focus of ADC intervention in the water and sanitation sector), the poverty rate is even higher (33.2% and more). Through the rehabilitation of the water supply system in the Municipalities of Nisporeni, Vrzreti and Grozeti, a total population of approx. 20,000 people should have access to sufficient and safe drinking water, thereby combating poverty and improving their living conditions, quality of life and public health. Through the cooperation with SDC in the water and sanitation sector in the reporting period, 5,600 persons will be provided with access to safe drinking water, 27,400 persons will benefit from sanitation and 6,200 persons from waste water collection and treatment.

13 14

See ADC policy document on poverty reduction. Source: Ministry for Economy and Commerce. 15 The distinguishing feature of chronic poverty is extended duration in absolute poverty. 16 See UNDP National Human Development Report 2010/2011 Republic of Moldova: From Social Exclusion Towards Inclusive Human Development.

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2.3

Budget scenario

In 2011 budgetary provisions amount to 1.6 mio. . Tentatively, roughly 60% of resources of this budget will be allocated to the focal area water and sanitation, about 30% to the focal area Vocational Education and Training and approximately 10% to the non-focal area governance.

2.4

Other financing instruments

Business partnerships ADC supports cooperation between companies in Austria and the EU and transition countries (joint ventures, outsourcing, supply contracts, know-how transfer, joint marketing, management contracts, franchising agreements etc.). Possibilities for cooperation should be explored in all areas of business, especially in food retailing and the export sector (e.g. wine production and marketing). Possible opportunities for private sector engagement could be the financing of village pick up points or (cold) storage facilities. NGO co-financing facility ADC supports civil society activities and partnerships between Austrian and local NGOs through a specific co-financing instrument. Proposals are to be submitted by Austrian NGOs in cooperation with a local partner in the framework of the Call for Proposals. In the past, ADC has supported several initiatives in democratisation and social security. The EU co-financing instrument supports projects by Austrian NGOs that are co-financed by the European Commission and ADC. Supporting regional cooperation in Southeast and Eastern Europe ADCs regional budget line Southeast Europe supports projects with a regional focus. Moldova has greatly benefited from such projects in the past. Examples include Eco Net (business training firms), Know-how-Transfer-Center, Media Development in Southeast Europe, tuitions for the Diplomatic Academy in Vienna or capacity building for the police to fight human trafficking. A new Regional Strategy for Southeast Europe is under preparation. Austrian Development Bank The Austrian Development Bank (OeEB), founded in 2008, has been stepping up its activities in Moldova. In 2009, the OeEB undertook research on the use of remittances.

3.

Programme implementation

The Federal Ministry for European and International Affairs (FMEIA) of the Republic of Austria is responsible for coordinating Austrian development policy and strategic planning of Austrian Development Cooperation (ADC). Austrian Development Agency (ADA) as the operational unit of ADC is in charge of implementing programmes and projects; particularly under 2.1 and 2.2 Project coordination and in-country management lie with the Coordination Office for Technical Cooperation of the Austrian Embassy Chisinau, the official representation of ADC in Moldova. Projects financed by ADC through grants are exclusively implemented by third parties, i.e. local partners, NGOs, international organisations and/or private firms. To foster local ownership and participation, increasing use is being made of local capacities and expertise in project identification and implementation.

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Annex Results Matrix

Sequence of objectives according to the "Logical Framework"
Logic of intervention Overall Goal Poverty Reduction through demand driven development in the water- and the VET-sectors 1. Strengthen regional infrastructure through improving sustainable access to water supply, sewage and wastewater treatment 2. Increasing employability through quality improvement and enhancing equitable access to educational services by harmonizing educational offer with labour market demands Objectively verifiable indicators Sources of verification Assumptions and risks Political stability and integrity of the country, no conflict between Cisand Transnistria, continuation of the EU approximation process. Main risk is political, economic and social crisis in Moldova, the deepening gap between political parties, often alongside ethnic lines (Romanian-Russian). Moldova is a country searching its identity and place in Europe, with mixed results. Trust in the country is weak, continuing migration weakens the already low developed capacities in economy and public institutions. Elections may change the political orientation of the country again.

Programme 1: Water and sanitation Purpose Contribute to the implementation of Moldovas strategic goals in the areas of water supply, sewage and wastewater treatment including support for the implementation of infrastructure investment policies and sustainable infrastructure development in municipalities and rural areas of Central-/ South West Moldova Active Participation in Sector Council meetings In the geographical focal area of ADC contribution to: Increased share of people with permanent access to safe water sources from 31.3% in 2002 up to 65% in 2015. Increase the number of popuGovernment statistics, health statistics (local and national)

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Logic of intervention Objectively verifiable indicators lation with access to sanitation systems from 41.7% in 2002 up to 71.8% in 2015. Significantly reduced incidences of water supply and sanitation related diseases in targeted service areas after infrastructure development measures. Local government statistics Apa Canal statistics Project reports ADC secures and absorbs the agreed contributions of EC through the Indirect Centralized Management and co-funding from SDC. Local authorities are able to duly provide their financial contribution. Full political support for activities and actions in the framework of national sector strategies and policies, in particular the principle of tariffs for water supply and waste water services. Political commitment to work on efficient mechanism to manage national finance for capital investments in the sector and to attract international investments. Local authorities and partners comply with basic principles of Public Financial Management and good governance. Sources of verification Assumptions and risks

Results

1. Water supply improved in selected rural areas and municipalities of Central/South West Moldova

ad 1.: Contribution to increased number of inhabitants in Central-South West Moldova with safe, piped water supply and with continuous (24 hours) service of at least 20,000 people; Water quality of supplied water monitored and corresponding to Moldovas standards. ad 2.: Contribution to provision for at least 5,000 inhabitants in Central-South West Moldova with improved sanitation facilities and/or connected to rehabilitated sewage systems: Pilot plants of constructed wetlands in rural areas are working.

2. Sanitation, sewage collection and wastewater treatment improved in selected rural areas and municipalities of Central-/ South West Moldova

Local government statistics Apa Canal statistics Project reports

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Logic of intervention Objectively verifiable indicators Sources of verification Assumptions and risks Harmonisation between donors and alignment to national policies and strategies are going reasonably well. 3. Management capacity for water supply and sanitation infrastructure established for targeted rural schemes and performance of Apa Canal improved in targeted municipalities of Central-/South West Moldova ad 3.: In targeted villages and municipali- ties: Non-revenue water reduced by half as compared before in- terventions in all targeted villages and municipalities. All schemes fully cover the operational and maintenance costs through revenues after interventions. In areas of waste water treatments, effluents correspond to European and national standards. Safe disposal of sludge from all other sanitation facilities or at least fundable projects in place by end of intervention. Local government statistics Apa Canal statistics Project reports Local partners (e.g. local governments, communities, Apa Canal, rural communal operators) have basic capacities and strong motivation to contribute to the successful implementation of actions.

4. According to specific needs of the ad 4.: Moldovan relevant water/waste wa- A framework for long-term sustainable financing of infrater sector entities, interventions for structure investments (rehaadditional policy reforms and instibilitation and green field protutional capacity development are jects) for water supply, sanita- supported tion and sewage, wastewater is available and owned by relevant national institutions by the end of programme. Experience of interventions to

Various water and sanitation sector strategy documents at national level Specific project reports Records of Water and Sanitation Working Group

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Logic of intervention Objectively verifiable indicators improve technical and administrative capacity of local service providers is transferred to national level and informs national strategies and standards. Programme 2: Vocational Education and Training (VET) Purpose Contribute to the creation of a modern, demand-driven and flexible VET system, adapted to the needs of the labour market, and instrumental for increasing the competitiveness of the work force and its employability on the internal and external markets 1. Contribution to VET system reform and curricula reform is provided by taking into account international standards and national/local economical needs Students and course/training participants have better chances to get a job on the labour market because of acquirement of new knowledge and better skills in standard VET and/or short courses, adult and/or advanced training or education. 3 new or improved demand driven curricula (standard VET and/or short courses, adult and/or advanced training or education) Cooperation/coordination between relevant ministries and/or agencies, VET institutions and representatives of national/local economy on regular basis 2. VET institutions provide modern and relevant VET At least 150 graduates of labour market orientated VET schools for water and sanitation related professions till 2015 More than 40 well educated Governmental statistics and reports, statistics and reports supplied by VET partner institutions and stakeholders Political stability and integrity of the country, no conflict between Cisand Transnistria, continuation of the EU approximation process. Cooperation between the local economy and public VET sector to meet the needs of the labour market. Investment climate and economic situation are favourable. Strong political will at the highest level in Moldova (Ministry for Education and Youth and other relevant authorities) to improve the situation in VET. Sources of verification Assumptions and risks

Results

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Logic of intervention Objectively verifiable indicators teachers for labour market orientated economic VET schools until 2015 More than 3880 graduates of labour market orientated economic VET schools until 2015 At least 270 graduates of agricultural schools till 2015 3. Students/participants are able to apply acquired skills
Non-focal area: Governance

Sources of verification

Assumptions and risks Availability of funds. Moldovan authorities have enough (qualified) personnel to support the implementation of VET reform and are actively involved in the implementation of the projects financed by donors. Close cooperation between all relevant VET stakeholders (Moldovan authorities, local economy, donors, VET institutions, teachers, etc.)

Teaching material and/or equipment of high quality at supported schools

Purpose

Contributing to good governance, including conflict prevention, the reintegration of voluntary returnees and strengthening civil society

Moldovas good governance performance according to relevant reports, indices and studies is improved

UN (human rights) reports

Political will for reforms and for good governance is existent; political Relevant indices (e.g. World stability. Bank Governance Indicator, Freedom house democracy index, TI Corruption Perceptions Index, Bertelsmann Transformation Index)

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MOLDOVA COUNTRY STRATEGY 20112015

Logic of intervention Results Good governance principles and modern transparency and accountability standards are integrated in all projects on national, regional and municipal levels Objectively verifiable indicators All ADC partner organisations (VET institutions, Apa Canal, municipalities and NGOs, etc) have adopted good governance principles, apply them in their activities and thus contribute to strengthening good governance, transparency, accountability etc. in relevant institutions on national, regional and municipal levels. Reintegration services for at least 50 voluntary returnees Capacities built of at least 30 migration officials
Cross-cutting issue: Gender Equality

Sources of verification Governmental and relevant NGO as well as international reports and studies Project documents, reports

Assumptions and risks Political stability and integrity of the country, no conflict between Cisand Transnistria, continuation of the EU approximation process.

Voluntary returnees are reintegrated and migration officials trained

Statistical data by IOM

Purpose

Contribution to gender equality and to elimination of gender discrimination in employment and labour, health and education sector in Moldova

Gender stereotypes in educational Governmental statistics and reports, analysis and reports sector effectively addressed supplied by VET and WSS partner and governmental Gender discrimination regarding participation of men and women in institutions the labour market reduced Domestic needs of men and women for clean water and sanitation evenly and effectively addressed

The Implementation of the National Action Plan is seriously pursued by the Moldovan government. Relevant sex-disaggregated data is available.

Results

Principles of Gender equality and nondiscrimination according to the ADC Gender policy are complied within all ADCs programmes in Moldova

Gender aspects are systematically Documents, project docuintegrated into design, implemen- ments, evaluation reports tation, monitoring and evaluation of ADC projects/programmes and sex-disaggregated data collected

Assumption: All stakeholders involved in programme cycle management and operational staff are gender aware and seriously committed to gender equality principles and

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MOLDOVA COUNTRY STRATEGY 20112015

Logic of intervention Objectively verifiable indicators Sources of verification Assumptions and risks standards. Projects and Programmes address gender specific issues identified in ADC programmatic focal and non focal areas Gender analysis available/undertaken for VET and WSS sector in Moldova and used to guide programme strategies and implementation Project/programme documents, Gender questionnaires, Gender assessments Risk: Gender equality is not perceived as a priority by stakeholders and time and financial resources are not sufficient for consequent integration of gender aspects. Assumptions: Women organisations are interested, and have the necessary financial and other resources to meaningfully contribute to project/programme design and implementation of strategies.

Meeting Minutes, Inception Strategic and operational cooperation Womens organisations/Gender reports experts involved in feasibility aswith UN Women and local womens organisations established/strengthened sessments, design, implementation and M&E of ADC programmes Support provided to womens organisations Curricula, training materials Increased gender awareness and competence of VET providers and students/participants Gender issues are considered/addressed in VET curricula and training material, Gender stereotypes are eliminated in curricula and training materials

Sex disaggregated statistics Assumption: comprehensive Genof participants / and benefi- der expertise is available. ciaries in ADCs proRisk: Gender equality is not pergrammes ceived as a priority by stakeholders, and time and financial resources are considered to be too limited to consequently integrate gender into VET. Projects/programmes reach out to all potential participants.

Equal school attendance for girls and boys promoted Cross-cutting issue: Environment Purpose Contribute to the integrity and resiliPositive overall impact on water ence of ecosystems and ecosystem resources in the intervention areservices, particularly in relation to water as, particularly on ground water resources, soil and biodiversity, and promote environmental awareness Government statistics

No extreme weather events occur that may substantially change the natural resource situation. Reliable statistical data is available.

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MOLDOVA COUNTRY STRATEGY 20112015

Logic of intervention
Results

Objectively verifiable indicators

Sources of verification

Assumptions and risks National legislation is consistently implemented and resources for Economic Reviews made disposable. Partners have the necessary capacities to implement environmental recommendations.

Principles of Integrated Water Resource Management are applied in all projects in the water and sanitation sector

In all project documents, issues of Project documentation sustainability and potential tradeoffs between all different forms of water use are assessed, documented and taken into consideration Environmental Reviews according Reviews/screening notes, monitoring and evaluation to national Legislation (Law No. reports 851-VIII) or ADA Environmental Screening performed and recommendations implemented

Environmental sustainability of all programme interventions is secured

Students/participants have developed VET curricula and training material Curricula/training material environmental awareness and acquired reviewed or developed integrate modules/chapters on environmenrelevant environmental competences tal issues where relevant

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MOLDOVA COUNTRY STRATEGY 20112015

Contact
Federal Ministry for European and International Affairs Directorate-General for Development Cooperation Minoritenplatz 8 1014 Vienna Austria Phone: +43 (0)50 11 50 4417 Fax: +43 (0)50 11 59 6417 Mail: stefan.weidinger@bmeia.gv.at Austrian Development Agency (ADA) in Vienna Desk for the Republic of Moldova Zelinkagasse 2 1010 Vienna Austria Phone: +43 (0)1 90 399 2548 Fax: +43 (0)1 90 399 1548 Mail: programme@ada.gv.at Coordination Office for Technical Cooperation Austrian Embassy Chisinau Mateevici 23B 2009 Chisinau Moldova Phone: +373 (0) 22 739370 Fax: +373 (0) 22 796940 Mail: chisinau@ada.gv.at

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