Page  1
PROGRAM INFORMATION DOCUMENT (PID) 
CONCEPT STAGE 
Report No.:  AB4269 
Operation Name 
Sustainable Employment Development Policy Program 
Region 
EUROPE AND CENTRAL ASIA 
Sector 
General education sector (30%);Social Protection (30%); Private 
Sector Development (20%); Public Administration (20%) 
Project ID 
P112227 
Recipient 
UNMIK 
Implementing Agency 
MINISTRY OF FINANCE AND ECONOMY 
Date PID Prepared 
January 6, 2009 
Estimated Date of 
Appraisal Authorization 
June 1, 2009 
Estimated Date of Board 
Approval 
Already approved by Board 
1. 
Key development issues and rationale for Bank involvement 
 
The Sustainable Employment Development Policy Program is a program of three roughly annual 
budget support grants supporting sustainable employment and increased transparency and accountability 
of public expenditures in Kosovo.  The unemployment rate in Kosovo is the highest in Europe and is a 
key factor in the high poverty rate.  Poverty, however, appears to be relatively shallow suggesting that 
increases in employment could dramatically reduce poverty and put the country on a more stable growth 
path. 
 
The program is financed through two trust funds with contributions from IBRD surplus and 
contributions from ten donors:  the European Commission, the United Kingdom, Finland, Switzerland, 
the Czech Republic, Italy, Sweden, Estonia, Norway, and Denmark.  Pledges of about $93 million have 
been made.  
 
While one long run objective of the program is achieving sustainable employment, the 
underlying focus in the medium term is to create a coordinated interministerial approach to policy 
making. Such an approach would be useful in addressing other critical issues which Kosovo faces.  So, 
the expected outcome is as much about capacity-building and improved policymaking as about 
achieving growth in employment. 
 
The same issues come up in the area of public financial management. Currently there is 
insufficient coordination between the line ministries and the Ministry of Finance and Economics in 
producing both the Medium Term Economic Framework and the annual budgets.  This lack of 
coordination explains in part chronic problems in adhering to the budget.   
 
It would be unrealistic to expect the program to achieve substantial increases in employment and 
a
perfect public financial management system in three short years.  However, the program should help 
the Government make important progress in establishing a policy framework conducive to generating 
employment and to improving transparency and accountability in public expenditures. 
 
2. Proposed 
objective(s) 
 
(1) Create conditions to generate sustainable employment 
 
(2) Increase transparency and accountability of public expenditures 
 
3. Preliminary 
description 
Page  2
The program supports the creation of an interministerial committee which will focus on the key 
elements for creating sustainable employment:  (a) maintaining macroeconomic stability, (b) improving 
the investment climate, (c) improving labor policies, regulations, and institutions, (d) providing future 
workers with appropriate education, skills, and training, and (e) providing a social protection framework 
which provides protection while encouraging employment.  This committee will develop an action plan 
for each of these areas.  The respective ministries will then be responsible for implementing the action 
plan.   
 
The program also supports improvements in public financial management.  A working group has 
been set up to design and implement: (i) improvements in public investment and overall budget 
preparation; (ii) improvements in public procurement practices; and (iii) establishment of monitoring 
and evaluation systems in both central and municipal levels.  Each of these areas have been flagged by 
the PEFA assessment as needing improvement.  In addition, the program will support strengthening 
wage bill management.  
 
Satisfactory progress in designing and implementing these reforms would trigger roughly annual 
releases of budget support grants from the trust funds. 
 
4. Environment Aspects 
 
Since this is a Development Policy Grant and has no direct effect on the environment, no 
environment aspects have been envisaged, tackled, or planned. 
 
5. Tentative financing 
Source:   
($m.) 
Recipient 0 
Special Financing (Bank funds) 
40 
Special Financing (multidonor trust fund) 
53 
(approximate)
Total 93 
 
6. Contact point 
Contact: Anita M. Schwarz 
Title: Lead Economist 
Tel: (202) 473-1361 
Fax:  
Email: Aschwarz@worldbank.org