2.  Strong reforms underway in Serbia, still numerous challenges ahead  Importance of setting priorities within national agenda  Joint efforts of all relevant stakeholders and increased responsibilities in implementation

3. Main goals and commitments of the Government of Serbia:  improved coordination and planning of development assistance  improved aid effectiveness and efficiency  improved coordination of internal and external funds planning  alignment of development assistance with national priorities  setting rules to make these tasks regular an repetitive

4. NA - a three-year, multi/inter sectoral, programmatic document, drafted in wide consultations of relevant stakeholders and adopted by GoS in January 2007, to be revised on a one year roll-on basis, providing for:  the mid-term policy objectives and priority programs within sectors  inter-sectoral priorities for international assistance  assessment of needed external support. based on:  the Poverty Reduction Strategy  EU agenda (European Partnership priorities, National EU accession strategy)  Sectoral strategies and Action Plans  Memorandum on the Budget and Economic and Fiscal Policies for 2007 with projections for 2008 and 2009  GOPs- Annual Operational Action Plans for pilot ministries included in the process

5. Joint project identification by LM, MIER and donor community for 2008 (n) EU support IPA 2008 Needs Assessment Document (07-09) Needs Assessment Document (07-09) Preparing draft Budget Memo (incl NIP) Preparing draft Budget Memo (incl NIP) Programming of EU assistance including preparation of FICHE, negotiation, intern-agency consultations and signing of FA Final Budget Memorandum and Budget Prepare final GOP 1 (08-10) for LM GoS Work Program Budget Execution GoS Annual Report MFIN final accounts MFIN final accounts Implementation – Management by performance using GOPs Implementation – Management by performance using GOPs LM preparing Budget request LM preparing Budget request MIPD (n to n+2) drafting, Consultations and approval Preparing draft GOP 1 (08-10) in LM (EI, PRS, PAR and sector strategy) Detail design of projects / plan for implementation Implementation of projects/programme (36 months) Other international assistance Programming including detail design and plan for Implementation Implementation of projects/programme Update Needs Assessment document (n to n+2) Year 2008 (n)Year 2007 (n-1) December January Year 2009 (n+1) December January Monitoring and Evaluation Individual Assistance Strategy / Action Plans LM final accounts The chart is based on the assumption of the 3 year rolling process where for each cycle one additional year is included. Hence to get full overview of activities the specific calendar year it is necessary to include activities from the previous two years. Final LM GOP 1 (07-09) Final LM GOP 1 (07-09) 1 GOP (Godisnji operativni plan / Annual Operational Plan): Three year rolling medium term planning document developed by line ministries (6 pilot ministries) comprising the detailed budgeted operational plan for the first year. GOP planning methodology is designed to be used as basis for development of Government’s annual Work Program, budgeting according to the programmatic classification, programming of international assistance, monitoring and reporting. Final Budget Memorandum and Budget Final Budget Memorandum and Budget

6. Assessed financial needs for international support (disbursement)- in mil euros 2007.2008.2009.2007-2009. Grants4664283821.276 Concessional loans300200200700 Total766628582 1 976 2007.2008.2009.2007-2009. Projected needed grant disbursement 4664283821.276 Estimated disbursement of grants approved by 2006. 390279204873 Difference76149178403

7. Defined Intersectoral priorities for International Assistance:  Employment generation  Institutional Capacity Building  Infrastructure Development  Environment Protection  Rural Development Based on the following criteria:  Priority level according to the existing strategic documents,  Achieved level of reforms and strategic goals in the area,  Importance of international technical assistance and expertise for implementation of planned activities and  Need for securing additional financial resources for implementation

8. Employment generation  Linking the economic development and market forecasts with education and labour market (qualitative labour supply to meet labour demand)  Pilot sector in the sector support initiative Institutional capacity building  Strengthening and development of institutions on the central and local levels Harmonization of legislation with the Acquis and implementation  Basis: Action Plan for strengthening institutional capability for taking over the obligations deriving from the European integration process and the Strategy for Public Administration Reform

9. Infrastructure development  integration into the regional and international networks  local infrastructure development Environment protection  institution building and legislation development  reduction of pollution (including water, air and land) from all sources of pollution  improvement of waste management, particularly hazardous waste Rural development  economic development and diversification, competitiveness  agriculture promotion  improvement of standard of living

10. Overview of the situation, priorities and needs per sector Principles:  Unique strategy platform for external and internal resources, including NIP financing  Priority projects/ activities based on the priority midterm goals defined in the strategic documents  Main achievements and implemented projects included

11. Further steps:  Programming of international assistance based on the NA document  Revision and updating on yearly basis  Initiation overall strategic planning, sharing lessons learned Planned upgrading of the document:  Better inclusion of the local level needs  Inclusion of institutions other than line ministries  Monitoring of the achievement in mobilizing national and external resources  Impact assessment of external assistance? All or pilot sector