Cultural Heritage and Local Economic Development: Good Practice from the Western Balkans. Final Synthesis Report

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Introduction Cultural Heritage and Local Economic Development: Good Practice from the Western Balkans Final Synthesis Report This synthesis note summarizes the findings of an analytical activity conducted in the Western Balkans (Albania, Bosnia-Herzegovina, Montenegro, and Serbia) funded by The Italian Trust Fund for Cultural Heritage. This activity focused on identifying good practices and challenges to enhancing the contribution of cultural heritage activities to local economic development in the Western Balkans. During 2007 and 2008 intensive fieldwork and consultation was carried out in each country and in the eight local case study sites (2 per country), culminating in a multi-country and multi-stakeholder workshop held in November What follows is a summary of the background to the study, the methodology followed, case study findings, good practices identified, challenges to be overcome, and possible areas for investment support and technical assistance. Background The World Bank has supported cultural heritage in Europe and Central Asia through a variety of activities. A recent review of the operations supported between 1997 and 2006 revealed 17 lending and grant (institutional development fund) operations, most of which focused on physical heritage conservation, with many incorporating a Community Driven Development Approach. These projects had important impacts in terms of creating new income and employment opportunities (in construction, accommodation, tourism and handicraft sectors), while also contributing to community empowerment and capacity building, urban revitalization, and enhancing the capacity and expertise of central and local cultural heritage institutions. This review, which was completed in 2007, highlighted a number of important lessons learned including: (a) projects that jointly address heritage conservation, community development, and tourism objectives were likely to create positive synergies that stimulate economic growth (b) cultural conservation and community tourism projects have important multiplier effects (c) the importance of a decentralized approach that engages local government in decisions about the care and use of heritage assets. Given these lessons, and with the support of the Italian Cultural Heritage Fund, it was decided to examine the synergy between Local Economic Development and Cultural Heritage in more depth by focusing on the Western Balkans. International experience has shown that cultural and natural assets can become drivers for Local Economic Development (LED) when there is a concerted and strategic effort by key local players, local communities, and the different levels of governments to manage, develop, and promote those assets in a sustainable and coordinated manner. A central rationale behind this study of Cultural Heritage for Local Economic Development in the Western Balkans is that the Western Balkan countries have rich cultural heritage and numerous natural assets that can be used to promote economic development and social cohesion. These

2 assets have yet to be adequately developed and mobilized to benefit local communities. The aim of this analytical work was to identify mechanisms and options to achieve culture-led economic growth that can be considered for possible support by the international donor community. The activity had two main objectives: a) to identify the mechanisms and approaches (institutional, organizational, social, financial, and economic) that have been successful in using cultural heritage (tangible and intangible) and other local assets in the selected areas of the Western Balkans (Albania, Bosnia Herzegovina, Kosovo, Montenegro, and Serbia) to increase local economic development; and b) to create a knowledge base that will be shared with regional stakeholders in order to stimulate dialogue at the national and regional level and inform the preparation of future investment operations. Methodology The methodology adopted for this study involved an innovative combination of economic and social assessment techniques. Economic assessment techniques applied included value chain analysis, location quotient analysis, industry performance analysis, and mapping industry concentration. These techniques mostly involved working with statistical data made available from government sources at the national level of analysis. The analysis also involved a review of dynamics of the cultural and associated sectors within the local economies of the case study sites selected. The social assessment combined techniques such as mapping cultural heritage assets, stakeholder analysis, and institutional analysis, and an examination of the broader social environment. In some cases (e.g. Serbia) asset mapping was done at the national level on the basis of secondary sources and existing maps of cultural assets. Institutional analysis also focused at the national level, examining the regulatory and administrative framework, the respective roles of local andcentral government, along with the presence and role of NGOs. At the local level (in case-study sites), the most important techniques applied included consultation with key stakeholders (local officials, NGOs, Community Activists, Academics, etc.), and participatory asset mapping. Social and economic assessments conducted at the local level were used to prepare a comprehensive SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis for each site which was shared with local stakeholders. The research approach involved the selection of four case study countries within the Western Balkans, and two case study sites within each country. The case study countries chosen included Albania, Bosnia-Herzegovina, Serbia and Montenegro. The choice of these countries was based on their unique cultural heritage and the differing macroeconomic importance of tourism. From the schematic presented below, it can be seen that the study sites selected included national parks, as well as historic cities, towns and regions. Detailed descriptions of these sites are presented in the section that follows.

3 Figure 1: Case study site selection Gjirokastra Albania Butrint Historic City National Park Montenegro Kotor Cetijne Historic Port City Historic Town Bosnia- Herzegovina Banja Luka (RS) Mostar (B&H) Historic City and Region Historic Old town and Bridge Serbia Sremski Karovic Raska District Historic Town Important Cultural Region Summary Findings from Study Sites Montenegro In 2006, there were 14,000 people working in Retail Trade in Serbia, and 11,000 working for Hotels and Restaurants 17% of the Montenegrin workforce. These sectors are good indicators of the overall performance of the tourism sector in Montenegro. Another good indicator is Guests arrivals, which have increased from half a million in 2001, to almost a million in Much of this growth was fuelled by increases in foreign tourist arrivals. Thus, while foreign tourists represented 20% of overall tourist numbers, in 2006 they amassed 40% of the total a four-fold increase. As a result of the expansion of the tourism sector, the number of establishments that cater to tourists has increased too. The total number of business units in the Catering Sectors grew from 2,101 in 2000, to 2,786 in The case study sites represent already important (Kotor) or potentially important (Cetinje) drivers of this growth. Kotor is part of Boka Kotorska (one of the largest bays on the Eastern Adriatic coast), situated between mountains Lovcen (1749 m) and Orjen (1894 m) and the Vrmac peninsula (300 m). It encompasses the historic town of Kotor and 13 settlements alongside the coastline of the bay, and has been an important commercial, political, cultural and artistic center through the centuries, with famous masonry, iconography, goldsmith, and silversmith schools. It has a large number of monuments, numerous palaces, and several fortresses. Out of our fours study sites, it had the most developed tourism infrastructure and the richest display of cultural heritage sites.

4 Kotor is among the most developed study sites investigated. It has numerous and well preserved cultural heritage assets, it is well managed, adequate medium and long-term plans have been prepared, and it is receiving increasing number of tourists every year. The thrust of future development plans seems to be further conservation and sustainable development. Local stakeholders acknowledged the perils of mass-tourism and were primarily interested in keeping the number of visitors at a manageable level and in attracting higher-end tourists. As such, most of them objected to large hotel developments and they proposed the attraction and development of small (well integrated) high-end five star hotels. The local Faculty of Tourism stressed the need for training students to respond to a more sophisticated market, and for upgrading the skill set of people working in the field. The local conservation legal framework (developed primarily after the 1979 earthquake) serves as an example for other heritage sites that are affected by earthquakes. Some of the NGOs working in and around Kotor are acknowledged for the cutting edge conservation and restoration work they are promoting, and are important regional players in the field (they participate in and organize workshops throughout the Balkans). Cetinje is located in the central part of Montenegro, at the feet of Lovcen Mountain, less than an hour drive from the capital Podgorica, Kotor, and Budva on the coast. The town of Cetinje was founded in the 15 th century by Ivan Crnojevic (the last ruler of the medieval stare of Zeta), and for centuries it functioned as the administrative, cultural, and religious center of the state. Because of its significant historical heritage, the town enjoys the honorary status of the historic capital of Montenegro. Although it is not a major tourist destination yet, Cetinje could easily become an important point of attraction in Montenegro and regionally. The most important investment concerns the expansion of the hotel base, and a better inclusion within the regional tourism network coastal towns (Kotor and Budva primarily), Mt. Lovcen, Skadar Lake, Dubrovnik (Croatia). While it is a site of importance for Montenegrins (considered to be the historical capital of the country), Cetinje needs to also develop an international brand if it hopes to attract more foreign tourists. In addition, it can take advantage of the local arts programs to develop festivities and culturally oriented events throughout the year. Developing a comprehensive urban plan, improving peripheral infrastructure and the physical condition of building in outlying neighborhoods, can act as a magnet for both visitors and investors. Serbia Between 2002 and 2006 employment in the sectors that immediately impact tourism (the Hotels and Restaurants sector, and the Retail sector) had a relatively poorer performance than the national average, decreasing at an average of -8% and -7% respectively. This is despite the fact that the number of tourists visiting went from 1.4 million in 1999 (when the Kosovo conflict was still raging on), to around 2 million in The number of domestic guests has been on a downward spiral starting with 2002, but its decline has been counterbalanced by an increase in the overall number of foreign guests (from 124,000 in 1999, to 470,000 in 2006). Sremski Karovci and Rask District are two sites that have the potential to benefit from the increased number of foreign tourists.

5 Sremski Karlovci is a small town (less than 9,000 inhabitants) and one of the smallest municipalities in Serbia, situated 11 kilometers away from Novi Sad, and 57 kilometers from Belgrade, at the slopes of the Fruska Gora National Park, and along the banks of the Danube. The municipality is part of the South Backa district (which in turn is part of the autonomous region of Vojvodina), with a centuries long tradition of agriculture and wine growing. The town center of Sremski Karlovci is the result of developments in the 18 th, 19 th and the beginning of the 20 th century. The oldest preserved buildings date back to the end of the 17 th and beginning of the 18 th century, from the period of Ottoman domination. In 1713, the Serbian Orthodox Church Metropolitan Seat was moved from monastery Krusedol to Karlovci. The 18 th century was a period of political and economic empowerment and development for the town, with most of the existent urban layout being developed in that period. Overall, Sremski Karlovci has a very good potential to spur local economic development by promoting cultural heritage activities. This has been demonstrated with some success already by the increase in cultural activities taking place every year. With relative small public sector and donor investments (mainly in infrastructure, historic buildings, local festivities and events, logistics, partnerships, and marketing), the town could attract needed private investments in hotels and restaurants, in entertainment venues (sports bases, fishing and sail marinas, etc.), and in other sectors that would help expand the economic base of the locality. In addition, updating the local and relevant national legal framework and developing a long term site management plan, could lay the foundations for sustainable cultural and economic development. Raska District is situated in the South-West of Central Serbia, and encompassing five municipalities (Kraljevo, Novi Pazar, Raska, Vrnjacka Banja, and Tutin). Most of the heritage sites of importance are situated in the municipalities of Novi Pazar and Raska. Raska, in particular, has a competitive advantage in tourism, with a significant number of visitors coming every year to the Kopaonik Mountain ski resort. Unfortunately, this tourism infrastructure is not geared to serve the large number of cultural (e.g. the Romanesque monasteries) and natural (e.g. Golija Park) assets present in the area. Furthermore, endemic unemployment, a fleeting economic base (comprised mostly of obsolete industrial facilities), and a host of social problems, and problems related to solid-waste management, could pose serious problems to short- and medium-term development initiatives. Raska district is a region that requires a comprehensive and complex development strategy. It is a fairly large area, and its cultural heritage monuments are spread over the territory of three municipalities; its population is diverse but also highly polarized (especially in Raska and Novi Pazar); its economic base is fairly heterogeneous but also obsolete and in need of revamping; it has a number of popular tourist attractions (such as the ski resort on Kopaonik Mountain, and the spas in Vrnjacka Banja), but also a series of potential tourist attractions that are not properly marketed and developed and marketed (e.g. the monasteries and the Golija Park); it needs significant investments in infrastructure (especially town and local roads, rail and bus systems), in the hotels and restaurants base, in human capital, in developing local events, improving municipal

6 services in waste managemen and in bringing municipalities and different religious institutions together. Bosnia-Herzegovina: The direct share of the travel and tourism industry in the GDP of BiH in 2007 has been estimated at 3.3% (USD million). However the overall economic activity generated by travel and tourism is estimated at USD 1.78 billion or 11.7% of the country s GDP 1. Overall employment in the wider travel and tourism economy stands at an estimated 107,088 jobs (9.5% of total employment or 1 in every 10.5 jobs). In spite of the recent expansion, Bosnia and Herzegovina has yet to become a widely-recognized tourism destination. According to the latest assesment of BiH tourism conducted for the purpose of developing a branding strategy, the country no longer suffers as much from a negative image associated with the conflict, but rather from a lack of international awareness as a potential visitor destination. Two sites that could contribute to raising the international profile of Bosnia-Herzegovina include Banja Luka and Mostar. Banja Luka. Although many buildings were lost in a 1969 earthquake and the conflict, the city s streetscapes and monuments offer a wide range of architectural styles from the early Bosnian Kingdom, Ottoman Era, Austro-Hungarian Empire, the Kingdom of Yugoslavia, and the Socialist period. The city has the potential to develop a strong local identity through conservation and interpretation of this built heritage. The city s immediate surroundings offer many significant historic monuments, religious buildings and archaeological sites, which could effectively be developed and linked to create a dynamic cluster of tourism attractions. Despite increasing efforts from the local authorities, these sites are currently underutilized as tourism assets because they have received insufficient promotion, interpretation, and investment (e.g. signage, access, toilets, etc.). Key heritage assets in Banja Luka include: (a) Performing Arts and Festivals The city hosts high-visibility events celebrating traditional and contemporary arts that offer good opportunities for increasing awareness of all of the area s cultural and natural assets on the part of tourists (b) Handicrafts efforts are afoot to revitalize traditional crafts in the city but little efforts have been invested in marketing handicraft products to local tourists. (c) Adventure and Eco-Tourism products such as rafting, mountaineering, and cave diving are in the process of being developed by local entrepreneurs. However, attention needs to be paid to environmental protection and good business practices, with standardization of international safety requirements and dependable customer services. Mostar. In addition to its historic old town and the iconic Stari Most Bridge restored in with the support of the international community and the Gov. of B&H, Mostar contains a vast array of monuments and architecture from many different periods 2. However, Stari 1 Source: WTTC (2007), Bosnia and Herzegovina Travel and Tourism: Navigating the Path Ahead, 2 See the main text and Annex 2 for a more detailed description of Mostar s history and built heritage.

7 Most Agency, which is responsible for conserving the old town, suffers from problems with funding, staffing and authority. The city is in danger of losing its local character and historic value, because of inadequate conservation and the recent increase of inappropriate building activities, by both the private and government sectors. Mostar s surroundings offer a rich array of interesting small towns and sites from various periods, many with BiH national monument designations. These areas generally have high visibility due to good promotion associated with Mostar, but they lack interesting activities and tourist facilities. With good management plans and small investments, these areas could become much more than half-day tourist attractions. Mostar is characterized by a number of important heritage attractions including: (a) Museums while the Old Bridge Museum is a state-of-the-art facility other local museums do not have sufficient budgets or staff to rise to this standard. (b) Bridge Diving - one of Mostar s best-known traditions is individual diving off the 21-meter-high Stari Most bridge (the practice dating back to 1664). The annual formal diving competition every summer draws large crowds. (c) Handicrafts even though the Canton Tourist Organization holds an annual competition for most original Mostar souvenir and local artists produce interesting products, little effort is made to market and further develop local handicrafts to visitors. (d) Performing Arts and Festivals, including several festivals held in Mostar that present both traditional and contemporary performing arts, do not have predictable government support or budgets and therefore the consistency of events is uneven and commercial potential is not maximized. (e) Religion - Less than an hour away from Mostar, the village of Medugorje has become one of the most visited places in all of former Yugoslavia, since six teenagers claimed that the Holy Virgin Mary spoke to them there in Mostar is included as a quick additional stop in many tours to Medugorje. While Mostar is not currently gaining much income from these stop-overs, one tour agent reports a positive effect because these tourists see that Mostar has recovered from the war and then are willing to consider returning at a later date. (f) Adventure and Eco-Tourism including Nature parks, bird reserves, natural springs, waterfalls, rafting rivers and mountains for winter sports. Environmental protection and appropriate development of these natural assets will be necessary to fully utilize their potential for local economic development. Albania The direct share of the travel and tourism industry in Albania s GDP in 2008 has been estimated at 4.1%, or USD 513 million, while the overall economic activity generated by travel and tourism is estimated at USD 1.85 billion or 14.7% of the country s GDP. Overall employment in the wider travel and tourism economy stands at an estimated 149,000 jobs (11.9 % of total employment or 1 in every 8.4 jobs). However, international tourist arrivals registering in hotels in Albania have peaked in 2005 at 83,000 tourists and have been declining ever since. Both Gjirokastra and Butrint could potentially play a role in arresting this decline. Gjirokastra is located in the Drino valley on a narrow promontory that lies between the dramatic Lunxheria mountain range to the east and Mount Gjerë to the west.

8 Because it is protected by high hills and at the crossroads of major travel routes, Gjirokastra first developed as a fortification, but by 1419 it was an administrative unit of the Ottoman Empire. While having the advantage of a UNESCO designation and the attention of a skilled NGO 3, the city is facing a critical lack of economic development that is common to many historic cities all over the world. In addition, the old town faces conservation challenges that include: (i) multiple ownership (sometimes up to 60 people) of historic buildings, making it difficult to negotiate sales and conservation decisions; (ii) the high cost of traditional materials and restoration; (iii) regulations that block the adaptive reuse of historic buildings; and (iv) rising expectations for modern housing amenities that have led many residents to move to the adjacent new town. While Gjirokastra has much potential for heritage tourism development, these factors, combined with the development of the adjacent new town, have created a historic center that is struggling to maintain its social and economic life. The restoration and revitalization of Gjirokastra will be a challenging task. However, initial projects that support the process of renewal and establish good practice can make an important contribution. This work would include developing a multi-stakeholder strategy that includes: (i) a set of relevant policies and a broad master plan to guide investment priorities and incentives; (ii) definition of good practice procedures and guidelines; (iii) a strategy to address the issues surrounding the private ownership of historic buildings; and (iv) a few demonstration projects that give the appropriate signal to attract third party support. Key heritage assets in Gjirokastra include: (a) unique architecture and urban landscape made up of distinctive tower houses, the Ottoman bazaar, the castle, and dramatic hillside setting. (b) local archaeological sites, that have not been fully researched, conserved, or interpreted, have the potential to provide a rich cultural tourism cluster and increase community identity and pride. (c) iso-polyphonic singing, a tradition found in the Gjirokastra area, has been designated as intangible World Heritage by UNESCO,. In addition, Gjirokastra is the home of the National Folk Festival which is held every four years. (d) The rural landscapes surrounding Gjirokastra are dramatically beautiful, and there is much room to increase the visibility, quality, and number of outdoor activities in the area to expand Gjirokastra s tourism offerings and appeal. Butrint is a protected area which became a World Heritage Site in 1992, an Albanian National Park in 2001, and a Ramsar Wetland Site of International Importance in The park comprises an unspoiled and diverse landscape of mountains, foothills, open plains, lakes, and lagoons. The park is a UNESCO World Heritage Site and has received international levels of funding and technical assistance from an extremely effective foundation for the past 15 years 4. It is also highly valued by the government as one of the most important cultural sites in Albania. However, its importance may not shield it from 3 Gjirokastra Development and Conservation Organization (GDCO) is an Albanian NGO established in Its mission is to conserve, revitalize and promote the historic city of Gjirokastra. It is funded by the Packard Humanities Institute. 4 The Butrint Foundation was formed in 1993 as a charitable trust. Its principle objective is to restore and preserve Butrint for the benefit of the general public.

9 the extreme pressures for development confronting the country s coastal areas. Butrint s gateway community (Saranda) and the community adjacent to the park (Ksamile) are already suffering from overdevelopment due to this pressure. This constitutes a serious threat to the development of one the potentially most successful tourist attractions. If this threat can be warded off, the park can play an important role in regional development and act as a model for sustainable forms of tourism, environmental protection and other commercial activities. Cultural heritage sites associated with the park include (a) archaeological sites and remains from the Greek, Roman, Byzantine, Angevin, Venetian, and Ottoman eras. It is also made up of a rich array of habitats including coastal wetlands, saltwater lagoons, rivers, lakes and open grazing lands. This unique combination of archaeology and nature creates a special remote and undiscovered atmosphere found at no other significant archaeological site in the Mediterranean; (b) handicraft development, supported by a small World Bank grant in the Park s surrounding communities, has resulted in a popular crafts kiosk selling souvenirs that are based on the Park s heritage values; (c) small rural villages adjacent to the park are charming agricultural communities that have not yet developed their heritage assets. Ksamile, the village within the recently expanded boundaries of the park, has beautiful sea views and beaches, which are threatened by overdevelopment. Saranda, a seaport and tourism gateway for the park, has a few archaeological sites, castles and monasteries, but these are not well promoted and are often overlooked by visitors. With an appropriate development strategy and strong support and encouragement, these communities may be able to effectively protect their cultural and natural resources and become assets in a tourism cluster. Good Practice Identified Based on the analysis conducted of the case study sites it is possible to identify a number of lessons in good practice. The practices identified relate to legislative innovation, the role played by non state actors, the role of specially designated and decentralized institutions, and the importance of comprehensive approaches to urban and regional planning. Legislative Innovation A basic condition for enhancing the role of cultural heritage in local economic development is an enabling legislative environment that adequately protects local and national cultural heritage assets. In many of these countries it was necessary to update the existing legislative framework which dates back to communist times. Both Albania and Serbia have made some progress on this. (a) In Albania, the new law on tourism (2007) is notable for its attention to the principles of sustainable tourism development, participatory planning, and the equitable sharing of costs and benefits. Also, the law on Cultural Heritage was updated in 2003 to reflect EU laws, with two of the most important changes being the further decentralization of heritage protection responsibilities, and the creation

10 of committees that analyze and coordinate the work of national and international organizations. (b) In Serbia, a new law is currently in preparation (Law on Cultural Properties) with special adjustments made according to contemporary preservation and conservation practices. The new law is also intended to be in line with EU provisions and regulations. New laws that will specifically deal with cultural heritage are also in preparation (e.g. Law on Archives, Law on Museum Heritage, and Law on Old and Rare Library Collections) The Role of Non-State Actors Another important lesson in good practice learned from the study was the potential role played by non-state actors such as non-governmental organizations, the church and the private sectors in preserving cultural heritage and promoting its role in local economic development. The evidence points to the need for a collaborative approach to supporting cultural heritage and its incorporation into local economic development. Examples of this can be seen from Albania, Montenegro, and Serbia. (a) In Albania the Gjirokastra Development and Conservation Organization (GDCO) works to conserve, revitalize and promote the historic city of Gjirokastra. It is an NGO funded by the Packard Humanities Institute that also works in partnership with international agencies such as Heritage without Borders, the University of Pennsylvania, and the United Nations Development Programme. Successful activities have included the restoration of sections of the castle, support for marketing artisan products, and establishing a tourist information center. (b) In Serbia, many of the heritage sites that typify the Raska region have been physically well preserved due to money raised by the Serbian-Orthodox Church, with co-financing provided by the Ministry of Culture. (c) In Montenegro NGO Expeditio 5 from Kotor is an organization with the declared mission of encouraging sustainable space development and enhancing urban and rural areas in Montenegro and the Balkans, through activities in the fields of architecture, urban planning, town planning, environmental protection, conservation, and public advocacy. Furthermore, several tax incentives have been put in place to aid cultural activities. The Law on the Profits of Legal Entities (2001, 2002, 2004) and the Law on the Profit of Private Entities (2001, 2002, 2004, 2005, 2007), entitles the entities to deduct 3% of their income in one fiscal year for donations made to cultural, scientific, sport, religious, educational, scientific, environmental, and humanitarian causes. (d) In Bosnia-Herzegovina, The Tuzla 6 city administration proactively seeks good ideas with civil society representatives and community members on a continuing basis (the Local Economic Development Forum, established by the city administration, serves as a key vehicle for this cooperation). These ideas are then refined, prioritized and put into a coherent strategic framework for development Although not a case-study site, the case of Tuzla was presented during the multi-country, multistakeholder workshop by the Mayor of Tuzla, December 9 th 2008.

11 Specially Designated and Decentralized Institutions Another factor critical to the success of efforts to preserve cultural heritage and enhance its role in local economic development, is the existence of strong institutions for multilevel governance. This speaks to the need for dedicated and decentralized public bodies with well defined responsibilities relative to cultural heritage. Ideally, the institutional and organizational framework should allow for technical specialization, while also devolving responsibility for the management of cultural assets to the lowest level of governance, i.e. either de-concentrated arms of the Ministry or local authorities. (a) In Serbia, the Ministry of Culture is the main body responsible for the development of national strategies and policies related to culture, and cultural heritage in particular. It also provides support for twenty two regional cultural institutions, and provides the legal framework for culture and media. The Department for Cultural Heritage of the Ministry of Culture deals with activities concentrated around archeological heritage, built heritage, museum activities, library activities, archives, and inspection. (b) In Montenegro, the Ministry of Culture aimed to democratize and decentralize its management through special experts commissions for particular cultural areas (cinematography, publishing and repurchase of publications, monuments and memorial sites building, and acknowledgment of the status of free-lance artists. 7 ) These commissions represent groups of independent experts that are responsible for managing open calls of funding projects in the respective fields. In Kotor a Regional Institute for Cultural Heritage Kotor was established to educate citizens and engage them in different conservation projects (on a professional or voluntary basis). (c) In Albania, the updated law on Cultural Heritage (2003) provided for the establishment of Regional Directorates to take responsibility for the revitalization and reuse of heritage sites, and for interfacing with private owners of historic buildings. The Tourism law (2007) also made provisions for Local Government to play a greater role in Tourism planning and development. Urban and Regional Planning Another critical issue to consider when looking to enhance the role of Cultural Heritage in Local Economic Development is the template used for Urban and Regional Planning. Good practice in the development of comprehensive urban plans was identified in Serbia (Sremski Karlovci), Montenegro (Cetinje), and Albania (Gjirokastra). (a) In Serbia, the town of Sremski Karlovci focused on historical research and restoration of particular buildings in the very center. Following that year, a new concept was introduced, aiming at creating long-term programs of urban and landscape restoration through re-evaluation and improved co-ordination of existing resources and the definition of a management plan. (b) In Montengro, the local self government for Cetinje, in cooperation with UNDP is working on a series of place-making projects in the city, one of the most important ones being the re-design of the central-plaza. The idea is to break with 7 Other relevant institutions are: the Ministry of Economic Development, the Ministry of Foreign Affairs, the Ministry of Tourism and Environment Protection, the Ministry of Education and Science,the Ministry of Finance, and the Ministry of Environmental Protection and Urban Planning.

12 the traditional way of planning and create better public spaces for locals and visitors. (c) In Albania, the Gjirokastra Conservation and Development Organization prepared a master plan for the historic city in cooperation with the urban planning faculty from the University of Pennsylvania. The World Bank Land Administration and Management Project is currently working on capacity building for urban planning in Gjirokastra and its twin World Heritage city, Berat. Challenges to be addressed Along with numerous examples of good practice identified during the fieldwork, a number of important challenges and policy gaps were also evident. These related to many of the same areas of good practice including: The legislative and institutional environment, land use and zoning enforcement and the role of non-state actors, along with issues pertaining to inadequate human and financial capital. Legislative and institutional gaps In most of the countries examined there were a number of legislative and institutional issues that need to be resolved. (a) In Albania, supporting structures, regulations, and funding are needed to make it possible to enforce the principles of participation and sustainability articulated in the Tourism law. (b) In Bosnia-Herzegovina, the current law for heritage protection at the national and entity level is out of date and largely irrelevant because of the changes resulting from the Dayton Agreement following the end of the war 8. Rather than using this old law, entity institutions are, for the most part, using the standards and requirements set out in international agreements that BiH has signed. Currently, the institutional organization of the cultural heritage sector in terms of roles and responsibilities is unclear because of poorly defined institutional mandates and overlapping responsibilities. One very positive note is that the institutes in the Federation and the RS are effectively cooperating on conservation projects across entity borders. (c) In Serbia, the National Sustainable Development Strategy for does not have any special provisions for cultural heritage development, The same is true for the National Tourism Development Strategy (2006), which highlights the importance of cultural heritage but does not specify any particular measures. Deficiencies in Land-Use Planning and Zoning Enforcement A major threat to the built cultural heritage in urban areas is inadequate enforcement of building codes and land use zoning laws. Structures that do not conform to the building norms and regulations, land uses that impact the aesthetic value of cultural assets, and unregulated private adaptation of historical buildings can severely restrict the value and potential of a town or city s physical heritage. 8 Law on Protection and Utilization of Cultural and Historical Inheritance (1985, 1987)

13 (a) Albania has zoning and land-use laws. However, one of the most critical and urgent issues affecting the country is the inadequate enforcement of these regulations to protect irreplaceable cultural and natural heritage. (b) In Bosnia-Herzegovina enforcement of existing urban regulations, codes and zoning, urban planning skills need strengthening in order to deal with the urgent and growing issues that confront historic sites and cities. (c) In Serbia, different kinds of ownership (e.g. state, private, church, or mixed properties) pose hurdles to conservation efforts. The private owners, for the most part, do not have sufficient funds or interest in conserving the historic buildings they reside in. On the other hand, municipalities and the central government focus the bulk of their investments on state-owned properties. For example, general urbanistic plans have been adopted for both Novi Pazar and Sremski Karlovci but they are often not followed or respected. Unlicensed/illegal buildings pose a real threat to heritage sites, as they do not only disturb the architectural balance (with anachronistic and kitschy developments), but also affect the structural health of historic buildings. (d) In Montenegro, one of Kotor s major problems is illegal building construction (especially in and close to the old town centre) as local tourism and the locality itself are expanding. Since maritime property falls under the care of the state, dealing with such issues is not always a straight forward affair. Restrictions on the role of Non-State Actors This was especially the case in Albania, where in the past, heritage conservation was always the responsibility of the state, and to some degree it is still perceived to be. Consequently, it is difficult for NGOs to find a role in the process and they are often under-appreciated by the state and municipalities. Also, there are currently very few informal business organizations such as hotel or restaurant owner associations at the local level, and it is clear that small businesses do not always have the political strength to demand support from local government. Expertise A limiting factor in realizing the economic potential of cultural heritage is the availability of conservation professionals with the requisite skills for preserving, enhancing and interpreting cultural assets. There are still some deficits in this area: (a) Serbia could make significant strides in building up a cadre of conservation technical experts by expanding the possibilities to become certified in conservation Currently, this option is limited to training within conservation institutes and museums but not in universities. As a result, potential experts for which there should be enough demand have limited options. The existing accrediting institutions have been traditionally closed-in and difficult to get into and without the training from these institutions, none is allowed to work on restoration projects. This leads to an unfortunate situation where architects cannot become conservation architects (even though there is a high demand for this profession) because they lack the training from such institutions. (b) In Montenegro most schools have nominal activities aimed at raising awareness and knowledge of school children about their cultural heritage. Several relevant

14 university programs exist, but most of them do not offer courses in the cultural heritage field. For example, The Faculty of Civil Engineering Architecture Department, does not offer a stand-alone course on the conservation of cultural heritage. Financing problems Typically, financing cultural heritage preservation, restoration and enhancing is a major challenge. Such difficulties will only increase in the coming years due to the financial crisis and the difficult economic circumstances facing many Balkan countries. (a) In Montenegro budgetary constraints are reflected in the financing of cultural (heritage) projects with less than 1.3% of the budget being allocated for such activities, from 2003 through (b) Similar budgetary constraints were identified in Albania, where the scope of the Tourism and Cultural Heritage Legislation, along with the size of the Portfolio of the Ministry, was not matched by sufficient financial resources. Options for Investment and Technical Assistance Given the many challenges identified above, there are a number of important roles which international donors (bilateral or international) can play in supporting the role of cultural heritage in Local Economic Development. This support can be broken down into two broad categories Investment Support and Technical Assistance. Investment Support Major investment support can be provided across the Western Balkans for a range of projects and sub-projects. For the most part, the types of investment necessary relate to access infrastructure, basic services infrastructure, urban revitalization, and asset restoration. (a) Access Infrastructure in many of the study sites, the access roads to major cultural assets (archeological sites or even the towns/cities themselves) need to be rebuilt or upgrading in some cases of significant degree. (b) Basic Services Infrastructure such as water, electricity, sewerage, fire protection, and solid waste management need continue to be important limiting factors to attract more tourists. The historic centre of Gjirokastra is an example of where the under-provision of these services is a major concern. (c) Urban Revitalization is also an important area for investment support. Work on roads, alleyways, walkways, building facades, is needed in order to make the localities more presentable. Work can commence on institutional buildings, and buildings that are publicly-owned in the expectation that such investments would attract private funds. In some cases, when an employment generation focus is a priority, competitive grants to encourage relevant upgrades and investments may be a worthy alternative. Homeowners could receive aid to conserve and repaint their houses. This would not only improve the attractiveness of the area but would be an excellent source of employment as a bridge to better economic performance 9 Following Montenegro s independence in 2006, the situation probably changed somewhat.

15 of the area. The entryways to the city and city centers could be targeted first - adjacent neighborhoods next (d) Cultural Heritage Assets and Sites could also benefit from investment support. These investments could include conservation, interpretation and tourism facilities (e.g., public toilets, signage, walkways, stairs, fencing, lighting, access roads and parking lots). In the case of Bosnia Herzegovina, the need to invest in heritage sites is particularly acute, as the country s budget constraints and the war s destruction have left most heritage sites in need of investments to address maintenance, conservation, site planning, and tourist facilities. Technical Assistance In addition to financing, the lack of institutional capacity and technical skills constitute complementary barriers to realizing the potential of cultural heritage in the Western Balkans. Ideally, this would constitute an important strategic approach for local economic development triggered by cultural heritage. While the institutional strengthening and reform agenda may represent an important political challenge, the development of skills through programs such as building community awareness and skills, encouraging small business development, and building institutional capacity can be more easily implemented as the following guidelines illustrate: (a) Community awareness campaigns could include: (i) the importance of the economic and social role played by heritage in society; and (ii) the local community s responsibility to preserve heritage through stewardship of cultural heritage, beautification and clean-up campaigns, and environmental protection. (b) Small business development skills are needed and could be built through community workshops and entrepreneurial development funds to: (i) generate new and creative community businesses; (ii) define new tourism products; (iii) improve business practices and increase connectivity; (iv) raise service standards; and (v) develop local souvenirs. (c) Key areas for institutional capacity building include: (i) built and intangible heritage management, institutional organization, conservation, interpretation, and mechanisms to increase revenues; (ii) tourism strategy, legislation, planning, promotion, sustainable practices and standards; and (iii) urban planning, regulation, zoning, design guidelines, and enforcement.