TIRANA, April 8 – The Parliamentary Committee on Administrative-Territorial Reform held a hearing with Minister of State for Local Governance Ervin Demo to review the current state of local government and its challenges.
Demo presented the performance and services achieved under the 2014 territorial reform, implemented in 2015. He noted that the reform consolidated municipal boundaries, expanded local functions, and improved governance, creating conditions for performance-based management. “Today we have a functioning local system thanks to the reform,” Demo said.
However, he emphasized that conditions have changed over the past decade, particularly due to demographic shifts. Demo highlighted that local revenues have risen 166% since 2015, representing 51% of the national budget compared to 36% before the reform. Investments per capita increased by 78%, and inherited arrears dropped from 12 billion Lek to 3.2 billion Lek.
Despite these gains, Demo said local inequalities persist. “Municipal size continues to significantly affect performance. Municipalities with over 50,000 residents outperform the national average, while those under 50,000 generally lag behind,” he explained. He noted that some smaller municipalities remain too limited to efficiently exploit economies of scale, and many still depend heavily on central budget transfers.
Demo added that the second decade of reform must focus on turning decentralization into a functional system that delivers tangible local results. “Digitalization and governance standards are not uniform across the country. Every municipality must guarantee a national minimum standard for all citizens,” he said. He also stressed the importance of building sustainable local expertise to meet European integration challenges and enhance economic development in smaller municipalities.
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