The Ministry of Finance of the Slovak Republic (“MF SR”), the donor of the Public and Private Finance for Development project, plays an important role in Slovakia’s development cooperation. Besides contributions to international organisations and international financial institutions, it cooperates with partner organisations such as the UNDP, EXIMBANKA SR, the Public Expenditure and Financial Accountability Programme (PEFA), or the Center of Excellence in Finance (CEF) in Ljubljana. It has also joined the The Addis Tax Initiative (ATI).
MF SR and UNDP
Besides the PPFD project that focuses on public and private finance, the Slovak Ministry of Finance in and the UNDP implement projects focusing on the promotion of innovation in public finance and public administration. One of the examples is the Slovak Transformation Fund – a project serving as a catalyst regionally to create local level urban transformation models, supporting ecosystems of innovators and identifying pathways for leveraging innovative financial mechanisms. Its predecessor, Transformative Governance and Finance Facility, was introduced in 2015 and has engaged UNDP Country Offices and governments in the region in experimentation, sensemaking and knowledge sharing. It has piloted and implemented new projects, initiatives and ideas, inter alia:
BOOST Impact Accelerator is an online acceleration program that amplifies, bridges and connects innovators across the region. BOOST was launched in 2020 as a reaction to COVID-19. It has now expanded its scope to tackle issues beyond the pandemic. It engages a wide range of public and private, local and international partners to co-design and jointly launch open calls for innovations that tackle specific development challenges related to inequality and poverty, governance, energy, environment, resilience and gender equality.
The program includes a series of training modules, workshops and individual mentoring sessions led by international experts, experienced in leadership, organizational and business development, digital transformation, behavioral insights, impact measurement and management, and other fields. BOOST innovators are spearheading change for millions of people – from improving air quality and forecasting floods, to creating e-learning classes for improved access to education for children and upskilling platforms for women in STEM.
A new report reflecting on the BOOST: To evaluate its impact and effectiveness and gain insights into the diverse landscape of the growing alumni community, an alumni survey was conducted recently. Read more here.
City Experiment Fund (CEF) seeks innovative solutions for cities and municipalities. It accelerates urban system transformation through deployment of a portfolio approach at the city level. Read a blog.
(CEF + RMF) Green Tokens: Incentivizing Eco-Conscious Behavior
CEF has partnered with the Resource Mobilization Facility, which finances pre-investor studies, to design a token system in one or few cities which participates on City Experimental Fund project (CEF), in the context of promoting eco-conscious conduct in urban environments. Both CEF and RMF are two Slovak Ministry of Finance initiatives within the framework of partnership with UNDP.
About the project
The cities of Skopje, Pristina, Podgorica and others in the region face significant environmental challenges, including those related to waste management, energy consumption, and overall sustainable urban living. The project Green Tokens emerges as one of the responses to those challenges, introducing an innovative reward-based token system to incentivize eco-conscious behavior among residents and businesses.
In the context of promoting eco-conscious conduct in urban environment, the project will develop a tailored made urban token system for above mentioned cities. These systems will be implemented in partnership with a municipalities as part of the City Experiment Fund’s portfolios. By integrating digital innovation with environmental advocacy, the project seeks to demonstrate the viability of reward-based systems in promoting environmental-friendly practices and also provide a scalable and replicable model for similar initiatives in other urban areas.
Ministry of Data is an open data challenge in the Western Balkans and Black Sea regions which offers a platform for citizens to present creative data-driven tools and solutions to community issues. Combination of traditional data sources like household surveys with non-traditional ones can unveil the full potential of data as a tool for bridging gaps between institutions and communities. The Slovak Ministry of Finance supports UNDP’s flagship initiative called the Ministry of Data. These are open innovation challenges in the region aiming to create data-driven tools and crowdsource solutions for socio-economic challenges such as air pollution and mobility in cities. Three rounds of innovation challenges were run, reaching 1000 young people through meetups in 13 countries, soliciting 150 ideas from over 600 young people. Furthermore, a number of resources have been produced including the Data Innovation Guide, a step-by-step guidance for development practitioners to leverage new sources of data, and the Ministry of Data handbook, a guide to run successful data innovation challenges.
Alternative Finance Lab is a mechanism for exploring and tapping into new financial technologies and mechanisms to leverage investments for the achievement of the Sustainable Development Goals.
Slovakia supports UNDP in exploring innovative financing mechanisms such as crowdfunding, impact investing, blockchain-based, and Islamic financing and other models.
The potential of social impact bonds (SIBs) has attracted increased attention over recent years. According to the Brookings Institute, in 2019 there were 135 impact bonds in 28 countries, in areas such as employment, social welfare, health, education and criminal justice. One of the fruits of the UNDP – Slovakia cooperation is introduction of the first social impact bond in Armenia. Its aim is to help dairy farmers increase productivity and help fight poverty, as higher productivity means higher household income.
In the Western Balkans or Eastern Partnership countries, the UNDP team explored municipal and sovereign bonds through, for example, the Breathe Better Bond initiative that was issued by local governments and is paired with technical assistance, and resulting proceeds are used to invest in projects that reduce both air pollution and greenhouse gas emissions.
In Lebanon, a cryptocurrency called Cedar Coin was introduced. The aim is to support reforestation and the protection of Lebanon’s cedar forests, with each coin purchased leading to the planting of a tree. With UNDP Morocco, the team supported the design of a digital passport that facilitates the direct trade of argan oil from women’s cooperatives in Southwest Morocco with exporters and buyers. This solution stimulates e-commerce sales, while building resilient businesses. In Serbia, the team helped pilot the use of blockchain for remittances from the diaspora community to reduce the cost of money transfers and enhance transparency. In Ecuador, the team supported the launch of The Other Bar — the world’s first blockchain shared value chocolate bar, which uses the new technology to deliver fair results for farmers and help them protect their environment.
If you want to know more details about the cooperation of the MF SR with other partners, choose from below.
The Slovak Ministry of Finance, together with the Export-Import Bank of the Slovak Republic, implements the program of engagement of Slovak entrepreneurs in projects in developing countries via two joint development cooperation initiatives: the Private Sector Liaison Officer (PSLO) and the program of preferential export credits.
In the quest to increase the participation of the private sector in development cooperation, the Ministry of Finance of the Slovak Republic follows the principles of sustainable development and participation of Slovak companies in achieving development goals. The Ministry of Finance, together with EXIMBANKA SR, implements a program of engagement of Slovak entrepreneurs in projects in developing countries.
The Export-Import Bank of the Slovak Republic, abbreviated EXIMBANKA SR, is a Slovak export-credit institution established under the auspices of the Ministry of Finance of the Slovak Republic. Since its foundation in 1997, it has focused primarily on foreign trade operations and the support of Slovak exporters, in order to increase the competitiveness of domestic goods and services and mutual economic exchange of the Slovak Republic with other countries. Given the growing demand for active participation of the private sector in development cooperation, EXIMBANKA SR has gradually become an important part of the development ecosystem of the Slovak Republic.
By expanding its portfolio, it creates opportunities for Slovak companies in the developing countries and thus contributes to their sustainable economic and social progress. The two main joint development cooperation initiatives of the Ministry of Finance of the Slovak Republic and EXIMBANKA SR are the Private Sector Liaison Officer (PSLO) and the program of preferential export credits.
Since 2020, EXIMBANKA SR has been performing the role of a contact point for the Slovak Private Sector Liaison Officer. PSLO is a network of organizations in nearly 100 countries that aim to support and facilitate the World Bank Group’s communication with the private sector. EXIMBANKA SR focuses on facilitating the contact of Slovak companies not only with the World Bank Group but also with other international financial institutions. It mediates and simplifies access to business opportunities and provides advice on engaging in development activities. EXIMBANKA SR also provides a program of preferential export credits to exporters of Slovak goods and services.
This development cooperation instrument gives a Slovak exporter the opportunity to offer foreign customers from the public sector from selected countries preferential financing. The benefit can be realized in the form of a contribution to the reduction of principal or interest, extended loan maturity, etc. and amounts to 35% or up to 50% of the total contract volume, depending on the country. The credit scheme is designed in accordance with the rules of the World Trade Organization and the Organization for Economic Co-operation and Development, in particular the Convention on Officially Supported Export Credits (OECD Consensus).
The aim of this instrument is to support commercially unfeasible projects, facilitate access to finance for partner countries and open the door to Slovak companies in developing countries. It allows the exporter to engage in projects that contribute to the development of the economy and society in the target country. The development aspect of the project is also a condition for obtaining program support. It is supervised by the Ministry of Finance of the Slovak Republic together with the Ministry of Foreign Affairs and European Affairs of the Slovak Republic. The Ministry of Finance of the Slovak Republic also approves the contribution for the benefit of the loan from the sources of official development assistance.
Cooperation with the EU shall bring further opportunities for the extended involvement of EXIMBANKA SR and Slovak entrepreneurs in development activities. In 2021 EXIMBANKA SR successfully completed the process of so-called Pillar Assessment (certification), thus becoming an eligible institution for the implementation of EU delegated cooperation. In practice, this means that EXIMBANKA SR will be able to apply for the implementation of EU development projects and bring interesting opportunities for the private sector.
The Ministry of Finance of the Slovak Republic is a member of the Public Expenditure and Financial Accountability (PEFA) Program since April 2019. PEFA brings together eights countries and institutions – some of the most active donors in the area of public finance management. Its main objective is to promote sound management of public finances in order to make more efficient use of public resources and improve the quality of services provided to the citizens, with particular focus on developing countries. The key component of the Program, “the PEFA assessment”, is perceived as the most comprehensive and relevant global diagnostic tool for measuring progress in PFM reforms. Besides maintaining the PEFA assessment framework, the other activities of the Program include promotion of PFM related research and capacity building.
The PEFA Program was founded in 2001 as a partnership between the EU, IMF, World Bank and the governments of France, Norway, Switzerland and the United Kingdom. It operates as a programmatic multi-donor trust fund, which is directed by the Steering Committee comprising the partner organizations. The work of the Program is managed and implemented by the PEFA Secretariat located in Washington DC at the World Bank. Slovakia is the first of the so-called new donors invited to join this prestigious expert initiative. This is largely thanks to Slovakia´s engagement in PFM and experience in supporting PFM reforms in partner countries.
More information about the program and its current and phase – running from 2017 can be found here: https://www.pefa.org/.
One of the main objectives of the Ministry of Finance of the Slovak Republic´s (MF SR) development cooperation is sound public finance management and good governance in partner countries. The MF SR, interested in knowledge exchange and facilitation of technical assistance in public financial management, decided to partner with the Center of Excellence in Finance. The CEF is an international organization based in Ljubljana, Slovenia with a mission to support capacity development for public finance officials in South East Europe.
Current activities
The partnership between the MF SR and the CEF dates back to 2010. During the ten years of cooperation, the MF SR has contributed to the implementation of several PFM capacity building activities in the Western Balkans and Eastern Partnership countries. The collaboration is based on both long-term bilateral projects and common learning initiatives for partner countries. The activities complement the MF SR’s, and CEF’s, programs with other development partners, such as the UNDP or the EU. The results achieved build on the Slovak experience and expertise in public financial management and development cooperation. During the last three years, the CEF engaged twenty-two Slovak experts for various learning & knowledge management activities.
The ministry’s joint flagship project supported the Public Accountants Certification Training in Montenegro. Since 2020, the MF SR has also co-financed the participation of Moldovan officials in the EU fiscal implications of structural reforms project, which is still being implemented by the CEF.
The partnership provides the Slovak consultants with opportunity to transfer their knowledge and experience. At the same time, it is a learning experience for them. This happens through:
- specialized presentations, content preparation for learning activities, recommendations drafts, and sharing lessons learned
- strategical and expert discussions
- contribution to CEF knowledge management
- observation of knowledge & information management trends and processes of international development cooperation
Panel discussion with experts on Montenegrin accounting reform
The MF SR is also a member of the Advisory Board and the Governing Board of the CEF (2018 – onward). Learn more about the MF SR cooperation with the CEF here.
Sharing experiences and lessons learned from numerous reforms in public finance management, including those of revenue mobilisation, has been a cornerstone of the Slovak development cooperation for years. In 2015, the country joined The Addis Tax Initiative (ATI) and became part of a broad international network of stakeholders active in the field of tax and development.
The Addis Tax Initiative is a global, multi-stakeholder partnership that aims to promote tax justice, mobilize public finance revenues, build effective tax systems, and fight against tax evasion. One of its goals is to enhance domestic revenue mobilisation (DRM) in partner countries. The ATI builds on the premise that DRM is the most sustainable and reliable source of financing for development.
Global tax debate
The ATI was initiated in 2015 in response to the approval of the 2030 Agenda and the Sustainable Development Goals, and that is when the Slovak Ministry of Finance joined the initiative as a development partner by pledging to fulfil the ATI commitments. One of the key objectives of the ATI is to integrate partner countries into the global tax debate.
Currently, 20 development partners and 25 partner countries have signed the ATI Declaration. Further, the Addis Tax Initiative accounts with 17 supporting expert organisations, which provide Official Development Assistance to DRM-related projects and contribute to the objectives of the Initiative.
ATI’s endeavours and partners’ commitments for particular periods of time are guided by Declarations (the first one was valid for the 2015 -2020 period). In January 2021, the members approved the ATI Declaration 2025, which contains four objectives for promoting and financing socio-economic development through domestic revenues:
(1) promotion of equitable tax policies, effective and transparent revenue administrations,
(2) maintaining or surpassing the global target (USD 441.1 million) for DRM cooperation,
(3) apply coherent and coordinated policies that foster DRM and combat tax-related illicit financial flows,
(4) enhance space for accountability stakeholders to engage in tax and revenue matters.
Watch Eduard Heger, Deputy Prime Minister and Minister of Finance in the Slovak Republic, affirm Slovakia’s support for the new ATI Declaration 2025 in a short video.
Learn more about the ATI at: https://www.addistaxinitiative.net/.
learn4dev is an international network of developmental organisations encompasing different backgrounds, established to provide better mutual learning opportunities. It’s also a platform offering training and knowledge-sharing in the key areas of international developmental cooperation. Today the network consists of 30 members, including bilateral-donor organisations, multilateral donor organisations, and international training and research centres.
The Ministry of Finance of the Slovak Republic has been an active member of learn4dev since 2017. Together with ITC/ILO, Slovakia was co-chairing the learn4dev network in 2018. The co-chairs presided over the work and network meetings , defining “diversity” as the key theme for that year.
For more information about the network, please watch this video.