Economic Diversification of Rural Areas

Project description

Title: Support to Economic Diversification of Rural Areas in Southeast Europe (SEDRA)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Countries: Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro, Serbia
Lead executing agency: Standing Working Group for Regional Rural Development in South Eastern Europe (SWG RRD)
Overall term: 2018 to 2021


The Southeast European (SEE) countries are characterised by great disparities between the urban and rural areas. Almost half of the population of Southeast Europe lives in rural areas, with the majority being financially dependent on agriculture and forestry and generating an average of 12 per cent of the region's gross national product. The percentage of people employed in agriculture in the region is approximately 20 per cent and ranges from eight per cent in Montenegro to 41.4 per cent in Albania. In most of the rural areas, the lack of income and employment, depopulation and land-abandonment, as well as the unsustainable use of natural resources have led to a substantial loss of economic viability, poorer quality of life, less cultivated land, and a major loss of the biodiversity. Furthermore, the potential for conflict is still present in the SEE region due to the ethnic and cultural divisions that exist both within the countries, as well as between them. This hinders cooperation and remains a serious threat to the stability of the region. The poor governance and weak administrative institutions pose an additional danger to the SEE countries’ internal stability. 

The core problem the Support to Economic Diversification of Rural Areas (SEDRA) program addresses is the insufficient capacity of the responsible stakeholders to support the economic diversification and the sustainable use of natural resources in rural areas.

The renewed EU accession process is the main incentive for harmonisation and adaptation of the rural development policies and instruments of the six Southeast European countries. Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro, and Serbia strive to implement the EU acquis and must harmonise their strategies, policies, and regulations with those of the EU. An explicit objective of the EU is to strengthen the economic and social cohesion through its structural policy, its common agricultural policy (CAP) and their accompanying instruments. Taking into consideration the high percentage of rural population, agricultural and rural development policies are the key areas leading towards sustainable development.
National strategies for implementation of the Agenda 2030 are still in their early stages; however, the project directly contributes to the United Nations Sustainable Development Goals: (1) No poverty, (2) Zero hunger, (8) Decent work and economic growth, and (15) Life on land.


The institutional capacities of selected stakeholders in Southeast Europe are being strengthened, and therefore supporting EU-compliant economic diversification in rural areas.


The project contributes to the economic diversification of rural areas, thus positively affecting the life choices of the rural population in a way that individuals can see a perspective for themselves and for their families and invest in sustainable business models. In this process, the project cooperates closely with the Regional Rural Development Standing Working Group (SWG) of South Eastern Europe. SWG RRD is the only regional organisation with a political mandate for cross-border cooperation in the areas of agriculture and rural development for national, regional, and local stakeholders. Its core functions are policy analysis, policy advice, networking and capacity building, especially in the context of the EU (pre-) accession process. 

The SEDRA project operates in three areas:

     1. Regional cooperation and policy advice

SEDRA strengthens the regional and national capacities through facilitating theme-specific policy dialogues and providing technical expertise on issues related to the economic diversification as a key strategy for rural development. Support is provided through further development of the regional coordination structures and mechanisms in respect to a more intensive and broader cooperation and a higher share of self-financing; strengthening the regional stake-holders' competencies and expertise; and setting up relevant working groups on the topics of economic diversification of rural areas. This leads to accelerated harmonisation of the appropriate laws, regulations, and procedures with the EU acquis, progress in the respective chapters of the SEE 2020 Strategy and improved capacities of the potential beneficiaries in SEE countries to use available funding, primarily from EU (pre-) accession assistance.

     2. Sustainable business models

Sustainable business models in structurally weak border regions are developed in previously selected value chains. This includes, inter alia, production and marketing of agricultural and wild products, local crafts, culinary traditions and sustainable tourism, as well as digitalisation of rural areas. The support to the value chains is built upon previous measures set within the Area Based Development Approach. The support is realised through trainings, targeted investment support to relevant key stakeholders from the public and the private sector and by facilitation of cooperation and networking along a value chain, mainly with the aim of increasing the added value and employment by improving the access to finances, services and markets. 

     3. Community-led and area-based development 

The SEDRA project strengthens the capacities of local and sub regional actors, public-private stakeholder networks (Local Action / Stakeholder Groups, Rural Development Networks) in order to support community-led and area-based development and to sustainably secure their funding through EU pre-accession assistance. Key topics are ‘cooperation’ and ‘access to funding’, which range from financial sustainability of the regional cooperation to securing financial support for small enterprises and community initiatives. People are empowered to shape development processes in their communities by following the LEADER approach. LEADER stands for "Links between the rural economy and development actions" and is a success story in supporting rural areas all across Europe since 1991. Only a bottom-up approach, which builds on broad, cross-sectoral partnerships between administration, civil society, and the private sector, can mobilise resources and pool energies that enable a region to develop further and successfully integrate.


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