Albania is a middle-income country. In recent years Albania has maintained positive growth rates, despite the ongoing economic crisis. The country is facing a challenge of maintaining growth in a difficult external environment while rebuilding fiscal buffers.
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WASHINGTON, May 21, 2015—The World Bank Group’s Board of Executive Directors today endorsed the 2015-19 Country Partnership Framework (CPF) for Albania, which proposes a lending program of up to US$1.... Show More +2 billion over a five-year period aimed at supporting Albania’s aspirations to achieve equitable growth and integration into the European Union. Executive Directors welcomed Albania’s recent progress in implementing macro-fiscal and structural reforms, and they noted the Government of Albania’s strong commitment to these long-overdue reforms. The CPF presents a strategy aligned with the World Bank Group’s twin goals of reducing poverty and increasing shared prosperity. In Albania, the World Bank Group (WBG) includes the International Bank for Reconstruction and Development, the International Finance Corporation (IFC) – the private sector arm, and the Multilateral Investment Guarantee Agency (MIGA), which provides investment risk insurance.The World Bank Group will increase and deepen its support for Albania’s reforms aimed at restoring macro-fiscal sustainability, stimulating private sector growth, and creating an accountable government. Albania’s drive for reforms and the encouraging results provide the impetus for an increased level of WBG support for the country.“Albania has a historic opportunity to break with the past and accelerate its path towards prosperity and integration into the EU. The new World Bank Group Country Partnership Framework for Albania responds to this opportunity, and supports country priorities developed in extensive consultation and engagement with main stakeholders in Albania,” said Ellen Goldstein, World Bank Country Director for Southeast Europe. “We look forward to continued reform momentum and effective implementation to accomplish results for the benefit of Albania’s citizens.”The CPF supports three focus areas. Under the CPF’s first focus area of fiscal sustainability and financial stability, the WBG will support measures for improved fiscal consolidation, strengthened public investment management in the transport sector, and improved financial stability. In the second focus area of stimulating private sector growth, the WBG will provide support to increased competitiveness and job creation, and reduce bottlenecks in the business environment and infrastructure gaps, such as those prevalent in the energy sector. In the third focus area of strengthening of public sector management and service delivery, WBG support is aimed at building citizens’ trust in government, strengthening service provision, and improving service delivery and access to basic services. The themes of gender integration and the EU accession process as a long-term policy anchor cut across the entire strategy.“IFC will support strategic sectors in Albania, such as infrastructure and energy, through Public Private Partnership (PPP) advisory services and investments, help strengthen the banking sector to support SMEs and export-oriented industries, as well as assist in improving the investment climate to attract foreign direct investments,” said Tomasz Telma, IFC Regional Director for Europe and Central Asia.The CPF has been guided by analytic findings and priorities presented in the recently-concluded Systematic Country Diagnostic. It also benefited from extensive engagement with the government of Albania, parliamentarians, local government, private sector, development partners, and a broad range of civil society stakeholders.“The extensive consultations undertaken with a broad spectrum of Albanian society strengthen the capacity to implement the program with active citizen engagement and feedback," said TahseenSayed, World Bank Country Manager for Albania. “We look forward to working with stakeholders and supporting the accomplishment of results for the people of Albania.”The World Bank currently supports eight projects in Albania with a commitment of US$512 million, while IFC has a committed portfolio of US$136 million. For more information, please visit: www.worldbank.org/alVisit us on Facebook: World Bank AlbaniaBe updated via Twitter: http://www.twitter.com/worldbankFor our YouTube channel: http://www.youtube.com/worldbank Show Less -
Albania made large economic strides over the last two decades that enabled the country to grow in a sustainable and inclusive way. A rapid pace of growth helped Albania narrow the per-capita income ga... Show More +p with the rest of Europe from 18% of average European Union (EU) incomes in 1998 to 30% in 2012. With rising incomes, poverty halved in the country from 25.2% in 2002 to 12.5% in 2008.The onset of the global financial crisis in 2008 significantly impacted growth and affected the pace of poverty reduction. The country is now embarking on a number of far reaching macro-economic and structural reforms as it travels on the path toward integration in the EU. The new Country Partnership Framework (CPF) of the World Bank Group sets forth a program aimed at supporting Albania’s aspiration to achieve equitable grown and integration into the European Union. Based on the three focus areas of restoring macroeconomic balances, stimulating private sector growth, and strengthening public sector management and service delivery, the CPF identifies key areas of engagement in the coming years. Supporting a Sustainable Growth ModelFiscal and financial sustainability have a fundamental impact on Albania’s ability to move to an accelerated and sustainable growth model. By clearing public sector arrears, for example, financial flows to the private sector are expected to increase, which in turn will boost growth and job creation.Wages and pension reform have been key factors in reducing poverty in the country. Better expenditure management and reductions in inefficiencies in spending can make space for investments in social services – contributing to increased welfare of the poor and bottom 40% of the population.Improving Business, Improving LivesReforms to improve the business environment are critical for job creation and can strengthen the link between economic growth and poverty reduction. Competitiveness, job creation, innovation and other areas of engagement can help overcome ongoing challenges hindering the country’s business environment.The tourism sector in Albania has experienced a rapid increase in annual tourist arrivals in recent years, but the country’s rich land endowments and pristine natural beauty are yet to be fully tapped for sustainable tourism development. Tourism can be a key source of growth and employment in Albania. Energizing Growth and InvestmentPutting the energy sector on a financially stable path is crucial to growth and fiscal consolidation in Albania. Ensuring a reliable and affordable power supply is one of the most important foundations for increased investment, growth, job creation and poverty reduction.Albania’s power generation is entirely dependent on water resources. Developing the country’s hydropower potential can serve as a strong driver for economic growth to help disadvantaged regions overcome poverty disparities. Securing Land for the FutureUnsustainable land management and poor enforcement of property rights remain a key obstacle preventing firms, farms, and households from entering the land market. Securing property rights, formalizing land settlements, and sustainable land management can have a positive impact on improving regional poverty disparities in Albania and improving the welfare of the bottom 40% of the population.Albania has an abundance of agro-forestry resources - an important element of inclusion in economic development. The country has a high proportion of forest cover and fertile soils, but most of the forest and pasturelands are in poor condition.Enhanced Governance and Increased TransparencyGreater trust between the citizenry and government can be created through changes in citizens’ interface with the government. The World Bank Group remains committed to helping Albania strengthen service provision, improve service delivery, and increase access to basic services for all people in the country. Improvements in the quality of service provision in social protection, health, and water supply to the bottom 40% of the population, those residing in poorer regions of the country, and to vunerable communities – including the Roma population – remain key areas of engagement for the World Bank Group.Photos: Jutta Benzenberg Show Less -