Kosovo is a lower-middle-income country which has experienced solid economic growth over the last decade. Kosovo is one of only four countries in Europe to experience growth in every year since the onset of the global financial crisis in 2008.
Read More »
Oil price shock and slowdown in Russia impacting region’s growth outlookWASHINGTON, April 17, 2015 - In the Emerging Europe and Central Asia (ECA) region, lower oil prices and the economic slowdo... Show More +wn in Russia are weighing heavily on many economies in Eurasia, while countries in the Eurozone are benefiting from lower oil prices and a modest economic recovery. Overall, economic growth in ECA will be almost non-existent in 2015, down from 1.8 percent last year, the World Bank said during the 2015 World Bank/IMF Spring Meetings.This drop in growth largely comes from a major slowdown in Russia, which is caused by lower oil prices and a sharp economic downturn. Not counting Russia, the rest of the region is expected to grow by 2.8 percent in 2015.“Emerging Europe and Central Asia is expected to be the slowest growing region worldwide, with almost no growth forecast for 2015,” said Laura Tuck, Vice-President for the World Bank’s Emerging Europe and Central Asia region. “These low growth prospects are driven in large part by those countries in the eastern part of the region that are highly dependent on oil exports, or on trade and remittances from oil exporting countries, which are experiencing a slowdown. This is compounded by ongoing geopolitical tensions due to the conflict in Ukraine. Poor households are hit either directly because they receive fewer remittances, or indirectly because of the macroeconomic consequences, including higher import prices, the disappearance of jobs in construction and other non-tradable sectors, and potentially lower government transfers because of induced fiscal pressures. As a result, poverty rates are expected to rise.”Tuck added that, “On the other hand, Central and South Eastern Europe and the Western Balkans – those countries that have close ties to the Eurozone – are benefitting from an increased pickup in net exports. The Eurozone is experiencing a nascent but modest recovery, with an expansionary monetary policy and declining oil prices, which is boosting consumer and business confidence.Impacts of Falling Oil Prices and Geopolitical tensionsGDP growth in Russia was just 0.6 percent in 2014, compared to 3.5 percent in 2012 and 1.3 percent in 2013.Looking ahead, the baseline scenario calls for a sharp recession in Russia, with a projected contraction of 3.8 percent in 2015 and 0.3 percent in 2016. This forecast is based on expectations of an ongoing slump in oil prices (oil prices remaining in the US$50-60 range) and no immediate resolution of geopolitical tensions.The flexibility introduced into the exchange rate regime (the ruble has depreciated nearly 40 percent over the last year) has allowed the country to avoid a balance of payments crisis and has facilitated rebalancing of demand and production away from imports and toward domestic products and exports.Countries in the South Caucasus, Eastern Europe, and Central Asia have been hard hit by the downturn in Russia and the oil price shock, directly and indirectly due to lower oil revenues, or a decline in remittances, and trade. Growth rates in 2015 are expected to be half those seen in 2014 in the South Caucasus and Central Asia, while Eastern Europe, which includes Ukraine, is expected to fall further into recession. Benefiting from the Eurozone linkEU-Central and South Eastern Europe (EU-CSEE) countries are expected to see growth remain roughly the same in 2015 as in 2014 – about 2.7 percent – which is a significant improvement from the previous two years when growth was very modest (0.5 percent in 2012 and 1.2 percent in 2013), but it still remains far below potential. Unemployment rates remain stubbornly above 10 percent in many EU-CSEE countries and consumption growth is sluggish.Economic growth in the Western Balkans is expected to be a modest 1.2 percent in 2015, up from 0.7 percent in 2014 as a pick-up in net exports is expected to offset slowing investment and consumption. The Western Balkans still remain heavily burdened by the lack of new credit, and non-performing loans are the highest in the ECA region (above 16 percent). In Turkey, growth slowed to 2.9 percent in 2014, but is expected to increase modestly to 3 percent in 2015.Overall, these countries close to the Eurozone are seeing a pick-up in consumer and business confidence with reduced fears of deflation with quantitative monetary policy easing, a fall in oil prices, initial signs of a pick-up in industrial production, and, at least to date, limited spillover from the financial turbulence in Greece and uncertainty over Ukraine. Going forwardGiven the weaker buying power of many households in the region, poverty rates are expected to rise in several countries. This is a reversal of the downward trend toward lower poverty rates across the region. Poor households in oil-exporting countries and remittances-receiving countries are hit by higher import prices due to devaluations, the disappearance of jobs in construction and other non-tradable sectors, and because of fiscal pressures. This highlights the need for a quick adjustment to the new economic reality. Only if countries seize new opportunities in tradable sectors, can the deterioration of poverty rates be stopped.Exchange rate adjustments, along with prudent monetary policy to keep domestic inflation under control, will help countries regain competitiveness in global markets in the Eastern part of the region. For the EU-CSEE part of the region, projected low oil prices and monetary policy easing in the Eurozone should continue to help to mitigate the impact of low capital inflows and remaining uncertainty, including that arising from high debt levels, vulnerabilities in the banking sectors, geopolitical tensions, and Greece’s current financial turbulence.“The bottom line is that countries are performing the rebalancing act to the ‘new normal’ in which they have to seize new opportunities to expand export sectors,” said Hans Timmer, Chief Economist in the World Bank’s Europe and Central Asia region. “This is very much true for oil-exporting countries, but also for countries in the western part of the region that have experienced depreciations and low capital inflows. Ongoing reforms to improve the business climate are key to permit expansion in these sectors. Moreover, steady financial sector and macro management is critical, particularly in dollarized economies. Postponement of the adjustments needed for the rebalancing can be very costly and may backfire.” Show Less -
The Roma are Europe’s largest minority group, numbering 8 to 12 million. They often face discrimination and have trouble getting access to basic rights and services. Many Roma families cope with chron... Show More +ic hunger. Roma children are excluded from educational opportunities and often segregated into ‘special schools’ for children with special educational needs. Without education, people can’t find jobs, and the cycle of poverty and isolation continues for generations.Growing Up Poor, Female and RomaThe World Bank is focusing on improving the lives of the Roma, not only to ease the human toll of discrimination and poverty, but also because of the high economic cost in lost labor and productivity.In the Balkans, the majority of working age people - Roma and non-Roma alike - do not participate in the labor force, representing an extraordinary loss of human capital for the long-run development of these countries. As Europe ages, between 10% and 20% of new potential workers in Bulgaria, Romania, and Serbia are young Roma. Getting this group into jobs would increase national GDP and boost government revenues substantially.For Marijana, as for so many young Roma, both the chance for success and the pain of discrimination began in primary school.“It made me feel so bad,” she says, “when my classmates’ parents didn’t want their children sitting with me, with Roma kids like me.” But, she says, that helped make her more determined to stay in school, even though as a Roma and a girl, and coming from a poor family, she was triply disadvantaged. She says her extended family often complained to her parents about the folly of paying school fees for girls.“They’d say, ‘why educate girls, she’ll just go off and get married and you won’t get anything, why are you wasting your money and time on her?’ Nobody except my immediate family believed I could do it.”Despite the obstacles, Marijana and her parents are not alone. Data shows that the vast majority of Roma want to work in steady jobs. A large percentage of Roma parents want their children to go far in school. So the World Bank, in addition to other international partners, is supporting countries in lowering and ultimately eliminating the barriers Roma face. Closing the gap in early education is crucial. Offering decent housing, promoting access to banking, microcredit and job training are also key.Taunts and Good Marks in Mainstream SchoolsInclusion is the most fundamental challenge, especially access to decent education, Marijana says. Despite being taunted with shouts of “Gypsy!” she is glad she went to mainstream schools, where the quality of education is much better, even though sometimes she had to cope with teachers who picked on her simply because she was Roma.Once, in fifth grade, she did a craft project for a class. “I made it myself, but the teacher said, ‘you didn’t do it, someone else did. You are Roma, it is in your character to lie,’ he said, in front of all my classmates. According to him, I didn’t do it and I got a negative mark.”But it was not all accusations and discrimination. “I had a very nice teacher of geography,” Marijana says. He said, ‘you are the only Roma in our school, we used to have one from a settlement, but she gave up, don’t do the same thing.’ And because of the trust my parents gave me, and some of the teachers gave me, I felt obliged to succeed and not quit. I can’t give up. I need to keep going and succeed.“After university in Belgrade, she says, her family was so proud of her and all she’d done.Marijana has been working for the World Bank for 7 years. She handles both Roma and non-Roma issues ranging from labor policy to education to social protection. But her most important impact might just come from her own history.Especially when she is out of the office, doing her job, she is a clear example of success over daunting odds. “I try to be an inspiration for others, when I have a chance to do field visits as part of my work, I always use the opportunity to encourage Roma kids and their parents to go to school, not to give up--giving up is a luxury, it is important to be persistent.” Show Less -
ContextRapid urbanization, industrialization and motorization have intensified pollution, especially in developing countries. Vehicle exhaust, untreated wastewater, nitrogen fertilizer runoff, dirty f... Show More +uel burning, industrial emissions and toxic waste including e-waste cause debilitating and fatal illnesses, destroy ecosystems and create harmful living conditions.Pollution is not a uniquely urban challenge; in rural areas, indoor cook-stoves, undrinkable water and contaminated soil are toxic and stunt economic growth. Poor people, who can’t afford to protect themselves from the negative impacts of pollution, end up suffering the most.In 2012, an estimated 9 million people died from air, water and land pollution, according to the Global Alliance on Health and Pollution. According to the World Health Organization, 7 million people died from air pollution alone. Environmental factors, especially air pollution, cause 24 percent of global disease and 13 percent of preventable deaths every year.While the challenge of pollution is a global one, the impacts are overwhelmingly felt in developing countries. About 95 percent of adults and children impacted by pollution-related illnesses live in low and middle-income countries.It is critical to address pollution because of its unacceptable toll on health and human capital, as well as associated GDP losses. Pollution management offers no-regrets options to boost economic development and competitiveness (through for example, improved transport, job creation, better energy efficiency, sustainable urban and rural development), mitigate related climate change (for example black carbon contributes to both air pollution and global warming), and address the vital demands of millions of people for healthier and more productive lives.StrategyThe World Bank Group works with developing countries and development partners to reduce pollution, implement proper waste management, improve water and air quality and promote clean development for healthier lives and better economic opportunity.Between 2009 and 2014, World Bank commitments (IBRD/IDA) to pollution management and environmental health totaled well above US$5 billion. In 2014, the World Bank established a Pollution Management and Environmental Health (PMEH) program that builds upon experiences in urban and rural pollution reduction from around the world to promote more systematic and effective responses to deadly and costly pollution.The World Bank also partners with the Climate and Clean Air Coalition and the Global Alliance on Health and Pollution to achieve greater global action to clean up pollution.The Bank provides technical assistance, financing and knowledge products that cover:legacy pollution cleanup and land rehabilitation;management of different forms of waste including solid waste, industrial/e-waste, and wastewater;improving air quality through the reduction of indoor/outdoor air pollution, short lived climate pollutants and GHG emissions;improving water quality, both in freshwater and in oceans;promoting environmental sustainability in economic sectors;helping countries improve environmental governance, regulation and enforcement.ResultsAir pollutionIn Santiago, Chile, the Sustainable Transport and Air Quality program supported a long-term shift to more efficient and less polluting forms of urban transportation.In Bangladesh, the Bank is working to tackle pollution from the country’s two biggest polluters: brickfields and transport. To date, 11 stations have been installed in eight cities to monitor air pollutants and generate real time air quality data.Clean Air and Healthy Lungs, a report released in 2015, examines lessons learned from past projects to enhance the World Bank’s air quality management work in the future.More results:Curbing Air Pollution in UlaanbaatarCleaner Cookstoves for a Healthier IndonesiaCutting Short-Lived Climate PollutantsLand PollutionIn Africa, a $25 million program has removed over 3,000 tons of obsolete and dangerous pesticides from close to 900 contaminated sites in Ethiopia, Mali, Tanzania, Tunisia and South Africa.In Belarus, the Bank worked with the Ministry of Natural Resources and Environmental Protection to develop its capacity to treat and dispose of hazardous waste. The Bank supported a massive cleanup operation at the Slonim burial site, which excavated and disposed of up to 1750 tons of toxic obsolete pesticides.More results:Argentina Solid Waste ManagementCleaning up Uranium in ArgentinaKosovo Energy Sector Cleanup and Land ReclamationRidding Moldova of Toxic ChemicalsSolid Waste Management in IndonesiaWater pollutionIn China, the Bank supported the government to establish the integrated management of water resources and the environment in the Hai Basin. Between 2004 and 2011, the project reduced wastewater discharge, cleaned over 6 million m3 of polluted sediment from the Dagu Canal, and improved living conditions for millions of people. Also in China, the Bank helped improve water and wastewater services for residents in Ningbo by financing investments in a water intake tower and tunnel, water treatment plant, water transmission pipes, sewers and pumping stations, greatly reducing pollution loads discharged into Hangzhou Bay.More results:Kazakhstan Nura River Cleanup ProjectControlling pollution in Croatia’s Coastal WatersWastewater treatment and landfills ease pollution in China’s Yangtze River Show Less -