Montenegro is an upper-middle-income country with enormous growth potential. Montenegro became a member of the World Bank Group in 2007. Montenegro’s economy has huge potential, but is hindered by significant structural, economic, and fiscal risks.
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Other countries in the Western Balkans have been similarly at risk, and not just from floods. Too little water in summer months has also had hefty consequences for other countries: the 2012 drought in... Show More + Albania reduced the country’s hydropower supply, exacerbating fiscal deficits to cover emergency power imports. Droughts and heat waves have resulted in severe agricultural production losses in FYR Macedonia in 2007-08 and 2011-12.Western Balkan countries are not well-prepared for such disasters, and scientists are warning us that climate change will only make matters worse. These countries need to think now about how to create more resilient societies going forward.With global warming of close to 1.5ᵒC above pre-industrial times already locked in, and a 40 percent chance to exceed 4ᵒC before 2100 if no further action is taken, the recent World Bank report, Turn Down the Heat: Confronting the New Climate Normal, finds that weather extremes considered as occurring every 100 years at most may soon become the “new normal”.The report delves into the climate prospects for the Western Balkans. Water extremes, both intense droughts in summer months and floods in winter and spring, are expected to intensify over the region, with repercussions on agriculture, energy, and population health and security. In a 4ᵒC warmer world, the Western Balkans would emerge as warming “hot spots”, with more frequent heat waves – spanning as much as 80 percent of summer months – and a 20 percent increase in the number of drought days. Added to that are concerns for water availability and human health, such as an estimated 20 percent increase in heat-related mortality. At the same time, winter and spring flood risks – including those on the scale of a 100-year flood – would increase along the Danube, Sava, and Tisa rivers due to more intense snow melt in spring and heavier rainfall in the winter months.An upcoming World Bank publication, Europe and Central Asia Flood and Earthquakes Risk Profile, shows that the potential economic damages and losses from 100-year type flooding in the Western Balkans are likely to fall between 3 percent and 20 percent of national income depending on the country. The study also shows that the risk of seismic events, and resulting economic damages and losses, in these countries is ever-present, if not increasing. More than half of Albania’s and FYR Macedonia’s national income would be subject to damage and loss from a severe earthquake—as those with long memories in FYR Macedonia can attest. As a response to these threats, the countries of the Western Balkans need to shift from a reactive approach to emergencies toward a more proactive and forward-looking approach to managing risk before disasters happen. The recent launch of the Serbian National Disaster Risk Management Program is an important step in this regard.Launched with initial funding from the European Union, United Nations Development Program, the Swiss State Secretariat for Economic Affairs, the Swiss Agency for Development Cooperation, the Austrian Urban Partnership Program, and the World Bank, this Program creates a common platform in Serbia for reducing and managing risks from various types of disasters. From floods to droughts to earthquakes, the Program provides an open and neutral space for coordination on disaster risk management across government agencies, sectors, and partners. Other countries in the Western Balkans, including Bosnia and Herzegovina, are taking initial steps towards building greater national resilience. Given the shared risks and close economic interconnections among countries, as well as common policy knowledge and capacity needs, regionally-coordinated approaches would enhance the effectiveness of disaster risk management in all Western Balkan countries. With the world watching and struggling to help as countries grapple with post-disaster relief and recovery in places as distant as Nepal and Haiti, smart ideas to develop some type of global disaster risk insurance are being discussed by the international community. In the meantime, some Western Balkans countries have already established a regional catastrophic risk insurance facility Europa Re. Owned by the Governments of Albania, FYR Macedonia, and Serbia, Europa Re provides insurance for residential properties, small enterprises, and agriculture against catastrophic events triggered by floods and earthquakes.Unfortunately, catastrophic risk insurance is not yet in high demand from households, business owners, and farms in the Western Balkans, meaning the next big disaster will once again produce devastating and uncompensated damages and losses for large numbers of citizens. The Governments of the Western Balkans might consider making catastrophic risk insurance mandatory — linked to property registration and transfer, for example. Countries like Turkey have done this, helping millions of households and small businesses to be protected from damage and loss when the next disaster strikes. It is important for Western Balkan countries to awaken to a changing climate and adapt to a world of more frequent and severe disasters. We at the World Bank stand ready to support your efforts to build more resilient societies. Show Less -
Against this backdrop, a new report, Water and Wastewater Services in the Danube Region: A State of the Sector, aims to provide a roadmap for how to stimulate action and improve services for the tens ... Show More +of millions of people living along the Danube River basin.The report analyzes the progress and challenges of 16 countries in delivering sustainable water and wastewater services to everyone, while meeting the European Union (EU) environmental acquis. By breaking down water services into the core components of context, organization, access, performance, and financing, the report seeks to encourage and inform a policy dialogue around sector challenges and across national borders, rather than provide a definitive set of policy recommendations.While significant overall improvements have been seen over the last 15 years, countries across the Danube region still show very different levels of progress in their ability to provide sustainable services for all their citizens. The level of progress generally reflects the level of economic development of a given country – with EU members, especially those that joined before 2007, benefitting from a generally stable policy environment and a steady stream of EU funding, while more recent members and candidate countries continue to struggle with public services gaps, especially among the most vulnerable, and underperforming utility service providers. Governments and water service providers can implement clear accountability and incentive mechanisms, improved financing strategies – including more targeted and poor-inclusive subsidies – and improved management practices. Broader water sector financing frameworks are also needed to overcome an estimated annual investment gap of more than €2 billion.In many countries, water service is generally continuous and the quality of the drinking water meets national standards. Despite overall improvements, however, the efficiency of utilities in most countries is below international standards.Increasing costs have driven increases in tariffs throughout the region to the point where services might become unaffordable for low-income customers in some countries – yet the region is far from implementing the EU’s cost recovery principle.Despite these challenges, however, there are also real opportunities. The report suggests that countries look closely at the local context to best understand and overcome the challenges that undermine the ability of these institutions to deliver. History has shown that the water and wastewater sector is open to change – and if governments base their efforts on solid analysis, they can continue to build a positive momentum for the sector.EU integration does pose a challenge – but it is also a tremendous policy and financing opportunity for many countries.Finally, the sector can count on a strong technical workforce which, together with reforms at managerial levels and in terms of accountability mechanisms, has great potential to move the sector forward and secure access to high performing water services for all the people in the Danube region. Show Less -
22.5 million people without piped water and 28 million without flush toiletsVIENNA, May 6, 2015—Many countries in the Danube River basin face a double challenge of meeting the high standards of the Eu... Show More +ropean environmental acquis while extending sustainable water services to all citizens, with 22.5 million people lacking access to piped water and 28 million without flush toilets, according to the World Bank’s new Water and Wastewater Services in the Danube Region – A State of the Sector report, released today in Vienna.The report, which analyzes water services access, affordability, quality, and financing, comes ahead of the “2015 Danube Water Conference” to be held in Vienna, May 7-8, in which government ministries, regulatory agencies, utility companies, professional associations, and local governments will contemplate the future of water services in the Danube region.The Danube River basin is the second-largest river basin in Europe, home to a total of 81 million people in 19 countries, a majority of them EU members. The Danube connects with 27 large and over 300 small tributaries from its spring in the Black Forest in Germany to the Black Sea in Romania, and, as such, is the largest water basin in the EU.According to the report, despite improvements in the last 15 years, countries across the Danube region still show very different levels of progress in providing sustainable services for all their citizens. Many long-standing EU members have benefited from a generally stable policy environment and a steady stream of EU funding. Access, in particular, to wastewater services has increased, the performance of their utility companies is at par with international standards, and the financing of their services is sound.In contrast, more recent EU members, candidate countries and non-EU countries of the Danube region continue to suffer from important public services gaps, especially among the most vulnerable, and from struggling service providers. This leaves millions of people without access, services underfunded, and water sector governance incomplete or unclear. Roughly one-third of water from these service providers never reaches its intended destination, the report says.As the report notes, Governments are often facing a double challenge of ensuring the transposition of EU legislation and development of wastewater management infrastructure, while also addressing the sector’s fundamental goal of providing sustainable services for all.The analysis recommends that countries look closely at local context to best understand and overcome the challenges that undermine water institutions’ ability to deliver. Governments and water service providers could implement clear accountability and incentive mechanisms, improved financing strategies, including tariffs covering efficient costs and targeted and poor-inclusive subsidies, and improved management practices. Broader water sector financing frameworks will also be needed to overcome an estimated annual €2.5 billion gap in financing."European integration has provided a powerful incentive for progress in provision of affordable and sustainable water and sanitation services. Yet recent EU members, candidates and non-EU countries of the Danube Region must strive to overcome significant gaps in both provision of basic services and governance of the sector" said Ellen Goldstein, World Bank Country Director for South East Europe. "The needs are large, so countries will need to sequence reforms and investments in line with their financial and technical capacities, in collaboration with international partners like the World Bank."The report is accompanied by DANUBIS.org, an online repository that allows utility managers and decision makers to benchmark the performance of more than 400 utilities in 13 countries in the Danube region. The platform also lists key strategic documents and legal texts from each country to facilitate sharing of experiences in the region. The report, conference, and online platform are supported by the World Bank and the International Association of Water Supply Companies in the Danube River Catchment Area (IAWD) under the Danube Water Program with seed financing from Austria. The Danube Water Program supports smart policies, strong utilities, and sustainable and wastewater services by partnering with regional, national, and local stakeholders, promoting an informed policy dialogue around challenges and strengthening the technical and managerial capacity of utilities and institutions.Lead author of the report and head of the Danube Water Program, David Michaud concludes "With this report and platform, countries now have the diagnosis. But the development and implementation of policy decisions are in their hands. We stand ready to help." Show Less -
Petrovic, like many of his fellow fisherman around the country, spends many hours in a small boat, casting his nets in the hope of snaring o... Show More +ne of the dozens of species of fish that are native to Lake Skadar.Unfortunately, Petrovic’s efforts have been hampered by overfishing on the lake in recent times – much of which is done illegally.“Nobody can say how many fish they can catch on average. Sometimes we don’t catch anything, trust me, because of weather and illegal fishing.”Over the last several decades, threats such as illegal fishing, illegal construction, and pressure on Lake Skadar from industry, residential use, and tourism have increased – creating an even greater need for a comprehensive strategy on natural resource management and preservation.Addressing this need, the World Bank – through a grant from the Global Environmental Facility (GEF) – began working with the governments of both Montenegro and Albania in 2008 through the Lake Skadar Integrated Ecosystem Management Project, a project designed to help these countries manage and preserve one of their greatest natural assets: Lake Skadar. Show Less -