Speeches & Transcripts
Laura Tuck's Remarks at the Signing Event for the Financial Sector Modernization Development Policy Loan and the Public Finance Development Loan
May 30, 2014
Honorable Prime Minister,
Ladies and Gentlemen:
Before the global financial crisis of 2008, Albania was among the fastest growing countries in Europe. The crisis has dramatically slowed growth in Albania. Immediate policy response to the global crisis was weak, prolonging a period of low investment and growth, reversing progress in poverty reduction and exacerbating macroeconomic and fiscal imbalances that have left public debt at crippling levels. These macroeconomic and fiscal imbalances are a roadblock to growth and jobs. The country has a large unfinished reform agenda. So it is important to have a clear vision and a sequence for correcting these imbalances and pursuing structural reform.
I am delighted to be here today to acknowledge the seriousness with which you and your team, Honorable Prime Minister, are pursuing this medium-term path to growth and jobs, and tackling some difficult reform areas. Our signing ceremony today--for two budget support operations underpinning financial and fiscal reforms--highlights your decisive leadership and your team’s commitment to this medium-term agenda, and our strong partnership in pursuit of Albania’s long-term progress and prosperity.
The World Bank has ramped up its engagement in Albania commensurate with this reform effort—with record lending commitments of more than $300 million this year and an equal amount in the coming year. The two operations signed today are a big part of that.
The first operation supports financial sector modernization, with the aim of building a more developed, resilient and inclusive financial sector. The second operation was approved just yesterday by the World Bank’s Board of Directors! It provides budget support linked to reforms in public finance management.
Over the past year, we have worked closely with the IMF and the European Commission to provide consistent advice and greater financing to support your medium-term macroeconomic and fiscal framework to restore growth. Our mandate at the World Bank—to eliminate poverty and promote shared prosperity—makes restoring economic growth and creating employment opportunities our top priority in Albania.
We look at Albania and see a country with tremendous growth potential, and a population determined to succeed. You have grown quickly in the past, and can do so again. Given the economic might of the European bloc, integration and penetration into European markets is a smart strategy to pursue, regardless of the timing of eventual EU accession.
Greater economic integration will require alignment of Albania’s policies and institutional performance with EU standards. The countries of the Western Balkans will need to grow fast—by as much as six percent a year—if they wish to catch up to European living standards in the next three decades.
The macro-fiscal stabilization which you have undertaken this year will need to be sustained over the medium-term. Key structural reforms will need to be pursued with vigor, especially deepening restructuring of the energy sector, creating a more attractive investment climate and enhancing the quality of public service delivery. I encourage you to maintain the conviction that you have today to take the country forward, despite the difficult choices this sometimes entails.
I’ve had the privilege in the past two days to see many Albanians working hard to deliver results for their fellow citizens. I visited the Property Registration Office to see the progress that has been made on land titling and registration. I went to a Social Assistance Office to learn about recent efforts to strengthen the social safety net and create a sustainable pension system. And I saw a marvelous transformation of a toxic, environmental “hotspots” into a safe space for children to play. This morning I traveled to Durres to discuss on-going efforts to improve water supply with decentralized management of water utilities. I am encouraged by what I saw, and also pleased that the World Bank has been contributing to these efforts.
This year, the World Bank is embarking on a systematic diagnostic to help us better define how we can support Albania in coming years. Honorable Prime Minister, as the challenge of undertaking structural and institutional reforms grows more complicated, please rest assured that the WBG will remain a steadfast partner, bringing global knowledge to your doorstep and providing advice and support to implement reforms that accelerate growth, create jobs and promote prosperity.
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