Time for focus on the future - Commentary of Kseniya Lvovsky, World Bank Country Manager published by daily Shqip

January 27, 2011

Daily Shqip

When Ms. Ngozi Okonjo-Iweala, the second top official at the World Bank and one of the most extraordinary women of our time, delivered a lecture at the Tirana University as part of her visit to Albania earlier this month, she concluded with a powerful, coming from the heart message which was not in the original script.  “You cannot afford a polarization. There is an opposition and there is a government and they don’t talk to each other. … If you do not overcome this situation, you are going to remain in the middle income trap between a per capita income of US$ 3 to 6 thousand. Because of no ability to think forward.…..”

As I am writing to the fellow Albanians the days following 21 January, this message has further grown in importance. After a decade of tremendous economic, social and political achievements, the country is at a critical juncture. It has all the potential - exclusive location, rich natural resources, talented people - to move decisively towards a prosperous and respected member of the European and global community, with unlimited opportunities for young generations.  But realizing this potential is no simple matter.

Our recently released country economic memorandum, Albania: The New Growth Agenda, focuses on challenges and opportunities for future growth. The main challenge for a middle income country like Albania is to harness sources of growth that will keep its economy competitive, despite a lower-cost production in poor countries and more resources for innovation in rich countries. High-quality education and skills that are linked to the needs of the market and strategic growth areas are the key ingredients for success. Talented and creative human capital can make up for financial resources when it comes to innovation: recent years witnessed growing examples of low-cost innovations in developing countries that brought their industries and companies world-wide recognition.  The “traditional” drivers of growth and competiveness -- macro-economic stability, strong democratic institutions, enabling business environment, and adequate infrastructure -- remain as important as ever in the post-financial crisis world with scarcer capital and increased risk aversion. Albania has made good progress but also faces a significant unfinished agenda in all these areas. In addition, growing environmental challenges - local, regional and global - increasingly interact with development activities, and the two must be addressed in tandem.

The bottom line is that the growth agenda is becoming much more complex and demanding. Those countries that are not strategically positioning themselves in a changing international competitive landscape will be left behind. For Albania, this means a pressing need for a long-term economic vision and broad-based strategy to make it happen. There is a need to clearer indentify the growth engines - the obvious ones include agriculture, mining, tourism - and put forward dedicated policies to support their development.  There is a need to move ahead with important policy reforms that require national consensus. These decisions cannot wait. There is no time to wait because regional and global competition is intensifying day by day while developing a modern competitive industry and growing human resources to run it is a long process. There is no time to wait because a somewhat chaotic territorial and industrial development that is happening in the country now reduces the value of its precious natural resources undermining the very foundation for future competitiveness.
Above all, there is an imperative to think collectively about a common future, not about the divisions of the past; to use differences for enriching a vision and path towards this future, not for preventing the country from moving forward; to mobilize the enormous energies of the young generation for fueling the engines of growth, not burning the cars.

Around the country, the examples of a strategic vision and collective efforts are multiplying.  I see them while visiting projects we support, meeting communities these projects serve, talking to academia, participating in workshops. I found admirable resilience and forward-looking attitude in the face of a massive disaster during my recent trip to Shkodra where a World Bank team worked with national and regional authorities and experts to help avoid the repetition of the 2010 flooding.  Having assisted with post-disaster relief and reconstruction in many places around the world, our team was very impressed by the government’s response -- both in terms of rescue and humanitarian aid operations, and emergency rehabilitation works. Even more impressive, while still addressing the emergency, the authorities and experts already initiated the work on a long-term flood management plan.  We are proud to support its preparation. If the people of Albania are willing to think forward at such a difficult time, the future of this country will be bright.