World Bank Supports Albania to Protect Most Vulnerable and Improve Health Financing

June 20, 2011

Social Sector Reform Development Policy Loan Agreement Signed Today

TIRANA, June 20, 2011 – The Government of Albania and the World Bank today signed the agreement for the Social Sector Reform Development Policy Loan (DPL), totaling US$25 million.  The agreement was signed on behalf of the Republic of Albania by Minister of Finance Ridvan Bode and on behalf of the World Bank by Country Manager Kseniya Lvovsky.  The ceremony was held at the Ministry of Finance in the presence of high government officials as well as members of the team who have prepared the project, which was approved on April 28, 2011, by the World Bank’s Board of Executive Directors.

The loan supports reforms designed to help Albania improve the effectiveness of its social safety nets, and enhance the efficiency and equity of health financing.  These reforms to the Ndihma Ekonomike and health insurance, adopted by Parliament earlier this year, support policies that strengthen the mechanisms to allocate funds and select beneficiaries in the main social assistance program; introduce incentives for investing in human capital by providing an additional benefit linked to school enrollment and attendance for families with school age children; initiate the process to create a unified registry of beneficiaries of social assistance programs; and change the indexation formula of the disability benefits program.

This operation also supports measures to enhance the efficiency and equity of health spending, by introducing more predictable fiscal rules to finance health; improving the methods for contracting with providers and the capacity to monitor their performance; and granting health insurance coverage to social assistance beneficiaries.

In both sectors, there has been progress in reaching the poor, but further changes, supported by this operation, are needed,” said Daniel Dulitzky, Sector Manager and the Project Leader. “In the social safety nets, the aim is to improve equity, efficiency, transparency, and effectiveness in the use of resources for poverty reduction, while in the health financing sector, the objective of the reform is to increase access for vulnerable groups, improve efficiency in service provision, and enhance transparency in the financing of the sector.”  

I would like to thank the World Bank for its commitment to Albania and its support of the reforms that government is undertaking in the social sector,  areas where the expertise of this Bank is important”, said the Minister of Finance, Ridvan Bode during the signing ceremony. “In addition, I would like to assure the World Bank that we will carry out these reforms successfully, because the government is very committed to timely implementation.”

Kseniya Lvovsky, Country Manager for the World Bank Office in Albania, referring to her recent visit to Berzhita commune added: “I had the opportunity to meet several beneficiaries of Ndihma Ekonomike and this experience reconfirmed the importance of the reforms in the social sector. For example one poor family with six children, Ndihma Ekonomike enabled them to continue sending their kids to school, and giving them the opportunity to become productive and fully integrated members of the society”.

Albania became a member of the World Bank in 1991.  Since then, 69 projects totaling US$1.4 billion have been supported by IDA and IBRD, and 10 projects totaling US$185 million by IFC.  Currently in Albania, there are 15 active projects in the social sector, health, education, natural resources, water and energy, municipal infrastructure, and public sector management that are helping Albania to achieve sustainable economic and social development and pave the way for European integration.