The Balkans Project

The World Bank recently announced its decision to finance up to $275 million from the International Bank of Reconstruction and Development, and up to $150 million from the International Finance Corporation over the next four years in Albania.

The main aim of the new Country Partnership Strategy is to support a recovery in Albania’s growth rates, improve the quality of education and health services, and strengthen Albania’s safety net.  With the IBRD and IFC’s support, Albania will also take steps to improve water conservation and increase its disaster preparedness.

Though Albania, like many of its Balkan neighbors, has had a troubled history, the former Communist country has made enormous progress in the last ten years, becoming one of the fastest-growing countries in Europe with average annual growth rates of six per cent and accompanying rapid reductions in poverty.  Albania is also one of a very few countries in Europe that maintained positive growth rates and financial stability during the global financial and economic crisis. However, given the massive challenges facing Greece, one of Albania’s main economic partners, Albania’s economic future remains uncertain. Additionally, Albania is still recovering from the devastating effects of blood feuds that have claimed more than 10,000 Albanian lives since 1991.

If successful, the World Bank’s new strategy will help Albania consolidate its fiscal position, improve the efficiency of public spending, address large infrastructure needs, raise education levels, and strengthen social safety nets and key health services to ensure that the poor are protected from economic fluctuations.

Albania became a member of the World Bank in 1991. Since then, 68 projects totaling $1.4 billion have been supported by IDA and IBRD, and 10 projects totaling $185 million by IFC.  In 2009, one such World Bank project meant to safeguard Albania’s coastal zones was used to selectively demolish parts of a village in southern Albania and leave many families homeless, according to an internal report of the International Development Association.  One can only hope that the World Bank’s involvement in Albania will be more constructive this time around, as its support is essential if Albania is to weather the coming years.