TIRANA, Sep 15ؔhe World Bank asked the Albanian government to study the latest price effects on the vulnerable part of the population. It suggested that more attention should be paid in analyzing the impacts of the reform in the electric energy sector over the poor.
“It is very important to monitor the impact of the reforms in water system management and electric energy sector over the population in general, and the poor in particular,” said the Bank during the conclusive stages of a project assisting the government in measuring poverty levels in the country.
Energy prices in Albania have hiked up during the last decade in attempts to cover the cost of growing production capacity and to guarantee a regular supply of electric energy. However, despite the fact that prices have doubled since 2002, production capacities have not increased according to expectations and a regular supply of electric energy has not been achieved.
The World Bank is the biggest lender to the companies in the energy sector and has repeatedly asked that energy prices should share the growth costs. At the same time, it has proposed that the poor should be subsidized by the government regarding a part of their electric energy bill. While the government has followed up with such proposals, the Bank evaluates that the measurement of the poverty level in Albania is not complete and therefore the government’s subsidies have been only partly effective while poor regions throughout the country continue to suffer power cuts.
The latest warning from the World Bank came as the Distribution System Operator (DSO), which was privatized at the start of 2009, is expected to raise electricity prices by the end of September.
Albania has progressed significantly in identifying the extension of poverty levels in its population and in taking measures in the war against poverty by assisting many to move above the minimum living threshold.
However, the Bank warned that given the reality of the global economic crisis, the government should be more aware of the crisis’ impact over the most vulnerable parts of the population.
“Albania faces new challenges in monitoring the effects of the global financial crisis,” the World Bank said.
Identification of the poor and understanding their needs is usually the first step in the fight against poverty. Studies show that poverty in Albania is not reflected in malnutrition, but in the overall lack of basic public services and the general degradation in environment and infrastructure. In many areas of the country, the government is not able to provide such services as basic health care and education and the poorest regions are characterized by missing infrastructure and a lack of energy. The poor suffer in particular from the lack of monetary incomes which makes it impossible for them to pay for goods such as medicines and the electricity bills.
However, the number of poor people in Albania has steadily decreased during the last two decades because of the general young age of the population and immigration opportunities. But the Bank reveals that half of the identified poor have yet to benefit from public services. The government finances economic assistance for ninety thousand families, about 13-14% of the population, but the economic assistance is not enough to help most of the needy above the minimum living threshold of 5700 Lek (43 euro) per month.
What makes matters worse is the persisting lack of a strategy for a long term fight against poverty by the government, a strategy that would require huge public investments in areas such as education, health care, and basic infrastructure, but that are usually overlooked by government spending.
