World Bank aid to respond to crisis impact

TIRANA, Jan. 6 – The World Bank will offer new financial assistance to Albania to help its government cope with the global financial crisis. The bank said in a statement last week that the global growth slowed down in 2011 and economic outlook for Europe deteriorated considerably following the deepening euro area crisis. The Western Balkans region is very sensitive to overall economic growth in the European Union, its largest trade partner, and it is further vulnerable to changes in monetary and financial conditions in European countries whose banks are the dominant asset holders in Western Balkan countries. Remittance flows into Albania and Bosnia and Herzegovina are equivalent to about 10 percent of GDP and these flows have been already affected by a slowdown in euro-zone economic growth.
The World Bank said it will increase the availability of its financing to several countries of Central and Eastern Europe, Western Balkans, the Caucuses, and Turkey. In other words it said it will offer a higher financing support for these countries in the two coming years (2012 and 2013) than the envelope foreseen in the current Country Partnership Strategies. For a four-year period 2011-2014 the World Bank and its IFC have set a $425 million assistance to Albania.
the Bank did not say how much the new offer will be only saying that its main objective was to help prepare these countries for and effectively respond to external shocks, while at the same time preserving focus on structural reforms and social safety nets which are essential for maintaining sustainable growth. In Albania, the World Bank is already engaged with the government in preparing the development policy loan on governance and competitiveness, which can use additional financial resources to strengthen the program of economic reforms. Albania will be also able to use additional World Bank assistance to reduce fiscal vulnerabilities and help safeguard economic and financial stability for continued growth and job creation. The statement said that the World Bank and Albania are at a preliminary stage of discussions about the use of an increased financing envelope and a group of experts would visit Albania to discuss and identify with government partners specific areas for expanding support to economic reforms, preparedness for external shocks, stability and growth.