World Bank program helps Albania’s reforms

TIRANA Oct. 13 – The World Bank said Friday it was preparing a program of Development Policy Loans (DPLs) to support Albania’s critical policy reform efforts. The first credit is intended to be in the amount of US$ 10 million. Such loans are given to countries which show a credible track record of reform progress. It is given in the form of fast-disbursing budgetary support and has been found by different governments to be a very useful tool that provides an anchor to enhance the credibility of key reforms. The Bank sent a team, led by Sanjay Kathuria, lead economist in the Albania PREM team, to discuss progress on the proposed loan. The team and government counterparts were in an advanced stage of preparing the loan which is intended to consist of a series of three inter-linked operations. The government has put forward a concrete and ambitious program for medium and long-term reforms. The key areas supported by the Development Policy Loan include improving the investment climate for private sector growth, improving fiscal sustainability and effectiveness of public service delivery, all of which are underpinned by cross-cutting governance actions to improve government effectiveness. It is anticipated that key actions taken in the context of the first Development Policy Loan include the enactment of new concessions and procurement laws, as well as a new Organic Budget Law, and improved consistency of actions with respect to the civil service law. Other areas include recommendations for elimination of superfluous licensing requirements in selected sectors, actions for reduction of the Health Insurance Institute deficit, starting preparation of a water sector reform policy paper and action plan as well as of a pension policy reform options paper, and improving practices in public expenditure management. Subsequent Development Policy Loans will support implementation and continuation of further reforms in these areas, and also support reform in land markets. The Development Policy Loans will support, both explicitly as well as implicitly, the Integrated Planning System and efforts to improve evidence-based policy making. Albania joined the World Bank in 1991 and Bank commitments to the country total approximately US$845 million being used in 60 operations.