World Bank specialist calls for more efficient public investments

TIRANA, Sept.10- Cheryl Gray, Head of the World Bank’s Directory of Poverty Reduction and Economic Management for Europe and Central Asia, has recently discussed public investments in the region. Gray has explained how public investments. if efficient, can result in a reduction in poverty and higher living standards for a large part of the population in the entire region. Mentioning her experience in the region, Gray has called for attention in adopting certain examples that are often taken by countries only on the basis of geographical proximity. “While Albania looks at Croatia or Serbia it does not consider that this might not be the best examples to follow. Rather, it would better look at Thailand,” Gray said. The practice of determining priorities in public investments, designing an efficient way to follow through and allocating the correct amounts is crucial to their subsequent success. The World Bank frequently studies the experience of different countries with public investments. Gray says that infrastructural and educational investments are usually quite popular and that Eastern European countries had a good start in this sector. In a while, though, the level of infrastructure started to lag behind the level of personal income and liquidity in important industries such as electrical energy. Higher tariffs and an efficient tax collecting scheme for electricity would make costs associated with its production or import more feasible. Technical and network losses should also be minimized as a considerable amount of energy is lost during transportation. While 5-10 percent of GDP currently is spent on energy, this would decrease in the coming years if reforms are put into place. Evaluating the performance of some countries, Gray praised Georgia for its reforms and said that Armenia and Kyrgyzstan have a long way to go. Another critical problem in Eastern Europe, said Gray, is the pensions system which will become a serious issue with the aging of the population in the near future.