|
EBRD publishes new Albania Country Strategy
Bank seeks to overcome country's tough investment conditions
In its new country strategy for Albania, published on its website today, the European Bank for Reconstruction and Development said it will focus increasingly on developing the private sector, supporting privatisation and improving infrastructure, particularly in the energy and transport sectors. But the Bank, which has committed more than €125 million of investment in Albania, cautioned that a difficult investment climate remains a serious obstacle for future investments.
In Albania to date the EBRD has signed 14 investments in power, telecommunications, banking, transport, real-estate and general industry. In addition to its own finance, the EBRD has mobilised a further €271 million in co-investment from commercial and official sources. The Bank has also raised over €17 million in donor funds to assist with institution building. Disbursement of its investments has been hampered by weak institutions resulting in implementation delays. The Bank said it hopes to overcome some of these in 2002.
The EBRD acknowledged Albania's commitment to democracy but highlighted the need to achieve continued political stability. The Bank said: "Albania has played an important and constructive role towards regional stability and cooperation, including through active participation in the Stability Pact for South-Eastern Europe." It also noted that the economy has been growing: Prices and exchange rates are stable and foreign reserves are maintained at comfortable levels.
Much more remains to be done, the EBRD said. The economy is fragile, with too many living below the poverty line and where levels of foreign direct investment are among the lowest in the region. "Besides the problems of poor law enforcement and run-down infrastructure, the pyramid schemes crisis of 1997 and the Kosovo war in 1999 have added to the discouraging external image of the country as an FDI destination," the Bank said.
Going forward, the EBRD highlighted three key challenges to establishing a sound free-market economy in Albania. First, the country needs to encourage private-sector development by investing in infrastructure and strengthening the investment climate through a stronger rule of law and renewed efforts in fighting corruption. Second, to support privatisations in the banking and telecommunications sector which will help strengthen corporate management, improve the quality of services and firmly assert the country's openness to foreign strategic investors. Third, to implement a plan for reforming the energy sector and solving the ongoing acute power crisis, a key bottleneck to private-sector development. "The Bank is well positioned and fully committed to provide direct and proactive support to the country in addressing the above challenges," said the EBRD.
|
