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EBRD issues latest strategy for Albania
In its latest country
strategy for Albania, the EBRD says the country has achieved impressive
macroeconomic growth in recent years but challenges still persist, especially
in improving the business climate, developing the private sector and improving
infrastructure, mainly energy and transport.
According to the strategy, the Albanian economy grew at annual rates of 7-8
per cent from 1998 to 2001, slowed to 5 per cent in 2002 because of an energy
crisis and floods, and is now growing at a 6 per cent rate. Small-scale
privatisation across the country is virtually complete and the private sector
now accounts for about 80 per cent of employment. The past two years have also
seen progress in structural reforms, an improvement in dialogue between the
government and business community, advances in the commercialisation of public
utilities, and steps to revitalise the privatisation of large enterprises.
Despite this significant progress, the Bank says Albania continues to suffer
from a high level of corruption and organised crime, poor law enforcement and
weak administrative and institutional capacity. Other challenges include the
need to increase private-sector development, bring more of the large informal
sector into the formal economy, continue to commercialise and privatise
utilities, and undertake essential investments in the country's dilapidated
infrastructure.
The EBRD remains committed to supporting Albania’s efforts to address these
challenges and going forward will, among other things, support:
Private-sector development - The Bank will renew its efforts to support
privatised and greenfield enterprises, with a particular focus on general
industry and agribusiness. In parallel, the Bank will offer to support
forthcoming privatisations, such as in the utilities sector, through the
provision of pre- or post-privatisation long-term financing.
Financial sector - The Bank views the sector as a key factor for the
development of SMEs, and will, for example, explore the possibilities for
donor-supported risk-sharing facilities and SME lending frameworks combined
with technical assistance funds. The Bank will also support, where possible,
the consolidation of the banking sector and work to complete the privatisation
of INSIG, the insurance company.
Infrastructure - Rehabilitation of the country's infrastructure and its
integration within the region will remain a key priority for the Bank.
Sovereign-guaranteed financing will be envisaged with due consideration to the
country's borrowing limits, and continued emphasis will be put on co-financing
and blending of resources with donors. The Bank will focus especially on the
energy, local and international transport, and municipal and environmental
infrastructure sectors.
The Bank has invested more than €172 million in Albania in sectors such as
energy, infrastructure, financial institutions, telecoms, property and general
industry.
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