The World Bank in Albania

1. The World Bankin Albania CAS Consultations February 2005

2. About The World Bank Group

3. What is the World Bank? • Founded in 1944, the Bank is the world’s largest source of development assistance • Owned by 184 member countries • Operates in 100 country offices with approximately 10,600 staff

4. What Does the World Bank Do? • Helps countries implement programs to raise quality of people’s lives • Works in partnership to design assistance strategies tailored to the needs of each country • Offers a mix of money and knowledge to implement these strategies • $18.5 billion in new lending commitments in the last FY

5. World Bank Group Composition • International Bank for Reconstruction and Development • International Development Association • International Finance Corporation • Multilateral Investment Guarantee Agency • International Center for Settlement of Investment Disputes

6. Why does it make economic sense to borrow from the World Bank? • Interest rates on World Bank loans are always lower than those of commercial banks • It lends to countries that cannot find any other source of financing at zero interest • Longer period to repay loans • No repayments for 10 years for some loans

7. Where does the World Bank get the money to make loans? • World Bank Bonds • Donor Funds • Trust Funds • Investors • IDA repayments

8. How is a World Bank loan made? • Bank offers two types of loans: investment and development policy loans • Bank and borrower agree on objectives, components and outputs • After loan approval and effectiveness, borrower begins implementation • Bank monitors implementation and evaluates results

9. The World Bank is not just about lending • Knowledge, cornerstone of Bank assistance • Research underpins Bank projects • Analysis and advice to clients helps create lasting policy improvements

10. A Changing World Bank

11. A Changing World Bank(cont.)

12. Who are the World Bank Partners? • Client country governments • Civil society representatives • Private sector • Multilateral development banks • Bilateral donors • United Nations agencies

13. World Bank and IMF: Differences • Bank promotes long-term growth that reduces poverty • IMF is the monitor of the world’s currencies • Bank lends only to developing and transition countries • IMF lends to member countries—both rich and poor — that have short-term problems in meeting their foreign payment obligations

14. About The World Bank in ECA

15. Europe & Central Asia Region (ECA) • Serves 28 countries in the Region + Kosovo Over 1000 staff 50% in Washington 50% in 24 Country Offices

16. How is the Bank boosting economic growth in ECA? • Enhance Investment • Climate By providing advice and financing programs that: • Boost Human • Capital • Ensure • Sustainability

17. Bank Support to Europe and Central Asia Region • Portfolio US$44.4 billion over 10 years • $3.6 billion in new lending commitments in FY04 for 59 operations • Analytical and advisory services included 186 reports and 58 technical assistance activities

18. Is the World Bank making a difference in the region? With World Bank assistance: • Annual mortality rate of Macedonian newborns down by 36% • Access to clean water in Albania is up by 18% • Safe drinking water brought to 2 million Uzbeks in rural areas • Russian children study with 20 million new textbooks • 200,000 ha of irrigated farm land restored in the Kyrgyz Republic

19. About The World Bank in Albania

20. Our mission in Albania To help Albania achieve stable economic and social development that brings more jobs, better living standards, greater government accountability while the country moves closer to Europe.

21. Challenges • High incidence of poverty • European integration • Strengthening governance • Addressing macroeconomic imbalances • Sustaining growth • Maintaining stability and consensus regarding essential reforms • Upgrading infrastructure • NSSED implementation

22. Albania and the Word Bank World Bank is active in Albania (since 1991) through: • International Development Association, (IDA) - its credits are extended for 20 years, 10 years grace period • International Financial Corporation (IFC) - private sector “window” of the WB • South Eastern Development Enterprise (SEED) - support to the development of private sector in the region • Multilateral Investment Guarantee Agency (MIGA) - promote foreign direct investment by offering political risk insurance (guarantees) to investors and lenders

23. Focus of Bank Assistance in Albania – CAS FY03-05 The current CAS supports National Strategy (NSSED). CAS main pillar are: • Improving governance and strengthening institutions • Promoting sustainable private sector growth • Fostering human development

24. World Bank Portfolio in Albania • 17 Active Projects which encompass many sectors, including: • Public Administration • Legal and Judicial Reform • Financial sector • Health care • Rural Development • Infrastructure • Environment

25. IDA Portfolio in Albania

26. Albania: Total World Bank (IDA) Commitments By Sector Since 1991 July 1991-July 2004

27. Non-lending services and policy advise • Country Economic Memorandum – Sources of growth beyond the transition • Albania - Decentralization in Transition • Social Safety Net Study • Poverty and Education in Albania • Albania - Poverty Assessment • Albania’s Rural Strategy • From exclusion to inclusion

28. Impact of Bank assistance in Albania: Infrastructure Infrastructure bottlenecks impede economic development and limit access to clinics, schools, or markets • Five Transport Projects: • Rehabilitated, constructed or built 1300 km of national roads • Rehabilitated, constructed or built 1700 km of rural roads • More access to basic services, urban markets, etc. for rural poor

29. Impact of Bank assistance in Albania: Education Conditions and quality of education in Albania are still poor, especially in the remote areas. With the help of • Two Education Projects • Constructed, reconstructed 228 schools • 80,000 children benefited from the new schools • Free textbook policy is introduced for the basic education all over the country and for the secondary education in the 80 poorest areas of the country

30. Impact of Bank assistance in Albania: Health Poor quality of health services and inequities in access affect Albanians’ health • Two Health Projects: • 115 health centers are constructed, reconstructed and equipped • new hospital services established in three main cities • the general master plan for the tertiary hospital in Tirana prepared • renovation of equipments in Tirana hospitals

31. Impact of Bank assistance in Albania: Rural Development Breakdown of collective farming had had devastating effects on agriculture • WB financed several projects in Agriculture • 335,000 ha rehabilitated and upgraded • 100,000 families benefited from the upgraded land • New markets facilitate farmers access to markets • 83 grants supported farmers ideas • 2 million people benefited from 900 community mini-projects on rural areas

32. Impact of Bank assistance in Albania: Financial Sector Lack of access to credit had an impact to private sector development and poverty alleviation. Microcredit Project is helping to build sound financial intermediaries. • Over 47,000 loans in the rural areas • In 8 districts or 380 villages elected savings credit associations make and enforce loan decisions. • About 150,000 persons have benefited so far from microcredits • Urban microcredit, Besa foundation has branches in 15 cities • Almost 5,400 active loans are increasing employment in urban communities.

33. Impact of Bank assistance in Albania: Governance Governance and institutional capacity remain weak. Strengthening governance and building institutions are essential for the country's long-term development. • With the help of a WB financed project: • for the fourth consecutive year, the Government has used a medium-term budget programme for its budget process • more than 1700 civil servants have been trained during the last two years • On-line legal database established at the State Publication Center • Court and case management system established at 5 courts • over 550 new judges who are helping to improve the quality of district courts

34. Going forward…Result-based CAS FY06-09 The core pillars for underpinning the design of the result based CAS: • Vision • Diagnostic • Programming • Results

35. A result-based CAS The features of the new CAS framework: • A stronger alignment of Bank’s program with the country’s vision for economic and social development and poverty reduction • Clear links between the development goals of the country and Bank interventions • A monitoring and evaluating framework

36. Elements for self-reflection • Lessons from the previous CAS • Findings of the Client Survey • Public Consultations • Government • Parliament • Political Parties • Civil Society • Private Sector • Donors

37. Lessons learned • CAS Completion Report • Lessons • OEDs Country Assistance Evaluation • QAGs for the lending program and for AAAs • Findings • Recommendations • Results Achieved

38. Findings of the Client Survey FY05 • Perceived Bank’s overall contribution – • Most important area • Poverty reduction (4.39 mean importance out of a scale of 5); Bring about economic growth (4.38) • Most effective area • Ensure investment in development bring results (4.4) • Project design and implementation • Establishing the conditions for long-term sustainability (4.53); helping assure that project benefits justify the costs to country (4.4) • Non-lending services • Providing new insights or options (4.49)

39. CAS Public Consultations • Multiple stakeholders (central and local government, parliament, political forces, civil society , academics, private sector, media, donors) • Regional diversity (Tirana+three regions) • Improved format (three rounds of consultations)

40. CAS Public Consultations - Process • Establishing consultations structures • Inter-ministerial committee • Parliamentary forum • Civil society advisory group • Information package • Special website for CAS and CAS on-line forum (English and Albanian)

41. For More Information: www.worldbank.org.al