Albania is the first country in the Bank’s Europe and Central Asia Region to complete a full Poverty Reduction Strategy Paper (PRSP), which expresses the country’s long-term vision of European integration, and provides first comprehensive national development strategy. The PRSP recognizes that high and sustainable economic growth—through private sector development—is the main instrument for reducing poverty in Albania.

Albania’s Country Assistance Strategy, which supports the PRSP, will serve as a roadmap for the World Bank assistance program for the next three years. The strategy focuses improving governance and strengthening institutions; promoting sustainable private sector growth; and fostering human development. It will increase Bank support for infrastructure, because its deficiencies constrain private investment and limit opportunities for the rural poor. It continues the Bank’s strong support for developing rural areas, where poverty is highest.

If Albania sustains accelerated reform, the World Bank will provide up to US$131 million in lending from July 1, 2002, to June 30, 2005, consisting of about four projects per year to support the PRSP, leverage the remaining reform agenda, and move Albania toward financial sustainability necessary for creditworthiness.

"These strategies and projects are the culmination of continued progress in Albania over the last few years, and they are a real indication that the country continues to advance. We appreciate the hard work of the Government and Parliament over the last few months to present these operations on time to our Board of Executive Directors," said Christiaan Poortman, the World Bank’s Country Director for Albania and Regional Coordinator for Southeast Europe.

In addition to discussing Albania’s development strategy, the Bank approved credits for three diverse projects. The Bank approved US$20 million for a poverty reduction support project, which includes a package of innovative cross-cutting public sector reforms, as well as priority measures to increase opportunities and improve service delivery, especially in education and health. Another US$15 million will go towards supporting the government’s financial sector reform program, which focuses on continuing banking sector reforms, including bank privatization and further strengthening of banking regulation and supervision. Finally, US$29.90 million was approved to rehabilitate and strengthen power transmission and distribution systems in the Durres, Elbasan and Kucova regions.