Igniting the Knowledge Bank with a local ABCDE in Albania

For the first time ever, a local version of the Bank’s trademark Annual Bank Conference on Development Economics (ABCDE) was organized in Tirana, Albania on June 10-11, 2008.  Bringing together about 60 researchers from the Bank, local, international and diaspora academia, development partners, policymakers and think-tanks, this first installment of what is to be an annual event focused on the key development challenge of how to create a competitive labor force in Albania.  “We hope, by this event, to help gradually deepen the development debates here in Albania and to provide a forum for the growing network of researchers focused on Albania’s challenges, while showcasing the Bank’s own analytical and research products,” country office economist Erjon Luci explained. 

Preparations for the conference included an international call for papers which reached a host of, some relatively unknown, Albanian academics working abroad.  More than 40 papers were submitted from local and foreign researchers on issues such as labor costs, taxation and informality, migration, rural labor markets, skills gap, education and training policies, poverty analysis, unemployment and social policies. The conference sponsored a handful of these diaspora researchers to return and present their work in Tirana alongside the Bank’s analytical products.  “The Bank has always pushed for public access to the Living Standards Measurement Survey (LSMS) but we had no idea how far and wide the academic research interest in such data had taken root,” noted Senior Poverty Specialist for the Western Balkans, Andrew Dabalen.   

Graduate students and researchers from the diaspora had the opportunity during a conference break to meet with Albanian Prime Minister Sali Berisha, who welcomed their contribution noting, “The solutions concerning employment and training of the labor force are now recognized to be key issues that will underpin the acceleration of Albania’s development.” 

Upgrading the labor force to shift from low skill to high skill-growth path is the big challenge for Western Balkan countries to compete in a fast changing global environment. This message, from a recent Bank reportset the stage for the first day that focused on labor supply and skill formation.

The next session highlighted findings about Albania from a range of recent ECA regional studies on productivity, aging, migration, and labor markets.  Albania’s population is still growing – a fairly unique phenomenon in Central and Eastern Europe which means the labor force is still a driver for growth.  But the population is also advancing in age.  Combined with the impact of large scale migration, this has created an urgency for raising labor productivity to preserve high growth and raise social welfare.  When it comes to skill development, the conference concluded that skill formation by simply delivering better education and training opportunities may not be enough – one paper looked at the need for managerial reforms that allow the public and private sector to better utilize human resources. 

Migration was the most frequently discussed issue of the conference.  Albania has attracted migration researchers, in part because the tight communist-period limits on migration contrasted by major population flows during transition has created a kind of natural experiment that can be analysed using household survey data.  Presentations examined a range of issues from the differential impact of temporary vs. permanent migration, to the relationship between poverty and internal and external migration, to the changing economic prospects for migrants in some receiving economies, and how migration is affecting wages, educational investment and agricultural labor. Several presentations highlighted an emerging trend of the migration of poverty from rural to peri-urban areas. 

Migration has been instrumental in reducing poverty especially in rural areas” was the main message presented from 2006 Poverty Assessment for Albania 

However, understanding how demographic changes and geographical mobility are shaping the structure of poverty and labor force in Albania remain critical to the design of economic and social policies.  The conference also touched on the measurement and data issues.  Although the current labor and social data for Albania are reasonably adequate, they are not yet fully exploited by researchers and policy makers and there is ample room for improving labor market indicators.

The conference also addressed social policies and their un/intended effects on Albania’s labor market.  Several papers pointed to aspects of the Albanian social assistance and social protection systems.  That discourage labor force participation and job creation.  The challenges to reforming these systems were discussed extensively, including how to take advantage of some, as yet, unexploited synergies. “I want to thank the organizers of this international level conference”, wrote Merita Xhumari, Professor at Tirana University.  “It was a wonderful opportunity for me to present the findings of a complex research program on social policy trends in the Western Balkans that I have been involved in”.

The final session of two-day conference featured parallel discussions on two key sectors relevant for labor market -- agriculture and small business. The main message of a recent Bank study on the Albanian agricultural sector was that with 50 percent of the workforce still in fairly low productivity farming, both rural development and building a competitive agricultural sector would necessitate shifting more people to off-farm employment, to allow for consolidating and commercializing the sector.  In addressing the role of small business formation in job creation and labor market development, a recent Bank report on access to finance concluded that “despite the recent strong credit growth in Albania, small business development is still limited by lack of access to credit.” 

The conference has marked a significant effort in bringing analytical work and policymaking closer for Albania.  “As Albania, a new MIC,  graduates from IDA to IBRD lending, the conference was very important in reinforcing the Bank’s role as the knowledge leader on Albania’s development issues, but also as an effective champion for local partners, academic and otherwise, to engage more deeply in the development debates”, said Country Manager, Camille Nuamah.

As follow-up to this event, we would also like to alert you and your organizations to the upcoming 2008 Labor Force Survey, and 2008 Living Standards Measurement Survey which the World Bank is involved together with INSTAT and UNDP, and encourage you to find ways to use this wealth of information in your work.   In fact, the World Bank Social Protection and Labor Unit in our Washington DC headquarters will shortly be soliticing proposals from qualified research institutions, firms, including universities, NGOs,or other institutions on the topics of “Understanding Labor Market Informality in Developing Countries” and “Migration and Labor Market Outcomes in Sending and ‘Southern’ Receiving Countries”.  More information is available at Informality and Migration.