New Delhi :Bolstering private sector investments, especially in the agricultural and tourism sectors, and optimizing post-COVID market changes to help the nascent auto-parts industry grow and integrate with the European automotive value chain, will help create jobs and spur growth in Albania, according to a new World Bank Group report.
The Albania Country Private Sector Diagnostic Report (CPSD/the Report), prepared by IFC and the World Bank, says the private sector, as the engine of Albania’s economic development, faces serious challenges—including limited access to finance, low levels of firm technology upgrades, skills shortage, and infrastructure gaps, among others. Yet, the private sector is vital to expanding the country’s economic base, promoting faster and more diversified export-oriented growth.
Further, the Report highlights that Albania can achieve resilient and more sustainable growth by strengthening trade integration with the global economy, as well as the European Union, while expanding the economic role of the private sector. Given the country’s small domestic market, economies of scale in manufacturing can only be achieved by integrating with global and regional value chains, a process that hinges on the country’s ability to attract foreign direct investment.
“The recent crisis has shown the importance of finding new ways for private sector development,” said Delina Ibrahimaj, Minister of Finance and Economy. “The CPSD Report offers valuable recommendations with regard to three important sectors, which have demonstrated and continue to demonstrate their potential for the sustainable growth of the Albanian economy.”
While economic openness is vital to Albania’s continued growth, the country’s heavy reliance on an undiversified set of exports exposes the economy to changing external conditions.
“In response, this CPSD aims to help the Albanian government promote robust economic growth, diversification, and competitiveness by fostering the development of the private sector,” said Damien Shiels, IFC’s Acting Regional Director for Europe. “However, as the Report underscores, improving the business environment and stepping up investments in technology and innovation will be key for Albania to accelerate the recovery and promote a resilient private sector.”
“In this turbulent time, fostering a robust and sustainable recovery will require a more productive and resilient private sector,” said Emanuel Salinas, World Bank Country Manager for Albania. “This report helps to understand which segments of the private sector are more promising and how public policies can provide the framework, enabling the private sector to work more efficiently, and create more and better jobs.”
The World Bank Group’s CPSDs provide in-depth economic analyses that identify opportunities to unlock private sector investment and create opportunities for more people.
The World Bank Group will channel its private sector development lending, investment, and advisory operations in Albania to target the sectors and areas of reform highlighted in the CPSD and help the government of Albania prioritize the actions which the report recommends.