From Nadir Mohammed –WB Info Service

Let me start with the CAS, the Country Assistance Strategy. It’s on our web site, both in English and Albanian and we have hard copies, so for those who want hard copy of the Country Assistance Strategy we will be happy also to give copy.

This is the strategy that governs our operations in the next four years. It envisages support to Albania in the order of 200 million dollars, both from IDA and IBRD. We are planning for eleven operation or projects, eight investment projects, and three development policy loans. Heavy emphasis on the social sector, education and health, business environment, infrastructure, transport and energy, and land management and land registration and follow up to our project in the costal zone development.

What do we mean by this governance filter? Because this also is also related to the question of what’s happening now in the public sector reform. As you know the Bank has been supporting public sector reform in Albania for quite some time now. This is very essential for the sustainability of development, we still have ongoing operation for public sector reform. We supported the civil service law, reform in the civil service, but we also supported public expenditure reform, support to the treasury, financial management, procurement. In general, our focus has been on core system in government. This will continue, because these are very essential for good governance. But in the new CAS every thing that the Bank will do in the next four years will be governed by these filters. It’s simple, it has four elements. First element is, we will ensure efficient and transparent public expenditure management, that’s in other words whatever the government does from it’s own resources from the budget we will assist in establishment of systems that will ensure that public expenditure is efficient, effective and transparent.

The second important aspect is our support to the decentralization in four sectors. In all sectors, in all what we do we would like to support decentralization and pushing service delivery closer to the clients. This would involve more support to delineating responsibility in the central local government, building capacities at the local level, but also strengthening the mechanisms of accountability at the local government. We would emphasize more in strengthening mechanisms of advocacy and citizen participation. So, in everything we do we would like to see citizens more involved in decision – making, in monitoring and evaluation and this is the third element of the governance filter.

The fourth element is, we would like to support the autonomy and de-politicization of public administration. This is very crucial and very important. First, as you know we assisted in civil service law and the creation of all the institutions that are overseeing the implementation of the civil service law. As you know, total public sector employment is around one hundred twenty five thousand. Of those only around three thousand are covered by the civil service law. So, this is basically less than two percent of total public sector. We would like to support and continue our support further expansion of the civil service law. And ultimately at one point we want to see all public sector employment is covered by the civil service law. So this has to be a gradual process, because the conversion will require more fiscal resources. We have to work within the fiscal envelope. This is very important for the autonomy of public administration and also critical for delineating the differences between the administrative sphere and political sphere, because if we confuse the two we are not creating sustainable institutions that would lead Albania to integrate in Europe. I don’t think also there is a consolidated database to verify public sector employees. We are assisting DoPA, Department of Public Administration to create a database in which all the public sector employees need to have their records. And we also supporting the Ministry of Finance to establish a treasury system and ultimately the database for public employment needs to be linked with the treasury system so all payment of wages and salaries need to be based on that database. We are still not yet there, but hopefully by end of June we will have the treasury system ready and the database will also be ready.

Two things took place recently and I just want to explain because we are also concerned in the World Bank that communication around public administration, changes are not being effective. More transparency and more communication on what’s happening in the public sector is very important. We started a year ago or more supporting the previous government on what’s called the functional review. This is a very important task, because as I just mentioned the size of public sector fifteen years after transition role of the state, role of government has changed. So it’s time to take a stop, and exam the role of the state, review the functions of all agencies, ministries and do the necessary reforms with two objectives. First is to ensure an efficient reengineering of state agencies and partners and to build capacities in them to review all duplications in the civil service and public administration and to identify also redundancies so that you create more space to increase the salaries for the public sector employment because you can not just increase, this day you have a fix number of public sector and you have limited fiscal ground to do this. It’s important to recruit qualified people in the public administration and the level of payment has to be competitive and that is very important. This process of the functional review started more than a year ago. However it coincided also with the political cycle so when the new government started working in September this process was already advanced. And I think what’s causing a lot of concern is lack of effective communication on explaining how much of what’s happening now is due to the functional review process and how much is due to political changes.

Let me just say also that the new government came with a strong commitment to advance further the good progress that took place to the civil service reform. And the new government had orientation of reducing the size of the public sector to create more room to build capacities, but also to improve public pay. The first initial step was consolidation of a number of ministries from eighteen to fourteen. I think that’s very welcomed development, because it brought also a lot of synergy. I’m sure in the long term it will certainly improve service delivery. However, this process coincided again with the functional review. So far eleven ministries completed the process of functional review, including those that have merged. So, the functional review became a good tool to put in place the new structure of the new ministries particularly those which have merged. As a result, what we observed that only eleven ministries and the Council of Ministers have completed the functional review. There are more ministries, three or four under this process. In this process, a number of people left the civil service or public administration and here I think it is very important to give the details and to ensure that the process is worthy and forward observed in the process of implementation of the new structure.  

You would have inevitably people leaving because of resignation, there are people who would leave naturally to retire, but there are people who became redundant in the process or asked to leave the civil service and here I think overall is to advice the government is to observe the spirit as well as the text of the civil service law. We know that are already institutions in place including DoPA, Civil Service Commission and for us in the Bank as well as many other development partners we will observe the process and actually for us one of the conditions of the previous Poverty Reduction Support (PRSC) Credit, we only observe the new processes that all the procedures as envisages in the law needs to be followed. If a public sector employee could feel that the process was not followed according to the law, the law provides for them all the right to challenge the decision and give them a number of procedures that they have to follow. My only request at this stage in addition to following the new processes as envisages the law is also to see  very effective communication to the public sector employees, to explain better the process but also to ensure them that their rights are preserved as envisages in the law.

Our two concerns are the following. One is to make sure that the processes are being followed according to the law. Secondly is not to loose capacity. The government, the Bank and all donors and development partners invested a significant amount of resources in training and building capacity and we don’t like this to be lost. Finally, we would like to ensure that this process is a really build not to politicize the civil service. And if the changes are necessary they should take place, but with the aim of bringing to the service highly qualified people. Qualification, experience and performance should be the only criteria for public sector employment whether entry or exit. We observe that Albanian Labor Market increasingly more educated people, are qualified people are available and should encourage those to go in the public administration.

I would like to briefly touch upon is the issue of independent regulators. As you know the public administration is created to implement government policies and programs with increased privatization that took place in fifteen years. State institutions were created to regulate the market and they are numerous in Albania. Obvious example is the Central Bank which regulates the banking system, the insurance regulators, the telecom regulator, the electricity regulator, competition authority and we would like to see increasingly capacity being build in this regulatory bodies and they should not be under any political influence and then they become relatively autonomous so they can perform the job that they were established to. At the same time we would also support that most of them they report to parliament, we would like to see more accountability mechanisms are strengthened  and also they become more open work serving citizens at large, their decisions, the inputs that are there for their decisions. So, this is very important issue for us at the Bank and we would like to support all these agencies and we would like to assist in building capacity and be sure they are autonomous. But also we would like to see that in their work they become more accountable and the role of oversight become very important in them.

Next issue: We at the Bank are committed to provide support to the Durres – Morine road corridor. This is a  very strategic road corridor, it’s very important for the north east part of Albania, it’s very important for encouraging economic activity in Albania and we are very committed to provide support to the government. The new government also identified this road corridor as very important as high priority. We are working very closely with the Ministry of Transport and Minister Basha in particular in ensuring the preparation for this road take place and we would like to see we can move quickly to start the work. Of course a few steps are still required, more technical aspects on the design issues, option issues, for as in the Bank it’s also the social and environment safeguards need to be studied carefully and we are expecting the final approval of the Albanian National Transport Plan which is being supported by the European Commission. It’s a very good plan and the government is intending to organize a donor conference meeting for the end of March in which this important corridor will also be discussed. We are collaborating closely with our development partners particularly the European Bank for Reconstruction and Development and European Investment Bank. So far, we have completed most of the preparatory work for the first section of the road Rreshen – Milot. I think this is more likely where the start could take place. And then there is another section of the road from Morine to Kalimash, which still needs some works. And finally, the Kalimash – Milot section. And still more technical work is needed on the alignment of the road and the technical options. But just in brief I think this is an important road corridor, it’s one of the top priorities of the government and for us in the Bank we are committed to provide all the necessary support for the construction of this important road corridor.

The World Bank provided the global facility to assist all countries around the globe after the conference in China, around 2 billion dollar were committed to assist, to support all countries that are effected by the avian influenza virus. The World Bank actually started providing support to countries in the region, Turkey, Kyrgyz and other. And we have received request by the government of Albania to support and we are mobilizing resources so that we can respond to this request quickly. We would work closely with government agencies and we will coordinate closely with our UN Agencies, PNUD, WHO which is the lead technical agency specialized to provide leadership in such issues, UNICEF and a number of other development partners such as USAID. A meeting is planed next week between the donor community and the government to discuss how we can move quickly. In our part at the Bank we are very much committed to provide support both on the health aspect but also a veterinary aspects where more resources are needed actually if there is a widespread of the virus. So we will coordinate closely with the government as our development partners and we will move quickly to provide the necessary supporting in this area.