The Government of Albania has embarked on a new and important initiative: the preparation of a national Growth and Poverty Reduction Strategy (GPRS). This note explains what the GPRS means for the Government and provides an update on Albania’s progress in preparing the GPRS by June 2001.

The GPRS will be Albania’s first comprehensive economic development strategy, with a particular focus on sustainable growth that benefits all Albanians. Albania is committed to preparing the GPRS by June 2001. The GPRS will help the Government improve the effectiveness of its policies. This will be done through a clearer strategic focus on growth and poverty reduction and by a better coordination of initiatives across different sectors under a comprehensive strategy. It will also provide a common framework for all donors to increase the impact of their assistance to Albania, and it will be the basis for arrangements with the IMF under the Poverty Reduction and Growth Facility (PRGF) and for concessional lending from the World Bank.

The GPRS will cover a three-year time period. The GPRS will include: (i) an assessment of the situation; (ii) growth and poverty reduction goals; (iii) plans for obtaining the goals: policy changes, institutional reforms, programs, and projects; and (iv) targets and indicators to monitor progress toward goals. Although Albania’s first GPRS will not be able to provide full answers to all questions, it will be clear about priorities, and it will identify important issues for further analysis. The GPRS will maintain a long-term perspective and be results-oriented. Implementation of the GPRS will be monitored and evaluated in order to adjust the GPRS annually. The process of elaborating a full GPRS will be repeated every three years.

The GPRS will contribute to Albania’s aspiration to move towards a Stabilization and Association Agreement (SAA) with the EU. In Albania, poverty reduction implies raising the level of development for the entire country. There are some Albanians who do not have sufficient income, and they will receive particular attention in the GPRS. But Albanians are also poor because they don’t have regular access to water and electricity, because health care is inadequate, because roads are in poor condition, and because institutions are weak. Through the GPRS, Albania is aiming to close the development gap between itself and other European counties. The GPRS will help Albania achieve its goals under the SAA.

The Government is committed to preparing the GPRS through a participatory process, involving central and local government, civil society (including non-governmental organizations, private business, and other citizen groups), and donors. Broad participation in the formulation of the GPRS will ensure public support for GPRS implementation.

The government has put in place institutional arrangements to support GPRS preparation. There is a Steering Committee, consisting of members of the Cabinet, and representatives from civil society and the donor community. Preparation of the GPRS at the technical level is the responsibility of an inter-ministerial GPRS Working Group, chaired by the Deputy Minister of Finance and comprising Deputy Ministers and Department heads from the Ministries of Agriculture, Economic Cooperation and Trade, Education, Finance, Foreign Affairs, Health, Labor and Social Affairs, Local Government, Privatization, Public Works, and Transport. In addition, the Minister of Finance is the national coordinator of the GPRS. A GPRS Technical Secretariat—which will support the national coordinator and the Working Group during GPRS preparation and monitor GPRS implementation—has been recently established in the Ministry of Finance.

In June 2000, an Interim-Poverty Reduction Strategy (I-PRSP) prepared by the Albanian government was presented to the Executive Boards of the IMF and the World Bank (see Appendix). The I-PRSP provided a general roadmap for the elaboration of a full strategy by June 2001. One of the initial steps was to conduct a stakeholder analysis and to provide the government with options for a participatory process. The Institute for Development Studies (IDS), UK, carried out this work in July and August 2000. Following extensive consultations with government, civil society, and donors, IDS prepared a report with their findings and recommendations.

Based on the IDS report, a basic Participation Action Plan (PAP) was then prepared by the GPRS working group with the assistance of the World Bank and IDS. The PAP provides the following framework for GPRS preparation:

• The GPRS is closely linked with the Medium-Term Expenditure Framework (MTEF). During 2000, five ministries (Education, Health, Labor and Social Affairs, Public Works, and Transport) participated in the 2001-2003 MTEF exercise, and the 2002-2004 MTEF exercise, which started earlier this year, has been expanded to include the Ministry of Agriculture and the Ministry of Public Order. The MTEF is an instrument for translating policy objectives into expenditure allocations. In each ministry involved in the MTEF, an MTEF/GPRS Sector Working Group has been established to elaborate sector expenditure strategies that reflect growth and poverty-reduction objectives. Through linking the GPRS and the MTEF, the Albanian government will ensure that GPRS policy objectives are translated into appropriate public expenditure decisions.

• The MTEF process is being expanded to allow for civil society participation. During the formulation of the GPRS, several MTEF/GPRS Sector Working Groups will consult regularly with civil society representatives (including professional and membership organizations, unions, academia, NGOs, local government, private sector, and other relevant stakeholders). While the government offers a framework for discussions with civil society, it will not get involved in the way civil society organizes itself. The Carter Center, which established an office in Tirana in May 2000, has agreed to facilitate civil society participation in the GPRS.

• In addition to consultations on a sectoral level, there will be a dialogue with the private sector, using the existing business advisory council established by the Ministry of Economic Cooperation and Trade. The government demonstrated its appreciation for the role of growth in reducing Albania’s poverty when it changed the name of the strategy in October 2000 from Poverty Reduction Strategy to Growth and Poverty Reduction Strategy. Albania’s decentralization initiative makes it important that local governments become full partners in the preparation and implementation of the GPRS. Steps will also be taken to involve parliament in the GPRS, in order to ensure that the GPRS builds on existing representative institutions.

The GPRS process was officially launched during a two-day workshop in November 2000. The workshop, held in Tirana on November 10-11, 2000, aimed to inform a broad cross-section of Albanian society about the GPRS, present the PAP prepared by the Government, and receive feedback from civil society about how it could participate in the GPRS. The first day featured high-level speeches on the GPRS, presentations of successful examples of participation in Albania, and introduction of the PAP, followed by small-group discussions with civil society representatives. On the second day, the Prime Minister and Minister of Finance officially launched the GPRS process. About 200 people were invited to the workshop, including more than 75 people from civil society. There was an effort to invite a cross-section of Albanian civil society, including community and village leaders from outside Tirana. Workshop attendance exceeded expectations, with an estimated 230 people.

The November 2000 workshop also launched the GPRS media and information campaign. The objective of this campaign is to inform the general public and specific groups of stakeholders about the GPRS process and opportunities for participation. The media and information campaign is being organized by a local media firm, in close cooperation with the inter-ministerial GPRS Working Group.

Following the launch of the GPRS in November 2000, a two-tier structure was set up to institutionalize civil society participation. Civil society advisory groups (CSAGs) were established in four key sectors: (a) agriculture/rural; (b) education; (c) health; and (d) labor and social affairs. The CSAGs are broad groups of 10-20 key stakeholders for each sector. Each CSAG has selected 3-4 individuals to sit down with the ministries’ MTEF/GPRS Working Groups and help draft the sector strategies for the GPRS. CSAGs are developing work programs for regional consultations and capacity building with a view to continuing their involvement in the GPRS process beyond the completion of the GPRS in June 2001. Also, a National Civil Society Advisory Group will be formed in March, including representatives from the CSAGs and other civil society representatives.

A GPRS Technical Secretariat, with two staff members, has been established in the Ministry of Finance to support the Minister of Finance in his role of national coordinator and the Deputy Minister of Finance in her role as chairperson of the GPRS Working Group. Although the Technical Secretariat will initially focus on technical support, it is expected that its mandate will be broadened to include monitoring and evaluation of the GPRS process and its implementation. During the next weeks, the Technical Secretariat will focus on: organizational support for the meetings of the inter-ministerial GPRS Working Group; preparation and distribution of a monthly newsletter in Albanian and English; creation and maintenance of a GPRS website; and maintenance of a GPRS library. The Technical Secretariat will also be responsible for organizing a national GPRS Workshop in June 2001.

The Government has engaged local consultants to support the participatory process and to consolidate inputs for the overall strategy paper. With financial assistance from DFID, three local consultants have been hired to assist the Government over the next four months. The local consultants will help ensure the participation of local governments, parliament, and the private sector, and will support the inter-ministerial GPRS Working Group in incorporating sector strategies and other inputs into the final GPRS paper.

As indicated in the I-PRSP, poverty is pervasive in Albania’s rural areas. In response to this finding, the government, with the assistance of the World Bank, is formulating a rural strategy as a main building block of the GPRS. Regional consultations planned under the rural strategy will also bolster the GPRS participatory process. In addition, a workshop on the environment, planned for April 2001, will explore environment-growth and environment-poverty linkages, and ensure their inclusion in the GPRS.

There is also a heavy work agenda with respect to poverty-related data. Poverty data in Albania are currently incomplete or out of date. The Ministry of Labor and Social Affairs, with the support of the Institute of Statistics, is preparing a Poverty Update based on information available. Given deficiencies in existing quantitative date, a qualitative poverty assessment, financed by the World Bank and UNDP, is expected to help provide a picture of poverty in Albania through the voices of the poor themselves. The government recognizes that the poverty diagnosis in the first GPRS will be based on less-than-perfect data, and is committed to establish institutional arrangements that will yield timely and accurate poverty data in the future. The Government is in the process of planning a Living Standards Measurement Survey to be carried out on a regular basis following the completion of the 2001 Census.

Recognizing the importance of donor community support for the successful preparation and implementation of the GPRS, the government is committed to an ongoing dialogue with donors. In October 2000, the Minister of Finance briefed the local donor community on the GPRS and invited donors to think how they could become involved. In December 2000, the government organized a workshop: Albania - Towards Harmonization of Development and Integration Programs, which underscored the mutually beneficial linkages between the GPRS, MTEF, Stability Pact, and SAA.

The support of the donor community for the GPRS process has been very encouraging so far. The British Department for International Development (DFID) and the World Bank financed the initial stakeholder analysis and the design of the participatory process. The involvement of the Carter Center in the GPRS process is funded by the Soros Foundation, the Dutch government, and the German government. UNICEF is financing the media and information campaign, the office of the UN Resident Coordinator in Albania financed the GPRS Launch Workshop, and the UNDP is contributing toward the Qualitative Poverty Assessment. DFID has also agreed to finance local consultants that will play a key role in supporting the Albanian Government during the next few months.

In Albania, a Donors Core Group on GPRS has been established to meet monthly and closely follow GPRS developments. The Core Group, currently attended by the Canadian Embassy, DFID, Dutch Embassy, European Union, Italian Cooperation, IMF, UNDP, UNICEF, USAID, OSCE, and the World Bank, is open to all interested donors in Albania.

There are many ways in which donors could become involved in the GPRS. Local governments and parliament will require capacity building to effectively contribute to the GPRS. Additional regional consultations would strengthen the participatory process. And Albania needs assistance to build its capacity for poverty analysis and monitoring. In addition to providing direct support to the GPRS—of which the government is very appreciative—donors are also invited to think how their existing programs and projects may become involved in the GPRS process.

Last, but not least, donor involvement will be particularly crucial in implementing the GPRS. Many donors already focus their programs on growth and poverty reduction objectives. However, by preparing an explicit strategy that outlines the country’s priorities, and by carefully monitoring the results of the strategy, the process of focusing donor assistance in the right places and of coordinating such assistance will hopefully become even easier.

Appendix: 

Albania: Interim Poverty Reduction Strategy Paper (IPRSP)
Prepared by the Government of Albania
May 3, 2000