Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
ALBANIA
FY 1998 Assistance to Central Europe Request . . . . . . . . . . . . . . . . . $ 30,000,000 Introduction
When democratic elections were held in March 1992, Albania, the poorest country in Europe, emerged from a 47-year legacy of almost total isolation and repressive communist dictatorship. The new government immediately embarked on an ambitious macroeconomic and structural reform program for which donor support continues to be critically needed. The flawed 1996 parliamentary election process underlines the need for continued attention to democratic development in Albania. Supporting a peaceful and sustained democratic and economic transition in Albania contributes to the U.S. foreign policy objective of promoting stability in the Balkans. Beyond our support to the transitional processes common to other countries in Central and Eastern Europe, continued engagement in Albania will also lead us to focus on "sustainable development" objectives, such as those often encountered in other parts of the developing world. A comprehensive Strategic Plan for assistance to Albania will be prepared in FY 1997 and will address issues that would be involved in moving to Development Assistance (DA) programming, justifications for doing so, and implications of not doing so.The Development Challenge
Albania faces all the challenges of an economy in transition from an authoritarian, command-driven system to one which is democratic and market-oriented. With a per capita gross domestic product (GDP) of approximately $630, Albania also faces the challenges common to many poor, developing countries.The Albanian economy suffered a 50% decline in real output during 1990-1991, which included a 70% drop in industrial production and a 30% decline in agricultural output. Official unemployment (registered unemployed) is around 13%, but actual unemployment is likely much higher. Much of the economic downturn is attributed to supply and transport bottlenecks associated with collapse of the central planning system and to disruption associated with the spontaneous mass privatization and fragmentation of land.
Although economic growth in Albania has been impressive over the past several years, recent signs of slippage in the Government of Albania's fiscal and economic management may generate new economic reform challenges in the short- to medium-term. A growing budget deficit, creeping inflation, and sharply increased levels of popular investment in an informal and unregulated financial sector (as evidenced, among other things, by burgeoning "pyramid schemes") all raise risks for continued positive macroeconomic performance.
In July 1995, Albania's debt to commercial banks was reduced by $371 million through a debt buyback which cost $96.5 million. Albania contributed $55 million of its own resources, with the Debt Reduction Facility of the International Development Association (IDA) and other donors picking up the remainder of the cost. Another $130 million in commercial debt was converted into long-term bonds. In addition, rescheduling agreements have been signed with bilateral creditors and all payments due under the Paris Club agreements have been made.
While much progress has occurred since 1992 in establishing democratic practices, there have been increasing concerns about the performance of the Albanian Government in the democratic reform area. Institutionalizing certain democratic concepts -- rule of law, independence of the judiciary, executive oversight by the parliament, independence of the media, and decentralized governance -- is critical at this stage of Albania's development.
Other Donors
USAID and the donor community pledged over $400 million in 1995 for development activities in Albania. The United States is the second largest bilateral partner. Other major contributors include Italy, Germany, the World Bank, the European Investment Bank, the European Bank for Reconstruction and Development, the International Monetary Fund, the International Fund for Agricultural Development, and the EU PHARE program.FY 1998 Program
Progress in implementing the Albanian SEED Program continues to reflect the overall economy which remains one of the fastest growing in the Central Europe region. Initiated in 1991, the USAID program originally had a significant focus on humanitarian assistance (food aid and medicines) and emergency responses (fertilizer and school textbooks), but since then has shifted its focus to developmental and transitional assistance as a more market-oriented economy and elements of a democratic society have emerged. In FY 1998, an estimated 45% of program funding will support the accelerated development and growth of private enterprises. New activities initiated in FY 1995 and 1996 are related to public administration, private forestry development, women's reproductive health, a more professional media, and enhanced performance of the legal system (the legal process in and through the courts, and training of judicial personnel); implementation of these activities will be well underway in FY 1998. Following the seating of a new Parliament and administration in 1996, additional possibilities for promoting and catalyzing Albania's steps toward economic and social transition will be identified.As a result of some questionable actions taken by the Government of Albania in the realm of respect for democratic process and human rights, USAID has undertaken a wide-ranging strategy review. The outcome of that strategy review is reflected in the FY 1998 program plan. (Additionally, as noted above, a Strategic Plan will be prepared in FY 1997.) In all cases, coordination and collaboration with other donors will continue to be emphasized.
Strategic Goal: Economic Restructuring Agriculture continues to dominate the Albanian economy by providing over 50% of the GDP and employment. A major proportion of USAID's assistance continues to focus on this sector. Efforts have supported increases in agricultural production by assisting suppliers to obtain credit and import fertilizer, seeds and other vital inputs that cannot be produced locally. A USAID-supported agricultural input dealers association and a national farmers' association successfully lobbied for reducing a turnover tax on fertilizer. With USAID's assistance, over 92% of the land is in private hands. Land registration offices are now open in 15 districts, 519,000 certificates which legally recognize land holdings have been issued to farm families, and 256,000 final property titles have been issued. A law allowing for the buying and selling of agricultural land has been passed and will soon be implemented. This will allow for consolidation of fragmented parcels into economically viable holdings. Private forestry development assistance addresses a critical resource need through agroforestry development on private farm lands, development of small enterprise nurseries, seedling development and processing, and a stronger private forestry extension capacity.
In addition, the small and medium enterprise sector is rapidly expanding. Of the 48,000 registered non-agricultural enterprises, over 90% employ only one or two persons. With USAID assistance over 25,000 potential entrepreneurs have been trained in various fields. In March 1995 the Albanian-American Enterprise Fund was incorporated, and subsequently opened for business in Tirana and New York in August of that year. As of October 1996, loans valued at $4.3 million had been approved, and a total of $1.6 million disbursed to borrowers.
With virtually all the agricultural land, housing, and most small and medium enterprises privatized, the FY 1998 program will target improved productivity and quality in agriculture, increased access to credit and skills training for the private sector.
The underpinnings on which to base economic sustainability include completion of the mass privatization of SMEs and larger enterprises, capital markets development, a sound, efficient banking sector, improved quality of urban and infrastructure services, and resolution of issues related to the status of state commercial banks. Several new private banks were opened in 1996. On the macro level the potential for spillover of instability in former Yugoslavia into Albania in the form of refugee flows from Kosovo (or, worse, engagement of Albanian and Serb military forces in Kosovo or Albania) constrains international investor interest in the country. If significant refugee flows do occur, the effects on Albania's weak economy would be devastating. The lack of physical infrastructure (power, water supply, highways, telecommunications, etc.) also constrain Albania's overall transition to a market-based economy. A weak and non-transparent legal system and continuing disputes between current and former land owners deter foreign investors.
Strategic Objective: Accelerated Development and Growth of Private Enterprises
Strategic Objective: A More Competitive and Market-Responsive Private Financial Sector
Strategic Goal: Democratic Transition
The basic concepts underpinning democracy -- popular representation and participation in government, diversity in ideas and sources of information, rule of law and respect for human rights -- have been introduced in Albania, but support for their institutionalization is very much needed. To aid Albania's transition, the SEED-funded National Democratic Institute (NDI) has worked closely with the Society for Democratic Culture (SDC) to oversee election activities, recruit and train election monitors, and encourage citizen participation. NDI and SDC implemented a comprehensive plan, which included voter education, media monitoring and public opinion polling, for the 1996 parliamentary elections. The International Republican Institute was particularly active in sponsoring a multi-party round table process after the flawed parliamentary elections, which led to substantive changes in the organization of the successful 1996 local elections. The Democracy Network project is encouraging the development and institutional strengthening of public NGOs involved in democracy, the environment, economic growth, and social safety nets. Advisors from the American Bar Association / Central and East European Law Initiative (ABA/CEELI) have assisted in the establishment of a Women's Legal Group as a women's rights advocacy group and a women's bar association and in development of a code of legal ethics. They have developed, published and now distribute professional journals and have established a publicly accessible law library.Key policy objectives for the FY 1997 to 1998 period include the drafting and passage of a national constitution for Albania, to replace the interim governing framework laws passed in 1991 and 1992.
In the area of local government management and urban services, USAID has assisted the Ministry of Public Works and five cities in management of municipal services, including a plan to privatize solid waste collection, and to develop a strategy to implement water privatization in Tirana and other cities. A public administration activity is being augmented by a housing and urban development activity focusing on five municipalities, fostering urban planning, economic development, improved public management capacity, and improved local budgeting capability.
Continued commitment by senior government officials to democratic reform will advance the consolidation of democracy and reinforce the effectiveness of USAID activities. At the local level, democratic reform initiatives are being efficiently and independently pursued by NGOs and local authorities.
Strategic Objective: Increased, Better-Informed Citizen Participation in Political and Economic Decision-Making
Strategic Objective: Legal Systems That Better Support Democratic Processes and Market Reforms
Strategic Objective: More Effective, Responsive and Accountable Local Government
Strategic Goal: Social Stabilization
A focus on social benefits and services to strengthen the human dimension of the transition to democracy is appropriate given their virtual disintegration by 1991-1992. Albania now has some of the worst health indicators in Europe, e.g., high maternal mortality (40 women per 100,000 births in 1994) and high infant mortality (35.7 per 1,000 births in 1994). To lower maternal and child mortality rates, as well as reduce the prevalence of abortion as a method of family planning, USAID in 1995 initiated a women's reproductive health care project with a focus on training public sector and private sector health care providers and the associated development and use of informational materials. While life expectancy was 72 years in 1990 (compared to an average of 76 years in Western Europe), this figure is expected to decline, especially for males, in the absence of appropriate and effective interventions; such decline would be consistent with patterns in the other ex-communist countries of Eastern Europe and Russia.A second emphasis in the health sector is improving the administration and management of health care in general. A "partnership in health care" with the Robert Wagner School of Public Service at New York University will offer extensive training and faculty exchanges in health administration and management to counterparts in the Ministry of Health, the University Hospital Center, the Medical School and the Institute of Public Health. This is complemented by financial management advisory services, arranged through the U.S. Department of Health and Human Services, to develop a hospital payment system and sustainable health insurance mechanisms. Another "partnership" focusses on community outreach and involvement in improving emergency medical services and women's health.
Strategic Objective: Improved Sustainability of Social Benefits and Services
ALBANIA
FY 1998 PROGRAM SUMMARY*
Strategic Objectives
Economic Restructuring Democratic Transition
Social Stabilization Cross-cutting and Special Initiatives Total Privatization -- -- -- -- -- Fiscal Reform -- -- -- -- -- Private Enterprise 13,350,000 -- -- -- 13,350,000 Financial Reform 3,600,000 -- -- -- 3,600,000 Energy -- -- -- -- -- Citizens' Participation -- 3,500,000 -- -- 3,500,000 Legal Systems -- 4,050,000 -- -- 4,050,000 Local Government -- 3,050,000 -- -- 3,050,000 Crises -- -- -- -- -- Social Benefits -- -- 850,000 -- 850,000 Environmental Health -- -- -- -- -- Cross-cutting / Special Initiatives -- -- -- 1,600,000 1,600,000 TOTAL 16,950,000 10,600,000 850,000 1,600,000 30,000,000 *Support for East European Democracy (SEED) Act funds
USAID Representative: Dianne Blane
ACTIVITY DATA SHEET
PROGRAM: ALBANIA
TITLE: Private Enterprise, 180-S001.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $13,350,000 SEED Act
INITIAL OBLIGATION: FY 1991; ESTIMATED COMPLETION DATE: FY 2000
Purpose: Accelerated development and growth of private enterprises.
Background: Albania had one of the most centralized and repressive regimes in the world from the mid-1940s until late 1990. The collapse of communism in Albania came later and was more chaotic than in most other Central and Eastern European countries. Attempts at reform only began in early 1992 after real GDP had fallen by over 50% from its peak in 1989. The democratically-elected government, which assumed office in April 1992, launched an ambitious economic reform program to halt economic deterioration and put the country on the path toward a market economy. Key elements included price and exchange system liberalization, fiscal consolidation and monetary restraint. These were complemented by a package of structural reforms including privatization, enterprise and financial sector reform, and creation of a legal framework for a market economy and private sector activity. These measures resulted in strong macroeconomic performance through 1995. More recently, slippage in Albania's fiscal and economic management has raised concerns about the prospects for continued strong performance.
USAID Role and Achievements to Date: Led largely by the private sector, the Albanian economy is among the fastest growing in the Central and Eastern Europe region. GDP is estimated to have grown by 8.6% in 1995. Projections for 1996 range from 5% to 13.4%. Inflation, which was 16% in 1994, decreased to eight percent in 1995. The Albanian lek has remained stable against the dollar. Agriculture, one of the first sectors to privatize, dominates the economy by providing over 50% of GDP and employment. USAID support has been vital in setting up a network of input supply dealers to provide fertilizer, seeds and other critical inputs. USAID has also taken the lead in implementing a property registration system to provide secure tenure to farm families and in establishing a fledgling land market, which will allow for consolidation of small parcels into economically viable holdings. In addition to work on private farm lands, assistance to private forestry is producing incentives for private leasing of public "refused" lands for sustainable forestry and grazing uses. The small and medium enterprise sector is also rapidly expanding. Technical assistance to small and medium enterprises is being provided in two major secondary cities. In other non-agricultural areas, over 25,000 potential entrepreneurs have been trained in English, computers, secretarial skills, cosmetology, auto mechanics, business and other areas. Many graduates have started their own businesses, while others have found higher paying jobs. Assistance has been provided to the GOA in establishing and improving the policy, legal and regulatory framework required to support the private sector.
Description: Over 55% of USAID/Albania's FY 1997 funding and 45% of proposed FY 1998 resources are in support of this activity. Given the importance of agriculture, a substantial proportion of these resources has been directed to this sector. U.S. firms and universities provide assistance to the GOA in agricultural policy, research, statistics, forestry and in changing university economics curricula to teach free market principles. Agribusiness support is provided directly to entrepreneurs by U.S. firms and NGOs, as is support to non-agricultural small and medium enterprises. U.S. universities lead support to the GOA in setting up a property registration system and in the establishment of Albania's first MBA program. Support is provided by the U.S. Department of Commerce to the GOA in trade policy, trade association development and in accession to the World Trade Organization. U.S. NGOs and firms provide training and technical assistance in legal areas such as commercial/business and collateral law and bankruptcy.
Host Country and Other Donors: Other major donors, especially the European Union (EU) and World Bank, are active in many of the sectors USAID supports. In some cases, USAID/Albania has activities which are closely linked with theirs. These include support to small and medium enterprises and implementation of a property registration system. USAID/Albania collaborates effectively with donors in other areas as well. In agriculture, USAID and EU-PHARE are the major donors. USAID is reorganizing the agricultural research system, while EU-PHARE is working on the development of an extension service. In another example, EU-PHARE has set up mechanization centers and helped develop herbicide and pesticide imports, while USAID has helped set up private fertilizer dealerships and assists with fertilizer imports. USAID support of private farm forestry is complemented by Peace Corps work in forestry extension and World Bank support to the Forestry Directorate. Government support is in the form of personnel, facilities and a demonstrated willingness to make policy and legal changes required to support the private sector.
Beneficiaries: Rural families, which make up approximately 60% of the population, are the major beneficiaries of this activity. USAID support to the agricultural sector and property registration system affects virtually all of them. Other significant beneficiaries of training and technical assistance are entrepreneurs engaged in small and medium enterprises in both Tirana and secondary cities.
Principal Contractors, Grantees, or Agencies: USAID implementors include: Department of Commerce, Urban Institute, ABA/CEELI, Coopers & Lybrand, Development Alternatives Inc. (DAI), Chemonics, International Fertilizer Development Center (IFDC), Winrock International/VPI&SU, University of Wisconsin Land Tenure Center, Volunteers in Overseas Cooperative Assistance (VOCA), Peace Corps, Land O'Lakes, Partners In Education and Training (PIET), the American ORT Federation and the University of Nebraska.
Major Results Indicators: Baseline TargetsReal GDP Growth -27.1% (1991) +5% (2000)
% of labor force unemployed 27 % (1992) 8% (2000)
New private sector enterprises (Number) 2,600 (1991) 90,000 (2000)
Domestic investment (US$) $509 million (1993) $1,290 million (2000)
Foreign Investment $10 million (1991) $120 million (2000)
Membership of selected business 0 (1991) TBD (2000) advocacy groups (individuals)
ACTIVITY DATA SHEET
PROGRAM: ALBANIA
TITLE: Financial Reform, 180-S001.4
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $3,600,000 SEED Act
INITIAL OBLIGATION: FY 1991; ESTIMATED COMPLETION DATE: FY 1999
Purpose: A more competitive and market responsive private financial sector.
Background: The banking system in Albania is virtually insolvent from bad loans to moribund enterprises. Furthermore, capital markets are still in an embryonic stage and not capable of fulfilling their function. Constraints to lending to entrepreneurs include the inability of banks to undertake secured lending, to take control of assets through bankruptcy procedures, and the non-existence of credit reference services. Though state assets are being divested to the public, the shallowness of capital markets impedes the efficient distribution of those assets among those best able to maximize their potential. Informal "pyramid" investment schemes risk drawing capital from more legitimate and production-oriented investment opportunities.
USAID Role and Achievements to Date: USAID's support includes assistance to the Ministry of Finance in privatization of the state banks, to the Central Bank in bank supervision and bank licensing and to both institutions in setting up the Share Registry for the stock exchange. USAID has also set up the Albanian American Enterprise Fund (AAEF) to increase foreign (especially U.S.) and domestic investments in promising Albanian enterprises. As a result, a new Chart of Accounts for banks is being adopted, new private banks -- foreign and domestic -- are being considered for licenses, the ability of the central bank to undertake on-site bank examinations has been increased, and citizens can now register the shares in companies they received as part of the voucher privatization, thereby significantly reducing the potential for fraud and abuse in the privatization and capital market formation processes.
Description: To increase the ability of the Albanian financial sector to effectively, efficiently, and legally mobilize capital towards its most productive use, both through banks and capital markets development, U.S. resident advisors are providing expertise in policy formation and analysis, as well as drafting legislation and regulations. Short-term assistance has focused on hands-on, discrete activities. Credit, equity investments and investment guarantees will be provided directly to investors and entrepreneurs.
Host Country and Other Donors: An International Monetary Fund advisor assists the central bank governor on financial sector policy. The World Bank has a $5 million credit line and has provided considerable technical assistance to the Albanian Rural Commercial Bank to make long-term loans to farmers. The German aid organization, GTZ, has provided technical assistance to the National Commercial Bank and will provide training in bankruptcy procedures as well as expertise in drafting commercial laws.
Beneficiaries: Beneficiaries include: U.S. exporters and investors wishing to do business in Albania who rely on the technical ability of the banks to carry out financial transactions; all depositors and borrowers who rely on the banking system; entrepreneurs seeking capital for development and expansion of private businesses; and institutional investors, domestically and abroad, seeking either to diversify risk or to invest in growing markets.
Principle Contractors, Grantees, or Agencies: USAID implements these activities through the U.S. Treasury Department, the AAEF and U.S. firms.
Major Results Indicators: Baseline TargetsFunds available in private sector $5 million (1995) $29.5 million (2000)
Equity capital (public & private institutions) $58 million (1995) $140 million (2000)
Public/private institutions with adequate 0 (1995) 12 (1999) capital and earnings (Number)
Legally registered financial institutions 1 (1995) 10 (2000) actively making loans (Number)
State-owned banks restructured 0 (1995) 5 (2000) (i.e., privatized or liquidated - cumulative number)
Stock exchange operative No (1995) Yes (1996)
Stock exchange transactions 0 (1995) 60 (2000) (average number per session)
ACTIVITY DATA SHEET PROGRAM: ALBANIA
TITLE: Citizens' Participation, 180-S002.1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $3,500,000 SEED Act
INITIAL OBLIGATION: FY 1991; ESTIMATED COMPLETION DATE: FY 1999
Purpose: Increased, better-informed citizens' participation in political and economic decision-making.
Background: Attempts at democratic reform in Albania started in early 1992 when the newly-elected Government began to develop the legal and political framework necessary for effective citizen participation in the political process. Since that time, Albania has held several elections and a national referendum on a proposed constitution. A parliamentary election held in May 1996 demonstrated that democratic processes have still not been fully established in Albanian political life. The tainted outcome of those parliamentary elections continues to be a source for concern, as it is expected that the Parliament will play a large role in preparing a national constitution during its current tenure. Government management of subsequent local elections in the fall of 1996 did, however, demonstrate notable improvement over the earlier process.
More encouragingly, since the arrival of democracy in Albania there has been a surge in formal and informal associations. Unheard of, and unimaginable during the previous regime except when used as instruments of the state, NGOs now make it possible for citizens to participate in the affairs of society. Almost four hundred new organizations have now been formally established. Strapped for cash and lacking experience, many of them have not developed the capacity for concerted action. Government policy toward the NGOs has been generally supportive but, with a few notable exceptions, these organizations are fragile, underfunded and often ineffective. A new broadcast law is expected to result in the establishment of several private radio and television stations.
USAID Role and Achievements to Date: USAID efforts over the past year have largely focussed on the 1996 electoral process and its aftermath. Activities have included voter education and campaign monitoring efforts in the run-up to the parliamentary elections, election monitoring, sponsorship of multiparty round table discussions prior to the 1996 local elections which promoted reforms in GOA electoral management processes, and direct technical assistance to the Central Election Commission prior to the local elections.
In addition, USAID provided the 1992-1996 Parliament with an electronic voting system, a sound system, computers, two printing presses and associated technical assistance. USAID advisors have carried out political party-building sessions in Tirana and the secondary cities, plus separate leadership training sessions with politically active women and their organizations and support groups. A Parliamentary Guidebook was published containing comprehensive information on Parliament, its deputies and organization, Government ministries, the Office of the President, the court system, political parties, etc. Since 1991, USAID has supported the Society for Democratic Culture (SDC), an Albanian election-monitoring and democracy-promoting organization. USAID advisors have sponsored public opinion polls. An assessment of the nature, problems and needs of the Albanian NGO community has been completed, and initial institution-building grants have been awarded to about twenty NGOs. Political party spokespersons have been trained in campaign management, and a group of journalists has been trained in election coverage.
Description: Current plans are to support an ongoing multiparty round table approach to political consensus-building, now focussed on promoting an open and transparent drafting process for the new constitution. Advisors also continue to support citizen participation, voter education and democracy-building activities of the SDC. USAID advisors are also supporting the Albanian NGO community by encouraging the institutional strengthening of public policy-oriented NGOs involved in four prioritysectors: democracy, the environment, economic growth and social safety nets. To assure a sound legal foundation for the NGO community, USAID advisors will research, publish and distribute a handbook on Albanian NGO law. As a catalyst for permanent collaborative linkages between Albanian NGOs and their counterpart organizations in other countries, a series of NGO internships, exchanges, and information-sharing opportunities are being offered. Assistance is being provided to the press and broadcast media to encourage their independence and viability.
Host Country and Other Donors: Some of the political parties are receiving support and assistance from their equivalent party organizations in Western Europe. Denmark's Dialogue for Development is supporting the Albanian Civil Society Foundation which, in turn, is supporting Albania's NGO community.
Beneficiaries: These efforts will benefit the broad spectrum of politically active citizens by strengthening the organization of political parties, the network of NGOs, and the print and broadcast media.
Principal Contractors, Grantees, or Agencies: USAID implements these activities through cooperative agreements with the National Democratic Institute, the International Republican Institute, the National Forum Foundation, the International Center for Not-for-Profit Law, the Organization for Educational Resources and Technical Training, and the International Research and Exchanges Board (IREX).
Major Results Indicators: Baseline TargetsPolitical parties more representative (number 20 (1992) 40 (2000) of women who run for parliament - 4 selected parties)
Number of 25 selected municipalities with 0 (1995) 14 (2000) public participation in annual budget process
Free and Fair Elections No (1996) Yes (2000)
NGOs participating in public policy-making 4 (1995) 185 (2000) and implementation (cumulative total)
Private, independent media (cumulative 0 (1995) 57 (2000) number of TV and/or radio stations
Number of public hearings by parliamentary 0 (1994) 58 (2000) commissions (cumulative total)
ACTIVITY DATA SHEET PROGRAM: ALBANIA
TITLE: Legal Systems, 180-S002.2
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $4,050,000 SEED Act
INITIAL OBLIGATION: FY 1991; ESTIMATED COMPLETION DATE: FY 2000
Purpose: Legal systems that better support democratic processes and market reforms.
Background: Albania is slowly undergoing a difficult but necessary process of transformation from a communist dictatorship, which was overturned in 1991, to a democratic society characterized by rule of law, respect for human rights, independence of the judiciary and free access to information and ideas.
USAID Role and Achievements to Date: USAID's rule of law program in Albania is aimed at promoting reform in the judiciary, the legal profession, legal education and commercial law. Work is progressing on establishing a law library at the Court of Cassation and the collection of donated books continues to grow. USAID advisors are also assisting in drafting the governing statute and code of ethics for the National Chamber of Advocates. The USAID advisors have assisted the European Law Students Association in publishing the inaugural edition of the University of Tirana Law Review. They have continued to work with the Council of Europe on distribution of over 10,000 copies of various new codes and regulations throughout Albania. The advisors have also presented continuing legal education workshops on the private practice of law, contracting, etc.; supported and participated in a study tour for judges and legal professionals; and offered comments on the proposed constitution and various draft statutes.
Description: Four areas of emphasis help assure that laws and legal institutions support democratic processes: 1) Judicial: an ongoing program to support the Albanian Association of Judges to become a respected and effective representative of the country's judges. 2) Legal: Continuing efforts to help the national and regional bar associations formulate a governing statute; the establishment of the Women's Legal Group as a women's rights advocacy group and a women's bar association; and the development of a code of legal ethics. 3) Legal Education: the development of professional journals including their publication and distribution; the establishment of a publicly-accessible law library; the establishment of a law journal at the University of Tirana's Law School. 4) Commercial Law: the presentation of continuing education courses in commercial law; the preparation of a series of workshops and a handbook on women's legal and commercial rights; and the development and implementation of modern commercial laws.
Host Country and Other Donors: The Council of Europe is providing legal expertise, training, furnishings and equipment for the establishment of a Magistrates School in Tirana to train and retrain the Albanian judiciary. The Government of Albania is refurbishing the building to house the School and courts at a cost of $1 million. Additional donors to Albania's legal reform process are the Soros Foundation, Danida (Denmark) and GTZ (Germany).
Beneficiaries: The direct beneficiaries of these activities are a significant percentage of the Albanian judiciary, including judges, lawyers, prosecutors and law students, and indirectly every member of the public who comes in contact with the legal system.
Principal Contractors, Grantees, or Agencies: USAID/Albania implements this activity through the American Bar Association's Central and East European Law Initiative (ABA/CEELI) project.
Major Results Indicators: Baseline TargetsAdoption of a democratic constitution No (1991) Yes (2000)
Cumulative number of judges, lawyers 0 (1991) 710 (2000) professionally trained
Strengthened legal associations, as No (1991) Yes (2000) illustrated by various measurements such as revenue generation
ACTIVITY DATA SHEET
PROGRAM: ALBANIA
TITLE: Local Government, 180-S002.3
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $3,050,000 SEED Act
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 1999
Purpose: More effective, responsive, and accountable local government.
Background: There is no tradition of decentralized authority in Albania and the public has no experience with a local government able to act on its own authority. The public expects most decisions to be made in Tirana, not by officials at the local level. In addition, current law and practices leave the local governments overly dependent on central government transfers. Albania recently passed legislation which is intended to guarantee that local government becomes an effective means of resolving public problems in order to overcome the general lack of public confidence in local administration and the tendency of the citizenry to address problems at the central level. Nevertheless, Albania is just beginning the process of decentralization of decision-making and resistance to local empowerment and decentralization remains strong.
USAID Role and Achievements to Date: Support in housing, urban development and public administration is being provided. Under the housing and urban development component: (1) the City and District of Tirana, the Ministry of Construction and the National Planning Institute formed a task force to develop a 70-hectare site, identify new sites for development, and address legal and policy issues related to residential upgrading, (2) the Concession Law for Public Services was passed in July 1995, (3) procurement procedures for contracting solid waste have been adopted by the Government of Albania (GOA) and Tirana has contracted with two private firms for solid waste collection while Korca and Durres have started the procurement process, (4) the GOA has agreed to privatize its water services, and (5) the GOA is creating a regulatory body for public utilities (power, water, telecommunications) within the Ministry of Mineral Resources and Energy. Under the new public administration component, initiated in late 1995: (1) agreement was reached between the mayor of Pogradec and a local NGO on a joint solid waste cleanup project, (2) a public-private partnership was facilitated in Shkodra which resulted in the opening of a civilian airport, and (3) public hearings are now being held in some cities, contributing to improved communication between the citizenry and local officials.
Description: The housing and urban development program is assisting in utilities management, land use planning and infrastructure development, emphasizing the roles of public-private partnerships. It is augmented by the new public administration program, which builds on the other program's successes by focussing on efforts to decentralize government decision-making, providing specific assistance in the areas of urban planning, municipal service management, budget process and economic development. This new program targets five local municipalities with an economic development potential which can be fostered through better public management, and it also aims to develop a capacity in local institutions to implement programs that will transfer knowledge gained in working with the pilot municipalities to cities throughout the country. The two programs are complementary, together working to achieve the objective of stronger management capabilities at the local level. Training and technical assistance continue to be provided to the central government as well as to local administrations in the areas of urban infrastructure privatization and regulation, and housing and urban land use planning.
Host Country and Other Donors: The World Bank and a bilateral Italian program provide support in major infrastructure (water, sewerage, etc.). The German Government has provided some technical assistance and training. The EU-PHARE is providing material support, principally computers, and some technical assistance to selected municipalities. USAID support is focused on major secondary citieswhich do not receive similar assistance from other donors. GOA support is principally in the form of personnel and facilities.
Beneficiaries: By spreading the results of successful programs in pilot cities, local authorities in all municipalities will benefit. The citizens they serve, residents of Tirana and secondary cities, will benefit from improved local administration and municipal services. The central government will benefit by turning over to the municipalities many of the duties for which it is currently responsible.
Principal Contractors, Grantees, or Agencies: USAID/Albania implements this activity through DAI/Mendez-England and the Urban Institute.
Major Results Indicators: Baseline TargetsMunicipalities with public participation in 0 (1995) 5 (2000) annual budget process (number of 5) pilot cities)
Increased Autonomy & Home Rule (local 12%-20% (1995) 23%-31% (2000) revenues as % of total budget in 5 pilots)
Cumulative number of municipalities that 0 (1995) 18 (2000) have adopted capital investment plans
Local government implementation of budge No (1995) Yes (2000) procedures & economic development planning
Increased public confidence in loca TBD TBD (2000) government (standard survey measures)
Improved local government services: -water- cumulative number of cities with 0 (1995) 26 (2000) 50% increase hours of service -garbage- cumulative number of cities affected 0 (1995) 19 (2000) by garbage collected and deposited in landfill
ACTIVITY DATA SHEET PROGRAM: ALBANIA
TITLE: Social Benefits, 180-S003.2
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $850,000 SEED Act
INITIAL OBLIGATION: FY 1991; ESTIMATED COMPLETION DATE: FY 1999
Purpose: Improved sustainability of social benefits and services.
Background: After nearly a half-century of economic and political isolation, Albania has the least developed public system of social infrastructure among the Eastern European nations. Many of its health care facilities are seriously dilapidated and outdated. The GOA is quite aware of the urgent need to revitalize and modernize its health care system. Moreover, due to the lack of alternatives brought on by isolationism, an official pronatalist policy and poor information, abortion has been the predominant form of family planning, resulting in high mortality and morbidity rates for women. For women carrying to term, prenatal delivery and postnatal services are woefully inadequate.
USAID Role and Achievements to Date: Working with USAID advisors, key health care administrators have acquired the knowledge and skills needed to manage more efficiently and effectively at the central level (the Ministry of Health) and at the district, hospital and polyclinic levels. Two hospitals, the Durres Hospital and the University Hospital Center of Tirana, were selected to implement hospital operations improvement techniques and to serve as models for the rest of the hospital system. The number of hospital beds, reflecting vacancies, has consequently been reduced. At the Durres Hospital, where the main hospital building collapsed in 1995, a strategic planning process has been instituted which will match available resources with a long-range plan for a replacement hospital. At the University Hospital Center, administrative and medical records were computerized. In both hospitals, pharmaceutical and medical supply purchasing and distribution are being computerized. Several national conferences have been held to share the information and management techniques developed at the pilot hospitals with over eighty hospital managers and administrators from all over Albania. The hospital partnership program has carried out a number of exchanges of medical personnel, sponsored an obstetrics conference in Tirana, and opened a maternal and child health resource center at the Tirana Maternity Hospital.
Description: USAID is focusing its efforts on the areas of health management and administration. An early program between the Jacobi Hospital in the Bronx, New York, and four hospitals in Tirana had a focus on emergency medical services, women's health care, and health administration and management, all key areas of need in Albania. The American International Health Alliance (AIHA) has initiated a new partnership between New York University's Robert F. Wagner Graduate School of Public Service and the University of Tirana's Medical School to introduce a health management program into the curriculum and to sustain the gains made at two pilot hospitals in the areas of strategic planning, financial management and cost accounting, medical records and pharmaceutical group purchasing. A modest program of assistance to Albania's Health Insurance Institute will allow the Institute to study the possibility of including hospital services in the proposed health insurance program. A new two-year effort is improving the knowledge of physicians, nurses, midwives and pharmacists in providing quality family planning services and counseling, increasing the number of service delivery points in both the public and private sectors, and enhancing the ability of Albanian families to make informed decisions regarding fertility and family planning through information, education and communication activities.
Host Country and Other Donors: The World Bank is supporting the reconstruction of rural hospitals throughout Albania and the University of Montreal and the Paris Hospital System are providing planning assistance and management training to the Ministry of Health. The United Nations Development Program (UNDP) is providing health care manuals to medical facilities. Switzerland is providing assistance to the nursing school. EU-PHARE has a Public Health Facilities Maintenance project and issupporting capacity-building at the Ministry of Health.
Beneficiaries: Medical professionals (doctors, nurses, technicians and managers) are the channels through which our programs are functioning, with the primary beneficiaries being Albanian citizens in need of medical care. Women throughout Albania will benefit from access to family planning information and improved counseling and care.
Principal Contractors, Grantees, or Agencies: USAID implements these activities through AIHA and a Participating Agency Service Agreement (PASA) with the U.S. Department of Health and Human Services.
Major Results Indicators: Baseline TargetsInfant mortality (deaths per 1,000 live births) 35.7 (1994) 25 (2000)
Maternal mortality (deaths per 100,000 births) 40.6 (1994) 20 (2000)
Health Services Improved:
-contraceptive prevalence rate (%) 8.3 (1994) TBD (2000)
Access to health education improved: -cumulative # of primary school 255,600 (1996) TBD (1999)l students educated about health
-cumulative # of citizens informed 4,000 (1995) TBD (1999) about family planning
Health services quality improved:
-cumulative # of primary health care clinics 3 (1995) 66 (1999) complying with standards
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