Washington, May 24, 2017—The new World
Bank Group (WBG) Country Partnership Framework (CPF) for Kosovo for 2017-21
aims to assist the country in moving toward more sustainable, export-oriented,
and inclusive growth, so its citizens are provided more opportunities for
a better life.
“The strategy discussed today by the World Bank Group’s Board of Executive
Directors supports Kosovo’s development agenda by focusing on three areas
- accelerating private sector growth and job creation, improving public
service delivery, and promoting reliable energy,” says Ellen Goldstein,
World Bank Director for Western Balkans. “With this new strategy, the
World Bank is supporting projects and reforms that will accelerate growth
and promote employment - particularly for young people and women.”
Kosovo has enjoyed stable and inclusive economic growth in recent years.
However, this growth has primarily been driven by consumption - fueled
by remittances and foreign aid - and has done little to generate employment
in the country. To maintain fast and steady growth that can create jobs,
a gradual rebalancing toward higher productivity at home and greater competitiveness
abroad is needed.
The WBG program has contributed to notable improvements in the business-enabling
environment in Kosovo in recent years. These improvements helped the country
move from the 117th position in the Doing Business ranking in 2012 to 60th
place in 2016, driven by improvements in business registration and cadastral
and land registration systems. Kosovo’s financial system was also strengthened
and has demonstrated greater financial stability.
Under the new CPF, the WBG will continue to support the reduction of the
administrative burden for businesses, as well as promote investment policy
reforms that can attract private investment and higher quality Foreign
Direct Investment to the country. Through the recently approved Competitiveness
and Export Readiness Project, the World Bank will also help Kosovo strengthen
product certification for export markets and develop the export-readiness
of businesses. It will also support productivity and competitiveness in
agriculture, a sector with good export and job-creation potential.
To address the constraints limiting greater private sector contribution
to growth, the International Finance Corporation (IFC), a member of the
WBG that promotes private sector development in developing countries, will
continue supporting the private sector through investments and advisory
work to encourage economic growth and job creation.
"IFC will be engaged in efforts to improve the business environment
and corporate governance, attract private sector participation in infrastructure
and energy projects, and help improve access to finance for companies engaged
in manufacturing and services, as well as agricultural producers,” said
Thomas Lubeck, IFC Regional Manager for the Western Balkans.
The WBG will also support the Kosovo authorities in their efforts to improve
financial management, public administration, and public service delivery.
It will seek to promote efficiency and prioritization of public spending
to ensure the best use of scarce public resources. WBG’s support will
focus on cross-cutting management of public resources, complemented by
targeted interventions to enhance the quality of, and access to, education
and health services. The goal is to help Kosovo capture its demographic
dividend by creating jobs and economic opportunities for young people.
The WBG will also continue to support Kosovo in alleviating the country's
unreliable energy supply, the most binding constraint to accelerating growth,
reducing poverty, and creating jobs.
“The World Bank, along with other development partners, is committed to
helping Kosovo resolve its energy shortages through a comprehensive strategy
that includes increased energy efficiency, development of renewable sources
of energy, integration into regional power markets, and support for new
power generation that is both reliable and affordable for citizens,” says
Marco Mantovanelli, World Bank Country Manager for Kosovo.
The CPF will build on the substantial progress that has been made, through
support from WBG programs, on renewable development, energy efficiency,
and environmental cleanup initiatives in the energy sector. For example,
the Bank helped end the 50-year old practice in power generation of the
open dumping of dry-coal ash, replacing this polluting system with a new,
closed wet-ash handling system. The WBG is also currently supporting the
rehabilitation of public buildings to improve energy efficiency, as well
as the development of renewable energy projects for private sector investment.
IFC has advised the Government of Kosovo during the privatization of the
supply and distribution business of Kosovo's electricity company, which,
so far, has generated EUR 148 million through tariffs and reductions in
World Bank Group financing to Kosovo during the CPF period is estimated
to range between $210 - $280 million. Kosovo is eligible for financing
from the International Development Association (IDA) of the World Bank
Group, which is the fund for the countries with the greatest development
needs. IDA credits are provided on concessional terms, with zero or very
low interest charges and long repayment periods. The World Bank has an
on-going portfolio of six projects, for a total of $124 million. The IFC
expects to support the private sector in Kosovo with up to US$60 million
during the CPF implementation period. IFC currently has three projects,
totaling $7.5 million.
This CPF was informed by a series of consultations with a broad spectrum
of stakeholders—government, parliament, civil society, think-tanks and
academia, private sector, and international development partners.
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