Final Report - European Commission - Europa

ii
6. Donors in Albania. The level of
official development assistance is relatively
high, at about 5% of GDP. Both fiscal and
external balance therefore depends to a
considerable extent on donor aid. The EC is
the largest single donor. Albania is currently
in the process of agreeing a Poverty
Reduction Strategy Paper with the World
Bank and IMF. The role of the EC in the
PRSP exercise has been limited.
Relevance of EC strategy to
country needs (p. 12)
7. Strategy documents. In 1995 the
Commission produced a Country Strategy
Paper (CSP) for Albania, followed in 1996
by a Multi-Annual Indicative Programme
(MIP). The MIP proposed a programme
focused in three areas: “development of the
domestic productive base”, “human and
natural resource management”, and the
“European Dimension”.
8. The country analysis contained in both
papers was comprehensive, but superficial.
There was no reference to the danger to
financial sector stability arising from the
pyramid schemes. While there was some
recognition of the institutional weakness of
the Albanian administration, the
implications of this for the implementation
of the proposed programme were not
seriously considered. The result was that the
programme was unrealistic. Even if the
1997 events had not occurred, the
programme was overambitious, unfocused,
and could not have been successfully
implemented. .
9. The events of 1997 led, correctly, to a
reassessment on the part of donors of their
role in Albania. The EC produced a Phare
“Concept Paper” – effectively a new strategy
and MIP. The Concept Paper shows that the
Commission had reflected on some of the
failures of previous EC assistance. Its focus
on governance was appropriate, and
included a relatively frank assessment of
previous Phare assistance.
10. However, the paper lacked analysis of
issues such as poverty, gender, and the
environment for the EC’s strategy. Nor was
there any analysis of the causes,
consequences and implications of migration,
or any serious assessment of the state of
Albanian civil society, or the implications of
this for the Commission’s overall objectives.
While the problems with Phare’s previous
assistance were recognised, this was not
translated into an assessment of the
Commission’s own structural limitations, or
into recommendations for future
programming.
11. The Concept Paper sets out three areas
of concentration: “democratisation process,
institution building and administrative
reform., “Employment generation and
private sector development”, and
“infrastructure development”, focusing on
the transport and water sectors. Phare would
withdraw from other sectors.
12. The strategy had two key flaws. On
public administration reform, the
programmes were overambitious,
fragmented and were not part of an overall
reform strategy or framework. On
infrastructure, the key weakness was a
failure to recognise how deep-seated was the
Commission’s inability to implement
infrastructure projects in a timely and
efficient manner in the Albanian context.
13. Shift in priorities resulting from
SAP process. Since 1999, there has been a
re-alignment in EC programmes away from
broad-based economic development and
towards prioritisation of EU integration.
However, there was no formal analysis of
the rationale and significance of this very
important shift. Moreover, a country
strategy which was due in the year 2000 was
not prepared.
14. The consequence of this shift was an
increasing number of relatively small public
administration and institution-building
projects focused on formal EU
harmonisation and integration requirements..
The result is a set of interventions that are
uncoordinated and are directed not at
supporting the construction of a professional
Albanian administration, but rather at
“checking off” different areas in which
action is regarded as a precondition in the
context of the SAA.
15. In view of the Evaluators, this
sequencing is incorrect. Without sustainable
economic development, built on functioning
public institutions, and founded on a strong