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Implementation Completion Report (ICR) Review - Technical Assistance Project for Economic Reform

1. Project Data:   
Project ID:
Project Name:
Technical Assistance Project for Economic Reform
Privatization, Private Sector Development
L/C Number:
Partners Involved:
Prepared By:
Laurie Effron, OEDCR
Reviewed By:
Alain Barbu
Group Manager:
Ruben Lamdany
Date Posted:

2. Project Objectives, Financing, Costs, and Components:

The TA project was to improve the ability of the Government of Albania in: (i) macroeconomic management;(ii) enterprise restructuring and privatization; and (iii) financial sector reform. The project was approved in conjunction with the EFSAC, a credit in support of reform in all these areas, and was designed to help in the preparation and implementation of the reforms to be carried out in the context of that credit. It was approved in May 1993 (about 15 months before the EFSAC was approved) for a credit amount of US$4.0 million equivalent; total project costs were estimated at US$4.6 million. The main components were long term and short term consultants, studies, equipment and teaching materials, and training and study tours. The project was amended in 1997 to provide technical support for winding down remaining pyramid schemes.

3. Achievement of Relevant Objectives:

(i) In macroeconomic management, the project helped in the preparation of the public investment programs (PIP); financed the automation of the Ministry of Finance treasury operations; and developed macroeconomic forecasting. (ii) In enterprise restructuring and privatization, the project provided TA to the Enterprise Restructuring Agency, which accomplished its main tasks and was subsequently disbanded; funds were also used from the project to support the mass privatization program, not originally foreseen at appraisal. (iii) In financial sector reform, TA funds were used to audit the state owned commercial banks for the first time, to establish a bank courier system (as a precursor to a payment and settlement system) and to automate the Bank of Albania's information and accounting system.

4. Significant Outcomes/Impacts:

Within the context of the original objectives, funds were used flexibly to support Government programs, such as the mass privatization program, that had not been envisaged at appraisal. In addition, after the collapse of the pyramid schemes, TA funds were used in conjuction with other donor funding (all of which was placed in trust funds administed by the Bank under the TA project) to help the Government wind down the remaining schemes.

5. Significant Shortcomings (include non-compliance with safeguard features):

The project was overly ambitious, given the limited capacity of the Government. Some of the activities never took place because of the civil unrest or disagreement over policies.
6. Ratings:ICROED ReviewReason for Disagreement/Comments
SatisfactoryMarginally Satisfactory
    The objectives were only partly achieved. In the area of macroeconomics, for example, national accounting was never strengthened; in the enterprise sector, some of the newly passed laws are inconsistent with each other and implementation remains weak, although these two areas were specific objectives of the TA project; in banking sector reform, except for the audits, little was done under the TA project.
Institutional Dev.:
    Same rating, different nomenclature.
    The sustainability of the specific accomplishments of the TA project are still subject to uncertainty: for example, will the PIP be integrated with the budget? will the macroeconomic forecasting ability be used efficiently in its new location in the Ministry of Economic Cooperation and Trade? will the new legal framework become effective? In the present context of Albania, the sustainability of these accomplishments is uncertain.
Bank Performance:
Borrower Perf.:
    The Borrower's performance is considered unsatisfactory, although marginally so, because of high staff turnover, frequent changes in organizational structure, and limited progress on financial sector reform, which was one of the three main objectives of the project.
Quality of ICR:

7. Lessons of Broad Applicablity:

OED agress with the lessons cited in the ICR: Continuity of good staff on both the Government and the Bank's part are needed; timetable and scope of TA projects should be realistic, with interim monitorable steps identified; the Bank needs to be ready to supervise TA projects intensively; and TA projects should have some flexibility built in, so as to be able to respond to changing conditions.

8. Audit Recommended?  No


9. Comments on Quality of ICR:

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