Education, social cohesion and a green recovery are top priorities for people of Albania, says OECD Development Centre report
17/05/2022 – High-quality education, social cohesion and a green recovery were identified as the most important dimensions to create new opportunities and improve the quality of life of people in the Western Balkans region and in Albania, according to the second edition of the Multi-dimensional Review (MDR) of the Western Balkans presented today in Tirana.
Albania is at an important crossroads in its development trajectory. Over recent decades, Albania has made remarkable progress in increasing the well-being of its citizens. With rising gross domestic product per capita and higher household consumption, the share of materially deprived households has been decreasing. In turn, extreme poverty is very low and life expectancy is increasing. Albania has taken important steps to strengthen domestic competencies. Learning outcomes, as measured by the OECD’s Programme for International Student Assessment (PISA), have been rapidly improving. Albania has an excellent basis to forge ahead on a green recovery path, reflecting remarkable progress in recent years across different dimensions. Albania adopted a Law on Climate Change in 2020 and Albania was the first Western Balkan economy to adopt its National Energy and Climate Plan (NECP) in December 2021. In 2017, Albania was one of the first Western Balkan economies to introduce renewable auctions for solar and wind energy.
However, socio-economic and environmental challenges in the economy remain. Despite the positive employment performance in recent years, quality jobs are few and both, youth and long-term unemployment are high. This puts pressure on the social protection system. Lack of relevant skills is an important obstacle. Many companies in Albania report that they cannot generate jobs because they cannot find the skilled workforce needed to fill them. Some 25% of firms recently surveyed identified an inadequately educated workforce as a major (the third-largest) obstacle to business. When it comes to green transition, energy and climate policies are not sufficiently prioritised, and policy implementation frequently lags. Several factors hamper investment in solar and wind power: difficult access to financing; low public awareness of the benefits of renewables; and a shortage of people with relevant skills. Recent roll-out of small hydropower plants (SHPP) are reportedly damaging the environment, especially due to poor planning and monitoring.
The Multi-Dimensional Review of the Western Balkans proposes priorities for enhancing the development prospects of Albania.
Building key competencies of student and adults is a key to create opportunities for citizens. Boosting the digital skills of students should be a top priority, given Albania’s thriving information and communication technology sector. As two distinct ministries hold responsibility for competencies in education, scope exists to improve governance through effective co-ordination and policy coherence. Albania should also improve the quality and attractiveness of vocational education and training (VET), a key education stream to provide job-ready skills. Increasing collaboration between VET and the private sector would be particularly important. Given the rapid pace of technological progress and changing business needs, creating better opportunities for adult learning is also vital to boosting competencies of the current workforce.
To foster social cohesion, providing those most in need with pathways to integrate into society and the labour market is a key priority for Albania. Aligning social protection and labour policies and programmes in design and operationally is an important step to respond to this challenge. Recently, Albania has put in place a comprehensive set of social protection programmes; however, unequal coverage and benefits leave many vulnerable citizens without sufficient social security.
Finally, cleaner air and more access to sustainable energy is key for improving the quality of life in Albania and to make it and an attractive place to live, work and invest in. Given its large hydropower storage potential, Albania has sufficient baseload capacity to replace its electricity imports with domestic intermittent renewables. Albania could explore the possibility of its hydropower storage potential (including pumped hydropower) becoming a “green battery” for the wider region. By incentivising the use of more energy efficient cars and modernising its railway system, Albania could significantly reduce air pollution and greenhouse gas emissions from its very energy-intensive transport sector. To ensure progress is measurable, capacity for air quality monitoring needs to be strengthened. To reduce the environmental impacts of energy infrastructure projects, particularly of small hydropower plants, such projects should be subject to consistent application of environmental impact assessments. More broadly, financing and regulatory frameworks for renewable energy and energy efficiency in buildings need to be further developed.
The Multi-dimensional Review (MDR) of the Western Balkans combines the assessments of five economies: Albania, Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia.
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