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Albania: Poverty Reduction Strategy Paper—Annual Progress Report

Author(s):
International Monetary Fund
Published Date:
January 2006
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6 Recommendations for the MTBP 2006-2008

The Progress Report has presented the country’s remarkable achievements since the development of the NSSED. In the last four years, all the growth targets have been reached before the planned date. Poverty appears to be falling and this is expected to be confirmed next year with the results of the 2005 LSMS. Most social and economic indicators are improving. To what extent should the allocation and efficiency of public expenditure be credited with this success? Figure 6.1 suggests that spending has been directed to priority sectors in the 2003 and 2004 budgets, which were the first to be developed after the formulation of the NSSED. The improvement of the planning architecture is expected to consolidate this shift. A key constraint remains the low rate of revenue collection that constrains efforts to expand the amount of resources allocated to priority sectors.

Figure 6.1Expenditure in priority sectors as proportion of total, 2002-2004

Source: Ministry of Finance, Information and Technology Department

The rate of budget execution has been high. An additional positive message is the shift in the composition of total spending towards much needed capital investment in priority sectors between 2001 and 2004, as shown in Figure 6.2. Actual expenditure on capital investment has exceeded the budget in practically all priority sectors and all years. In 2004, this was assisted by the proceeds of the sale of the Savings Bank, which led to an increase of public investment, which according to provisional estimates reached 5.5% of GDP.

Figure 6.2Capital expenditure in priority sectors as proportion of total, 2002-2004

Source: Ministry of Finance, Information and Technology Department; NSSED Department calculations

According to the budget calendar presented in Annex 4 and in line with the principles of the Integrated Planning System presented in Chapter 1, a key role of the NSSED Department is to advise on the allocation of resources in the design of the MTBP. The advice is submitted during the design phase of the three-year budget programme in the form of a technical note.

Improving the costing and prioritisation of NSSED public actions

An ongoing project, supported by the Poverty Reduction Strategy Trust Fund, is intended to strengthen the capacity of 5 line ministries to prioritise and cost public actions as identified in the NSSED. Improvements in prioritising public expenditure programs will contribute to better linkages between the NSSED and the ongoing process of budget reform. The project works in close cooperation with the MTBP process to ensure complementarity. The 5 ministries are: Labour and Social Affairs, Health, Education and Science, Transport and Telecommunications, and Agriculture and Food.

Current links between the NSSED Public Priority Action Plan 2004-07 and the MTBP within targeted ministries were reviewed. In an attempt to establish whether the 2 processes are consistent, the Public Priority Actions in the NSSED, the main priorities identified by the 5 target line ministries and funding allocated within the MTBP were compared. In each ministry, the output of the process is a matrix demonstrating the correspondence between the 3 sets of documents. A series of workshops have examined how each ministry builds consensus for agreeing on priority measures within the predicted resources available, in other words the ceilings set in the course of medium-term budgeting.

Taking the example of the Ministry of Labour and Social Affairs, the analysis has shown so far that the structure of the Ministry’s budget submission has differed from the definition of programmes used by the Ministry of Finance in the formulation of the budget. This makes it difficult to find a clear correspondence between activities defined as priority by the line ministry and those actually funded and gets in the way of monitoring budget design and implementation. It is mainly as a response to this weakness that this year’s Progress Report has worked closely with the MTBP.

Alternative demands on public expenditure need to be balanced. Over the coming few years, policy makers will increasingly be called upon to decide whether measures related to the poverty reduction or European integration goals should take priority. The development of the Integrated Planning System is precisely seen as providing a decision environment that will facilitate this prioritisation process.

As already suggested in Chapter 4, the objectives of both strategies need not necessarily be at variance with each other. For example, they coincide in 3 key sectors:

  • Water and sanitation. There has been progress in increasing access and quality and the relevant targets have been reached. However, the overall indicators are still very low compared to countries in the region and in certain parts of the country the situation is particularly problematic. Better off households have coping mechanisms but these are expensive and unaffordable for the poor. The evidence from the LSMS suggests a link between poor health and lack of access to water. These findings imply that there needs to be a renewed effort to boost investment. They also call for urgent solutions to continuing management problems related to the decentralisation process. The information provided at both the design and the implementation stages of water infrastructure projects needs to be more complete to allow issues of efficiency to be evaluated.
  • Energy. Since 2002, the situation has improved, although the gains appear partly the result of favourable climatic conditions. Power cuts continue to act as a disincentive to investment. The implementation of the electricity strategy and the reform of KESH (including its breakup into separate companies for distribution, transmission and generation of electricity) are not only a part of the European integration agenda but also intrinsic components of poverty reduction and growth. Poverty reduction objectives require in addition close monitoring of the introduction of lifeline tariffs for consumers, as the largest source of price increases in the past year has been the increase in utility tariffs. The proportion of the budget allocated to energy has been declining during the three years of implementation of the NSSED and this may need to be reconsidered.
  • Transport. Although certain issues in the setting of priorities in the rail and air transport subsectors are yet to be determined, primary emphasis needs to be placed on speeding up road projects, particularly the main horizontal and vertical axes. The share of investment increased in 2004 but this trend needs to be further supported.

The development of all these sectors was emphasised in the NSSED. It continues to be critically linked to the development of sectors that have been identified as potential sources of growth (for example, agro-processing and tourism) in the debate organised by the NSSED Department and in other recent assessments of the Albanian economy.

The agendas of the poverty reduction and European integration strategies also meet with respect to the need to strengthen the capacity of public administration. Currently, there is a commitment to cap the share of civil service salaries in GDP. Reforms are being considered to increase the component of payments that is based on incentives. Ongoing functional reviews of ministries aim to increase efficiency in the structure of institutions. However, the proposed establishment of a set of new institutions and the human resource implications, particularly under the European Partnership Action Plan, means that the efforts to increase efficiency must be strengthened if the commitment to contain the budget is to be respected.

In other areas, the policy debate needs to be continued to clarify and align priorities between poverty reduction and the integration process.

  • Education. The European integration agenda wishes to strengthen vocational training policies to be led by the Ministry of Labour and Social Affairs. This includes the establishment of a National Agency for Education and Professional Development, as specified in the European Partnership Action Plan. The Ministry of Education pursues the diversification of curricula to introduce vocational elements in secondary education. It is important to put these initiatives in the broader context of the overall low enrolment and completion rates in secondary education, which represents a potentially very important constraint to growth prospects. From a poverty reduction point of view, an emphasis on measures attracting and retaining students in general secondary education appears a more immediate priority.
  • Health. European integration policies focus on the prevention of communicable diseases and support to surveillance systems, whereas the NSSED has focused on the shortages in outpatient clinics and medical personnel in rural areas. While acknowledging measures to expand infrastructure and motivate staff to take up posts in these areas, the efforts need to be strengthened and the results of these initiatives need to be more closely monitored.
  • Rural development. The NSSED has repeatedly stressed the need to support disadvantaged rural areas through institutions like the Mountain Areas Development Agency and the Mountain Areas Finance Fund. At the same time, the integration agenda includes plans to establish a rural development agency that will play the role of the institution to administer pre-integration funds once Albania acquires the status of a candidate country. It would be important to map out the areas where these different institutions complement each other in the forthcoming development of a national strategy. This should also be seen in the context of declining budget allocations for the Ministry of Agriculture in recent years.

In addition, over the course of negotiations for the signing of the Stabilisation and Association Agreement and in the context of the National Plan for the Approximation of Legislation, the government is likely to commit itself to a number of institutional reforms in the environment, justice and public order sectors that will need closer scrutiny of their budget implications. This Report has argued that emphasis should be placed on low-cost interventions in these areas to manifest the country’s political commitment to applying the rule of law that will allow it to conclude the Stabilisation and Association Agreement and to postpone costlier measures until European funds can facilitate more ambitious reforms. Focusing at this stage on strengthening its infrastructure and public administration is in the interest of Albania from both the poverty reduction and the European integration point of view.

Finally, there needs to be stronger commitment by line ministries in the evaluation of the results of their policies using all available evidence. This Report has highlighted ways in which line ministries can review their policies. In the course of the preparation of this Report, selected line ministries were invited to submit proposals for policy impact analyses that the NSSED Department could support. The response was not encouraging, as ministries did not appear particularly interested to engage in a critical discussion of their policies. The forthcoming revision of the NSSED requires a change of attitude if the debate is to focus on improving the value of public expenditure.

Discussing progress in the implementation of the NSSED with members of Parliament

In May 2005, a roundtable was organised to discuss the progress made during 2004 in the education, health, social protection, environment and integrated rural development sectors. Members of the Parliament, representatives of respective parliamentary commissions, representatives of OSCE, and experts of line ministries attended.

The representative of OSCE expressed appreciation for the organisation of this event and for the continuous cooperation with the Parliament, the Ministry of Finance and the NSSED Department, emphasising the growing necessity of this cooperation. The aim of the meeting was to obtain feedback from Members of Parliament and strengthen their role in improving the 2004 Progress Report document and the NSSED process in general. The presentation of the NSSED process and the progress made in priority areas encouraged the debate between participants highlighting improvements made, as well as issues and policies to be improved in the future. One of the most important issues discussed by all participants was the need to move from particular programmes and projects to a national strategy of clear options and objectives reflected in the budget. The necessity of strengthening the role of the Parliament along all phases of strategy development, and of discussion in the respective parliamentary committees, was also stressed, as was the need to strengthen legal obligations to strictly implement priorities and ensure the follow-up of reforms and policies towards accomplishing national goals, regardless of changes of government or political forces in power.

Another suggestion has been the drafting of national strategies for each sector, determining clearly sectoral objectives, policies, system of indicators, policy standards and compliance of such strategies with the NSSED. It was stressed that NSSED should incorporate all other sectoral and regional strategies and each of them must be under the focus of NSSED. To this end, defined objectives and priorities should be consistent with each other. It is necessary to deepen the participation process in reaching a national consensus on policies and issues to be contained in the strategy and to improve awareness of all stakeholders in the NSSED. In relation to the issue of institutionalisation, i.e. the need to structure the NSSED process by accurately determining who should draft, approve and implement, was underlined. Drafting and implementing the strategies should not be regarded as separated from drafting and implementing the budget.

The legal framework has been evaluated as problematic, since a law should not be approved if not accompanied by financial and political cost considerations. Another debated idea was that of establishing a parliamentary commission of development and technology. It was also observed that to raise the quality of the strategy, the Members of Parliament should have more time to review and discuss it before approving it.

A unique National Strategy should be drafted during 2005-2006 to determine the long-term national vision and achieve national consensus on all issues included in it. Since European integration will be its major focus, this strategy may be called the Strategy of Development and Integration. It is also suggested that strategies that are drafted should be medium-term because of social changes and of changes that the public sector may undergo in the future. Integration of regional strategies should be also taken into consideration.

In the field of education, the importance of teacher training was stressed. The cooperation with the specialised structures in the Ministry of Education and Science and the Institute of Pedagogical Studies should be strengthened. Decentralisation in the education sector was identified as a specific problem because of doubts about the capacities of Regional Education Departments and local government. Regarding the reasons of dropouts it was requested that they are reformulated more clearly. The closure of small schools and their concentration has been evaluated as a good alternative, which could redirect investment to other options, such as ensuring transport for children etc. The issue of distribution of free textbooks was discussed and one participant argued against it because it could lead to misuse of books, suggesting a subsidy instead. The introduction of a psychological service in schools was appreciated as a very good initiative; however it should not be focused only on children abandoning school.

As far as the health sector is concerned, it was emphasised that capacities should be built and mechanisms established to measure its performance and quality. Some Members of Parliament were critical of the progress in this sector, especially the present state of the level of services and the health infrastructure in rural and northern mountainous areas. Financing of these areas should increase at a faster rate.

A question raised for discussion was whether it is possible to establish an obligatory discussion and approval of NSSED in the Parliament. The issue was also discussed with the Parliament’s Economy and Finance Committee, in the context of extending the role of Parliament in the implementation of the NSSED and the review of the Organic Budget Law. Although the role of Parliament has grown in budget discussions, Members of the Parliament suggested an even greater role toward the NSSED.

The issue of accuracy of data produced by INSTAT was also discussed, pointing out the need to improve the system of indicators, without which there can be no correct analyses and no forecast for the future can be achieved.

Regarding environment issues, environmental protection has been evaluated as a positive fact. However, it was admitted that there is yet no consistency between projects and programmes for the environment financed by different bodies. Thus, it was underlined once again that foreign aid needs to be harmonised and coordinated toward the priority to improving the environment conditions. According to participants, more attention should be paid to the use of the concept of integrated investment in time and space within a particular area because this is what impedes the development of the agricultural sector and rural areas. Members of Parliament asserted that more attention should be paid to regionalisation of agricultural production. As for subsidies in agriculture, based on international experience, it was suggested that they should be allocated for maintenance and for rural areas. Regional development should determine if an investment is worthwhile or not and this is consistent with the concept of integrated investment in several areas at the same time. Standards should be defined and credit should be ensured for regional development.

The importance of sustainable management and planning of resources have been stressed, because what is most important is that funds and capacities be allocated in due place and time.

Annex 1 Selected monitoring indicators

According to the new Integrated Planning System, the NSSED will be focusing on medium and long-term strategic planning, and will be extended in order to cover all government priorities. In terms of monitoring and data collection the first steps have been undertaken in order to measure the performance against priorities identified across all planning frameworks. The monitoring of national goals will be clearly linked to high-level social indicators and the results of special studies in order to follow the long-term progress of the country. Collaboration with line ministries will be changed from focusing on short-term results into following the progress towards medium and long-term policy outcomes.

The Management Information System at the Department of Policy Development and Coordination (DPDC) at the Council of Ministers will be confirmed as the primary short- to medium-term performance monitoring system for use by central institutions and ministries in implementing the integrated planning system. The database structure will be harmonised with the MTBP classification system with implementation of the redesigned system occurring in 2006. The Management Information System will capture all approved ministry outputs and output targets and they will be specially coded to enable specialised monitoring of sector and crosscutting strategies. An annual monitoring plan will be negotiated with ministries to identify which major outputs and output targets will be monitored by central institutions and which will be subject to internal ministry monitoring. Ministries will be directed to update the Management Information System on a timely, accurate and periodic basis and the DPDC will develop standards in 2005.

In terms of evaluating progress towards the long-term strategic directions, the NSSED Department will use administrative data as well as data from households survey, the Census, and national accounts, aiming at increasing the quality of analyses and strengthening the collaboration with INSTAT in defining data that address Government’s priority policies. During 2004, cooperation with INSTAT continued on the LSMS questionnaire, in order to address national policies, on labour and social affairs, health, education, agriculture, and land. Output of the national statistical system was used to evaluate the impact of two selected policies: the distribution of economic assistance block grants to municipalities and communes and the impact of teachers’ qualifications on student performance (referred to in Chapter 4).

Decision-making at the NSSED level requires only a limited number of high-level indicators, which reflect the broader objectives of government policy or broad trends in socio-economic conditions. Based on best international practices, this year’s Progress Report has reduced the number of indicators per ministry to focus on the policies of highest priority. This Annex reports on a supplementary list of high-level indicators to highlight the shift of emphasis from output and input indicators to outcome and impact indicators. It must be stressed that this process is far from complete. A definitive list of monitoring indicators will have to be developed in the framework of revising the NSSED. During the preparations, stakeholders will agree on a set of indicators with new target levels that will be embedded within the resource envelope. An agreement will need to be reached with INSTAT to ensure the timely and accurate submission of updates each year.

Table A1.1Selected monitoring indicators
Indicators/ DefinitionSource
20002001200220032004
Growth
Domestic public investment / GDP6.87.46.04.65.8*Min of Finance
Remittances (in million $)531615632778966Bank of Albania
Number of tourists (excl. ethnic Albanians) (in thousand)151165196207246INSTAT
Education
Student-teacher ratio in primary education18.718.918.918.818.8Min of Education
Student-teacher ratio in secondary education17.918.820.721.622.0Min of Education
Health
Life expectancy at birth74.674.974.974.475.4INSTAT
Proportion of one-year olds fully immunized against:
Diphtheria, pertussis, tetanus95.597969797Min of Health
Poliomyelitis9696969697Min of Health
Tuberculosis85919195Min of Health
Ratio of doctors per 1,000 inhabitants2.22.32.12.1INSTAT
Social policy
Dependency coefficient of old age pension plan (contributors / beneficiaries) (urban and rural)1.051.061.160.910.79Institute of Social Insurance
Agriculture, environment and natural resources
Agricultural sector production growth rateINSTAT
AgricultureINSTAT
LivestockINSTAT
FisheriesINSTAT
Irrigated land area (in thousand hectares)697293108Min of Agriculture
Mechanisation rate (2000=100)1009796108Min of Agriculture
Chemical fertiliser used (kg/ha cultivated land)3.12.83.03.03.1Min of Agriculture
Trade balance in agriculture (in Lek billion)-11-12-13-16-11INSTAT
Trade balance in agro-industry (in Lek billion)-20-21-26-24-20INSTAT
Transport
Number of deaths in motor vehicle traffic accidents216211260WHO HFA-MDB
Energy
Hydroelectric energy generated (GWh)4736368431235865417KESH
Hydroelectric energy imported (GWh)107218192269937567KESH

Provisional data for 2004; … Not yet available; 1According to the World Bank Country Economic Memorandum, road fatalities are believed to be underreported by 15-25% because government statistics refer to death at crash site rather than death within 30 days as the international convention requires.

Provisional data for 2004; … Not yet available; 1According to the World Bank Country Economic Memorandum, road fatalities are believed to be underreported by 15-25% because government statistics refer to death at crash site rather than death within 30 days as the international convention requires.

Annex 2 Mid-term plan of priority actions

As mentioned in Chapter 1, this year the matrices of mid-term priority actions were developed in line with the medium-term budgeting process. This was decided in order to address a criticism made by various stakeholders, not least in the Joint Staff Assessment of last year’s Progress Report, that it is often not clear what the cost of priority policies is and whether they fit into the MTBP. According to the instructions issued by the Ministry of Finance, the preparation of the medium-term budget relies on the contribution of line ministries in 2 steps:

Programme Policy Review Ministries describe policy goals and objectives for each programme.

Programme Expenditure and Investment Planning Ministries identify target output levels for each of their programmes and allocate sufficient resources from their medium-term budget preparation ceiling to each programme for the delivery of those target outputs. Resource allocations include allocations for public investment.

Only 5 ministries have worked through these procedures this year: Education, Health, Labour and Social Affairs, Agriculture and Food, and Territorial Adjustment and Tourism. In addition, the Ministry of Transport and Telecommunications submitted a review of one of its programmes. Their Programme Policy Review matrices are presented below. A Programme Policy Review is not intended to be a full and comprehensive review of the sort that is required for an update of the NSSED. However, line ministries need to demonstrate that they have:

  • identified and described each of their expenditure programmes;
  • reviewed the policies relating to each expenditure programme to ensure that a programme policy statement can be written (or revised);
  • reviewed the policies so that they are consistent with and reflect wider national policies (NSSED, European integration, NATO accession); and
  • identified the status of each of their policy statements (for example, whether any particular policy statement has implicit or explicit Council of Ministers approval)

The NSSED Department took part in the process through the MTBP Secretariat and reviews of the line ministry inputs for consistency with the national strategy.

Of the remaining ministries, the 8 ministries with the largest shares in the budget were asked to prepare a sector expenditure strategy, a less comprehensive procedure to encourage a strategic approach to the planning of public expenditure. The sector strategies identify concisely target outputs, beneficiaries, the current situation, plans for reform and the budget implications for each programme to consolidate the link between budgets and policies. Of these ministries, the following submitted a sector expenditure strategy: Defence, Finance, Industry and Energy, and Local Government and Decentralisation. The NSSED Department was directly involved in assisting the Budget Department in the development of these strategies. The following ministries did not submit a strategy: Culture, Youth and Sport, Environment, Justice, and Public Order.

It must be stressed that the matrices do not yet indicate whether the proposed activities will receive budget funding, as the medium-term budget programme process had not yet been completed at the time of writing. However, their inclusion in the Progress Report is considered essential in showing the links between the NSSED and MTBP processes. This is a first small but significant step for the NSSED Department to assume an increasing role in the formulation of strategies at the sector level. In the context of the Integrated Planning System, the NSSED Department will assume increasing responsibilities over the coordination of sector and crosscutting strategies. The prioritisation process will need to be ever more strategic in linking long-term goals with medium-term policies that are embedded in medium-term budgeting.

2.1 MINISTRY OF EDUCATION AND SCIENCE

Programme 1: Planning and management
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Guidance of decentralisation process of pre university education system (in cooperation with The Ministry of Local Government and Decentralisation). Increase of efficiency for education system administration in all levels of education.(1) All communes will manage investments for new buildings and school maintenance beginning year 2010

(2) All schools (public and non public) of pre-university education system will be inspected once in three year.
Year 1

(1) Pilot experiment for decentralisation executed by Tirana Municipality will end in 2006. (2) Amended law for decentralisation of education system (3) Increase 20% number of communes involved in decentralisation process for education system. (4) 20% of schools inspected using the new inspection system.

Years 2-3

(1) Increase 20% number of communes involved in decentralisation process for education system. (2) 20% of schools inspected using the new inspection system.
(1) Legal framework and guidelines for decentralisation process in education

(2) Investments in infrastructure/maintenance of schools functions transferred to local governments

(3) New inspection system, adapted from European experiences, to evaluate the performance of all schools of preuniversity education system.
Programme 2: Basic education
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
(1) Equal opportunities to compulsory education for all children of relevant age

(2) Complete education reform in content and methodology designing new curricula and implementing standards of content and achievement

(3) Improve management of human resources by raising teacher motivation
(1) Increase number of school years, by expanding the compulsory education from 8 to 9 years; increase average years of education for population from 9.5 to 10.5 during next 10 years

(2) Increase enrolment rate in compulsory education (99%) and kindergarten (47%).

(3) Increase the number of schools and classrooms; improve teaching facilities in order to provide optimal teaching conditions; equip schools with teaching and laboratory tools as well as other necessary school equipment.

(4) Increase education results by implementing minimal and maximal educational standards.
Year 1

(1) Build new schools and rehabilitate existing ones, particularly in urban areas reducing by 20% the students that learn under inappropriate conditions. (2) Design new curricula (programmes and textbooks) for the 3rd and 7th classes of compulsory education. (3) Increase number and quality of school equipment, providing for their maintenance, with particular emphasis on laboratories of chemistry, physics, and biology. (4) Provide 100% of pupils with textbooks.

Year 2

(1) Design new curricula for the 4th and 8th classes of compulsory education. (2) Build new schools and rehabilitate existing ones, particularly in urban areas, reducing by 30% the students that learn under inappropriate conditions. (3) Widely equip basic education schools with teaching and laboratory tools in order to increase the teaching quality. (4) Provide 100% of pupils with textbooks.

Year 3

(1) Design new curricula for the 5th and 9th classes of compulsory education. (2) Build new schools and rehabilitate existing ones, particularly in urban areas, reducing by 30% the students that learn under inappropriate conditions. (3) Widely equip basic education schools with teaching and laboratory tools in order to increase the teaching quality. (4) Provide 100% of pupils with textbooks.
(1) Number of textbook/students, complete 100% of needs.

(2) Number of rehabilitated or newly build schools and surface (m2)/ pupils

(3) Number of equipment and necessary teaching tools reaching 3 laboratories per 1000 pupils.

(4) 22 pupils/teacher

(5) 35 pupils/classroom

(6) Assessment of achievements according the standards reaching 98% practicability.
Programme 3: General secondary education
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Increase high secondary education enrolment, create optimal working conditions in schools, reform methods and content to improve teaching quality and student comprehension (1) Higher secondary education enrolment: 79% in 2006 and 90% in 2009.

(2) New diversified secondary education curricula in all higher secondary schools.

(3) Improve content quality, teaching level, and student comprehension through improved curricula, continued progress in school technology, and teacher qualification and motivation.

(4) Improve school infrastructure through the construction and rehabilitation, expanding capacity by 5-7 % annually, to reduce number of pupils per class and equip schools with teaching materials.

5) Publish and subsidise all higher secondary level textbooks for all students
Year 1

(1) Implement new curricula, programmes and textbooks for the third year of the diversified higher secondary school (Grade 11). (2) Train teachers to implement the new curricula (3) Construct and rehabilitate schools, especially in urban areas, to decrease the number of students per class to 35 by 2009. (4) Equip 60% of higher secondary schools with laboratories and teaching materials, including computers.

Year 2

(1) Implement new curricula, programmes and textbooks for the third year of the diversified higher secondary school (Grade 12) (2) Train teachers to implement the new curricula (3) Construct and rehabilitate schools, especially in urban areas, to lower the number of students in unsuitable classrooms by 20%. (4) Equip 80% of schools with laboratories and teaching materials

Year 3

(1) Consolidate and possibly improve new curricula in diversified secondary education.

(2) Train all teachers to implement the new curricula (3) Equip all schools with laboratories and teaching materials.
(1) Number of new programs and textbooks covered 100%.

(2) Student-classroom rate 35

(3) 3 laboratories per 500 pupils

(4) 90% enrolment rate

(5) 95% promotion rate
Programme 4: Professional secondary education
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Reform Technical and Vocational High Education according to labour market needs and the development of specific areas of the country. Increase the number of students in this educational system through new possibilities, curricula design on two levels and extension of collaboration with business and community. Better professional preparation of students, establishing the facilities of professional training (practice) and equipping existing ones with machineries and suitable technology.Introduce new studying profiles (branches) to increase the demand for this kind of education, hence aiming to increase the enrolment in this system at about 30% of students studying in general high education. Respond to market needs in different areas of country.Year 1

(1) Rehabilitate 10% of schools and equip them with teaching and laboratory tools to increase teaching quality. (2) Extend curricula in two levels. (3) Prepare new curricula based on the study of labour market needs. (4) Increase number of students by 20%.

Year 2

(1) Improve existing curricula and prepare 20% of textbooks. (2) Introduce new branches of study. (3) Equip professional education schools with didactic tools for general subjects. (4) Equip professional training facilities with machinery and equipment.

Year 3

(1) Introduce new profiles (branches) of study and provide respective teaching programmes and 40% of textbooks. (2) Equip professional education schools with teaching and didactic laboratory tools (50%). (3) Equip facilities of professional training (practice) with machineries and technologic equipment (30%).
(1) Number of students per teacher: 20.

(2) Two professional and vocational textbooks for three students.

(3) Teaching laboratories and facilities for every school.

(4) One place of work per two students exercising professional practice.
Programme 5: University education
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Reform higher education with principles and goals of Bologna Declaration in order to achieve European standards. The main priorities are:

(1) Expand capacity of university and post-university education to respond to society needs for qualifications

(2) Increase teaching quality through the improvement of curricula and enrichment of laboratories and technical equipment.

(3) Institutional and financial autonomy

(4) Improve scholarship system to reflect academic performance and economic need of students.
(1) Increase number of university and post-university students joining from high schools from 75% to 90%.

(2) Each university should be able to cover 40% of academic necessities from their own revenues.

(3) Increase mobility of students and lecturers implementing the ECTS credits system as well as the subsidiary diploma.
Year 1

(1) Increase number of students by 10%. (2) Accreditation of first 3 universities

Year 2

(1) Designate laws and regulations for financial autonomy. (2) Increase number of students by 10%. (3) Accreditation of other 4 universities

Year 3

(1) Create intranet network among universities. (2) Increase number of students by 10%. (3) Scholarship scheme to be based on merits. (4) Each university should be able to cover 40% of academic necessities from their own revenues. (5) Improve laboratory equipment in Polytechnic University and natural science universities by 20%. (6) Accreditation of 3 other universities
(1) Ratio student/lecturer: 20/1

(2) Ratio between academic and administrative personnel: 3/1

(3) Student diploma will have 180 credits ECTS or 20-25 hours per week

(4) Proportion of in-class hours vs. out-of class hours: 2/3
Programme 7: Scientific research
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
(1) Reform of scientific research system

(2) Management of scientific research programs as well as the integration of Albanian scientific research with European programs.

(3) Involvement of private sector in scientific research activities.
(1) National Platform for the reformation of scientific research system.

(2) Scientific research institutions integrated within national research and development programs as well as in network with European research programmes. Implementation of national evaluation indicators of VSHT in research system until by 2015.

(3) Involve private business in national research and development programmes as well as in international programs financing x%.
Year 1

(1) Platform for reformation of scientific research implemented in three years. New organisation structures for scientific research institutions, normative acts for their administration, as well as new legislation for the scientific research system. (2) Increase 15% each year in national and international programs, in cooperation with European scientific research structures and initiatives. (3) Involve private business in national scientific research programs and bilateral agreements, as well as in financing projects x% (amount of money).

Years 2-3

(1) Pending on KPSHZHT decision for scientific research reformation, creation of new organisation structures for scientific research institutions, normative acts for their administration. (2) Increase 15% each year in national and international programs, in cooperation with European scientific research structures and initiatives. (3) Involvement of private business in national scientific research programs and bilateral agreements, as well as in financing projects x% (amount of money).
(1) National Platform presents new legislation, creates 3 scientific research centres and changes financing system according to international standards

(2) Approval and project financing for the national and international programmes to be done through a competition system based on the best European practice.

2.2 MINISTRY OF HEALTH

Programme 1: Planning, management and administration
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Improve functional structure for adequate management of health system. Conserve integrity of health services structure designing regional health authorities (RHA). Develop strategic and policy papers for health sector. Continuous inspection and monitoring for the sector.A complete and modern law framework, an adequate financing system, capable human resources in order to fulfil the needs of the health system, as well as a complete information system at all levels of health service. By 2015 all RHA to be delegated 80% of competencies.Year 1

Decentralisation action plan and appropriate financial resources determined based on 3-year national plan of health services development. Information system for human resources established. 1% of staff trained from centre for continuous professional formation. 20% of Ministry staff strengthened as an overall improvement of Ministry’s capacities. New classification for nurse servicing established.

Year 2

Monitoring of RHA activities based on health standards. 30% of other competencies will be delegated to RHA. Involvement at least one representative from patient protection office in the RHA board in decision-making process. 5% additional staff trained from centre for continuous professional formation. Planning and classification of human resources in national level.

Year 3

Monitoring of regional RHA activities based on health standards. 10% of other competencies will be delegated to RHA. Personnel distribution and placing in institutions according to the categories and numbers based on national plan. 10% additional staff trained from centre for continuous professional formation.
All the staff that works in the RHA planning departments should be graduates in economics. Every head of institution should have post-university qualification in health management.
Programme 2: Primary health care services
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Offer quality primary health care services based on curative, preventive and promotional components. Provide autonomy for family doctors as part of primary health care. Accredit/license ambulatory care, mother and child care and oral care.Better access for health care and services offered according to specified standards. Cover 100% of territory with ambulatory centres until 2010. Reduce under-5 mortality to 10 per 1000 live births until 2015. Reduce maternal mortality by half from 2001 (22.7 deaths per 100,000 live births) to 2015. Create mental health community care system all over the country until 2010. Educate 90% of population (parents, educators, teachers, social and health workers) on principles of oral health care. 90% of children aged 0-6 will benefit from fluorine tablets by 2015.Years 1-3 - Each year:

Cover 10% of rural areas with ambulatory centres. Equip 10% of health centres. Equip 5% of mother-child consulting centres with necessary tools. Expand unified treatment for pregnant women and newborns in maternity hospitals in 2 hospitals. Expand family planning services in 10 health centres. Improve 4% of total public oral heath infrastructure and cover 7% of population with preventive services.

Year 1

Multidisciplinary mental health community teams (psychologist, psychiatrist, and social worker) created in all prefecture centres. Information system for primary health care completed in 5 regions.

Year 2

Increase number of contacts with the people served from the multidisciplinary team.

Year 3

Decrease number of in-patients in psychiatric hospitals.
Primary health care service:

At health centres 1 doctor per 2000 habitants in urban areas / 1 health centre for each commune maintaining a ratio of 1 doctor per 1700 habitants in rural areas.

At ambulatory centres 1 nurse per village (where there is no doctor)

ISKSH law

Family doctors: 1.3 per 1000 inhabitants

1 mental health centre per region

1 mental health care centre per 150,000 inhabitants

1 dentist per 1500 people aged 0-18
Programme 3: Secondary health care services
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Provide hospital health care at all levels for better access, satisfactory quality and effective cost management. Improve hospital management by establishing autonomous hospitals. Improve service quality by introducing the guidelines of clinic practices, accreditation system, continuous training of personnel, standardised maintenance of medical equipment and performance evaluation based on respective indicators.Develop modern practices of hospital management by 2005: developed system of clinic and financial information, as well as monitoring system measuring hospital performance.Year 1

Improve human resources and financial management in 20% of regional hospitals. Increase number of patients in need for specialised oculist care and ORL as ambulatory patients. 40% of haemodialysis needs covered each year. Increase by 30% the number of patients that will benefit from the expansion of Durres hospital. Establish legal framework for accreditation. Establish performance evaluation process for hospitals. Cover blood needs by 100%.

Year 2

Improve human resources and financial management in a further 30% of regional hospitals. Increase by 30% the number of patients that are in need for specialised oculist care and ORL as ambulatory patients. Maintain 40% of haemodialysis needs covered each year. Cover blood needs by 100%. 20% of hospitals supported in accreditation process. Eliminate hospital waste by 20%.

Year 3

Improve human resources and financial management in a further 30% of regional hospitals. Increase by 30% the number of patients that are in need for specialised oculist care and ORL as ambulatory patients. Cover 50% of haemodialysis needs. Cover 100% of blood needs. Additional 40% of hospitals supported in accreditation process. Eliminate hospital waste by 40%. Establish transplant treatment service.
Provide hospital service at regional level for a population of 200,000 inhabitants.

Provide hospital service at district level for a population of 100,000 inhabitants.

Providing the hospital service in rural level for a population of 20,000-40,000 inhabitants daily.

Develop quality standards (accreditation) according to the ALFA standards for Albanian hospitals.
Programme 4: Public health services
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Conserve and improve population health, prevent infectious and chronic diseases through the surveillance system as well as implement appropriate measures and programs in cooperation with family doctors.Vaccine shots / mandatory immunisation covered (100% and over 95% respectively).

No cases of poliomyelitis and measles; very rare and sporadic cases of German measles, diphtheria, and tetanus.

Decrease number of hepatitis B infants.

Strengthen epidemiology surveillance and monitoring of potable water.

Prevent epidemic outbreaks; decrease each year the number of people infected by water-borne diseases by 5%.

Establish and equip public health laboratories by 2015.

Improve and approximate current legislation with EU.
Years 1-3 - Each year:

Increase proportion of regions that report on illnesses in time with high quality information by 10%. Improve level of epidemiologists, sanitary inspectors as well as other public health professionals. Increase health planning and management capacities.

Year 1

Review HIV/AIDS and mental health laws. Introduce haemophilus influenza vaccine. Prepare list of environmental health indicators. Prepare guideline for investigation of epidemic outbreaks.

Year 2

Review infectious diseases and sanitary inspectorate laws. Introduce parotid vaccine.

Year 3

Establish public health laboratories in 12 regions with developed standards. Legalise public health school.
Shift from national to EU standards.

2.3 MINISTRY OF AGRICULTURE AND FOOD

Programme 1: Planning, management and administration
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Improve functioning via strengthening of capacity for implementing policies to bring planning, management and administration closer to EU standards.

Sustainable maintenance of the building for providing efficient and commode conditions for employees. Strengthen the use of Ministry’s resources. Training.
Creation of an efficient ministry. Continuous improvement of leading capabilities of the Ministry staff and other levels of decision making. Approximation of working conditions to EU standards. Creation of a modern accounting system by 2010.Year 1

Reconstruct old building and maintain new building. Improve conditions 50%. Train 50% of new staff and 25% of existing staff. Modernise accounting system 5%. 30% offices with internet.

Year 2

Improve conditions 80%. Train 50% of new staff and 35% of existing staff. Modernise accounting system 20%. 55% offices with internet.

Year 3

Improve conditions 100%. Train 50% of new staff and 45% of existing staff. Modernise accounting system 32%. 70% offices with internet.
Number of employees taking master, diploma, certificates for short run training.

Modern accounting program.

Modern building.
Programme 2: Agricultural and food security inspections and consumer protection
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Reconstruct veterinary service to match European integration requirements. Control epidemiological situation especially for zoonotic diseases. Strengthen food security, consumer protection, phytosanitary control, plant protection service and food inspectorate in accordance with EU standards.Approximation of veterinary and phytosanitary service, plant protection and Food Inspectorate with European standardsYear 1

Preparation of 40 draft regulations applying the Veterinary Law. Vaccination against anthrax and brucellosis of 1.000.000 animals. Search for TBC in 100.000 animals. Elimination of positive animals. Preparation of nutritive codex.

Years 2-3

Support and strengthening of 7 veterinary and phytosanitary inspection points of border control. Vaccination against anthrax and brucellosis of 1.000.000 animals. Search for TBC in 100.000 animals. Elimination of positive animals.
Vaccines and phytosanitary control in accordance with European standards.
Programme 3: Irrigation and drainage infrastructure
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Improvement of national policies for irrigation and drainage, reform of irrigation, drainage and flood protection system, transferring the responsibilities of decision making to Water User Associations and Drainage Boards.Increase agricultural production through the fulfilment of farmer needs for water and improved drainage and flood protection of agricultural lands. Complete independence of Water User Associations and Drainage Boards.Years 1-3

Rehabilitate and improve 20000 ha of irrigation and drainage infrastructure. Collect evidence on the most damaged dikes of irrigation reservoirs and rehabilitate 10 dikes. Capacity of 28 drainage pumping stations to grow by 20% (through repairs of 5 drainage pumping stations (hidrovors). Transfer of irrigation responsibilities to WUA for 20000 ha.
Fulfil farmer demands for water up to the optimal application of 3,500m3/ha/season

Drainage system performance (by free leakage): 7 lt/sec/ha; endurance: 80mm of rain for 24hrs when hidrovors are used.

Flood protection security of 20% or an iterative 1 time in 5 years
Programme 4: Support the agricultural, fish, agro-industrial and plant production
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Create conditions for modernisation and improvement of technological process, increased production and competitiveness of food products through better quality, technology and market infrastructure. Conserve genetic resources in farms and set up new structures to implement breed programs. Cooperate with GTZ and FAO for marketing policies. Free trade agreements with and EU and international organisations in cooperation with the private sector.Achieve technological progress and growth of agriculture, farming and agroprocessingYear 1

Develop and finalise wine cadastre. Increase credit for agro-industry by Lek 7 million to construct milk collection centres with cooling systems. Gradual harmonisation of EU Regulation 493/99. Complete 2 wholesale markets, monitor grants with competition.

Year 2

Increase credit for agro-industry by Lek 8 million to construct new lines for horticulture processing (2KR) and create links between farmers and agro-processing associations to promote agricultural products through participation in national and international fairs (Fair of Agribusiness in Tirana, Green Week in Berlin).

Year 3

Increase credit for agro-industry by Lek 9 million to develop viticulture and wine industry through new technological lines.
EU Regulation 1493/99
Programme 5: Research and extension
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
To continually increase the provision of applied research, technical expertise and support agricultural extension services and agro-business for profitable, efficient and sustainable agricultural production.

To provide technical and economic assistance for farmers by public extension service.
Raise quality of agricultural research to internationally recognized standards (OECD)

Fit research projects to increased needs of beneficiaries.

Sustainable increase of farmer income.
Years 1-3

Support and supervise 37 research projects; disseminate results. Implement agricultural research policy (Year 1 establish management body of the National Agency for Research and Technology Transfer; Year 2 reorganise Regional Research and Technology Transfer Centres). Establish and equip 20 Agriculture Information Centres. Train agricultural specialists and farmers (220 days for specialists and 600 days for farmers). On Farm Research (OFR) for the development of new technologies (25-30 projects per year). Extension services based on contracts (10-15 contracts per year).
(1) Number of new varieties of plants and animal breeds improved and/or created/ registered at National Seed Agency according to OECD standards. (2) Agency to function as semi-independent structure and include beneficiaries in decisionmaking. (3) Adoption rates by the farmers of the research project results. (4) Number of farmers contacted by Agriculture Information Centres. (5) Participation and cost-sharing of farmers and private agricultural specialists in extension activities (demonstrations, field days, training events, selling of extension materials etc).
Programme 6: Management of natural resources
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Sustainable management of agricultural land, including forests and pastures, through legal and regulative background for administration and development of land market and sustainable use of natural resources. Sustainable development of fisheries through rehabilitation and modernisation of fishing activity and ports, support and management of the sector, support of aquaculture, and facilitation of licensing.Develop fully functional land market (according to EC standards) and sustainable use of forests and pastures. Provide stable development of fishery in seas and internal waters, according to international standards to increase production in the optimal exploitation limits. Support the process of management, rehabilitation and modernisation of marine and ports infrastructure.Years 1-3

Monitor Fishery Project of World Bank. Invest in ports infrastructure, piers construction and first phase of fishing port of Durres. Invest in the maintenance of lagoons and wholesale markets. Strengthen control of Fishery Inspectorate through the logistical equipment and 1500 inspections in land and sea per year. Repopulation of the pond categories with fingerlings, with 1.000.000 koran and 1.500.000 carps. Keep national register of fishing vessels according to EU standards. Monitor fishing reserves according to FAO and EU standards.
Approximate legislation for conservation and management of fishing reserves according to international standards FAOGFCM for accountable fishing.
Programme 7: Integrated rural development
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Administer and coordinate all policies and investments in rural areas to increase rural incomes and to protect resources.Coordinate projects in rural areas.Year 1

Prepare and approve Rural Development Strategy. Initiate pilot regional development projects (Lezhe, Elbasan), expand credit for agricultural inputs, 6% production growth in north eastern areas (MADA project)

Year 2

Creation of Payments Agency to coordinate funds for rural development. 30% of investments used for rural infrastructure of mountainous areas; 10% to modernise and consolidate farms.

Year 3

Increase number of trained farmers by 20% in rural policies, Common Agriculture Policy, agrarian environment policies and afforestation, and in EU standards.
10% export growth of agricultural products that match EU standards (tomatoes, potatoes, watermelons, cucumbers and medicinal herbs).

Train regional administration and farmers in EU standards adopted for the products that will be exported.

Programme 7: Advisory services

2.4 MINISTRY OF LABOUR AND SOCIAL AFFAIRS

Programme 1: Labour market
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
(1) Increase legal employment within and outside Albania; reduce illegal migration and employment at informal economy.

(2) Avoid poverty due to low wages and unemployment, by setting a reasonable minimal wage and unemployment benefits for those who can not find a job.

(3) Develop active policies on labour market in accordance with EU employment guidelines.
(1) Promote and support full, productive employment services.

(2) Guarantee human right for profitable employment, advice and professional qualification for every position. Provide financial support. Reduce unemployment.

(3) Provide professional training to raise professional skills of unemployed job seekers registered in Employment Offices, for the most preferred occupations in the labour market.
Year 1

(1) Maintain existing jobs, create new ones, and provide vocational training of unemployed job-seekers in accordance with labour market professions, through funds for employment promotion programmes of the state budget and donors. (2) Continue establishment of Vocational Training Centres (VTC) in Elbasan, Fier, VTC4 and Korca. Provide equipment and furniture to existing centres and basic materials to the new ones. (3) Computerise employment services.

Year 2

(1) Maintain existing jobs, create new ones, and provide vocational training of unemployed job-seekers in accordance with labour market professions. (2) Continue investment in Korca, VTC4 and Vlora; provide equipment and furniture to existing VTC.

Year 3

(1) Continue investments in VTC building in Korca and begin reconstruction of Vlora VTC; provide furniture.
The following groups will be prioritised:

- Provide employment for trafficked women, women over 35 years old, Roma women, disabled women, single mothers, divorced women with social problems (according to DCM 632)

- Focus programmes of employment promotion on unemployed graduates in public or private institutions / enterprises through vocational exercises (applied training -probations)

- Reduce number of job-seekers to 150000 in 2006, 147000 in 2007, and 144000 in 2008. Reduce unemployment rate to 14% in 2006, 13.7% in 2007 and 13.4% in 2008.

- Increase unemployment benefits by 10% every year.
Programme 2: Social insurance
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Guarantee distribution of benefits according to contributions and state budget support.(1) Guarantee payment against gained rights in social insurance.

(2) Increase social insurance benefits to achieve the minimum living standards.

(3) Reduce state budget subsidies in social insurance fund.

(4) Improve mandatory social insurance system with supplementary schemes.

(5) Enhance financial sustainability through continuous increase in the number of contributors.

(6) Improve service quality through infrastructure development, computerisation and modernisation.

(7) Enhance institutional power and continuously improve administration.
Years 1-3

(1) Increase the level of revenues faster than the level of expenditures; (2) Align the rural to the urban pension scheme through increasing the level of contributions for the self-employed in agriculture; (3) Increase the number of contributors in the voluntary insurance scheme; (4) Improve infrastructure and increase the quality of services.
(1) Increase the level of benefits by 8% in urban areas and by 15% in rural areas; (2) Revenue realisation: Lek 44502 million (2006), 49497 million (2007), and 54625 million (2008); (3) (a) Transfer from social insurance funds towards individuals: Lek 53397 million (2006), 58321 million (2007), and 63942 million (2008); (b) Transfer from state budget into Social Insurance Institute’s budget: Lek 16274 million (2006), 16416 million (2007) and 17173 million (2008); (4) Increase urban pensions respectively by 9%, 8% and 7% and rural pensions by 14% per year; (5) Increase level of other benefits at the level of annual inflation; (6) Decrease pensions’ period of contracting by two months; (7) Improve dependency ratio (old age pension/contributor) by 5% per year; (8) Improve replacement ratio (wage/monthly pension) by 1% per year; (9) Improve revenue ratio of contribution to GDP by 0.1% per year.
Programme 3: Social protection
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Improve identification of individuals and families who are really in need. Improve effectiveness and efficiency of offering economic assistance (NE) and social services in community.(1) Improve targeting of economic assistance and disabled peoples benefits (PAK) toward poorest families.

(2) Extend geographical coverage of social services.

(3) Develop new social services of high quality and community-focused in accordance with international standards.

(4) Improve the combined offering of social services by public authorities and NGOs through effective leadership and preparation of new financing strategies.
Year 1

(1) a. Implement new system of transferring grants for NE, PAK and social services; b. Review criteria for NE distribution and criteria of disabled commission; (2) a. Transfer House of Children and Babies to local government; b. Set up structures of social services at regional level; c. Establish database of needs and offered services at regional and national level (continue); (3) a. Establish legal base and start procedures for setting up the custody service; b. Carry out community-based projects, financed by the World Bank; c. Draft standards of PAK maintenance; d. License social service providers; (4) a. Approve tasks and control procedures for NE, PAK and social service inspectors; b. Review indicators and criteria of government grant allocations.

Year 2

(1) a. Implement new criteria of selection for providing social services; b. Review system of transferring grants for NE, PAK, and social services; PAK payment indexation; (2) a. Transfer PAK and centres for the elderly to local government; b. Continue to develop database on needs and services; (3) a. Develop procedures for individual evaluation on children care and provide training in this area; b. Continue implementation of 20 sub-projects in 8 regions; c. Draft standards for elderly people; d. Train inspectors at national and regional level; e. Train local government; (4) Develop legal framework on the use of the Social Fund.

Year 3

(1) Implement new criteria of PAK payment indexation; (2) a. Establish new structures in remaining regions; b. Continue to develop database on needs and services at community level; (3) a. Develop procedures for individual evaluation for other vulnerable groups and pilot in two regions; b. Finalise implementation of 20 subprojects; c. Develop standards for trafficking victims; (4) Develop new sustainable projects for community through the use of the Social Fund.
(1) Complete transfer of six Houses of Children and Babies and 3 PAK Centres (2006);

2) Set up social service structures in four regions (2006);

3) Carry out 20 projects with the community (World Bank);

(4) Reduce number of families in NE scheme by 3% through annual control;

(5) Annual increase of PAK payment and number of PAK recipients by 10% and 0.5% respectively;

(6) Train State Social Service and local government staff;

(7) Establish 60 new community-based services financed by the World Bank project;

(8) Complete transfer of three PAK Centres and three centres for the elderly (2007);

(9) Complete transfer of two PAK Centres and two centres for the elderly (2008);
Programme 4: Planning, management and administration
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
To support the effective achievements of Ministry’s goals and objectives, by ensuring professional services (planning, development of legal framework, human resources and foreign relationship development), physical infrastructure, including IT services and other daily services.1) Increase the efficiency and effectiveness of staff performance through professional services and motivation; 2) Strengthening the institutional management; 3) Development of Information technology and computerisation of statistical system; 4) Organisation and restructuring of MoLSA making it capable to fulfil its obligations and government programmes in accordance with the NSSED and other international documents aiming at accomplishment of requirements of PVPE and other international agreements where the Republic of Albania is counterpart.Year 1

1) Setting up an efficient electronic system of communication and information; 2) Improving of skills and human source efficiency for each position; 3) Functional and structural revising of MoLSA in accordance with the priorities of PoSA; 4) Undersigning of bilateral agreements for social security area with Romania and Hungary; 5) Studying current situation of the statistical system.

Year 2

1) Undersigning of bilateral agreement for social security area with Italy; 2) Setting up a statistical data base for the ministry; 3) Rationalising of role, mission and structures within MoLSA.

Year 3

1) Studying feasibility of information technology. 2) Setting up computerisation of central and local administration; 3) Undersigning of bilateral agreement for social security area with Greece.
Professional service’s standards have not been in full accordance with the development and Stabilisation -Association Process’s priorities. That’s why the strategic, human resources, communication and information, and achievement’s management, is going to be improved, Standards aim to create professional, sustainable and motivated administrate.
Programme 5: Labour, health and security inspectorate
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Promoting an efficient system operation (formal and legal) of labour trade, through reducing the informality at labour market. Making inspections to ensure those private companies and their employees to be registered by law. Protection of employee’s interest by fulfilling their requirements of safety standards and also of healthy condition at work.Promoting of job conditions by international standards to protect employee’s interest of safety and healthy conditions at work, and also increasing the support to those people who need to be protected.Years 1-3

(1) Legislation approximation to achieve legal framework with international standards in the function of inspection policies. (2) Development of capacities for implementing labour legislation.
Programme 6: Internal audit
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Internal audit helps the institution to improve the efficiency and efficacy of its operations, through undertaking independent control and preparing a report when they identify the most risked area and those area that lack efficiency in public funds’ administration.1) To give advise on projected management in order to add the value and to improve measures of public subject; 2) Systematically evaluation and improvement of productivity of risk, control and governance management.Year 1

1) Developing an well-understanding memorandum for the audit of the other institutions like ISE and the Aid Inspectorial and Social Services; 2) Certification for the staff audit of pendant subjects; 3) Developing an well-understanding memorandum for the co-projects audit with foreign funding; revising standards to improve institutions audit performance.

Year 2

1) Furnishing of all audits and supervisors with internal audit certificate as qualified supervisors; 2) Developing a well-understanding memorandum for funds audit that currently are managed by local government for social assistance and disability; 3) Designing the new audit Plan regarding factors that rescue the use of funds for employment promotion and social assistance.

Year 3

1) Increasing the number of audits with permanent license as qualified supervisors; 2) Developing a well-understanding memorandum for the audit of funds managed by Vocational Training Centres with the new status; 3 Designing the new audit Plan regarding factors that affects increasing of the informality at labour market.
1) Provide a permanent license as qualified auditors to 20% of the staff; (2007); 2) Provide a permanent license as qualified auditors to 30% of the staff (2008);

2.5 MINISTRY OF TERRITORIAL ADJUSTMENT AND TOURISM

Programme 1: Planning, management and administration
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Improve working conditions, increase management efficiency, institutional development, and functional review.

Develop sector strategies and policies, identify and monitor programmes.

Compile and implement laws according to EU instructions.
Improve management efficiency for Ministry staff and other levels.

Complete legal framework for licensing and all other sectors.
Years 1-3

(1) Technical assistance and training is provided for the Ministry staff. Set up computer network for all directories of the Ministry. (2) Prepare and improve staff in order to be able to apply market economy policies. (3) Involve all staff in compilation and implementation of sector policies.

Programme 2: Urban infrastructure

Programme 3: Water and sanitation
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Finance and improve of water-supply and sanitation systems. Develop water infrastructure through determination of priorities in improving living conditions. Use 2 main policies: decentralisation of service (shifting the weight to local governments) and private sector participation (creating facilities and attractive conditions).Stabilise and improve water supply and sanitation offering access to a stable and secure service for the entire population aiming to achieve European standards in both urban and rural areas.Year 1

Complete the transfer of state-owned water supply and sanitation enterprises to local government units. Increase the basic service indicators (safe and inspected water, connection to sanitation system) by 2-5%.

Year 2

Change the central government role from service provider to facilitator and regulator. Improve basic service, monitoring, and technical-economic indicators by 3-5%.

Year 3

Improve basic service and technical-economical indicators by 5-10% through improved management and higher tariffs.
Programme 4: Housing and urban planning
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Increase housing access for the poor and vulnerable with social housing programmes.

Improve conditions of houses privatised in 1993 and assure their continuing maintenance and stability.
Increase local government capacity in housing programme administration.

Maintain co-owned houses. Assure implementation of civil code for coowned houses. Create co-owners assembly.
Year 1

Lek 722 million: training (52m), loan interest support pilot project (50m - principal paid from municipality), conditional budget for municipalities (620m)

Year 2

Lek 865 million: loan interest support pilot project (50m), conditional budget for municipalities (815m)
Programme 5: Tourism
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Recognition of Albania as a tourist destination in the Mediterranean as well as a competitive position in the international tourism market.To generate employment in the future, to accelerate social and economic and social development, to create a good image in the international tourism market, to increase government income from border entry tax, to develop stable and environment-friendly tourism.Year 1

Implement strategy stages and projects (such as hotels structure development, sun and beach products) to offer regional development and accommodation of modern standard. Create increasingly positive image and sustain long-term development.

Year 2

Effectively organise public and private sector cooperation in tourism. Attract private investment in facilities development and services. Improve tourist products quality. Expand and diversify products.

Year 3

Efficiently implement selected pilot projects for development of areas specified in strategy. Train tourism sector workers. Increase participation in international promotion activities and encourage international tourism.
Increase number of foreign tourists to 300,000.

Increase number of beds in hotels: Adriatic Sea 3000, Ionian Sea 1200, mountain area 100, lake area 1000 beds.

Functioning of tourist promotion organisation. Improvement of professional teaching level for tourism schools, creation of supervising and management staff capable for tourism activities. Promotion of diversified tourism segments.

Programme 6: Public services

2.6 MINISTRY OF TRANSPORT AND TELECOMMUNICATIONS

Programme 1: Planning, management and administration
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Support achievement of objectives of transport and telecommunications system by creating optimal working conditions and providing financial support.
Programme 2: National road system
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Rehabilitation and construction of national network, including road segments of East-West and North-South corridors, Durrës-Morinë road, Arbri road, tourist roads, cross-border roads as well as branches connecting above-mentioned corridors with other national roads. The programme includes also modern maintenance of road infrastructure and provision of road safety elements.Create quality circulation conditions in principal national road axes with sufficient capacity to cope with growing traffic requirements. Stable maintenance accompanied by all appropriate signalling elements; reduction of risk points and creation of conditions of safety in circulation, reduction of number of accidents.Year 1

Continue construction on 19 km of Rrogozhina-Lushnja road (1 and 2), about 20km of Milot-Rrëshen and Kukës-Morina roads, Vlora-Orikum, Palase-Dhermi-Himara, Velipoja, Dardha, and Liqenas roads, systematise and asphalting of Fier ring, slides in different national axes, invest in road signalling etc.

Year 2

Year 3
Programme 3: Road transport management
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Medium and long-term development of Albanian road transport through harmonisation and increase of efficiency, implementation of advanced technologies, gradual expansion of transport information systems, determination of integration issues, as well as approximation of transport legislation to European standards.Design transport development strategy, as well as medium and long-term strategic plans, harmonise all types of transport, prioritise development of low cost transportation. Adjust standards for approximation and improvement of transport laws and fiscal system for road transportation according to European standards.Year 1

Studies of medium and long-term transport strategic planning, including the national plan for road transportation.

Year 2

Studies of European Union standards for different types of transportation, especially for approximation and adjustment of transportation legal framework.

Year 3

Studies of transport information systems for orientation of transport users. Studies of financial resource schemes for transport investment based on private-public partnership
Development of transportation systems and efficiency, improvement of environmental impact in transport. Increase security in road transportation, involve Albania in regional and trans- European transport system, intensify measures to create conditions according to regional and European standards.
Programme 4: Ports
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Improve processing capacities and service conditions in Albanian ports, through increased investment and quality of their implementation. Create optimal conditions for export-import, develop safe service system.Design rules and regulations for the good operation of Durres port within 3 years according to the landlord model, complete investments in the port development master plansYear 1

After the necessary legal framework and regulations, establish the Albanian Sea Administration. Continue investments with budgetary and donor funds for improvement of port infrastructure in four ports. Continue negotiations with Italian cooperation in order to make effective the €12m credit.

Year 2

Budget and foreign-funded investment in order to complete the requirements of the Albanian Sea Administration. Continue investments with budgetary and donor funds to improve port infrastructure in four ports.

Year 3

Continue budget and foreign-funded investments to improve port infrastructure in four ports. Construct travellers terminal in Durres port.
Complete paving and draining of grounds in Durres port, complete east bulwark in Shengjin port, construct quays in Shengjin port, conclude phase 2 and 3 according to the master plan in Vlora port, rehabilitate quays in Lijmon port (Saranda).
Programme 5: Railways
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Modernisation of railway infrastructure in the main railway axis, namely on the line Tirane-Durres-Rrogozhine and the line Shkoder-Bajze-Montenegro border. Construction of a new railway line for connection with Macedonia. Improvement of passenger railway transport by quick renewal of inventory of vehicles and premises of railway stations. Intensive maintenance and improvement of technical infrastructure and mobile means.Improvement of the state of railway transport with the view of increasing competitive capacity and swift integration in regional and European network.Year 1

Modernise the railway line Tirana-Durres and connect with Rinas Airport (project of GE Transportation Systems) at an investment value of €57.5 million and $12.2 million. Local cost has been estimated at about €10-15 million. The project will be implemented in 2006-2007. Construct the new railway line to connect with Macedonia. Based on the study carried out by IST, the project cost is about €5.2 million and the investment will be concluded in 2006-2007.

Year 2

Modernise the railway line Tirana-Durres and connect with Rinas Airport (project of GE Transportation Systems). Construct the new railway line to connect with Macedonia. Modernise the railway line Shkozet-Rrogozhina. The cost of this project is about $21.6 million.

Year 3

Modernise the railway line between Shkodra and the border with Montenegro. The cost of this project is about $17.5 million.
Programme 6: Civil aviation
Policy descriptionPolicy goalsPolicy objectivesPolicy standards
Support with necessary funds the accomplishment of the concessionary contract for the construction of passenger terminal at Mother Teresa airport, support for construction and operational costs of maintenance of the airport of Kukes, as well as support for the accomplishment of the master plan for modernisation of air traffic control. Opening of airports of Vlora and Saranda. Necessary legal improvements.Improvement of services, internal and external air infrastructure, modernisation of air traffic control.Year 1

Make the Vlora and Saranda airports operational through state budget contribution of about €25 million for each. Provide operational expenditures for Kukes airport. Prepare for signing up to conventions and international air agreements.

Year 2

Continue investments to make Vlora and Saranda airports operational. Provide operational expenditures for Kukes airport. Provide complementary legal package in accordance with Air Code.

Year 3

Provide operational expenditures for Kukes airport.

2.7 MINISTRY OF FINANCE

Programme 1: Macroeconomic policy and budget management

Policy objective: Maintain macroeconomic stability; broaden the revenue base; improve the strategic allocation of budget resources; improve economy, efficiency and effectiveness in the use of resources

Activity 1: Prepare a macroeconomic assessment and forecast at the beginning of the year for presentation and approval by the Council of Ministers and prepare updates at key intervals during the year for approval by the Council of Ministers
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Reliable macroeconomic assessment and forecasts to be produced in February, June, and SeptemberRegular and ongoing activity of the Macro Department of the Ministry of Finance.Discussions between the Macro Department, the Bank of Albania and INSTAT centre on reviving the Macroeconomic Committee and developing scenarios around a consistency framework.
Activity 2: Provide advice to the Council of Ministers with regard to tax policy and prepare instructions to the General Directorates of Taxation and Customs with regard to tax policy and revenue targets
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Tax policy and administration recommendations for the 2006-08 MTBPRegular function of the Ministry of Finance. There is currently no dedicated directorate. The work for this is carried out on an ad hoc basis.A tax policy unit/capability within either the Macro Department or the Budget Policy and Analysis Department of the new Budget General Directorate will be required to carry out this work on a more systematic basisTo be determined once institutional decisions related to this have been taken
Tax policy and administration recommendations for the 2006 Budget
Activity 3: MTBP Preparation and Annual Budget Preparation
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Draft MTBP document at end June

Final MTBP document at end December

Draft Annual Budget at end October

Final Annual Budget at end December

New Organic Budget Law (expected 2006)
MTBP and budget preparation is led by the Ministry but is otherwise a collaborative exercise with all ministries and agencies throughout the government.The new MTBP procedures are being implemented in 5 ministries in 2005. This is likely to increase to 9 ministries in 2006, 14 in 2007 and all ministries and agencies in 2008.The main budget management implications resulting from the reform actions in this aspect of the programme comprise the net costs of converting the Budget Directorate into a General Directorate of Budget. This includes the cost of a General Director and an additional Director’s position. There are no immediate plans to change the number and seniority of the remaining staff in the department who will be distributed between the two directorates in the new structure. Given the importance of the new reforms and the demands that supporting them will place of the current staff, it is anticipated that some more new positions will need to be created in the Budget Department. This has yet to be fully determined, however, and may need to be included in the Ministry’s sector strategy for the 2007-2009 MTBP.
Manual of Procedures for Public Finance Management (partly complete, some procedures already implemented, others to be implemented over next few years)Albania is currently in the process of a major public expenditure management reform, which is being led by the Budget Department of the Ministry. The main components of this reform are as follows:Successful roll-out and implementation will require much greater leadership and support to line ministries from the Budget Department. As a result of this, the status of the Budget Department was upgraded in April 2005to that of a General Directorate, with a Directorate for Budget Policy and Analysis and a Directorate for Budget Implementation. Leadership and support for implementation will be provided by the Directorate for Budget Policy and Analysis.
New Public Investment Management System (to be designed and implemented over the next several years from 2005)A (lay version of a) draft New Organic Budget Law has been prepared and is currently under discussion in the Ministry. This will lay the public finance foundations for eventual accession to the EU.
A draft Manual of Procedures for Public Finance Management is under preparation. Components have already been completed and implemented by some ministries in 2005. These include Programme Policy Review and Programme Expenditure and Investment Planning procedures which bring the start of budget preparation to March and create a more formal link between the MTBP and the annual budget.
Activity 4: Budget implementation
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Monthly reports to Minister of Finance on budget ImplementationThis is a regular and ongoing activity of the Budget Department of the Ministry of Finance.Budget transfer management software will be implemented during 2005 to improve the efficiency with which budget transfers are managedThe main budget management implications comprise the net costs of converting the Budget Directorate into a General Directorate of Budget. This includes the cost of a General Director and an additional Director’s position. There are no immediate plans to change the number and seniority of the remaining staff in the department who will be distributed between the two directorates in the new structure.
Monthly instructions to line ministries and agencies on virementManagement of virement requests has proved cumbersome and time consuming in the past. This should be made more manageable through the use of a budget transfer management software system.The status of the Budget Department was upgraded in April 2005 to that of a General Directorate, with a Directorate for Budget Policy and Analysis and a Directorate for Budget Implementation.
Monthly consolidated budget cash flow forecasts and revised fund allocations

Programme 2: Treasury and accounting

Policy objective: Ensure budget execution, accounting and reporting are carried out according to the requirements of the Annual Budget Law

Activity 1: Cash management and debt servicing
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Monthly and quarterly cash flow projectionsThere is currently a need for a new and modern Treasury management computer systemUnder the World Bank Public Administration Reform Project, consultants will design and implement a new and modern Treasury management computer system.Funding has been provided under the Public Administration Reform Project for the new Treasury management computer system. This will require additional domestic resources. Once the new system has been completed, it is anticipated that additional IT and Treasury staff will be required to ensure the system runs correctly and efficiently. The recurrent financing implications of this will be determined over the next year.
Monthly projections of domestic and foreign payment requirementsBudget execution is currently focused on management of cash and payments as opposed to managing and controlling commitmentsShift focus from strictly cash and payments management to management of commitments.
Activity 2: Debt management and reporting
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Monthly reports on the stock of external and domestic debt, creditors, types of debt.This is a regular and ongoing activity of the Treasury and Debt Department of the Ministry of Finance.None currently envisaged
Debt-related reports as required by international financial institutions
Activity 3: Accounting and reporting
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Establish national accounting standardsThis is a regular and ongoing activity of the Treasury and Debt Department of the Ministry of Finance.
Prepare government accounts

Programme 3: Planning, management and administration

Policy objective: Improve management capacities to implement government policies

Activity 1: Human resource management and training
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Evaluate past training programs and assess training needs: customs tax, tariffs, budget preparation and implementation, internal financial control
Implement training programmes
Activity 2: Information technology and dissemination
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Link budget and treasury systems
Internal information systems to deal with fiscal evasion, financial crime and money laundering
Annual publications on Ministry of Finance performance to be also available electronically
Activity 3: Legal drafting
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Organic Budget Law, customs legislation, tax legislation, money laundering legislation

Programme 4: Advice on strategic policy options

Policy objective: Create a policy-driven system in which a medium-term policy framework, comprising mutually consistent cross-cutting and sector strategies, supports long-term national goals and advises the Government on strategic priority options

Activity 1: Formulation of the National Strategy for Socioeconomic Development
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Develop standards for the approval of the national, sector and regional strategies to ensure they are coherent and costedUntil now, the NSSED Department’s activities focused on the monitoring and dissemination aspects of the NSSED while its coordination responsibility was constrained by insufficient linkages to the public expenditure management cycle. This has begun to change through increased cooperation with the Budget Department and will be further consolidated with the approval of the Integrated Planning System.In the framework of the Integrated Planning System, the NSSED will shift its focus away from short-term ministry action plans emphasising poverty reduction goals to become a strategic planning process for all national priorities making recommendations on crosssector allocations.Given the importance of the reforms and the demands they will place on the current staff, it is anticipated that some more new positions will need to be created. This has yet to be fully determined, however, and may need to be included in the Ministry’s sector strategy for the 2007-09 MTBP.
Revise National Strategy for Socioeconomic DevelopmentThe NSSED Department staff will have job descriptions reflecting the need to develop sector expertise to coordinate strategic work.
Coordinate and support the development of sector and crosscutting strategies in line ministries.
Activity 2: Monitoring, evaluation and dissemination
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Coordinate long-term monitoring and reporting with INSTATThe NSSED Department has already prepared three annual progress reports. Investment in data and policy analysis skills will continue.The share of time and staff resources allocated to dissemination activities will be reduced in favour of strategic policy work with the sectors. The gap will be covered by either reducing the overall level of activity or outsourcing some of these activities in cooperation with partners.
Undertake / coordinate poverty analyses as a tool for strategic policy making
Publish annual progress report in time to inform the MTBP process; consult with Parliament

2.8 MINISTRY OF INDUSTRY AND ENERGY

Programme 1: Planning, management and administration

Policy objective: Increase efficiency in use of domestic resources; improve staff capabilities to design and implement government policies

Activity 1: Planning of current expenditures, investments funds for Ministry of Industry and Energy and Inspectorate of Equipment Under Pressure
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Cover expenditures of Ministry of Industry and Energy and Inspectorate of Equipment under pressureAs the reconstruction of Ministry building has been completed, envisaged funds for investments during the period 2006-2008 are about Lek 700,000.

Programme 2: Provide support for geo-sciences

Policy objective: Contribute to sustainable economic development, infrastructure building and modernisation, sustainable environment, higher quality of life, integration into the European institutions.

Activity 1: Evaluation, management and monitoring of subterranean water in the main basins, with priority given to the urban and tourist zones
Activity 2: Re-estimation of the necessary inputs for building the infrastructure, metal or non-metal sources with economic profit and impact in country’s sustainable development
Activity 3: Studies in service of well administration of the territory and natural resources at national and local level
Activity 4: Studies in geographic environment and its monitoring
Activity 5: Evaluation of geological dangers; geological and engineering studies for the evaluation of the stability and the expansion of public infrastructure
Activity 6: Scientific studies with applied interest in geology, hydrogeology etc
Activity 7: Expansion of information system, data bank, and information transmission toward decision-making bodies and the society (GIS)
Activity 8: Increase of utilisation of useful minerals based on government policies, according to their usage and the demand of market economy
Activity 9: Rational and effective administration of useful mining
Activity 10: Monitoring of closed mines
Activity 11: Mineral dangers, rehabilitation of mineral zones, technological and other environmental and social development research on minerals
Activity 12: General geological-geophysical studies on the geological construction and hydrocarbon potential
Activity 13: Studies in different area of geo-sciences
Activity 14: Complex studies for development of oil and gas sources as well as development of infrastructure that affects their optimal utilisation and refinement
Activity 15: Monitoring of environment in oil industry areas and of rehabilitation projects
Activity 16: Rules and legal and sub-legal acts for detergent, paper and wood, and glass products industries
Activity 17: studies on alternative energy applications based on country resources and identification of problems of this type of energy, efficiency and environmental protection in industrial zone.
Activity 18: Monitoring of discharges in environment from industry operators in general and steel and Iron-chromium in particular; preparation of rules and procedures for monitoring and operation of metallurgical industry
Activity 19: Increase of effectiveness and quality of production in non-food industry branches for entering the European market
Activity 20: Protection from fire risks in non-food industry

Programme 3: Support for energy sector

Policy objective: Better management of energy situation; balance demand and supply in order to fulfil energy supply needs; increase the efficiency of the use of electrical energy.

Activity 1: Implementation of annual Action Plan of the Albanian Power Corporation (KESH)
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Reduce technical and non-technical losses according to the approved annual targets; reduce subsidiaries tariffs for water supplies.During recent four years, all the defined targets in the annual Actions Plans have been achieved.Based on the annual Action Plans some technical, organisational and administrative measures will be implemented.Payment of Lek 900 million for previous obligations in 2006 for budgetary and non budgetary consumers; payment at the level of 100% of actual bills for budgetary and non-budgetary consumers.
Activity 2: KESH Restructuring through division in separate companies of generation, transmission and distribution
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Divide KESH into three (vertically integrated) sectors judicially and commercially independent: generation, transmission, and distribution; restructure distribution sector and draft law on its privatisation; restructure generation sector and draft law on its privatisationThe established operator of the transmission system is judicially independent and the limits with the generation and distribution systems have been defined. A study undertaken by an international company is expected to be completed by June 2005, and to recommend the optimal number of distribution and generation companies.Establishment of distribution and generation’s associations; re-evaluation of the assets according to the divided sectors; distribution of the received credits according to the divided sectors.
Activity 3: Establishment of the internal electrical energy market and its integration into the regional market
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Open market by 2008 for budgetary, non-budgetary and private consumers; design the regional electricity marketThe Energy Treaty has been approved by the Council of Ministers; the transmission, distribution, and measurement codes and the market rules have been prepared.Construction of Vlora TEC with foreign financing at about $105 mil; establishment of a new national dispatching centre with foreign financing €23 mil; construction of new 400kV interconnection line Elbasan-Podgorice with foreign financing €43.9 mil.
Activity 4: Update the National Energy Strategy by 2006
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Updating the National Energy Strategy reflecting changes in energy needs.Monitoring of the implementation of National Energy Strategy and reporting on its achievements in Interministerial Energy Committee and European Union.Based on the Action Plan of the Strategy (2003-2005) and on Energy Efficiency Law, during the period June-December 2005, very important preliminary measures will be undertaken for enabling the process of updating of the Strategy in January 2006.The necessary funds for enabling the review of the strategy are Lek 10million (the fund for preparing the Strategy in 2003 was Lek 8.6 million).
Activity 5: Implementation of Energy Efficiency Law during 2006-2008
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Increase the efficiency of energy supply for all socioeconomic sectors in accordance with EU standards.The Energy Efficiency Law was approved by the Parliament in April 2005Preparation of four Council of Ministers Decisions based on Strategy Action Plan and Energy Efficiency Law requirements are under way:1) Establishment of Local Energy Offices for preparing the energy database at national and regional level according to EU requirements;

(2) Establishment of functioning mechanisms of Energy Efficiency Fund and renewable sources of energy;

(3) Preparation of energy auditing;

(4) Designation of labels for electrical appliances.
Funds needed to establish local Energy Offices (1-2 specialists in each prefecture) for 2006 are Lek 15 million.
Funds needed for promotion of Energy Efficiency and renewable energy sources are Lek 13 million in 2006, Lek 15 million in 2007, and Lek 17 million in 2008.
Activity 6: Monitoring of implementation of National Strategy of Energy Sector in 2006-2008
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Follow up the progress in implementation of National Strategy of Energy Sector aiming at developing a new Action Plan 2006-2008 to ensure the achievements of the defined objectivesThe necessary funds for making available the monitoring of the strategy are Lek 6 million in 2007 and Lek 7 million in 2008.

Programme 4: Support for mines and enterprises

Policy objective: Elimination of the life and environmental threatening hazards; Finalisation of enterprises transformation process; Reactivation of super phosphate industry

Activity 1: Closing of Mines and privatisation of their assets
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Close mines to avoid dangers for inhabitants and their environment as well as infrastructure damages; re-open at any time at low cost; privatise existing assets or abandon them if they do not get privatised.The checking and preliminary identification of mines and their sections that need to be privatised or liquidated has been completed; Council of Ministers Decisions have been prepared and approved; projects for closure of mines have been designed, the documentation for privatisation of mineral assets is under way; the preparation of documentation for mine closure is under way; financing needs from state budget are going to decrease gradually.Complete the map and identify mineral objects that need to be closed; develop guidelines for closure of these mines; prepare necessary documentation for privatisation of special assets and mineral objects; continuously track implementation of programme of mine closure; prepare technical documentation for closing again the opened mines; collaborate with Ministry of Economy to solve problems that come out of privatisation of assets; carry out studies and Investments before closing mines and privatising assets; prepare privatisation documentation.During the period 2006-2008, the funds needed for mine closure, their monitoring, and re-closure is about Lek 297 million.
Activity 2: Monitoring of closed mines
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Monitoring of closed mines has to be undertaken to avoid risks resulting from discharging of utilised material, gas and water dumping etc.Design of study and compilation of legislation are in process.A new study on monitoring the closed mines is quite important; establishment of structures for monitoring the closed mineral objects; monitoring of mineral objects.
Activity 3: Conservation of corporation of super phosphate in Kurbin and new urea plant in Fier
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Reactivation of super phosphate industry in Kurbin.The new urea plant in Fier and the super phosphate corporation in Kurbin are out of work.Realise goals of concession law in 2006; continue conservation process and locate investors for reactivation.Increase budget from Lek 6.85 million in 2005 to Lek million in 2006. Increase budget for enterprise closure from Lek 0.15 million in 2005 to Lek 1.5 million in 2006.

2.9 MINISTRY OF LOCAL GOVERNMENT AND DECENTRALISATION

Programme 1: Planning, management, and administration

Policy objective: Set up the computerized address book for every local government units; increase the efficiency of Ministry of Local Government structures; prevent, manage and rehabilitate affected areas from fatalities to protecting citizen’s lives

Activity 1: Addresse
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Provide the locality addresses for all Albanian citizens.Decision-making process under way, denomination of squares has not yet been completed in two thirds of local government unitsCompile sub-legal acts, orders, and functioning methodologies; modernise sector; update budget financial effects for 2005.The financial effect of this sector, which will consist of 5 people, is Lek 1.7 million annually.
Activity 2: Setting up the National Inspectorate of Civil Protection
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Increase the security and prevent fatalities.A complete legal framework and many documents related to preparation of civil emergency staff already exist.Compile sub-legal acts, orders, and functioning methodologies.The financial effect of this sector, which will consist of 4 people, is Lek 1.7 million annually.

Programme 2: Civil Registry

Policy objective: Improve and approximate services to modern standards; set up and administer National Register of Civil Registry Office

Activity 1: Establish and enforce civil registry structures
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Rapid service for all population through reducing service times.In local government units with high population, the services provided by the civil registry offices are not of high quality because they are understaffed.Draft sub-legal act to increase personnel.The financial effect for Increasing the number of the personnel of some units in some districts at about 43 persons is Lek 10.2 million annually.

2.10 MINISTRY OF DEFENCE

Programme 1: Planning, management, and administration

Policy objective: Further improve working conditions and standards in the Ministry of Defence and General Headquarters of Armed Forces; realise military contributions for country integration in Euro-Atlantic structures.

Activity 1: Normal administrative-operational activities
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Consolidate working conditions and ensure contemporary functioning of Ministry of DefenceProvision of equipment and other necessary facilities is in process.To cover personnel payment, buy equipment and provide necessary expenditures for Ministry of Defence and General Headquarters.(Lek 1,300 million), Planned expenditures for this activity mainly consist of: staff payments, part of operational expenditure for the functioning of the ministry, investment in equipment, expenditures for full functioning and consolidation of computers network etc.
Activity 2: International collaboration and integration activities
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Accomplish military obligation in the framework of integration process.There are obligations that come from National Plan of Action for Accession; planning and review process, Partnership for Peace activities, objectives of Partnership, membership into international military organisations, bilateral military collaboration etc.Increase participation into military partnership and integration activities; expenditure for the accomplishment of Partnership’s objectives, obligations coming from National Plan of Action for Accession; planning and review process etc.(Lek 875 million) The planned expenditures cover all international activities undertaken by Armed Forces, such as military cooperation activities, Partnership objectives etc.

Programme 2: Guarantee security

Policy objective: Ensure normal activity and improve the Armed Forces operations; develop defence reform based on laws and plans approved by Parliament and government policies and programmes; improve and ensure the necessary non-military supporting capacities of Armed Forces in order to increase the operational capacities and interaction with NATO’s structures; international military contribution of Albania

Activity 1: Normal administrative-operational activities
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
To improve and consolidate living, working and exercising conditions of Armed Forces; personnel motivation through treatment of issues such as housing, feeding etc and increase the number of military personnel.In process: Partly reorganise Armed Forces structures, improve personnel treatment, increase number of professional military personnel and provide with budget resources, improve food treatment, intensify exercise, close activities of some structures, maintain and administer facilitiesMaintain existing personnel, develop military preparations and exercises of Armed Forces; develop and improve legal framework to support defence reform; motivate personnel through housing, feeding etc, close and move different units of Armed Forces, reduce and change personnel structure; increase number of professional personnel in Armed Forces etc(Lek 21,500 million) Considerable part of the expenditures are made of personnel payments, where effects of increased number of professional personnel and their payments have been planned; remaining part of expenditures is assigned for everyday activity of the structures of main Commands and autonomous structures of General Staff.
Activity 2: Reorganisation of Armed Forces
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Consolidate the Armed Forces’ reorganisation until 2006 and start the modernisation process from 2006 onwards. The purposes of defence reform under this objective are: (1) Re-configure officer personnel structure through implementation of law on career and military ranks; increase number of professional soldiers by 500 persons per year; increase number of non-commissioned officers by 10% per year; reduce number of active soldiers by 15-20% until the end of 2007; (2) Operational development of main active structures of Armed Forces, such as Rapid Reaction Brigade, Commando Regiment, Helicopter Regiment, Pioneer Brigade, Civil Defence Base, Battalion of Military Police, Electronic Intelligence Centre, Coastguard etc.In process: Rapid Reaction Brigade’ consolidation, improvement and increase of operational capacities of Commando Regiment, reorganisation and establishment of Helicopter Regiment, improvement of operational capacities of Coastguard, Pioneer Brigade, Civil Defence Base, Military Police etc.In process: development, improvement, reduction and innovation of personnel structure in Armed Forces, engagement into exercises of different nature, gathering and processing of excessive ammunitions and military equipment etc(Lek 6,120 million) The expenditure have been mainly planned for: movements during the process of closure of some units, reorganisation process, operational needs of restructured units such as Rapid Reaction Brigade, Helicopter Regiment etc and gathering and processing of excessive materials.
Activity 3: Infrastructure Development
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Develop the necessary Infrastructure according to the new organisational structure and the strategic plan of Armed Forces.Reconstruction and construction are under process. The target is to maintain and modernize the necessary effective infrastructure of Armed Forces as well as to destroy and to process the infrastructure, logistical material and excessive ammunition.Under process: development and improvement of infrastructure through construction and reconstruction of priority active structures of Armed Forces, expropriation for military needs etc.(5 Billion lek) Infrastructure expenditures, which are under process even this year, have been planned for renovation of priority active structures’ objects such as: Rapid Reaction Brigade (Zall Her Project), National Exercise Centre, garrison’s objects in Rrapi i Treshit in Tirana, Helicopter Regiment mainly in Rinas), Commando Regiment, etc
Activity 4: Modernisation of Armed Forces
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Modernisation of the command-guide-communication system and Naval Space Surveillance System as well as enhancement of other supporting and logistical capacities of Armed Forces.Actually the process of development of Command- Guide-Communication System is under process and it is forecasting to continue for a long period. The establishment of Naval Space Surveillance System has just begun and it is anticipated to finish by 2008. The use of this system will be doubled civilian-military.The purchase of some communication equipment has begun since 2002; the preliminary work for establishment of Naval Space Surveillance System, and programmes for purchasing some military technical equipment are under process.(7,412 billion lek) Establishment of C4I system, of air space, naval space and land space surveillance system are the only programmes of modernisation process, part of them will continue during 2006-08. Planned expenditures in this activity are mainly will cover these systems and military technical expenditures for Naval Forces and/or Armed Forces. The completion of Naval Space Surveillance System during 2005-08.
Activity 5: Military missions and contribution abroad
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
To realize and accomplish the country international military commitment and obligations of international military mission.Participation with mission and/or limited military troops in Bosnia, Afghanistan, Iraq, Georgia, Romania, etc. Actually during 2005, 50 individuals have increased the participation.Further commitments in different operations outside the country.(1.5 billion lek) These expenditures have been planned for maintaining the military contingents that serve abroad, like in Iraq, Afghanistan, Bosnia, Romania, Georgia; etc.

Programme 3: Education

Policy objective: Consolidation and modernisation of routine administrative and functional activity of military education and exercise’s system

Activity 1: Normal administrative-operational activities
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
To ensure and improve living, working and teaching conditions, and good functioning of military and exercises schools.In Process: Improvement of staff working, teaching and exercising conditions, through fulfilment of needs and by providing facilities and area for schools and exercises.Staff maintenance, concrete plans and programmes for normal activities as well as development and consolidation of military schools, especially the Military University and National Centre of Exercise.(Lek 1,450 million) These expenditures are planned to maintain the staff and ensure the functioning of the education and exercise system of Armed Forces.
Activity 2: Modernisation of Military Education and Exercise’ System
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Re-organisation of military schools and consolidation of Military University, National Centre of ExercisesIn process: re-organise and consolidate military schools, complete and consolidate the Military University and National Exercises Centre. Investments in infrastructure and necessary elementary equipment were carried out in 2004 and further investment is under way in 2005.In process: Legal framework to develop and improve military education system; preparation of expropriation practices for building the National Exercises Centre(Lek 900 million) Completion of reconstructing of National Exercises Centre, Military University, other areas of Doctrine and Exercises Command, equipment and useful support for expropriation payments etc.

Programme 4: Health

Policy objective: Provide basic and specialized medical support for Armed Forces

Activity 1: Normal administrative-operational activities
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Provide and improve the medical support of first and second level in Armed Forces.Armed Forces have limited capacities for medical support within staff and their troops which is needed in both routine and special operational activitiesMaintenance of medical personnel, realisation and expansion of disease preventive measures; normal and specific vaccination; medical treatment of staff.(Lek 1,050 million) Staff payments and insurance of Armed Forces medical support of first and second level
Activity 2: Reorganisation and modernisation of Military Hospital
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Reorganisation and modernisation of Military HospitalFull reconstruction of Military Hospital, improvement of infrastructure; hospital equipment is under way.Reconstruct hospital area; planning the needs for purchasing special and common equipment.(Lek 300 million) Renovation of infrastructure and special and common equipment of Military Hospital.

Programme 5: Sport and culture

Policy objective: Provide the necessary cultural support for Armed Forces; improve staff management

Activity 1: Normal administrative-operational activities
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Improve capacities and skills of cultural support.Improvement of working conditions, full functioning and consolidation of Cultural Centre of Armed Forces are in process.Staff maintenance, Cultural Centre needs to be furnished with special and common equipment; finalise reconstruction.(Lek 145 million) National Centre of Armed Forces staff payments, administration, reconstructing, and renovation of special and common equipments
Activity 2: Reorganisation of the Armed Forces
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Fulfilment of Personnel ObligationsDecrease and change the personnel of Armed Forces.Payment of released soldiers.(Lek 664 million) Released military staff payments (temporary payment for 2 years) in Tirana garrison, placed in National Centre of Armed Forces.

Programme 6: Technical-scientific support

Policy objective: Provide technical-scientific support for Armed Forces

Activity 1: Normal administrative-operational activities
Output TargetsCurrent SituationProgramme Reform ActionsBudget Management Implications
Improve capacities and necessary technical-scientific skills at Institute of Military Studies and Projections; and Institute of Military GeographyImprovement of working conditions and technical capacities are under process.In process: Staff maintenance, reconstruction finalisation in 2006, special equipment mainly for Institute of Military Geography(Lek 284 million) Staff payment in two military institutes, administration, reconstructing, equipment
Annex 3 Sector and crosscutting strategies
Responsible ministryStrategyCouncil of Ministers decision number and date
1. Agriculture and FoodAgriculture and food
2. Culture, Youth and Sport
3. Defence
4. EconomyExport51 - 8 Oct 2002
Small and medium sized enterprises57 - 2 Feb 2001
Privatisation, electro energy sector171 - 19 Apr 2002
Telecommunication sector288 - 18 Jun 1999
Water infrastructures571 - 8 Dec 1999
5. Education and SciencePre-university education538 - 12 Aug 2004
6. EnvironmentNational Action Plan of Environment34 - 28 Jan 2002
National Action Plan of Biodiversity532 - 5 Oct 2000
7. European IntegrationEuropean Partnership
8. FinanceNSSED223 - 24 May 2002
9. Foreign Affairs
10. HealthHealth382 - 19 Jun 2004
11. Industry and EnergyEnergy424 - 26 Jun 2003
12. Justice
13. Labour and Social AffairsEmployment and vocational training69 - 10 Jan 2003
Social servicesIn process
Social insuranceIn process
DisabilityIn process
14. Local Government and DecentralisationDecentralisation and local autonomy651 - 29 Dec 1999
Training717 - 30 Oct 2003
15. Public Order
16. Territorial Adjustment and TourismWater supply and sanitation706 - 16 Oct 2003
Water273 - 7 May 2004
Rural water supply and sanitation679 - 16 Oct 2003
Tourism517 - 3 Jul 2003
17. Transport and Telecommunications
18. Minister of State by the Prime Minister / Council of MinistersAnti-corruption580 - 21 Aug 2003
Public expenditure management calendar

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