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Nov 30, 2017 18:06 EEST
TIRANA (Albania), November 30 (SeeNews) – Large regulatory barriers may have harmed firm growth and job creation in Albania, the World Bank said in a new report on Thursday.
“Poor access to financial services also constrains accumulation and use of financial assets by firms in Albania, and affects relatively more the firms with the most rapid employment growth,” the World Bank said in its report titled Western Balkans: Revving Up the Engines of Growth and Prosperity.
"Barriers to firm registration and high personal income taxes also discourage formal-sector job creation."
Between 30 and 60 percent of total employment in Albania is informal, the report said, adding that high informality undermines workers, firms, and the economy at large.
The report looks at how Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia - the six countries of the Western Balkans - can speed up economic growth and achieve faster income convergence with the EU.
It will take as many as six decades for income levels in the Western Balkans to catch up with those of the European Union if economies in the region continue to grow at the average speed achieved between 1995 and 2015. However, reforms and macroeconomic stability that can enable average annual growth rates of 5% would allow the Western Balkans to converge with the EU in just two decades, instead of six, the report noted.
Albania still has a high share of agriculture in GDP and a manufacturing sector that is growing its share in the economy from a low base.
According to the report, Albania has the second highest levels of remittances as a share of household income after Kosovo.
“Poverty rates are also higher in rural areas. The share of the population living in urban areas has been steadily increasing in some countries, notably Albania and Montenegro, over the past decade,” the report noted.
The unemployment rate in Western Balkans is almost two times higher than in other small transition economies that are now in the EU. With half of the working age population in the region seeking work and a quarter of job-seekers failing to find it, the need to increase participation in the labour market in the region remains key, the World Bank noted.
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