BB: Albania's wealth will grow from investments in education and technology

2024-08-06 11:30:00, Ekonomi CNA

For more than two decades, Albania has been part of the group of countries with high middle income (countries with per capita income between $4,466 and $13,845, World Classification), but in order to get out of this threshold, it must increase investment in education and technology suggests the World Bank in its latest World Development Report for 2024, which focused on the middle-income trap.

Middle-income countries are in a race against time. Since the 1990s, most countries in the world, including Albania, have done enough to escape low-income levels and eradicate extreme poverty.

But now, ambitions must rise to achieve high-income status within the next two or three decades.

According to the World Bank, the key points where this achievement is realized is an economy based on innovation and investments in human capital. A good example in the world is North Korea, while in Europe, Poland, Estonia, etc.

With an aging population and high public debts, upper-middle-income economies, of which Albania is one, are growing in tight spaces.

Now people in middle-income countries are fearful and distrustful of rising to high-income status in the next two decades.

The only way to ensure prosperity is the economy's approach to technological development and the promotion of talents. The bank suggests that governments in the most middle-income countries, of which Albania is a part, should borrow technology and ideas for its development from abroad.

This process requires restructuring of enterprises, greater freedom in the economy, social mobility. Yes, according to the World Bank, this process depends a lot on how disciplined the government is in its policies, the executive levels in corporations and how creative they can be.

In addition to technology, countries like Albania must invest in human resources and talents, which lead the creative force. In general, in countries like Albania there is a talent gap compared to developed countries, so investments in education are considered the main means to mark progress.

Talented and merit-based leaders are much needed to drive reforms before prosperity, the WB report concludes.

But is Albania going in this direction?! For almost a decade, education has not been a priority of the government. Low investments, demographic movements and the quality of teachers have caused Albania to record the strongest drop in the global ranking of educational achievements between 2018-2022 in the international PISA test.

Albania continues to experience high levels of youth emigration. Official INSTAT data showed that last year 24.6% of young people aged 15-29 were wasting their time because they were neither working nor going to school or attending any training.

Albania continues to invest about 3% of its GDP in education, one of the last European levels.

On the other hand, the country's economy is not technology-oriented and scientific research at the university does not exist.

Agriculture and services dominate the structure of the economy, but are mostly based on free labor rather than technology.

Public investments in Albania are not technology oriented and on the other hand, private businesses operate in sectors with low labor value./Monitor