Mrs. Laura QORLAZJA – IFC’s Country Representative in Albania

Mrs. Laura QORLAZJA – IFC’s Country Representative in Albania

October 24, 2016
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“It is important that state institutions play a greater role in creating a business environment able to retain current investments and attract new ones”

FIAA: What is the IFC’s current long term finance investment strategy in Albania?

Photo L. QorlazjaMrs. Qorlazja: Thank you first of all for giving me the opportunity to talk about IFC in general and its work in Albania.

IFC was established in 1956 as part of the World Bank Group to support private sector investment in emerging markets to create jobs and raise standards of living. IFC’s financial products enable companies to manage risk and broaden their access to foreign and domestic capital markets. Our financial products consist of fixed and variable rate loans extended to the private sector, which finance both early-stage companies and expansion projects. IFC also makes loans to intermediary banks, leasing companies, and other financial institutions for on-lending. In addition to lending, IFC engages in equity investments that provide developmental support and the long-term growth capital the private sector needs. IFC invests directly in companies’ equity and also through private-equity funds.

Since Albania joined IFC in 1991, IFC has been a supporter of sustainable economic development in the country through its investment and advisory services. We have a total investment portfolio in Albania of $820.7 million in 26 projects across a variety of sectors, including energy, infrastructure, banking, manufacturing, and trade.

IFC’s program for Albania for the 2015 -2019 period is aimed at supporting Albania’s aspiration to achieve equitable growth and integration into the European Union. The program will be pursued with a focus on our twin goals of reducing poverty and boosting shared prosperity, and the following strategic priorities:

  • Improving access to infrastructure (renewable energy, ports, road operation and maintenance);
  • Boosting countries’ competitiveness (manufacturing, agribusiness, tourism);
  • Improving the business environment (NPL resolution, investment climate);
  • Supporting social sector reform (health care, waste management).

What are some examples of individual projects that are aimed at improving the business environment in Albania?

IFC’s strategy in Albania is to accelerate the recovery in Albania’s economic growth through improved competitiveness and an enhanced investment climate. A few examples of individual projects that aim to improve the business environment are:

Debt Resolution Project: This aims to make the Albanian debt resolution system more efficient by improving the insolvency framework and practices, which will strengthen the avenue for resolution on nonperforming loans, increase returns to creditors, and protect economically viable companies. The new law on Debt Resolution, drafted with the assistance of IFC, is expected to be approved soon by the Albanian parliament. 

The Southeast Europe Tax Transparency and Simplification Project: This aims to achieve two objectives: (i) simplify tax administration procedures to reduce tax compliance costs, especially for small and medium enterprises, and (ii) improve the legal framework and efficiency of the administration of international taxation procedures, with a focus on Transfer Pricing/Double Taxation Treaties. This project covers not just Albania but also other countries in our region, such as Bosnia & Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia.

ASA – Improving Investment Climate, Competitiveness and Regional Integration in Agribusiness in Albania: This is part of the larger Western Balkans ASA Project. The project’s objective in Albania is to improve the business environment for Albanian businesses, focusing on agribusiness value chains, through three components: (i) improving business regulations and quality infrastructure at the national level to reduce regulatory costs; (ii) strengthening investment policy and facilitation to increase foreign and domestic investment and support the entrance of new investors, and (iii) facilitating access to markets (intra-regional and inter-regional) by reducing cross-border costs and delays in the movement of goods across borders, both within the region and to the EU.

What concerns, if any, do you have about the current investment climate in Albania? How do you believe these concerns can be addressed?

Despite the reforms undertaken by the government to improve the investment climate and the high priority given to this, the business environment continues to experience shortcomings that negatively impact private investments and, therefore, growth. These include the institutional and regulatory burden; excessive bureaucracy; fiscal indiscipline; poorly defined investment incentives; instability in fiscal laws and regulatory requirements; and an uneven implementation of the law. The 2008 global crisis also posed difficulties for many private companies, making it hard for them to engage in current or new projects. The crisis has had an ever bigger impact on foreign companies in countries where foreign capital is supposed to flow to the Albanian economy. This further reduces the appetite of investors to invest.

Boosting private investments, domestic and foreign, is critical to restore and accelerate growth, and create jobs. To achieve this, it is important that state institutions play a greater role in creating a business environment able to retain current investments and attract new ones.

What further steps would you like to see the government take to improve the business environment for foreign investors in Albania?

Ensuring a legal framework for investment that  is clear, predictable, stable and fair, as well as ensuring investor protection through strict law enforcement and a reliable justice system, would result in a more transparent and attractive investment climate. In addition, to create conditions for accelerated private sector investment and generate economic growth, state institutions should play a greater role in (i) orientating businesses to invest in high growth sectors, (ii) creating sector-focused promotion policies to attract new investments, (iii) ensuring freedom of access by improving business regulations and reducing compliance costs for the private sector, (iv) avoiding informality and ensuring fiscal discipline and law enforcement, and (v) encouraging banks to resume lending to companies.

And what steps can foreign investors themselves take?

Foreign as well as domestic investors should continue their efforts to maintain a constructive dialogue with state institutions, which will ultimately help tackle shortcomings and improve the business environment. In this context, business association such as the FIAA play an extremely important role in bringing businesses together and conveying their concerns, in one single voice, to the government.

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Laura Qorlazja has 21 years’ experience with international and local accounting firms. During her work in Albania and abroad, Laura has been responsible for overseeing a range of client services including audit and other attestation services, financial advisory services, tax consulting and accounting consulting across a wide range of industries, from telecommunications, energy and public utilities to construction and consumer goods. Laura has an in-depth understanding and experience of the application of international and national accounting standards as well as business valuation methodologies. In addition, she spent nine years in the telecommunications industry in Albania. During her years working in accountancy, Laura was holder of the Certified Public Accountants, USA (CPA), a member of the Albanian Institute of Authorized Chartered Accountants, IEKA (ACA), a member of the Society of Certified Accountants and Auditors of Kosovo (CAA), and a Bankruptcy Administrator. In April 2016, Laura was appointed IFC’s Country Representative in Albania.