Massimiliano Paolucci, the World Bank Country Manager for Kosovo and North Macedonia, delivered remarks at The Economist Impact Western Balkans Summit 2024 during the panel session titled “Advancing Sustainability: Infrastructure, Energy Solutions, and Financing Opportunities.”
Paolucci highlighted the need for stronger integration within the Western Balkans and with the European Union (EU) to achieve sustainable growth. "The crises that the region has experienced over the past years have clearly indicated the need for stronger integration within the Western Balkans and with the EU, as well as of sustained structural reforms," he stated.
While acknowledging a modest improvement in economic growth projections—from 2.6 percent in 2023 to an expected 3.8 percent by 2026—Paolucci emphasized that this rate is insufficient for convergence with EU income levels. He called for bold structural reforms to enhance productivity and reduce infrastructure and human capital gaps with the EU.
"The Berlin Process and the EU’s new Growth Plan for the Western Balkans offer an opportunity to catalyze growth-enhancing reforms and investment through much-needed resources," Paolucci noted. He cited World Bank research suggesting that reducing border clearance times could significantly bolster regional integration and competitiveness.
Focusing on Kosovo, Paolucci underscored strategic reforms targeting macroeconomic stability, governance, productivity enhancement, human capital investments, and export promotion as essential steps. "Kosovo's advantageous location and youthful population offer significant growth potential," he said while pointing out challenges such as low labor force participation among women and educational quality needing improvement.
Paolucci mentioned recent efforts to improve transport networks across the Western Balkans through projects like the regional Trade and Transport Facilitation project. He also stressed continued investment in greening infrastructure to meet productivity challenges and align with EU green growth initiatives.
Highlighting renewable energy investments, Paolucci praised projects in solar power, wind power, and energy efficiency. "A good example is the Kosovo Energy Efficiency Fund... designed to operate on a revolving basis," he remarked. This fund aims to scale up investments in energy efficiency targets.
On digitalization, Paolucci reported progress in extending fiber-optic cables to remote villages in Kosovo, connecting over 60,000 rural residents to high-speed internet. "Kosovo can now focus on capitalizing on its well-developed digital infrastructure," he added.
In conclusion, Paolucci emphasized that investing in infrastructure alone is insufficient without parallel investments in human capital. "Investing in human capital—as a precondition to unlock higher potential growth—while preserving fiscal adequacy requires effective and comprehensive reforms," he asserted.
"We at the World Bank will continue to support Kosovo and the region in its structural reform agenda for more sustainable and inclusive development," Paolucci affirmed.
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