TIRANA, Feb. 3 – The devastating floods in southern Albania this week due to heavy rains and the overflow of several rivers is expected to have a serious impact on the country’s economy this year, experts say.
Back in May 2014, devastating flooding in Serbia and Bosnia and Herzegovina were a major factor in their poor economic performance.
“The floods in May 2014 are estimated to have cost Bosnia and Herzegovina around 15 percent of GDP and Serbia around 4.7 percent of GDP in lost output and damages. Serbia is estimated to have contracted in 2014 for a third time since the global crisis, and Bosnia and Herzegovina is stagnating,” says the World Bank in its latest South East Europe Regular Economic Report.
The Albanian government and international financial institutions such as the World Bank and the IMF expect the country’s economy to accelerate to 3 percent in 2015 but the flooding could cause a revise downward of the GDP as happened in Serbia and Bosnia and Herzegovina.
The flooding in southern Albania has caused considerable damage to agriculture, livestock, houses and businesses and local infrastructure, estimated at millions of euros.
The Interior Ministry announced some 5,000 hectares had been flooded in the southern Albanian regions of Fier, Vlora, Berat and Gjirokastra from the overflow of the Vjosa, Osum, Drino rivers.
Experts say the government could also be forced to revise its 2015 to compensate damage to the affected households and businesses.
However, the improved situation in Albania’s hydro dependent power plants is estimated to bring positive impacts due to the reduction of electricity imports and increased exports.
Climate extremes in the Western Balkans will pose major risks to agricultural systems, energy, and human health, according to a climate change report published by the World Bank.
“From the Western Balkans to Siberia, from Europe to Central Asia, the impacts of extreme climate events, such as floods, droughts, and forest fires, are already being felt, all with significant human and economic cost, as well as environmental impact,” Laura Tuck, World Bank Vice President for Europe and Central Asia, has warned.
Agriculture is one of the most climate-sensitive of all economic sectors, and without a clear plan for aligning agricultural policies with climate change, the livelihoods of rural populations are at risk, says the World Bank in a publication over reducing the vulnerability of Albania’s agricultural systems to climate change.
In Albania, the risks of climate change are an immediate and fundamental problem because the majority of the rural population depends either directly or indirectly on agriculture for their livelihoods.
“The rural poor will be disproportionately affected because of their greater dependence on agriculture, their relatively lower ability to adapt, and the high share of income they spend on food,” said William Sutton, an author of a book on Albania’s agriculture and a lead agriculture economist at the World Bank. “Climate impacts could therefore undermine progress that has been made in poverty reduction and adversely impact food security and economic growth in vulnerable rural areas,” he adds.
Tahseen Sayed, the country manager for the World Bank Office in Albania, has also warned
recent flooding events have underscored the climate change risks. “Climate variability has magnified serious weaknesses in the management of Albania’s water resources, characterized by fragmentation and duplication of water management responsibilities, as well as inadequate stakeholder involvement in integrated water management decision making,” she has said.
Albania continues remaining the most agriculture-based economy among the seven enlargement economies, according to a report published by Eurostat, the statistical office of the European Union. Albania’s agriculture, forestry and fishing sector continues remaining one of the key drivers of the Albanian economy accounting for 22.2 percent of the GDP and 44.6 percent of total employment.
A World Bank report has described the Drini-Mati River Delta in Albania as one of the most vulnerable coasts in the region.
Albania regularly suffers from floods, which are problematic for agriculture when they delay the planting of crops or destroy harvests. Projections up to 2050 for Albania indicate that flooding events could increase in both frequency and intensity under the influence of climate change.
Insurance coverage of natural hazards among Albanian homeowners and small and mid-size businesses is almost non-existent (only 1-2 houses out of 100 currently have private catastrophe insurance coverage), which in case of a major event would have to appeal for government help, says the World Bank.
