DRAFT

ALBANIA

URBAN DEVELOPMENT AND POVERTY REDUCTION

Ministry of Public Works

I. Urban Poverty Analysis

1.1.  Introduction

1.1.1 After the demise of the communism, Albania has undergone through a 10 years of reforming period to establish the market economy and institutions. During this period, no effort has been made to analyze the urban poverty inherited from the past and evolution of poverty during the transition period of last decade.

1.1.2. The purpose of this report is to provide a good picture of the urban poverty characteristics in Albania and the urban poor, analyze what are the causes of this poverty and propose public priority actions that address the poverty reduction in the context of the urban development.

1.1.3. Urban is a cross sector definition, so to capture the urban poverty as a multidimensional phenomenon in our analysis we have considered the following dimensions: a) income/consumption; b)living conditions (access to basic public services, such as, water, sewerage, road, electricity, school, clinic/hospital); and c) tenure insecurity.

1.1.4. The official statistical data available are not sufficient to provide an accurate level of urban poverty and quantitative and qualitative analysis of urban poverty features, differences of urban poverty between: (i) South, Middle and North of Albania, (ii) primary and secondary cities, and (iii) urban and peri-urban within a city. As a source. we have used extensively the social assessments carried out in various cities, INSTAT, and the World Bank documents on poverty and social analysis for Albania. In this report we have used the comparative approach in order to come up with basic features of the urban poverty in Albania.

2.1.  Analysis of Urban Poverty in Albania

2.1.2. What characterized the urban poverty during the socialist regime?

During the period of socialist regime, the government provided more or less an equal distribution of investment for basic services that resulted in equal services for urban population. Although there were roads, water electricity, sewerage, schools and clinics in all cities, the service provision was very poor and quite inefficient for the state own providers. Particularly in remote and secondary towns services were even worse. Also, wages were almost equal and very low and consequently, consumption was very limited. Immovable private property consisted only in some houses that were unaffordable to maintain from the owners.

2.1.3. Evolution of Urban Poverty after the demise of communism.

A. Living Conditions

A.1. Rapid uncontrolled and unregulated urbanization. The post-communist period in Albania, beginning in 1990, has been characterized by massive population shifts from the countryside to large and medium-sized urban centers such as Tirana, Durres, Vlore, Elbasan, and Saranda, and to undeveloped coastal areas. Because the country lacks formal land and housing markets and a proper regulatory framework, this urbanization is occurring primarily through informal processes, particularly the development of informal low-income settlements.

A.2. Emerging of new “...pockets of urban poverty. Slum-like communities have formed around Tirana and other major cities, lacking urban infrastructure and services”[1] The data of Living Standard Measurement Survey (LSMS) conducted in 1996 in Albania, has indicated that poverty in Albania is a rural phenomenon with almost 90 percent of the poor residing in rural areas[2]. The emerging of “pockets of urban poverty” in the peri-urban areas is a pure response of the rural poverty to migration. People migrating from rural areas or other depressed regions of the country simply stake out and claim unused land on the outskirts of towns and build houses that are often quite substantial but don’t have access to basic infrastructure

A.3. Limited access to basic infrastructure services. During the last decade, after the demise of the communism the basic services deteriorated further. Current policies failed to respond quickly to the high demand from the growing population in the big inland urban or coastal urban areas. Investments in physical and social infrastructure have not kept pace with the rapid growth in settlements, and the percentage of the population without access to infrastructure has increased to around 50-60%. In addition, the existing infrastructure networks have not been maintained over the past decade due to lack of funding sources, and their deterioration has significantly decreased the quality of existing services. In the city of Sarandë, according to the interviews with experts, it results that part of central sewerage system is 70 years old by now.

Water supply is intermittent, with most urban areas receiving less than 4 hours of service per day. There is a growing concern of the customers about the deterioriation of water quality. Sewerage service coverage is diminishing as many urban areas are expanding, and there are no sewage treatment plants in the country. Electricity service is also poor and with severe shortage in the summer and winter. Roads are seriously degraded, which affects public transportation, garbage collection, labor mobility, and most other urban activities.

Box Water Service Findings in the cities of Durres, Fier, Lezhe and Saranda[3]

Finding: In the households under survey water is used mainly for “drinking cooking, washing, and sanitation”. Most households, mainly in the city, use as their main water resource “indoor tap”, and whenever there is insufficient water supply they use as water resource “neighbor’s indoor tap”. In the village, people use as water resource also “yard wells” and “outdoor tap”. “Insufficient water supply” is the main problem among the surveyed households. Most respondents are not satisfied with their main water resource. When there is no water from the main resource they use water tanks or mechanic pumps. “Improved safety of drinking water” and “increased hours of water availability” are indicated by the surveyed households as two most important improvements that they want.

Box: Sanitation Service Findings in the cities of Durres, Fier, Lezhe and Saranda[4]

Finding: Most households in the city discharge wastewater from their toilet directly into central sewerage system, whereas in the villages into septic tank in the yard. Main problem associated with sanitation system in the city is that sewage floods the streets. Whereas, in the village the old-fashioned system of septic tanks is becoming more and more problematic regarding the sanitation.

This lack of basic infrastructure disproportionately affects the informal low-income settlements on the outskirts of cities and towns. These communities are usually excluded from any investment financing from the Government, as well as from the overall urban planning process or any other form of collaboration with central or local government to improve their living conditions. People in the new settlements are resorting to other means of meeting their needs, such as tapping into systems illegally or through formal or informal arrangements with utility companies. According to the Social Assessment in Saranda “In the city of Saranda, for example, parts of the new constructions in Koder quarter are not connected with sewerage system. They discharge toilet wastewater into septic tanks dug by dwellers themselves near their houses. Sanitation expert said, “into the ground there should be cavities where toilet wastewater can flow, but whenever they get clogged due to discharge of solid materials, wastewater emerges on the surface”[5].

The social assessment carried out by ISB and CO-PLAN in four sites, of which 2 in the peri-urban and 2 in the city, shows that lack of access to basic infrastructure services is typical in peri-urban areas.

Box 1 Basic Infrastructure Service Deficiency

Selita
(in the city) / Mihal Trameno
(in the inner city) / Bathore 2
(peri-urban) / Frutikultura
(peri-urban)
Roads / 91% unpaved / 38% unpaved, 24% graveled, 36% asfalt / 38% unpaved, 62% graveled / 54% unpaved, 46% graveled
Main mode of transport / To work place-50% walk, 18% public transport, 20% private cars
To school, health center, market place-85% walk / To work place-45% walk, 24% private cars .
To market place-65% walk, 18% public transport / To work place-81% private minibus transport,
To market place-57% walk / To work place-45% private transport minibus, or 18% public transport
To school, health center, market place-74%-96 walk
Drinking Water supply / Tap water inside the house 79%, tap outside the house 19% / Tap water inside house 98% / Well 60%, public taps 19% / Well 75%, tap water 23%
Sewage service / Sewage system 66%
Discharge in drainage canal 31% / Sewage system 90%,
Discharge in drainage canal 8% / 67% cesspit, and the rest discharge in the drainage or irrigation canals / Cesspit 89%
Solid waste collection / Municipal collection / Municipal collection / Neither municipal nor private collection / Neither municipal nor private collection
Electricity / Legal connection 97% / Legal connection 90%,
Illegal connection 8% / Illegal connection 85% / Illegal connection 57%, legal connection 25%
Inhabitants (no.) / 2,741 / 3,652 / 2,196 / 2,269
Size of the area (ha) / 42 / 36 / 39 / 53
Distance from the city center / 3km / Less than 1km / 6km / 7km

A.4. Limited access to formal housing market

The privatization of state own houses and apartment units in early 90’ was followed up with heavy investment of private sector, that increased tremendously the market price of houses. The formal housing market was oriented towards high income families, leaving thus the low income families off the market. According to a most recent study on housing in Albania, “The poorest strata, existing on less than a dollar per day, comprise 26 percent of the population in Tirana and 35 percent in its peri-urban periphery”[6]. One quarter of the metropolitan Tirana population lives in this periphery. As a response to shortage of affordable houses, emerged informal housing market. The informal housing market is characterized by an unregulated extension of many apartment units in the inner city. At the Tirana center, the floor space is averaging 8 square meters per person compare to 20 square meters per person in Central and Eastern Europe. Another feature, is building or acquiring informally built housing in peri-urban areas from rural migrants, usually without public services of electricity, water, sewage and streets.[7]

A.5. Education is deteriorating

Poverty is strongly linked to education. Enrollment rate in education is declining, particularly at secondary education. Likewise, during the last 10 years the dropout rate of children was 3 percent each year[8]. In some urban areas the number of pupils per classroom is higher than 40[9]. There are growing serious concerns about the quality of education service.

A.6. Health services is limited

Health services is limited and with a poor quality in many cities, and in particular in small towns. About 30 percent of existing health centers are not functioning[10], reducing thus the access of the people to health services. The health services access is even worse in the growing peri-urban areas due to migration. These areas are very mixed with mostly informal and or illegal settlements.

In the north-eastern areas malnutrition is present in around one quarter of children[11]. Infant mortality rate in 1997 was 22.5 per 1,000 births, or almost three times as higher as the central European countries[12].

B. Monetary Poverty

B.1. In Albania poverty defined from the income level per capita, is very high. According to INSTAT living conditions survey of 1998[13], monthly average income per capita was about USD30 per month, or about USD1 per day. The “Household Welfare, The Labor Market, and Public Programs in Albania”, published in July 1999[14], reported that the average monthly level of Consumption per capita in 1996 was about USD42.

B.2. There is a high dependence of poor families on Government social assistance. In 1999 there were 149,000 poor families or around 20 percent of the total families in Albania, receiving economic aid from the Government[15]. Of these families, about 40 percent live in north of the country.

B.3. There is also e relatively high dependence on remittances. Households that have members working as emigrants in other countries have lower poverty rates than no-migrant households.[16]

B.4. INSTAT has reported unemployment rate in Albania 18.4 percent in 1999. In urban areas this figure is higher, and even higher in peri-urban areas. High percentage of informal private businesses makes the employment very uncertain and keep wages low.

Box 2 Unemployment rate in inner city and peri-urban

Selita
(in the city) / Mihal Trameno
(in the inner city) / Bathore 2
(peri-urban) / Frutikultura
(peri-urban)
Unemployment rate / 51% of active labor force / 23% of active labor force / 58% of active labor force / 82% of active labor force

C. Tenure insecurity

C.1. The privatization reform has transformed the state owned property in to private, and created the market environment for the growth of a new private real estate. Tenure is uncertain, with restitution claims still coming from former land owners, and state land being held in temporary or permanent leasehold. Squatting of public and private land from families has created many uncertainties in land tenure.

C.2. Lack of legal title is a typical phenomenon in informal housing sector. This hampered both housing investment and finance markets, as the occupant can’t sell or use as collateral their property. In the peri-urban areas of Albania people have invested and is still ongoing, on their property without permission, in order to assert their right to the land and increase their tenure security on their own[17].