% of GDP
a free service
In 1990 Albania ended 44 years of xenophobic communist rule and established a multiparty democracy. The transition has proven difficult as corrupt governments have tried to deal with high unemployment, a dilapidated infrastructure, widespread
gangsterism, and disruptive political opponents. International observers judged local elections in 2000 to be acceptable and a step toward democratic development, but serious deficiencies remain to be corrected before the
2001 parliamentary elections
Update No: 067 - (19/11/02)
The Albanians are coming back from rock bottom. Only five years ago they were shattered by a series of financial collapses, with people losing their savings, none too great, to pyramid schemes going awry. After years of state-provided security, even if at exiguous levels, they were suddenly loose in the risky new capitalist world.
The economy back then was the poorest in Europe. That dubious distinction is now held by Moldovans.
The economy booms
Since 1998 the economy has been steadily improving, with GDP rising by 7-8% per year, and moreover with very low inflation. Slower growth is expected for this year, not surprisingly.
The turning-point was the Kosovo war in early 1999. Suddenly, a flood of foreign aid and credits was extended, while NATO forces and international aid agencies and the like came to town. House prices in richer areas soared, but genuine trickle - down effects were felt across the board. There was even for the poorer, hope on the horizon.
Albania entered the sights of foreign investors, and not just Italian gangsters, although Albania does still attract too many of these. Greeks are coming in aplenty and so are co-religious Turks.
The socialists benefit
The Socialist Party was in office when the Kosovo War and the economic boom took place. They have been the great beneficiaries, being returned last year.
They have also gained from 9:11, since they are cooperating fully with the Americans - Tirana, capital of the one nation with a majority of Moslems in Europe, is an obvious haunt of Islamic Militants, as is the Croat - Muslim Republic in Bosnia, where they held a special conference on October 8th.
But the regime is adamantly opposed, having no truck with terrorists of any kind. Several al-Qaeda suspects were handed over to the US recently; Tirana has its role in the campaign against terrorism. Indeed, after being an isolated outpost of extremist forms of communism for years it is now at last coming into its own.
Albania's former queen, Geraldin, window of King Zog, died in October. One thing that is pretty certain is that her son, Leka, is unlikely ever to rule in Tirana.
His bid to be elected king failed a few years ago; although he scored 30% in a referendum. But his record as an arms dealer in Spain for years is no help; lacking money is also no advantage. A mendicant would-be monarch is not what Albanians desire.
IMF expects slower growth rate for Albania
Albania's economic growth has slowed down. GDP growth by the end of the year is expected to be only 4.5 to 5 per cent, Husayn Samei, head of an IMF delegation, stated at a news conference at the end of the delegation's mission in Albania, Albanian Radio has reported.
He said that the energy crisis and the floods at the end of September were two of the factors behind the country's economic slowdown. He also said that the government's privatisation projects had been adversely affected by the unfavourable situation of the world economy. All these factors, he said, had led to a revision of the GDP projections for the current year. "We think that the growth rates for 2002 cannot be higher than 4.5 to 5 per cent," he said. Samei highlighted the need for more private sector investments, government's measures to maintain the macroeconomic stability, and the improvement of the business climate. Priority should be given to the promotion of investments and exports, too, he said.
The IMF mission also spoke about the need for measures to improve infrastructure, consolidate governance, step up the fight against corruption, enhance transparency and dialogue with the business community, and establish a more dynamic financial sector. It said that the GDP growth rate for the period from 2003 to 2005 would be 6 per cent.
Speaking at the same news conference, Finance Minister Kastriot Islami, described some of the main targets set by the government for 2002 and the next year. He said that the inflation rate would be 4 per cent at the end of this year and that the growth rate for the period from 2003 to 2005 would be 6 per cent.
Islami said: "According to our macroeconomic forecasts, inflation rate by the end of the current year would be about 4 per cent, while the growth rate would be 4.5 to 5 per cent as a result of the aforementioned objective factors. We have still not made an assessment of the impact of the recent flooding. During the period of 2003 to 2005, according to our cautious and realistic projections, the annual growth rate could be 6 per cent. The currency exchange rate has been and will remain stable, reflecting the fluctuations on the international currency exchange markets. We intend to follow the same policy next year," he said.
At the end of the current year the total deficit and the domestic deficit are expected to be within the targets set at the beginning of the year, he said. "We intend to follow a cautious budgetary policy and reduce these deficits to 6.5 per cent and 2.7 per cent, respectively, by the end of 2003," he said.
FOREIGN ECONOMIC RELATIONS
Italian premier pledges help to Albania in energy sector, tourism
Italian Prime Minister Silvio Berlusconi met Ilir Meta, Albanian deputy prime minister and foreign minister. "Albania is our privileged partner in the Balkans. This was also reflected during my recent visit to Albania," Berlusconi said. "I am pleased about the new political climate between the ruling and opposition parties in Albania, he added. He stressed that the two countries had now identified the priorities for their future cooperation. Berlusconi expressed Italy's readiness to contribute to the long-term and comprehensive solution of Albania's energy problem and, in this context, he referred to the forthcoming meeting of [Albanian Electricity Corporation] KESh with Enel, the Italian electrical energy supplier, in Rom, Albanian TV has reported. Berlusconi also said that Italy was ready to contribute to the development of tourism in Albania and that Italy's best experts could be involved in tourism development projects. He reiterated his plans to encourage serious Italian investors to invest in Albania. Berlusconi said that it was also important to create an objective image of Albania and Albanians in Italy.
Meta emphasized the consensus among Albanian political forces on the development of a partnership with Italy. "Your visit gave a new impulse to Albanian-Italian relations, raising these relations to a new qualitative stage, based on a long-term cooperation, not on emergency situations," he told Berlusconi. The implementation of Corridor 9 project, Meta said, was a very important project for the development of all countries from the Adriatic Sea to the Black Sea. The intensive development of our bilateral relations requires the liberalization of the visa regime for all Albanian citizens travelling to Italy, he said...
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