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Update No: 062 - (20/06/02)

The Albanians are having a second term of government by the Socialist Party, which won re-election last year. The economy had been doing well for year after year since the Kosovo War of 1999 that put Albania on the map. A second term for the ruling Socialists made sense, especially as they have a knack of re-inventing themselves under new leaders.

Buoyant economy
The big plus for them in the elections was that they were able to point to high growth with low, near-zero inflation, a magic combination indeed. GDP growth in 2000 was a buoyant 7.8% and in vital elections year, 2001, it was 7.3%. This year is it notched a mere 6%, but this is very high by European standards.
Of course, Albania is a very poor country on those same standards, with a long way to go to reach lower EU levels, say attained by neighbouring Greece. But the Albanians are no longer the incurably poor people of Europe.
Greek and other foreign direct investment (FDI) is coming in more vigorously. FDI of US$141m in 2000 was topped by 220m in 2001. FDI of US$235m is expected in 2002.

Political upheaval
The political scene was dominated earlier this year by an internal feud within the Socialist Party that saw Albania without a government for weeks after January 29th and then the emergence of a new young premier, Pandeli Majko. Majko is a compromise centrist candidate to keep two contenders from splitting the party.
One faction is led by the leader of the party, Fatos Nano, the other by the recently resigned premier, Ilir Meta. Nano accused Meta, at 32 the youngest premier in Europe, of being guilty of "corruption, fascism" and goodness knows what else, all of which Meta stoutly denies, calling Nano "an irresponsible politician" in return.
A compromise has been reached under the premiership of the young reformer, Pandeli Majko. Meta offered his support to Majko and wanted to become interior minister, a very key post in highly security-conscious Albania. Nano vetoed this and Meta has withdrawn, Stefan Cipa, a 43-year old agronomist, being chosen instead. Four ministers from the old government have kept their posts, including the key figure, Foreign Minister Arta Dade.

Chinese overtures
Majko and President Rexhep Meidani met senior Chinese lawmaker, Tomur Dawamat, vice-chairman of the Standing Committee of the National People's Congress of China, in Tirana in June. The curious Chinese-Albanian relationship is a longstanding one, former communist chief, Enver Hoxha, being a fan of Maoism, as he had been earlier of Stalinism. Mutual relations and the Taiwan issue were discussed.
The Chinese are interested in investing in Albania, a cheap labour outpost in Europe, a sort of new Hong Kong for Europe's southern region. Time will tell if anything comes of the visit. 

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ENERGY

Albanian government sets up task force to monitor energy policy

There will be a "task force" group to follow upimplementation of targets determined by the Albanian government on policies in the energy sector official sources close to Ministry of industry and Energy announced, ATA News Agency has reported. 
The "task force" will have representatives of various institutions and its duty will be to monitor the implementation of reforms as determined in the Action Plan. The "task force" is due to make a report to government every three months. 
The main objectives set have to do with the formation of a powerful industry for energy, a legal framework, restructuring of the Albanian Power Corporation, building up of investments and the creation of anenergy market in line with the EU standards and the Thessaloniki statement on having a regional market of energy.

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FOREIGN COOPERATION

Albanian leaders talk about mutual relations with Chinese lawmaker

During a visit by senior Chinese lawmaker, Tomur Dawamat, he and Albanian President Rexhep Meidania and other local leaders discussed bilateral relations, cooperation and the Taiwan issue, New Europe reported.
Tomur Dawamat, vice chairman of the Standing Committee of the National People's Congress of China met in Tirana with the Albanian President and the Prime Minister, Pandeli Majko.
Noting that China and Albania have maintained friendly relations, Dawamat pointed out that since first establishing diplomatic ties some 50 years previously, the two countries, as well as the world in general, have undergone a series of major changes, the People's Daily reported. However, the traditional friendship between the two peoples had not altered in any way.
The visiting Chinese official referried to his belief that in the new century, China would be willing to further enhance and develop friendly cooperation with Albania on the basis of mutual respect and in the search for common grounds, while preserving cultural differences, and mutual benefits.
For their part, the Albanian leaders said that their country would firmly support the one-China policy. President Meidani expressed the hope that the two sides would develop cooperation in fields such as politics, economics, culture, education and sports. He also noted that Chinese entrepreneurs were welcome to invest in Albania. absorb

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TRANSPORT

Majko re-ignites prospect of Kosovo-Durres highway 

The Prime Minister of Albania, Pendeli Majko, stated that his administration views the construction of a new highway connecting Albania and Kosovo as a top priority. Believing that relations between Tirana and Belgrade are strongly conditioned by the Kosovo question, he is once again calling for the commencement of construction of a new highway from the Adriatic port city of Durres to the Kosovo border. 
While the present road, dating back to the Italian military occupation, is narrow, winding and dangerous, the new road would traverse the Fan Valley and proceed to Kukes along the Drin River, reaching Kosovo at the Morina/ Vermica border crossing near Prizren, RFE/RL reported from Tirana.
In a television interview recently, Majko spoke of the highway's importance: "Can you imagine what an impact this road would have on the entire Albanian market, if the ride from Durres to Morina took about two hours? This is not a dream. It's a reality. We have discussed several options and agreed on one project costing US$250m."
Majko also referred to a new tax that would be added to the next fiscal year's budget in order to enable the state to fund the cost of construction. He said the goal will be to collect US$20m annually, on top of the donations already promised by businesses and leaders of the Albanian diaspora.
However, main business groups in Albania differ in their opinions regarding the prospect of this tax. The Union of Business Associations hail the idea, while the Association of Investors and Producers are against imposing a new tax. Analysts say that with the present state of the economy, the government has decided to cut this year's state budget by six per cent so as to be able to respond to growing inflation.

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