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Albania

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  ALBANIA

REPUBLICAN REFERENCE

Area (sq.km)
28,748

Population
3,490,435

Capital
Tirana

Currency
Lek

President
Mr. Rexhep Meidani

Private sector
% of GDP

45%

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Background:
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: 058

The Albanian situation has been transformed by the resignation of the premier, Illir Meta, at 32 the youngest in Europe. There has been a bitter inter-party struggle in the dominant Socialist Party between himself and the chairman, Fatos Nano, who accuses him of serious charges. 'Corruption, fascism' and everything else under the sun are among the accusations flung at him. Meta dismisses them all, accusing Nano of being 'an irresponsible politician.'
It is worth putting this imbrioglio in perspective.
The country is still very backward. It is still a very poor country, the poorest in Europe on all accounts. But it now has a future.
In the immediate aftermath of liberation in 1991 the economy went into free fall. The Party of Labour of Albania, the communists, changed their name to the Socialist Party of Albania and won the first genuine multi-party elections since the 1920s.But it was replaced by the opposition Democratic Party of Albania in early 1992. The government did a brave thing in that year, which no government for instance has yet dared to do in Russia - it privatised land. This was fundamental in an economy still more than half agricultural. Things began to look up as peasant incomes grew. 
But there was a huge downside to the radical reformism of the government, under premier Nano. People began to experiment with finance schemes, from which they could obtain loans, offering their landholdings as collateral.
1996 was an election year and the government of the day under Sali Berisha, head of the Democratic Party of Albania, and then president, began to loosen the purse-strings. Inflation, which had been modest for an economy in early transition, took off, reaching double figures, while a series of pyramid financial schemes, in which large numbers had unwisely invested their savings, collapsed. GDP fell by 8% in the course of 1997. Naturally people began to be nostalgic for communism. The socialists, having boycotted rigged elections in May 1996, won elections in July 1997. The Communists were back.
They resumed a reform course, stalled by their predecessors, and things began to improve, GDP rising by 8% in 1998, 7% in 1999 and 8% again in 2000.The economy was greatly helped by two booms, the repatriation of funds from the more than 300,000 émigré workers and the Kosovo War, which brought a flood of aid and assistance from abroad. The presence of NATO troops helped to re-establish stability and curb banditry.
The economy continued to boom in 2001, allowing the socialists to win re-election. With growth still in the 7-8% range and remarkably low inflation, the population were prepared to give the incumbents another chance, although the opposition under Berisha cried foul.
The state budget for 2002 envisages 7% growth in GDP and 2.4% inflation (see below). Generally the country is doing well under adverse circumstances.
Ahead beckons membership of the EU, another fruit of the war. The Europeans have lost their scorn for the Albanians. It is very important in this respect if their membership bid is to be successful, that the Albanians should make clear their opposition to terrorism, because as Muslims and with a tradition of banditry they are bound to remain suspect in the new hyper-security conscious age. Moreover, there is a formidable mafia in this country which is suspected amongst other depredations of organising a conduit into Europe of drugs from Afghanistan, as well as economic refugees from mainly Moslem countries.

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INDUSTRY

New agency to handle small and medium-size enterprises in Albania


Small and middle-sized enterprises (SME) in Albania are expected to have their own agency this year to service the development and solve problems associated with their activities, ATA News Agency has reported.
The private sector in Albania occupies over 70 per cent. Around 40 per cent of the total number of the employees are employed in small and medium sized enterprises. Nevertheless, according to specialists, the level of their development is low. The main obstacle to the development of these enterprises is the low level of credit available.
In Albania there are around 56,000 small and middle enterprises, the major part of them situated in the zones of Tirana and Durres.

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SHIPPING

EIB issues €17bn Durres port restructuring loan


The European Investment Bank (EIB) is lending €17bn for the revamping and upgrading of the cargo handling facilities and quays of the port of Durres in Albania, New Europe has reported.
The loan, which is an entirely new EIB project, is being advanced to Durres Port Authorities (DPA), a state-owned joint-stock company established in its present form in 1998, which owns and operates the port. A €5m EIB loan signed in 1995 for a Ferry Terminal at the port of Durres, was cancelled due to severe delays in project implementation.
The project is made up of three components: Paving, drainage and engineering networks behind the quays; purchase of one or two mobile cranes of 40-50 tonnes and, rehabilitation of slope protection at the western breakwater of the port.
The port of Durres is the largest and most important of Albania's four ports, handling some 85 per cent of the country's international maritime traffic, an EIB press release informed. As the western end of the Pan-European Transport Corridor VIII, Durres has a significant role to play in the economic development of the country and the Western Balkan region.
Its financing structure is a good example of EIB co-operation with other multilateral financing institutions such as the European Commission (PHARE) and the World Band. This new EIB loan is also complementary to a €22m EIB loan signed in 1998 for a 21 kilometre section of a new high capacity road between the port of Durres and the capital, Tirana.
Active in Albania since 1994, the EIB has contributed over €140m towards projects of key importance for the Albanian economy.
These include various infrastructure investments and the promotion of small and medium-sized enterprises in the productive and co-operative sectors through a global loan (credit line) to Albania's banking sector.

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TELECOMMUNICATIONS

Vodafone Albania happy with end-year results


Five months after launching its commercial operation, Vodafone Group's newest subsidiary, Vodafone Albania, announced a total customer base of 118,567 at the end of December 2001, 117,548 of which were pre-paid customers.
Vodafone International Holdings and Vodafone Greece presently hold a 51 and 49 per cent share in Vodafone Albania, respectively. At the end of December Vodafone Greece also announced its total registered customer base had reached 2,884,872 representing a 29.6 per cent increase compared to December 2000.

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TRANSPORT

Modernisation of Shkoder-Bajze railways to be launched


The rehabilitation of the Shkoder-Bajze railway road will start soon. Sources from Shkoder-Bajze regional directorate of railways in this district reported that, through the 322m lek fund [one dollar is about 140 leks] , allocated by the state budget, will the complete rehabilitation of Shkoder-Bajze railway road, damaged during the riots of the year 1997 will begin, ATA News Agency has reported.
During February, the above-mentioned sources stated, it is expected that the auction to determine the winning company which will carry out the rehabilitation works of this line, will be organised.
According to the project drafted by the General Directorate of Albanian Railways (AR), it is forecast that of 11. 2 kilometres of railway line from Shkoder to Grishe village with cross-bars and rails will be laid.
In December last year, with a 25m lek fund allocated by the state budget, the complete rehabilitation of the international station of Bajze started, which is now ready to receive goods which come from Montenegro and other countries.
Shkoder-Hani i Hotit railway line was set up in 1985 and has continued its work till 1992. It is the only railway line which links Albania with Montenegro and Europe.

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