% of GDP
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: 075 - (28/07/03)
Albania may for long have been the poorest country in Europe, but it is so no longer. That is now the unfortunate Moldova. Moreover, it is coming increasingly into the Western fold for reward for its staunch anti-terrorist stance since long before 9:11, since indeed the Kosovo war of 1999.
That war was the dividing-line between the miserable 1990s and the dynamic and decisive 2000s, in which Albania has been coming of age. Admittedly from a very low base, GDP has been growing by 7-8% per annum, with only imperceptible inflation. The Socialist Party of Premier Fatos Nano has been re-elected and is becoming seen as the natural party of government despite opposition leader and former premier Sali Berisha's protestations to the contrary.
Anti-terrorist campaign saves the socialists
The socialists were undoubtedly lucky to be in power in 1999 and 2001 when events went dramatically Albania's way. The Kosovo War in 1999 saw the country become the recipient of an enormous international aid effort as refugees in their hundreds of thousands flocked across the border from Kosovo. NATO deployed its forces in bulk from its Albanian bases, while the World Bank and EBRD extended loans to a country whose chronic security problems were temporarily at least in abeyance.
In the course of 2001 an ugly situation was developing in neighbouring Macedonia, as Albanian secessionists in the south of the country grew restive, drawing on support from the Kosovo Liberation Army, which has subsequently been disbanded. In fact a sinister organisation was in gestation, the Albanian National Army (AKSH) which claims to fight for the unification of all Albanian-dominated territory in the Balkans, including Albania proper, Kosovo, Southern Serbia, Western Macedonia and even parts of Greece and Montenegro. It has been over-reaching itself, striving for a Greater Albania.
In the later 2001 after 9:11 a peace deal was signed in Macedonia, with local Albanian secessionists agreeing to lay down their arms and support a coalition government with ethnic Albanian parties participating, in Skopje. But various hotheads among the Albanian population carried on fighting all the same, drawing on auxiliaries from Kosovo across the porous borders. Bases were established in Albania itself.
The Albanian government has given no support to these firebrands at all. Quite the Contrary, they want no part of a Greater Albania. AKSH has been driven underground.
In early July police arrested four key members of AKSH, including its political leader, Gafur Adili. Say Macedonian police sources: "We were informed that four members of AKSH's leadership including Gafur Adili were arrested in the Albanian town of Podgradee. They were later transferred to Tirana prison." Adili, which is considered the code name of Valdet Vardari, and three other high-ranking leaders were arrested as they "sneaked to Albania from Macedonia in order to hold a meeting on the group's future actions."
The group was arrested for the very 21st century offence of "promoting nationalistic hatred" between Albanians and Slavic-Macedonians.
Albanian police denied entrance to Adili in March, describing him as "a destabilising individual" who came to Albania to spread "false information." The United Nations mission in Kosovo (UNKIK) in April declared the AKSH a terrorist organisation, following a bomb attack on the railway in the northern, Serb-dominated part of the province.
Previously the AKSH claimed responsibility for several hit-and-run attacks in ethnically divided Macedonia and fragile southern Serbia, killing some 20 policemen and soldiers. The AKSH was also black-listed by US President George W Bush over its extremist actions after a peace deal was signed in Macedonia in 2001.
US Defence Secretary, Donald Rumsfeld, made a three hour visit to Albania to express his appreciation for Albania's support to US anti-terror policies.
Rumsfeld stressed that the Pentagon would also continue its close military cooperation with the Albanian government, but stopped short of saying whether the United States planned to set up a military base on Albanian territory, as recent Albanian media reports have suggested.
"We discussed the possibility of exercises and training cooperation. But we did not get into detailed discussions beyond that," the defence secretary said. Rumsfeld also expressed his appreciation at Albania's recent signing of an agreement with the United States, whereby Albania pledges not to surrender US nationals to the International Criminal Court. This is a controversial measure whereby this super-power has 'earned it' numerous small opportunities allowing them to earn good will at little immediate cost.
IMF approves US$6 million loan under PRGF for Albania
The Executive Board of the International Monetary Fund (IMF) has completed, in principle, the second review of Albania's economic performance under its Poverty Reduction and Growth Facility arrangement, M2 PressWIRE has reported. The IMF Board's decision will become effective upon a further decision following, the World Bank's Executive Board review of Albania's Poverty Reduction Strategy Paper (PRSP), scheduled for July 10th, 2003. At that time, Albania will be able to draw SDR 4 million (about US$6 million) from the IMF.
The three-year PRGF arrangement was approved on June 21st, 2002 for a total of SDR 28 million (about US$39 million). So far, Albania has drawn SDR 8 million (about US$11 million) under its current PRGF arrangement from the IMF.
The PRGF is the IMF's most concessional facility for low-income countries. It is intended that PRGF-supported programs will in time be based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners, and articulated in a Poverty Reduction Strategy Paper (PRSP). This is intended to ensure that each PRGF-supported program is consistent with a comprehensive framework for macroeconomic, structural, and social policies to foster growth and reduce poverty. PRGF loans carry an annual interest rate of 0.5 per cent, and are repayable over 10 years with a 5 ˝-year grace period on principal payments.
Following the Executive Board discussion, Anne Krueger, First Deputy Managing Director and Acting Chair, said: "Albania's performance during the first year of the three-year PRGF-supported program on balance has been satisfactory, with low inflation, a stable effective exchange rate, and gradual fiscal consolidation. However, structural reform has been slower than envisaged; the authorities have taken steps to speed up the process and strengthen their economic strategy.
"The Fund has concluded the second review under the program, on the strength of the authorities' commitment to and ownership of the program, the progress being made in the fiscal area, and the strong and well-sequenced structural reform agenda.
"Fiscal policy has been hindered by weaker-than-expected revenue collection, but the deficit targets have been met.
"Looking forward, strong measures have been identified to broaden the tax base, improve revenue collection, and strengthen budgetary procedures. These should permit both increased expenditures on priority measures for poverty alleviation and continued fiscal consolidation. In the context of low core inflation and continued exchange rate stability, there is scope for further lowering policy interest rates.
"The steadfast implementation of structural reforms remains crucial to high private-sector led growth. Key priorities are removing administrative barriers to investment, improving governance, and fighting corruption.
"The authorities have developed a first progress report on their comprehensive National Strategy for Socio-Economic Development. This document testifies to the authorities' commitment to their poverty reduction strategy, which continues to provide a suitable framework for the current policy program and for the support of the international community," Ms. Krueger stated.
For further information contact: IMF Public Affairs Tel: +1 202 623 7300 Fax: +1 202 623 6278 IMF Media Relations Tel: +1 202 623 7100 Fax: +1 202 623 6772
Albanian government approves cooperation agreement with Slovakia
Albania and Slovakia will exchange mutual assistance on customs issues. The government approved in its last meeting the agreement between the government of the Republic of Albania and the government of Slovakia for the mutual cooperation and assistance on customs issues, ATA News Agency has reported.
Besides the practical importance, in relation to the cooperation in the fight against fiscal evasion and inter-border crime, this agreement institutionalises the inter-governmental cooperation of the institutions of fiscal sphere.
Foreign ministers meet in Albania to discuss Balkan road project
The six-month Italian presidency of the EU which began on 1st July, should complete the initial stage of the specific projects related to Corridor VIII [project to build road linking Albanian Adriatic port of Durres and Bulgarian Black Sea port of Varna] and start implementing them, Khorizont Radio has reported quoting Foreign Minister Pasi in Tirana where the six countries participating in the construction of Corridor VIII were holding a ministerial meeting. The foreign ministers of Albania, Macedonia and Italy also attended this forum. Turkey was represented by its transport minister. Rather surprisingly, Greece did not send a minister to the meeting and was represented at the forum by the Greek ambassador in Tirana.
In his speech, Bulgaria's top diplomat stressed the need for a political consensus among the six countries on the common infrastructure strategy and for joint steps to convince the international financial institutions to finance the projects. In Solomon Pasi's view, the infrastructure strategy of Italy, Macedonia, Bulgaria, Greece, Turkey and Albania should also be presented to the EU and the United States. They should be convinced that the strategy is a factor not only for the region's stability but also for Europe's stability as a whole. Corridor VIII is especially important because of the link to the Middle East, the Caucasus and the Caspian region, Solomon Pasi said. On behalf of Prime Minister Simeon Saxe-Coburg-Gotha, Solomon Pasi invited the prime ministers of the other countries attending the forum to visit Sofia this autumn to follow up their efforts to construct the corridor. Pasi said that Bulgaria is ready to organize a meeting at an expert level for this purpose.
INVESTMENT BACKGROUND REPORTS
Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports.
For further information email:
Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly newnation reports and the complete worldaudit democracy check for the low price of
US$12. The print-out would be a good companion to take with you. Having read it, you might even decide not to go!
To order please click here:
Investment background report