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Albania

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ALBANIA


  
   

REPUBLICAN REFERENCE

Area (sq.km)
28,748

Population
3,510,484

Capital
Tirana

Currency
Lek

President
Alfred Moisiu


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: 068 - (01/01/03)

The socialists in charge in Albania are doing well. A buoyant economy (albeit from a low base), a drive against corruption and gangsterism, a rapprochement with Serbia and new-found status in the world as a staunch ally against rogue regimes and terrorists, hence a virtual unofficial member of NATO. 

Lugubrious legacy
Albania had a particularly baroque command-administrative system under communism, when its leader Enver Hoxha, was the most fanatical of Stalinists. He permitted no reforms or overtures to market economics, to speak of.
He died in April 1985 at the very threshold of the era of perestroika and glasnost in the Soviet Union, the month after Gorbachev became first general secretary. He would have had no truck with Gorbachev and thought that Khrushchev was already an unmitigated disaster for the socialist cause. Indeed, even in China in 1952 on a visit to Mao Tse-Tung he 'smelt the revisionism in the air.' Mao was always warning of the ubiquity of the capitalist-roaders: Well, he and Hoxha have been proven absolutely right even despite the tyranny that both of them exercised. 
Albania may have had the purest Stalinist regime in Europe into the 1980s; it also had, not by any accident, its poorest economy.

Coming in from the cold
Albania is now changing fast. Soon after the end of communism there in 1991-2 there was a disastrous flirtation, with pyramid-financing schemes, in which one-half of the population lost their savings by 1997. The centrist government under President Sali Berisha, in power since April 1992, lost in elections five years on to the Socialist party, the ex-communists. Its leaders were mainly in their early thirties or less, with only childhood memories of Hoxha's rule and with a determination to do better. The party's manifesto committed it to being modern and progressive, to democracy, social justice and economic reform.
As in Hungary, the ex-communists knew the ropes and were chastened at past misdemeanours which they wanted to live down. They have proved ardent exponents of reform. But then they were singularly lucky in their timing. The Kosovo War broke out in early 1999 and Albania fully cooperated with NATO forces and international aid bodies to deal with the huge refugee problem, as more than a quarter of a million Albanian Kosovars fled to refuge. The influx of Western money and aid agency operatives turned the economy around.
From 1999 onwards, GDP began to grow at 7-8% per annum, and at that with remarkably low inflation. The refugees have returned home; but the international community has not abandoned the small republic of three million. The possibility of a new civil war involving Albanians in Macedonia was clearly an important incentive to keeping Western interest going in nation-building in Albania. 
The events since 9:11 in 2001 have seen the threat of civil war in Macedonia recede, and especially since the election there in September of a new government, including the main Albanian party under former rebel leader, Ali Ahmeli, which has abjured the use of force and not before time. 
Since 9:11 the Albanians have been fully cooperative with the Americans in the anti-terrorist struggle. 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 an international congress of such extremists from 50 countries was held on October 8th in Travnik with the aim of forging a united front against "American-Zionist aggression." The Albanian government has been able to hand over suspected terrorists among Islamicists in its territory to trial in the US, whereas the Bosnian authorities under the International High Representative have paradoxically had their hands tied in this regard by the delicacy of the international operation in Bosnia. Albania is now a de facto part of NATO on the Adriatic's eastern shore, a fact that must have Hoxha turning over in his grave. 

The long heritage of banditry and crime
The major problem in the Balkans and in the east of the Mediterranean generally, indeed in Italy at its centre, has been the nexus of corruption and organised crime. Communism in Albania, like fascism in Italy, put a temporary stop to it. But in the post-Hoxha epoch of communism, 1985-1991-2, the gangsters, or what might be more romantically be called the brigands or bandits, made a comeback in Albania, never having been fully eradicated, any more than were the mafia under Mussolini.
There is a striking anomaly here, from which lessons can be learnt. The isolated and repressive governance of Albania under Hoxha had kept everyone, including the brigands, under wraps. It has been the opening up to the West which has given them a new lease of life.
Albania is one centre of a world-wide network of gangsterism, linking Central Asian heroin smugglers, Russian mafia and Balkan middlemen to Western Europe and the United States. There have links with government figures and officialdom in the period since Hoxka's demise, that increased apace after the watershed of 1991-92.
The Albanian criminals present law enforcement agencies in Albania, and now in the EU and the wider world, with acute problems. One of the gravest is that the Albanian bandits are ruled by a code of honour that makes the Italian Mafia's omerta resemble a casual word of warning by comparison. The Kanun, or Code, goes back to the 15th century; it was codified by Leke Dukagjini, an Albanian prince who was a leading warrior in the unavailing struggle with the Ottoman Turks. It covers not only marriage, family law and property, but also above all matters of honour, under which a besa, or pledge, must never be broken.
The Kanun continued to regulate everyday life well into the 20th century. Blood feuds became an endemic occurrence, as clan members avenged in kind, the killing of any member of their clan, as an obligation creating a never-ending spiral of murder.
Hoxha's regime did the utmost to repress the Code, substituting loyalty of the party and to communism in its stead. But old habits die-hard and the local party chieftans in the north and the east where the Kanun was strongest continued it in the guise of stern party loyalty.
With the demise of the old order in the 1989-92 period, old-style bandits in the mountains, whose lives and mores had changed little in 600 years, emerged into the open, with allies in local administrations, ready to break into more modern rackets. The opening up of the borders and the arrival of foreigners from Italy, from the other Balkan countries, particularly Turkey and Kurdistan, and from Russia and beyond gave them unprecedented scope for their talents. But to exercise these to the full required connivance by officialdom; hence a spectacular growth of corruption.

The campaign against corruption
One merit of Berisha's rule, with his Democratic Party of Albania in charge of government, was that it saw the commencement of an anti-corruption drive. During 1992-93 Ramiz Alia, Fatos Nano and other former communist leaders were placed under arrest and charged with corruption and the misuse of power. The Socialist Party of Albania (SPA) was at this time on the defensive, being politically isolated after its poor showing in 1991's parliamentary elections and continually damaged by the arrests and trials of its members for their actions under the communist regime. Nano, the SPA leader, was charged and found guilty of channelling large profits to providers of food aid by falsifying official documents during his brief term as premier in 1991. Former president, Ramiz Alia, was sentenced to nine years in prison for abuse of powers and violating the rights of citizens; while former premier Adil Çarc was given a five-year term on similar counts, a sentence commuted for reasons of ill-health.
These events, however, did little to alleviate the deep public resentment at the scale of corruption in public life. Nor was it abated when Alia and 30 other political prisoners were released in an amnesty in a successful bid to obtain Albania's admission to the Council of Europe in 1995.
The flood of international aid since 1999 has seen a quantum leap in the scale of corruption and gangsterdom, as 'surplus' stores go missing. The gangsters, impeccable ex-communists to a man, have 'cleaner' political records than the old stalwarts of the SPA, not themselves averse to corruption when the opportunity arises, as we have seen. A parallel can be drawn here with the mafia in 1943-45, and in the immediate post-war years, in Italy when the Americans released them from the detention they had suffered under Mussolini and reinstated them in important local posts as staunch anti-fascists and anti-communists, which indeed they were. The role of American Italian mafiosi as 'honest GI brokers' on the ground was not unimportant here and helped to bequeath to postwar Italy its festering mafia problem.
The SPA leaders today are keen to eradicate the image of Albanian brigandage once and for all. Albania's chief prosecutor, Theodhori Sollaku, has addressed an appeal to lawmakers to approve bills that will effectively bring an end to suspicious wealth enjoyed by several businessmen and/or state officials. How effective the campaign would be, even if the bills are passed, depends on there being close cooperation between the police in both Albania and the EU, indeed beyond Europe too.

The bandits go abroad
Albanian gangsters are nothing, if not enterprising. Having survived the rigours of a totalitarian regime compared with which Brezhnevite Russia was a predator's picnic, they feel confident of besting anything the West has to put up against them in their line of business. Following in the wake of the Russian mafia, they are moving into Western Europe and beyond.
In towns and cities across the UK, the Albanians are taking over organised crime. UK Home secretary David Blunkett has warned that Europe's stability is being threatened by organised crime from the south east of Europe, above all from Albania. Their "organised criminals are more organised than we are," he bemoans.
Scotland Yard estimate that Albanian gangs control about 75% of prostitution in Soho, London's red-light district. About three quarters of heroin coming from Afghanistan onto Britain's streets passes through Albanian hands. Albanians and Albanian Kosovars are said to be involved in extortion, gun-running and organised theft in the UK. They even plotted the abduction of Victoria Beckham, wife of the football star, David Beckham.
In the last year a similar pattern has been reported from Milan to the American Midwest, where Albanians are emerging as the aspirant superstars of crime to rival the Sicilian mafia, the Chinese triads and the Russian mob. However, there are signs that the Albanian gangs have over-reached themselves in taking on the Italian mafia in Milan, where they are being rolled back by a concerted onslaught with help from the police. Countries with weak local gangsters, such as the UK, offer them better long-term prospects. 
In the soft niches of northern Europe the Albanians have inestimable advantages in their operations. UK police officers interrogating Albanian criminals are finding the code of silence almost impossible to crack. The Albanians have a safe homeland and a sizeable diaspora in the UK, just as the IRA has done in its time. Albania lies athwart one of the most lucrative drug-trafficking routes; their links to the Kosovo Liberation Army have provided a supply of weapons and they are always ready to use extreme violence. 
It is hardly surprising that the UK government is moving towards tougher immigration practices, the closure of the Sangatte detention centre in Northern France being one. The Albanian government is giving full assistance to Scotland Yard and other EU police forces to combat the menace. Albania is now an evident part of Europe in bad times as well as good.

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ENERGY

Albania's energy sector to get aid from European Bank

Parliament passed on 21st November at a plenary session, the draft law "On ratification of agreement between Albania and European Bank for Reconstruction and Development (EBRD) for the project of reconstruction of energetic sector."
Industry and Energy Minister, Viktor Doda, estimated ed that "this agreement will improve the energy situation in the country and will assist in reconstruction of energy sector," ATA News Agency has reported 
Later, Minister Doda, responding to remarks and discussions of deputies, stressed that the contract with the EBRD should be implemented as soon as possible because "the energy sector in our country is one of the most problematic points." 
Implementation of the contract, continued Doda, calling for a draft of strategies and the commitment of all governing structures to successfully cope with the current challenges of energy in the country. 
Regarding the problem of funds misuse raised by several opposition legislators, Doda stated that "in KESh [Albanian Energy Corporation] there are very good experts trying to properly realize the policies of this institution, there is continuous control by ministries and the government in relation to abuses and funds misuses." 
"The problem of power has been inherited for years, but serious efforts are being made to cope with the challenges," he stressed.

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FINANCIAL NEWS

World Bank satisfied with its projects in Albania 

The World Bank has said it was generally satisfied with its projects in Albania, although some had been slowed by the lack of capacity of local institutions charged with putting them into practice, The Associated Press has reported. 
Other technical and political factors were also behind the slow going, Christian Poortman, the bank's regional coordinator for southeastern Europe, told a news conference, ending a visit to the country. 
"Overall, our portfolio of projects is not performing too badly, somewhat better than the average from what we see in the region," Poortman said. "We would naturally like our money to be applied more quickly." 
Albania has received US$657m in World Bank loans since 1991, of which US$426m has already been disbursed. The rest of the funds are tied up in numerous projects, most already under implementation. 
The projects focus on reducing poverty through investments in key sectors, support for improved governance and anti-corruption measures, as well as help in key structural reforms. 
The bank also provides technical assistance to accelerate bank privatisation and restructuring public utilities in Albania, one of the poorest countries of Europe. 
In June, the bank's board of directors endorsed the new assistance strategy for Albania for the 2003-2005 fiscal years, but it has yet to approve concrete projects. 
Following a recent crisis in the electricity supply, the World Bank has paid special attention to the Albanian energy sector and will be the primary source of funds in the construction of a new power station. 
"The situation remains very fragile," Poortman said. 

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FOREIGN ECONOMIC RELATIONS

Albania signs cooperation agreement with Greece

Local Governance and Decentralization Minister, Ben Blushi, signed on 21st November an agreement on cooperation and mutual assistance with the Greek ambassador in Tirana, Dimitris Iliopoulos, ATA News Agency has reported quoting the press office of the Ministry of Local Governance and Decentralization. 
Based on this agreement, the Greek government will financially support projects in public facilities such as water supply networks, lighting, canal networks, roads and so on beginning from January (2003). 
These projects, worth 1.5m euros, will be implemented in cities of Saranda, Ballsh, Korce, Vlore, Tepelene and so on, it is said in the press statement of Ministry of Local Governance and Decentralization.

Albanian, German officials sign technical cooperation agreement

A governmental agreement on financial and technical cooperation was signed in Tirana for the year 2002 between the governments of Federal Republic of Germany and the Republic of Albania, ATA News Agency has reported.
Following the talks between delegations on 18th-20th November, the agreement was signed for Albanian side by Deputy Economy Minister Adriana Berberi and for German side by Leo Kreuz, director-general for southeastern European countries in the Federal Ministry for Economic Cooperation and Development.
In the context of the federal budget for year 2002, the Federal Republic of Germany has made available an amount of 15.65m euros to assist the Albanian economy. Potable water supply, improvement of canals network, economic reform and others are several of the sectors to benefit from German assistance. 
Specifically, there will be financial aid for improvement of water supply and canals networks in cities of Elbasan, Berat and Kavaje. In the energy sector it is aimed at improvement of power supply in south of the country, as well as financing of a regional energy study. 
This protocol of cooperation for year 2002 also foresees several other projects such as: protection of Shkoder lake (7.5m euros) and potable water supply/sewerage in northern areas (5m euros). 

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