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Albania  

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ALBANIA


  
   

 

 

 

 

 

Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 4,695 4,100 3,800 114
         
GNI per capita
 US $ 1,380 1,340 1,220 123
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km)
28,748

Population
3,582,205

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.
Albania has long been thought of as a freak country. Actually it is one of the most beautiful in Europe, with a magnificent climate, warm but never getting too hot, given its mountainous and hilly topography. It is merely a matter of time before it becomes a great tourist attraction.
That has been prevented of late by its well-deserved reputation for gangsterism and kidnapping. It is worth giving a historical survey to see why things may shortly change.
The country was ruled in the interwar period by highland chieftains with resonant names like King Zog and his son, Leka. The last reigned as an infant for a few months in 1939 before Italy under Mussolini invaded and occupied the country. He is still alive and attempted a comeback in an election in 1997. But he made the mistake of standing as a prospective premier, clearly wanting to be a king. Despite his pedigree and majestic height of 6ft 9ins, he failed to impress his subjects-to-be with his hereditary right to rule. He came nowhere in the election.
In the interim between the infant Leka and the events of 1989, the Albanians were ruled for fifty years by the communists. This meant in effect the personal dictatorship
of Enver Hoxha, an extraordinary character, perhaps the most extraordinary the communist world threw up. He kept his country in virtually complete isolation. It became the poorest in Europe.
Albania had a severe crisis in the 1990s, with a financial crash in mid-decade. The population took a while to understand the rules of the capitalist market-place. Thousands lost their savings in pyramid investment schemes. But from the turn of the millennium it has done well, compared with its bleak past. GDP has been rising by 7-8% per year, albeit from a very low base. The Albanians are no longer the poorest people in Europe. That dubious distinction now belongs to the Moldovans. The Socialist Party is benefiting, in power since 1997, and was re-elected comfortably in 2001. Tirana is 100% behind the US anti-terrorist campaign, having no truck with ethnic Albanian secessionists next door in Macedonia and Kosovo. The last thing the Albanians want is a war of any sort. With Milosevic gone there is no reason to quarrel with the Serbs. 
The Albanians blotted their copybook, however, with the French and the EU by supporting the US over Iraq. Indeed they have even agreed with the US not to extradite Americans to the International Criminal Court. 
The two leading premiers of the PS government have been Pandeli Majco (now defence minister) and Fatos Nano, the current holder of the post. Both are very highly regarded in Washington, which sees Albania as its closest ally in the region, now that the Turks have refused cooperation over Iraq. The grimness of the Hoxha years have made the Albanians no friends of dictators.

Update No: 084 - (29/04/04)

Opposition Split on 'Nano go'
While chairman of the Democratic Party (DP) Sali Berisha has announced that the 'Nano ik' (Nano go) movement that aims for the resignation of Prime Minister Fatos Nano will escalate and continue on a multi-dimensional concept, the chairman of the Renovated Democratic Party (RDP), Dashamir Shehi, says this movement's mission is over. Some 20,000 have demonstrated in Tirana for the removal of the premier. Things came to a head in February when Berisha led a demo that tried to storm the prime minister's office. But the security forces saw it off.
Nano and Berisha have long been at loggerheads, the deadliest rivalry in Albanian politics. At the moment the Socialist leader is on top, but trouble is brewing. There is popular dissatisfaction at how little trickle-down effects there have been from the rapid growth in the economy, GDP rising by 7% per annum on official figures in this decade. 

Albania to help over Olympics and to Increase Troops in Iraq 
Albania is raising its international profile in several ways. It is cooperating fully with the Greeks over security for the coming Olympic Games, to be held in Athens and elsewhere in August. 
It is also keen to develop good relations with the US, fostered by its close cooperation in the anti-terrorist struggle. In a letter addressed to the U.S. Secretary of State, Colin Powell, the Albanian Minister of Foreign Affairs, Kastriot Islami, said Albania would increase its military presence in Iraq. "Our contribution is not only continuous but even apt to be expanded," Islami says in this letter, written in response to a message of April 8th from the US. 

Albania, Macedonia to Sign Cooperation Memorandum on Integration 
Albania and Macedonia are expected to sign a memorandum for cooperation between the respective governments in the framework of the common aspiration to become EU members. The Macedonian deputy Prime Minister, Radmila Sekerinska, proposed such a memorandum during an official visit to Tirana on April 19th.
The Greeks are a key player for both states in their EU aspirations. Cooperation over Olympic security needs to be seen in this light.

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FOREIGN LOANS

Albania power generation gains key financing

The World Bank recently approved a US$25m equivalent Credit for the Power Sector Generation and Restructuring Project for Albania, New Europe reported.
The project will finance the construction of a new thermal power plant in Vlora and provide technical assistance to improve the performance and support the reform of the power sector in the country. The total cost of the project is estimated at US$112.7m and is expected to be financed by US$25m of the IDA credit, US$37.5m each from EBRD and EIB and US$12.66m from KESH.
Albania has been facing a major electricity crisis which initially was the result of excessive demand resulting from illegal use of electricity and non-payment of bills. This was aggravated by the impact of adverse hydrology on Albania's predominantly (95%) hydropower-based system. Despite the significant progress made since the beginning of the implementation of a power sector action plan developed by the government and KESH, and agreed with the donors, there is still need for large quantities of electricity imports.
"The Vlora thermal plant will contribute to an increase of Albania's electricity production, diversify domestic generation and reduce excessive dependence on electricity imports," said Iftikhar Khalil, World Bank Task Manager for the Project. "It will also reduce technical losses and improve the quality of supply (outage frequency and duration, voltage fluctuations). It will also support on-going efforts to reduce illegal use of electricity and restructure the sector. The project will improve the security of electricity supply and thereby facilitate Albania's reconnection with the UCTE (Union for the Coordination of Transmission of Electricity) system and its participation in the proposed South East Europe Regional Energy Market (SEEREM)."
The plant will be located at a site about 6km north of Vlora, in a zone earmarked for industrial development and adjacent to an existing offshore oil tanker terminal. Its installed capacity would be between 85 to 135 MW depending on the evaluation of bids that will be requested for this range of plant size.
The construction of this power plant and all other policy actions supported by this project reflect the measures proposed by the NSSED for the power sector and the energy sector strategy adopted by the government.
The project is also expected to facilitate private sector involvement in the sector. The project, and actions supported by it, would bring an increase in electricity supply and improved balance in production between hydropower and thermal power, reduction in transmission losses due to the location of the plant near demand centres, and significant reduction in unpaid-for electricity consumption.

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