Books on Albania
% of GDP
Update No: 090 - (27/10/04)
Albania used to be the poorest country in Europe, a dubious
distinction now held by Moldova. It is still, however, probably the most
gangster-infested country in the Balkans and, therefore in Europe.
It has long been an increasingly active transhipment point for Southwest Asian
opiates, hashish, and cannabis transiting the Balkan route and - to a far lesser
extent - cocaine from South America destined for Western Europe. It has limited
opium output, but growing cannabis production. Ethnic Albanian narco-trafficking
organizations are active and rapidly expanding in Europe. It is consequently
vulnerable to money-laundering associated with regional trafficking in
narcotics, arms, contraband, and illegal aliens. In addition to all of this, it
has been infamous for its role in "people smuggling" including the
gangster organiser 'White slave' trade in young women.
Landmark conference on drugs
Albanian authorities in September held the country's first-ever national
conference on drug usage and trafficking, describing the issue as a government
priority. According to Albanian Attorney General Theodhori Sollaku, the country
is a transit point for the heroin trade, as well as a site of cannabis
production. "Up until now, cannabis has been the only drug produced in
Albania. However, there are signs of the presence of heroin and synthetic drugs,
like ecstasy," Sollaku said.
Acting US Ambassador to Tirana Steven Zate urged the government to do more to
halt these illegal activities. "The Albanian government, supported by the
international partners, has to act on this phenomenon, and not only with the
words written in the national strategy," Zate said. Albanian Prime Minister
Fatos Nano urged the creation of a common front. The drug problem is "a
negative sign for Albania's image in the world," Nano said, urging
politicians to avoid blaming each other and instead work together to enact
Albania has come under frequent criticism from the international community for
failing to take sufficient steps against organised crime, including narcotics
trafficking. The government, however, insists it is doing what it can. Police
have identified all the drug traffickers operating in Albania, Public Order
Minister Igli Toska said, calling on other countries in the region to take
stronger measures. "The Balkans is not a region where hard drugs are
produced, but unfortunately it is a transit point," he said.
According to the European Commission's Ambassador to Tirana, Lutz Salzmann,
authorities should punish traffickers as a higher priority than drug users.
"You need to rehabilitate the drug users through social and economic
projects. The state has to catch the real traffickers to stop this
phenomenon," Salzmann said.
Conference on crime and corruption in the West Balkans
It is singularly appropriate that Albania should host a conference on the
subject for the West Balkan countries in Tirana. For it is the natural hub of
their drugs traffic and other smuggling activity, with its porous borders with
Montenegro, Serbia (Kosovo), Macedonia and Greece and easy access to Italy.
Justice ministers of West Balkan countries have agreed to step up their
cooperation in the fight against organised crime and corruption. In a statement
approved on September 23rd at the end of a one-day conference in Tirana, the
justice ministers of Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia,
Montenegro and Serbia said that they would pool their efforts to tackle the
growing power of criminal organisations in the region.
"The justice ministers expressed their determination to continue and
strengthen further the fight against organised crime and corruption by enhancing
the cooperation among countries in the region," the resolution said. The
conference, the first of its kind, was convened at the initiative of Albania,
one of the most affected countries by organised crime activities in the region.
"Organised crime is becoming an increasingly transnational phenomenon and
we cannot combat it alone. We agreed on coordinating our efforts and using more
effective means to fight it," Albanian Justice Minister, Fatmir Zhafa said
after the conference. The ministers agreed on the adoption of new legislative,
practical and technical steps to boost regional cooperation and set up organised
justice against organised crime, according to the statement.
Nano promotes Albania as site for FDI
A more positive-sounding conference took place in New York recently. Nano,
recently urged US investors to consider Albania for future investments. Nano
made the appeal in New York at a conference held in conjunction with the US
Commerce Department. The appeal comes as Albania has largely failed to attract
large-scale foreign investment some seven years after the collapse of the
pyramid investment schemes.
Nano was hoping to dispel awful memories of the collapse of the fraudulent
investment schemes in 1996 and 1997 that unleashed riots throughout the country.
He told the conference that conditions had greatly improved. "Albania does
not offer unpleasant surprises any more for the investor," he said.
"The Albanian legislation on foreign investment is very liberal. There are
no restrictions on participation of foreign capital or for repatriation of
profits. Albania offers comparative advantages in labour force compared to the
other countries of the former communist bloc of eastern Europe."
This positive theme was picked up by other participants. US Assistant Secretary
of Commerce, William H Lash, said US companies have already invested in Albania
and that he is optimistic. "We've asked the hard questions on the future of
the economy, the future of privatisation, and we got answers back that we are
comfortable with," Lash said. "This is a country that I know American
investment is very welcome there. The prime minister has already mentioned that,
great success in investment by General Electric, Lockheed Martin, by the
Albanian Enterprise Fund, by Western Union, UPS. You see the country taking
steps… The opportunities are there."
Kalman Mizsei, the UN assistant secretary general and director for Europe and
the CIS at the UN Development Programme, said the two factors were at work in
Albania to encourage foreign investment. One, he said, is the high level of
entrepreneurial spirit among the population. The other is the large overseas
Albanian diaspora. Mizsei emphasised the importance of foreign investment for
countries from Central Europe that joined the European Union in May.
"Foreign direct investment has been absolutely crucial for the success of
the current new European Union member states. This engine of economic
integration is something that no country can miss. It brings in
corporate-governance ideas and practices that they spread in the whole economy.
We badly need this type of energy," Mizsei said.
Germany's Hochtief to revamp Albanian airport
Hochtief, Germany's biggest construction company, said it will be responsible
for expanding and renovating Albania's state-run airport in Tirana. After six
months of negotiations ending in July, there's no reason for the deal, which
still needs to be signed by Albania's Prime Minister, Fatos Nano, and approved
by the country's parliament, not to go through, Hochtief spokeswoman, Donatella
Gasser, said, the Handelsblatt reported. Gasser would not comment on how much
Hochtief would receive from the Albanian government in exchange for building a
new terminal and improving the airport's infrastructure. The company currently
runs the airport in Athens and was involved in projects in Sydney, Hamburg and Düsseldorf.
Raiffeisen Bank restructures in Albania
Austria's Raiffeisen Bank said it has restructured the Savings Bank of
Albania into a commercial operation that soon would enter the Balkan country's
financial market aggressively, Forbes.com reported.
Raiffeisen bought Savings Bank, the last state-owned bank in ex-communist
Albania, for US$126 million (€102 million) in December.
It has invested €3 million (US$3.7 million) this year in the restructuring,
and plans to spend €15 million (US$18.4 million) next year on training
employees, legal procedures and a bank reorganization, said Raiffeisen's top
official in Albania, Steven Grunerud.
Savings Bank branches will take Raiffeisen's name, he said.
Raiffeisen is now investing heavily in new computer systems, upgrading branch
appearances, training staff, installing ATMs and developing new products for
The newly restructured bank also has started lending money, which it was
prohibited from doing for the last seven years due to a high rate of creditors
not repaying the debts.
It expects to lend up to €150 million (US$184 million) through next year.
"We believe that by lending, we will help the economy and allow Albania to
develop into a much stronger economic condition," Grunerud said.
Savings Bank is Albania's largest bank, holding half the country's deposits.
Another 14 commercial banks operate in the country. Most foreign banks arrived
after the 1997 collapse of a pyramid investment scheme that triggered widespread
chaos and the fall of the government.
FOREIGN ECONOMIC RELATIONS
Greece supports Albania's integration into NATO and EU
Greek President, Costis Stephanopoulos, assured recently in Tirana, whilst on a
three day visit, the support of Greece to Albania's integration into the NATO
and the EU, ATA News Agency reported.
"We should intensify the fine relations between us, especially those in the
economic field," said Stephanopoulos at a joint press conference with
Albanian President, Alfred Moisiu, after their meeting.
The existence of the inherited problems from the past constituted no obstacle
for the development of their bilateral relations, said Moisiu.
Regarding the issue of Kosovo, Stephanopoulos stressed at the conference that
Greece adhered to, and would abide by, the Resolution 1244 of the United
EU agrees to give Albania funding in 2005
The European Union has earmarked €25m (more than US$30m) in grants and credits
for Albania next year, the Finance Ministry said recently, Forbes.com reported.
The government and a European Commission mission held talks in Tirana discussing
how to spend a €16m (US$19.7m) grant and €9m (US$11m) credit to Albania in
2005, a ministry statement said.
The EU experts urged the government to bring Albanian legislation into line with
EU standards, cut red tape, speed up the sell-off of the state sector and
improve the civil service.
The EU has been the biggest donor to Albania, giving about €1.3bn (US$1.6bn)
Albania signed up to the Stabilization and Association Agreement last year as a
first step to eventual EU membership. It is, however, a long way from qualifying
for membership due in part to political infighting that has slowed
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