In-depth Business Intelligence

Key Economic Data 
  2002 2001 2000 Ranking(2002)
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)

Books on Albania


Area (




Alfred Moisiu

Private sector
% 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 necessary legislation. 
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.

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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.

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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, 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 customers. 
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.

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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 Nations. 

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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, 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) since 1991. 
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 post-communist reforms.

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