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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 6,124 4,695 4,100 109
GNI per capita
 US $ 1,740 1,380 1,340 120
Ranking is given out of 208 nations - (data from the World Bank)

Books on Albania

Update No: 155 - (27/04/10)

The basics
Albania is bordered by Montenegro and Kosovo to the north, the Former Yugoslav Republic of Macedonia to the east and Greece to the south. It has a coastline on the Adriatic Sea.

Ethnically, Albania is largely homogenous – over 95% of its 3.6 million inhabitants are ethnic Albanians. According to estimates, roughly 70% of the population is Muslim, 20% Albanian Orthodox and 10% Roman Catholic. The average age in Albania is just 29.

Despite undergoing a radical transformation since the communist era, Albania remains a very poor country. A recent Eurostat survey places it at the very bottom of Europe in terms of Gross Domestic Product (GDP).

After World War Two, Albania became a communist state allied with the Soviet Union and then China, before pursuing its own form of autarchic socialism under the dictatorship of Enver Hoxha. Under Hoxha, Albania remained very backward and became a totally closed society. But he expired in March 1985, the very month Gorbachev became General Secretary of the Communist Party of the Soviet Union.

New developments were afoot – the collapse of communism no less and the end of Yugoslavia. Even the bastion of totalitarianism in the Balkans that was communist Albania was affected. In the early 1990s, a multiparty democracy was established – replacing decades of isolationist communist rule.

The 1999 Kosovo War
A most traumatic event took place in the first half of 1999. The Serbs intervened in Albania, from where their brethren were being evicted. NATO reacted with massive force – a barrage of bombs.

After a brief ground conflict and mediation by Russia, its traditional ally, Belgrade agreed in June to withdraw its forces from Kosovo and acknowledge its de facto independence. However, it has yet to recognise it de jure.

Into the EU?
International agencies had come to town during the war and brought an abundance of aid and, even more important, expertise to Albania. After a decade of economic progress, Albania formally applied for EU membership in April 2009, but if its accession bid is to move forward it must tackle a number of issues: particularly the ubiquity of its mafia and corruption, its political instability and its need for urgent economic reform.

In 1992, Albania had already become eligible for funding through PHARE, the EU's main financial instrument to assist Central and Eastern European countries in the run-up to the 2004 enlargement. In 2001, CARDS replaced PHARE for the Western Balkan countries.

Since 2007, Albania has been receiving EU financial aid under the Instrument for Pre-Accession Assistance (IPA) for transition assistance, institution building and cross-border cooperation. IPA aid for 2008-2010 totals €245.1 million.

Albania's Stabilisation and Association Agreement (SAA) entered into force on 1 April 2009. Albania officially joined NATO on the same day.

In December 2009, the EU excluded Albania from the first stage of its visa liberalisation scheme for Western Balkan citizens. However, the European Commission recently sent a mission to examine the situation and Tirana is hopeful of being added this year.

Albania became a potential candidate country for EU accession at the Thessaloniki EU summit in June 2003 and officially submitted its application for membership in April 2009.

Once it has evaluated the responses to a questionnaire aimed at determining Albania's readiness to join the EU, the European Commission will issue an 'opinion'. If it is positive and then endorsed by the EU Council of Ministers, the country will acquire official candidate status.
After Albania had officially requested to join the European Union, EU foreign ministers stated that they would return to the country's application once national elections had been completed in June 2009.

Dubious electoral results
However, since the poll was held on 28 June 2009, the ruling Democratic Party of Prime Minister Sali Berisha and the Socialist party of opposition leader Edi Rama have kept accusing each other of fraud. Berisha's party prevailed in a very close vote. Olli Rehn, the EU's enlargement commissioner at the time, said the country must do better when staging elections in future, citing campaign violence and procedural violations.

In its observation report on the elections, the OSCE's Office for Democratic Institutions and Human Rights stated that the elections marked tangible progress for Albania but the improvements were overshadowed by the ''politicisation of technical aspects''.

While the elections met most OSCE [Organisation for Security and Cooperation in Europe] commitments, they did not adhere to the highest standards for democratic elections and all the political parties must work harder to respect the letter and purpose of the law, the report concluded.

The Socialist Party, which controls nearly half the seats in parliament, proceeded to boycott the assembly for several months and thus block the passage of laws – many of which are needed to align the country with EU legislation.
Though the Socialists returned to the legislature in February, they are refusing to take part in parliamentary activities as their demand that the votes be recounted was rejected by the assembly, which is dominated by Berisha's coalition.

EU Enlargement Commissioner Stefan Füle has expressed concern about the lack of political dialogue and recently warned Tirana that such instability has no place in the democratic politics of the EU.

Yet the Socialist Party is showing no signs of letting up. On 5 April, they called for anti-government demonstrations to ''accelerate the end'' of Berisha's government.

Economic prospects
Albania, which was a closed, centrally-planned state for almost fifty years, has been making the difficult transition to a modern, free-market economy since the early 1990s.

Between 2004 and 2008, macroeconomic growth in Albania averaged around 6% and despite the global economic crisis, it still recorded 3% growth in 2009. A fiscal reform package was recently adopted with the aim of reducing the grey economy and attracting foreign investment.

Agriculture accounts for over half of employment in Albania but modern equipment is seriously lacking, while energy shortages and poor infrastructure mean that business development and outside investment is scarce.

The EU is Albania's main trading partner but the gap between imports and exports has produced a large trade deficit. EU funds are being used to improve the national road and rail networks, the poor state of which is hampering economic growth.

Corruption and organised crime
In its most recent report on Albania, the European Commission raised concerns about the impartiality of the judiciary and said a comprehensive reform strategy was needed.

The Commission criticised attempts by the national executive to limit the independence of the judiciary and raised concerns about its impartiality, following the postponement of certain high-level cases on procedural grounds.

The government has implemented an anti-corruption strategy and action plan in line with the EU's European Partnership initiative and efforts have been made to increase transparency.

However, the Commission still stated that corruption remains a problem in many areas and has called for greater political will, stronger institutional arrangements and better inter-agency coordination to fight a ''culture of impunity''.

On a visit to Brussels on 14 April, Prime Minister Sali Berisha declared that a number of tough measures had been put in place to crack down on corruption and organised crime. He claimed that corruption had been eradicated and that foreign investors now enjoyed simple procedures for starting businesses at an attractive flat tax rate of 10%.

Speaking to EurActiv in an exclusive interview, Berisha also that the Albanian mafia is now a thing of the past, as arrests have been conducted across Western European countries and more than 1,000 criminals have been sent to jail.

In an April 2010 statement following a meeting with Albanian Prime Minister Sali Berisha, Permanent President of the European Council Herman van Rompuy said: ''Prime Minister Berisha represents a country that has made its political vision and ambition very clear. I would like to use this opportunity as well to reiterate my strong commitment to the EU integration perspective of the entire region of the Western Balkans.''

On a visit to Albania in March, EU Enlargement Commissioner Štefan Füle used unusually tough language, warning Tirana that a prolonged political stalemate would harm the country's EU accession prospects.

''A fully functioning parliament is essential to a fully functioning democracy. If the current political stalemate were to persist, it could well prevent Albania from reaching the political standards expected from a country that has applied for EU membership,'' he said.

Speaking to EurActiv in March, Füle expressed concern about the ''stability of democratic institutions and the lack of political dialogue in the parliament''. Recognising that considerable progress had been made in recent years, he urged Albania to overcome the impasse, adding that ''responsibility lies with both political parties – both the ruling group and the opposition'.'

On a visit to Brussels on 14 April, Albanian Prime Minister Sali Berisha pleaded the case for his country's EU accession and provided numerous examples of tough measures imposed to crack down on organised crime and corruption.

In an exclusive interview with EurActiv, the prime minister said that his country was now one of the safest in Europe following a ''zero tolerance'' crackdown on the Albanian mafia, and economic growth had remained steady despite the global crisis.

On 5 April, Socialist opposition leader Edi Rama called on Albanians to instigate demonstrations against the ''bad governing'' of Prime Minister Berisha's ruling Democratic Party.

''The time has come for a big popular movement in order to accelerate the end of this government, responsible for electoral fraud, but also for other social and economic injustices,'' he said. Rama, who is also mayor of Tirana, urged citizens to protest against ''stolen votes'' and the ''ruining of the country's and each family's economy''.

Albanian Foreign Minister Ilir Meta conceded that the political stalemate was not ''contributing'' to speeding up the country's EU integration. In an interview with RFE/RL, he accused Socialist leader Edi Rama of making demands that run counter to the country's constitution.

He declared that an inquiry commission, which was only set up by votes from the ruling party, had the legal stature to rule on the controversy and accused the Socialists of ''damaging the country's image for the sake of the personal agenda of their own party chairman'.'

Speaking to EurActiv in March, Albanian ambassador to France Ylljet Aliçka claimed that Albania is making steady progress on adopting European standards and has a lot to offer the EU.

''Corruption and organised crime remain a problem in Albania, but there is a strong desire to tackle these issues and the results are encouraging. But we have to speed up the pace of reform in economics, infrastructure and tourism,'' he said, adding that the country's administrative capacity is ''more mature'' than its political class.

Aliçka believes that Albania suffers from an image problem in Europe and would in fact bring many positive things to the EU: ''Religious tolerance, secularism, cultural diversity, tourism, young people, skilled workers... Albania's energy resources are also very important – only 20% are currently exploited,'' he said.

After its observation mission for last year's national elections, the OSCE's Office for Democratic Institutions and Human Rights stated: ''The 28 June 2009 parliamentary elections marked tangible progress with regard to the voter registration and identification process, the legal framework, adopted in a consensual manner by the two main parties, the voting, counting and the adjudication of election disputes."

"These substantial improvements were overshadowed by the politicisation of technical aspects of the process, including during the vote count and tabulation, which temporarily blocked the counting process in some areas, as well as by violations observed during the election campaign. These actions of political parties undermined public confidence in the election process," the statement continued.


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