| Blessed with Chinese GDP growth rates
| |
| | and its reluctance to overhaul the
|
| (7-8% annually in each of the last 3
| |
| | moribund banking system and enact anti
|
| years) and German inflation (4%, down
| |
| | money laundering measures. It took
|
| from 32% in 1997, mostly attributable to
| |
| | crushing pressure by IFI's to force the
|
| increases in energy and housing costs),
| |
| | government to hive off the Savings Bank's
|
| it is easy to forget Albania's Somali
| |
| | pension plan business into Albapost, the
|
| recent past.
| |
| | local Post Office.
|
| In 1997, following the collapse of a
| |
| | In the intervening years, Albania got its
|
| series of politically-sanctioned pyramid
| |
| | fiscal act together (though its tax base
|
| schemes in which one third of the
| |
| | is still minimal) and made meaningful
|
| impoverished population lost its meager
| |
| | inroads into the informal economy (read:
|
| life savings, Albania imploded. The mob
| |
| | organized crime), not least by
|
| looted 700,000 guns from the armories of
| |
| | dramatically improving its hitherto venal
|
| the army and the police and went on a
| |
| | and smuggler-infested customs service. A
|
| rampage, in bloody scenes replete with
| |
| | collateral registry has been introduced
|
| warlords, crime, and 1500 dead. It took
| |
| | and much debated bankruptcy and mediation
|
| 5% of GDP to recapitalize Albania's
| |
| | laws may be enacted next year.
|
| tottering banks and overall GDP dropped
| |
| | Everything, from the operations of the
|
| by 7% that year. During the two preceding
| |
| | Central Bank to the executive branches is
|
| years, Albania has been the IMF's poster
| |
| | being revamped. Those who remained in
|
| boy (as it is again nowadays). Since
| |
| | Albania are much more invigorated than
|
| October 1991, the World Bank has approved
| |
| | they have been in a long time.
|
| 43 projects in the country, committed
| |
| | But the problems are structural. Albania
|
| close to $570 million and disbursed two
| |
| | is among the few countries in our
|
| thirds of its commitments. This,
| |
| | post-modern world which rely on
|
| excluding $100 million after the 1999
| |
| | agriculture (55%) rather than industry
|
| Kosovo crisis and $50 million for
| |
| | (24%), or services (21%). Only 40% of the
|
| agricultural development.
| |
| | population live in cities and female
|
| The European Investment Bank (EIB), the
| |
| | illiteracy is still at 24%. Tourism
|
| EBRD, the EU, and the Stability Pact have
| |
| | (especially of the archeological kind) is
|
| committed billions to the region for
| |
| | promising. But there are less than 6
|
| infrastructure, crime fighting, and
| |
| | computers and 40 phones per 1000 citizens
|
| institution building projects. Albania
| |
| | and less than 40% of the roads are paved
|
| stood to benefit from this infusion and
| |
| | (Albanians were forbidden to own private
|
| from a future Stabilization and
| |
| | cars until 1985). FDI amounts to a measly
|
| Association Agreement with the EU
| |
| | $50 million a year and aid per capita has
|
| (similar to Macedonia's and Croatia's).
| |
| | tripled to c. $160 since 1997. Pervasive
|
| Yet, as Chris Patten (the Commissioner in
| |
| | electricity shortages (despite budget
|
| charge of aid) himself admitted to "The
| |
| | draining subsidies of imported energy)
|
| Economist": "The EU'S capacity for making
| |
| | hamper economic activity. Albania was
|
| political promises is more impressive
| |
| | rated 100th (out of 174) in the UNDP's
|
| than our past record of delivering
| |
| | Human Development Index and 90th (out of
|
| financial assistance". The aid was
| |
| | 175) in UNICEF's Report on the State of
|
| bungled and mired in pernicious
| |
| | the World's Children (under-five
|
| bureaucratic infighting. The EU's
| |
| | mortality). Its neighbors ranked 55-73.
|
| delegation in Tirana was recently
| |
| | The isolationist legacy of the demented
|
| implicated in "serious financial
| |
| | and paranoid Enver Hoxha is only partly
|
| irregularities".
| |
| | to blame. Mismanagement, corruption, the
|
| The economic picture (if notoriously
| |
| | criminalization of society, and tribalism
|
| unreliable official statistics are to be
| |
| | are equally at fault in post-Communist
|
| trusted) has been mixed ever since.
| |
| | Albania. Everyone takes bribes - not
|
| The budget deficit hovers around 9%
| |
| | surprising when a senior Minister earns
|
| (similar to Macedonia's, Albania's war
| |
| | less than $1000 a month (ten times the
|
| ravaged neighbor). The (very soft and
| |
| | average salary). A well developed, though
|
| very long term) external debt is at a
| |
| | fast eroded, social (extended family,
|
| nadir of 28% of GDP (though still 150% of
| |
| | village, tribe) safety net ensures that
|
| exports) and foreign exchange reserves
| |
| | only 20% of the population are under the
|
| cover more than 4 months of imports. This
| |
| | official poverty line. But these extended
|
| is reflected in the (export averse)
| |
| | ties are one of the reasons for local
|
| stable exchange rate of the lek. But the
| |
| | unemployment (almost 20% of the
|
| overall public debt is much higher (70%)
| |
| | workforce) - immigrant workers (mostly
|
| and the domestic component may well be
| |
| | family members) constitute more than 25%
|
| unsustainable. Money supply is still
| |
| | of those employed.
|
| roaring (+12%), interest rates are
| |
| | With a youthful (32) Prime Minister (Ilir
|
| punishingly high (8% p.a.) though in
| |
| | Meta, overwhelmingly re-elected this
|
| steep decline, and GDP per capita is less
| |
| | year) who is an economist by profession,
|
| than $1000. It is still one of Europe's
| |
| | Albania is reaching out to its
|
| poorest countries (especially its rural
| |
| | neighbours. As early as 1992 it joined
|
| north). Most of its GDP growth is in
| |
| | the improbable (and hitherto ineffective)
|
| construction and trade. Health and
| |
| | Black Sea Economic Cooperation Pact (with
|
| education are decrepit and deteriorating.
| |
| | Greece, Turkey and ... Azerbaijan and
|
| And people vote with their feet (emigrate
| |
| | Armenia!) - which currently lobbies for
|
| in droves) and wallets (the economy is
| |
| | the re-opening of the Danube River.
|
| effectively dollarized).
| |
| | Albanian cheap exports are competitive
|
| Privatization receipts which were
| |
| | only if transported via river. Albania
|
| supposed to amortize public debt did not
| |
| | signed recently a series of bilateral
|
| materialize (though there were some
| |
| | agreements with Montenegro regarding
|
| notable successes in 2000, including the
| |
| | transportation on the Bojana river and
|
| completion of the privatization of land
| |
| | the Skadar Lake, use of harbors, the
|
| and of the important mining sector).
| |
| | extension of railways and roads, and the
|
| Negative sentiment towards emerging
| |
| | regulation of aviation rights. Despite
|
| economies, Albania's proximity to the
| |
| | the fact that Macedonia is (abnormally
|
| Kosovo and Macedonia killing fields, and
| |
| | for geographical neighbors) not an
|
| global recession make this prospect even
| |
| | important trading partner, Albania has
|
| more elusive. Had it not been for the
| |
| | responded positively to all the
|
| $500 million in remittances from 20% of
| |
| | Macedonian initiatives for economic and
|
| the workforce who are employed in Greece
| |
| | political integration of the region. It
|
| and Italy - Albania would have been in
| |
| | is here, in regional collaboration and
|
| dire straits. Money from Albanian drug
| |
| | synergy, that Albania's future rests.
|
| dealers, immigrant smugglers, and other
| |
| | Should the region deteriorate once more
|
| unsavory characters still filters in from
| |
| | into mayhem and worse, Albania would be
|
| Prague, Zurich, and the USA. These
| |
| | amongst the first and foremost to suffer.
|
| illicit - but economically crucial -
| |
| | Hence its surprisingly conciliatory
|
| funds may explain the government's foot
| |
| | stance in the recent crisis in Macedonia.
|
| dragging on the privatization of the
| |
| | It seems that Albanian politicians have
|
| omnipresent Savings Bank (83% of all
| |
| | wisely decided to move from a "Great
|
| deposits, no loans, owns 85% of all
| |
| | Albania" to a prosperous one.
|
| treasury bills, 2% net return on equity)
| |
| |
|
