Albania's economic development

Fatos Nano
Prime Minister, Albania

For centuries Albania was considered to be a remote part of Europe, but a glance at a map will show just how close a neighbour it is to Italy, Greece and other members of the European Community. In fact, it is fair to say that Albania - or the Land of the Eagles - is the only European country which can offer so wide a range of investment and development opportunities.

In part, Albania has remained under-developed as a consequence of its recent history - it was the last European country to reject the centrally-planned economy of hard-lined Stalinism and to open its doors to foreign investment. The enthusiasm with which Albanians embraced the market economy from 1992 onwards led to a rapid consumer boom in imported consumer goods, but unfortunately domestic investment tended to focus on the construction and service sectors rather than areas of industrial production.

During the spring of 1997, events in Albania dominated the world news, owing to the collapse of a number of so-called 'pyramid' investment schemes. Similar companies, which purport to offer impossibly high rates of interest to investors, had previously operated in many other countries - most notably in Romania and Russia. In part, the pyramids were attractive to investors because of the absence of a developed commercial banking sector.

With the inevitable collapse of these schemes, furious investors turned against the Democratic Party Government of Prime Minister Alexander Meksi which was forced to resign in March, leading the way to the formation of a government of national reconciliation. The general election of June 1997, which was closely supervised by the international community, returned a broad coalition led by the Albanian Socialist Party which was invited by the new President Dr Rexhep Meidane to form a government on July 29.

Albania has many challenges to face during this period of post-conflict reconstruction but the new government, with the active support of the international community and institutions such as the International Monetary Fund, the World Bank and the European Bank for Reconstruction & Development, has already taken a number of significant steps to restore public order and international confidence in our country. While our obvious priority will be the restoration of macro-economic stability, along with the control of inflation and the budget deficit, we are determined to address the wider question of Albania's economic development without delay.

Looking forward to the future, I am confident that Albania's rich natural resource base (including copper, chrome ore, oil and hydro-power) and its strategic location at the heart of Europe will continue to attract the attention of investors, both foreign and domestic. Within the first two months of the new administration, we have already received a wide range of offers from prospective foreign partners and investors in a number of important sectors.

Our government's philosophy is to provide the legislative support necessary to continue to attract serious foreign investors, as well as to carry forward the privatisation process which began more than six years ago. We remain committed to the privatisation of the remaining strategic sectors still in state ownership, including the mining and mineral industry, the telecommunications enterprise and the power generation sector.

In other areas which have already been identified as crucial for Albania's economic development, such as light manufacturing and tourism, we intend to build upon the notable successes of recent years which include 'blue chip' investors such as Coca-Cola, British Petroleum, Premier Oil, the Rogner Group and F:Lanto. The activities of these companies in Albania began well before the recent crisis, and we are greatly encouraged by the fact that they have all continued their operations without interruption.

Although the basic legislative framework for foreign investment is already in place, the new Government is in the process of reviewing the procedures in the interests of efficiency and transparency. Our overall aim is to ensure that the process of investing in our country will be of a similar standard to that of any other European nation. We have several business centres and a number of law firms, as well as a wide range of well qualified specialists and consultants.

In the sphere of international relations, we are fully committed to maintaining our strong links with the European Union, with which we are actively working to achieve an Association Agreement in the near future. Negotiations are progressing towards accession to the World Trade Organisation. Albania is already an active member of the Council of Europe and was one of the first signatories to NATO's Partnership for Peace.

We are confident that Albania, which has Europe's youngest population, has enormous potential for development across a wide range of sectors. For serious investors there are very significant opportunities to share in the progress and success which we as a government, supported both by our people and our international partners, are determined to achieve. We look forward to welcoming you to Albania.