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52 Pages·2001·0.65 MB·English

COUNTRY PROFILE 2001
Albania
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Comparative economic indicators, 2000
EIU Country Profile 2001 © The Economist Intelligence Unit Limited 2001
1
Contents
3 Basic data
4 Political background
4 Historical background
8 Constitution and institutions
10 Political forces
13 International relations and defence
15 Resources and infrastructure
15 Population
16 Education
17 Health
17 Natural resources and the environment
18 Transport and communications
20 Energy provision
21 The economy
21 Economic structure
22 Economic policy
26 Economic performance
27 Regional trends
28 Economic sectors
28 Agriculture and forestry
29 Mining and semi-processing
30 Manufacturing
31 Construction
31 Financial services
32 Other services
33 The external sector
33 Trade in goods
35 Invisibles and the current account
36 Capital flows and foreign debt
37 Foreign reserves and the exchange rate
38 Appendices
38 Sources of information
39 Reference tables
39 Population
40 Labour force
40 Government finances
41 Money supply
41 Interest rates
41 Gross domestic product
42 Gross domestic product by sector
42 Gross domestic product by sector
42 Prices and earnings
43 Arable production
43 Fruit tree stock and production
EIU Country Profile 2001 © The Economist Intelligence Unit Limited 2001
2
44 Livestock numbers and production
44 Minerals production, state sector
44 Manufacturing production, state sector
45 Exports
45 Imports
45 Main trading partners
46 Direction and composition of trade, 1998
47 Balance of payments
47 External debt
48 Foreign reserves
48 Exchange rates
EIU Country Profile 2001 © The Economist Intelligence Unit Limited 2001
Albania 3
Albania
Basic data
Total area 28,748 sq km, of which 24% arable, 15% meadow and pastures, 36% forest
Population 3.42m (2000, EIU estimate, not including those temporarily working or seeking
work abroad)
Main towns Population, 2000 (EIU estimates)
Tirana (capital) 600,000
Durres 130,000
Elbasan 100,000
Vlore 90,000
Shkoder 80,000
Climate Mediterranean in the coastal plain, much harsher in mountainous areas
Weather in Tirana Hottest month, August, 17-31°C; coldest month, January, 2-12°C; driest
(altitude 89 metres) months, July and August, 32 mm average rainfall; wettest month, November,
211 mm average rainfall
Language Albanian
Measures Metric system
Currency Lek (Lk)=100 qindarkas. Average exchange rates in 2000: Lk143.71:US$1;
Lk132.73:€1. Exchange rates on January 5th 2001: Lk140.65:US$1;
Lk133.85:€1
Time 1 hour ahead of GMT in winter; 2 hours in summer
Fiscal year Calendar year
Public holidays, 2001 January 1st (New Year’s Day), March 6th (Great Bayram), March 8th
(International Women’s Day), April 13th-16th (Catholic and Orthodox Easter),
November 28th (Independence Day), December 17th (end of Ramadan),
December 25th (Catholic Easter)
© The Economist Intelligence Unit Limited 2001 EIU Country Profile 2001
4 Albania
Political background
The Republic of Albania is a parliamentary democracy governed by a left-of-
centre coalition led by the Socialist Party of Albania (SPA), also comprising the
Democratic Alliance (DA), Social Democratic Party (SDP), Agrarian Party (AP),
National Unity Party (NUP), Party of Democratic Unity and Prosperity (PDUP),
and Union for Human Rights (UHR). The government came to power after a
parliamentary election in June 1997, and the SPA won most seats in the local
elections of October 2000. The prime minister, Ilir Meta (SPA), took office in
October 1999. The SPA chairman, a former prime minister, Fatos Nano, in
effect shares power with Mr Meta.
Historical background
A distinct though The Albanians’ physical isolation in the western Balkans mountains and the
subject people distinctiveness of their language have enabled them to resist assimilation,
despite being subjects of foreign powers for much of the past 2,000 years, and
to perpetuate such customs as clan loyalty and blood feuds. The Ottomans
gained full control of Albania from the Byzantine empire in 1478, after
which the majority of Albanians converted to Islam. This had been preceded
by a brief period of Albanian unity when resistance to the Ottomans was led
by Gjergj Kastrioti, also known as Skanderbeg, who is now revered as a
national hero.
In the 18th century two independent principalities were established, one in
the north and the other in the south, corresponding to the division between
northern speakers of the Geg dialect and southern Tosk-speakers. However,
both provinces were reconquered in the early 19th century. During the
turmoil of the first Balkan war an independent republic was proclaimed on
November 28th 1912, and was confirmed at the London conference in July
1913. However, Albania became a virtual protectorate under a German
princeling and Kosovo and the Albanian-inhabited areas of Macedonia were
allotted to Serbia; other Albanians remained in Greece and Montenegro.
When the present frontiers were fixed in November 1921, one-third of ethnic
Albanians were left outside Albania.
Independence did not lead In 1924 the Democratic Party, which had won two-fifths of the seats in the
to democracy parliamentary election of 1923, seized power from Ahmed Zogu of the Geg
feudal gentry. The focus of revolt was the southern town of Vlore, and the
leader was a Tosk, Fan Noli. However, his attempt to introduce democracy
and agrarian reform was overturned by the gentry with Yugoslav support:
Zogu returned, proclaiming himself king in September 1928.
In 1926 Albania signed a treaty ceding economic power to Italy. In 1939 King
Zog refused to renew this treaty, prompting Italy to invade. During the Axis
occupation of Greece and Yugoslavia in the second world war, Albania’s
frontiers were enlarged to embrace Kosovo and the Albanian districts of
EIU Country Profile 2001 © The Economist Intelligence Unit Limited 2001
Albania 5
Macedonia and Montenegro; a part of northern Greece, which was home to
many Albanian-speakers (the Chams), was also administered from Tirana.
Communism left a At the end of the second world war the communist Partisans gained the
deep legacy upper hand over rival guerrilla groups, declaring themselves the government
of Albania in November 1944 and proclaiming a people’s republic in January
1946, after a one-party election in December 1945. Albania’s territory
reverted to its pre-war borders as Yugoslavia, under Josip Broz Tito, clung on
to Kosovo, suppressing an uprising whose goal was to unite Kosovo with
Albania and western Macedonia.
The communist leader, Enver Hoxha, led Albania into ever deeper isolation.
First, he had to face Tito’s attempts to integrate Albania into Yugoslavia,
breaking the alliance with Tito in June 1948, when the Soviet-led expulsion
of Yugoslavia from the Cominform allowed him to align himself with Stalin.
Although the Soviet Union gave Albania economic assistance, it was a remote
patron with no common frontier. The second challenge came when, in the
1950s, Nikita Khrushchev began loosening the Stalinist system and urged
Albania to do the same. Instead, Hoxha loosened ties with the Soviet Union,
opting for close relations with China as Sino-Soviet relations sharply
deteriorated. After substantial aid had been received from China, relations
worsened and, following the death of Mao Zedong in 1976, Hoxha plunged
Albania into self-inflicted autarky.
When he died in 1985, his successor, Ramiz Alia, took a more moderate line.
After the fall of communism in most east European states, Mr Alia allowed
multi-candidate (but not multiparty) elections. He also repealed the 1967
prohibition of public religious observance and permitted foreign travel.
Democracy is fragile The government of Hoxha’s Albanian Workers’ Party (AWP) came under
immense pressure in 1990-91. Many people, particularly young men, fled the
country, mostly to Greece and Italy. There was an eruption of demonstrations
and student protests, which compelled the leadership to make further
concessions, including the right to form independent political parties.
The AWP won the first free election but soon renamed itself the SPA,
denouncing Hoxha’s rule. It formed a coalition government and initiated a
programme of reforms. Hopes in those and other changes and the new
freedom from political repression brought expectations of higher living
standards, but the economy, weakened by years of autarky and malinvest-
ment, deteriorated sharply. Mobs expressed their frustration by ransacking
state property, and support for the SPA collapsed. A fresh election held in
March 1992 produced a landslide victory for the Democratic Party (DP), and
its leader, a cardiologist, Sali Berisha, became president. However, within six
months of the election two leading DP members, Gramoz Pashko and Neritan
Ceka, left the party, accusing Mr Berisha of authoritarian rule. Local elections
later in 1992 showed a serious ebbing of support from the DP towards the
SPA. In response, Mr Berisha ordered the arrest of the SPA’s leaders, including
the current party chairman, Fatos Nano, on corruption charges.
© The Economist Intelligence Unit Limited 2001 EIU Country Profile 2001
6 Albania
Important recent events
May 1996: The Democratic Party (DP) led by Sali Berisha claims victory at the
parliamentary election. However, the result is viewed as flawed by foreign governments.
January-May 1997: Rioting breaks out in the wake of the collapse of “pyramid”
investment funds, into which much of the population have deposited their life savings.
Large sections of the country descend into anarchy as army barracks are looted.
June-July 1997: A fresh parliamentary election is held and won by the reformed
communists of the Socialist Party of Albania (SPA). Its leader, Fatos Nano, becomes
prime minister. Mr Berisha resigns as president and is replaced by the SPA’s Rexhep
Mejdani.
September 1998: The assassination of Azem Hajdari, a DP member of parliament,
leads to fresh rioting. Mr Nano resigns as prime minister and, four months later, as SPA
chairman; he is replaced as leader of the government in October by Pandeli Majko.
November 1998: A new constitution enters into force following a referendum.
March-June 1999: NATO bombs Yugoslavia (Serbia-Montenegro) as over 400,000
Kosovo Albanians seek refuge in Albania.
October 1999: An SPA congress elects Mr Nano, rather than Mr Majko, as party
chairman. Mr Majko resigns the premiership. Ilir Meta (SPA) takes over as prime minister.
October 2000: Local elections give 43% of the vote to the SPA and 34% to the DP.
Irregularities are noted by foreign observers but not on the scale claimed by the DP.
An illusion of prosperity Support for the DP was buttressed, nevertheless, by an economic recovery that
underpins DP rule gathered momentum from 1992. The system of farming changed from
collectivism to smallholdings. By 1995 industrial output and services were
expanding, and Mr Berisha was seen in the West as an exemplary post-
communist reformer. However, the marks of prosperity did not indicate deep-
seated reforms. Many households became flush with cash, from remittances
from émigré workers, from arms and fuel smuggling into Yugoslavia (Serbia-
Montenegro) in defiance of UN sanctions, and from breaking the Greek
blockade of Macedonia. A corrupt administration tolerated drug-trafficking
and money-laundering, offering further sources of informal earnings.
Under the extreme form of communism practised from the mid-1960s to
1990, private trade had been forbidden. Consumer goods were restricted to
poor-quality, home-produced goods available in limited quantities; people
were prohibited from owning private cars. Hence the euphoria engendered
by the liberalisation of trade was unparalleled among the countries
undergoing the transition from communism.
Political stability is Despite the rise in living standards, support for Mr Berisha was eroded by his
fraudulently bought authoritarian style and mounting evidence of corruption in the public
EIU Country Profile 2001 © The Economist Intelligence Unit Limited 2001