ALBANIAN ECONOMY - JUST ANOTHER VICTIM OF POLITICS
AIM Tirana, 24 February, 1998
If a documentary film were shot about Albania only inside restaurants, hotels, kiosks, businessmen's offices, it would be difficult to tell which country the film was about. There you can see luxurious equipment and people who speak a few foreign languages dressed in accordance with the latest fashion. But, if a documentary were made about roads or infrastructure in general, we would see holes full of water, scattered garbage, buildings in construction which exceed even the wildest surrealism.
This is not just a visual expression of a superficial contrast. The coexistence of two quite contrary realities is an expression of the essential contradiction between what an individual has managed to achieve by its free initiative and what the state has not managed to do in the domains which belong to it - the sphere of public services and infrastructure. Paying no heed to this contradiction, equally due to ignorance and the lack of will, the Albanian government after 1991 got hold of certain macro-economic indicators, advocating by means of them economic stability, reduction of inflation, rise of gross social product, total privatization, attraction of foreign investments, etc.
All this modern vocabulary, abused for political purposes was nothing but an exhibit of false success. Last year's developments are a perfect argument in favour of this! The Albanians have managed to reconstruct and modernise their small housing units, but they could not do anything about the endless series of holes and bumps along the roads, schools which hardly deserve the name, hospitals which are just called that, nor the depreciated electric power network due to which they spend their nights mostly in total darkness. Not forgetting the fact that whole regions of the country are flooded whenever it rains, equally in winter and in summer, water in the pipes of the public waterworks runs only according to a strict timetable.
When in 1991, the political and economic system in Albania was changing, many believed that it would be the easiest to solve the problem of the economy. Political enthusiasm at the time was so predominant that the economy was considered as a very simple additional obstacle to it which can easily be overcome. In fact, momentary opening of Albania stimulated activating of certain sources and previously unknown potentials in individuals in the economic development which created hope that the Albanian economy and business would have a chance to develop. What can be said with certainty is that the advantages of the new economic and political system were considered to be advantages created by the very winning power. However, enthusiasm cannot always create sound premises of development. Superfluous enthusiasm can be not only naive but it can even have fatal consequences. Flourishing of pyramidal systems, reform based on political rather than economic criteria, lack of a unique national economic strategy, etc., led not only to a vague state of economic development, but significantly influenced creation of a political situation with the by now known consequences.
The political dimension was the main handicap of Albanian economy. Governments which ruled the country after 1991, in the economic sense were content with just a few simple propagandist formulae in favour of free and independent individual, forgetting or not grasping the essence of development of an economy in transition based on development of institutions of the market. But, even six years after Albania had opened to the world, opening of institutions to Albanian business still has not succeeded. The Albanian business has not succeeded in finding the way towards banks for financial support, for consultations, for new roads to development. Nowadays, Albania has the smallest number of market institutions of all the other countries of Eastern Europe.
Nevertheless, Albanian economy is still a victim of politics and politization. It is unthinkable that the current government is forced to pay dearly for everything that was happening for years. It is also clear that the economic situation cannot change overnight. But, it is still not clear how reconstruction of national economy will be accomplished. The political game with macro-economic indicators towards stabilization still continues, the game about political responsibility of the previous government in destruction of the economy still continues, with support from abroad, etc. However, although the sum of 300 million US dolars available for investment into Albanian economy in the course of 1998 is mentioned, it is difficult to believe that there are projects and infrastructure which could use this money.
In the beginning of this year, somehow unexpectedly, the government of Nano informed about the raise of salaries: 2,300 state administration employees, judges, customs officers, policemen etc., will get a raise of 80 per cent. Pensioners will get a raise of pensions of 20 per cent on the average. At first sight this decision creates an impression that the inflow of capital into the budget is also rising (it was planned that in 1998 it would double) and that the latest results from 1997 are not as bad as expected. It seems, however, that this measure is just the result of the effort to increase the value of labour in the public sector (during the past six years the salary of a public servant amounted to 60 US dollars a month), as well as to alleviate poverty of pensioners (income of pensioners amounts to about 20 US dollars a month). Even such a raise of salaries can hardly alleviate poverty. Everything is over-priced in Albania. In the past two years, prices of the essentials, such as eggs, bread, vegetables, meat, have doubled. Prices in restaurants are competitive with those in Greece or Italy. In the conditions in which seven or eight out of ten agricultural products are imported, every Albanian pays taxes and profit of Greek, Italian and Macedonian producers. At the same time, they also pay taxes to the Albanian state and merchants. Greek oranges and tomatoes, Turkish potatoes and onions, Macedonian cucumbers and peppers, Italian macaroni and chocolate, are predonminating on the market of the agricultural country of Albania.
On the other hand, there is a true strategic confusion concerning the future development of the country. The thing that is striking is that a sort of traditionalism in the assessment of potentials of development of the country prevails. It is still believed that priorities of development can be determined and supported from the top. Fiscal policy is mostly centred on covering budgetary deficit with no visible influence on domestic business, increase of production, employment or increase of export. All this results in that which is marked as lack of perspective and hope for the future of the economy.
Rather than speaking of an economic crisis which can be articulated in figures (inflation of about 45 per cent, unemployment above 40 per cent, etc.), the country certianly is going through a serious crisis of confidence. Thousands of the Albanians are determined to flee the country. Thousand of others are seeking jobs as migrant workers in neighbouring countries. In seeking jobs outside Albania, almost every week news arrive about people drowned in the Adriatic Sea. To say nothing about half a million Albanians who are already outside Albania. Above all a spark of hope is sought in the fact that economic policy preceeds a psychological revival which would later result in opening of new jobs. It is regretful, but in the past seven years slogans of political parties were: "Let us make Albania attractive for foreign investors". It is being forgotten that this country should primarily be make attractive for its own citizens. Perhaps that is what should be the starting point.
AIM Tirana
Bardhul MINXHOZI