Albania Seeks Economic Revival
Challenges for new government include 50 percent unemployment, dependence on food aid
THE end of 48 years of Marxist rule in Albania, heralded by the Democratic Party's victory in parliamentary elections March 22, is expected to lead to economic changes that would start the country on the road to a free-market economy. Albanians hope this will trigger desperately needed foreign investment in Europe's poorest country.
Sali Berisha, leader of the Democratic Party that defeated Socialist and other opponents by a 2-to-1 margin, has vowed to strengthen ties with Washington and has predicted that "in the near future, Albanian-Americans will contribute to the transitional process."
Bob Gordon, executive director of the Washington-based Albanian-American Trade Association, says: "The new government will attempt to move farther with reform legislation that had already been enacted but not implemented."
Mr. Gordon predicts that "there's going to be a warmer relationship" between Albania and the United States. "The absence of foreign exchange will mean there won't be an immediate explosion of activity with regard to trade and investment. But I think the atmosphere and the attitude will be more receptive."
At the moment, Albania's economic situation is critical, due in large part to the collapse of the communist system imposed in 1944 by the late dictator Enver Hoxha. The country's 3.2 million inhabitants, who once produced more than enough food to feed themselves, now depend on aid from the European Community, while factories are idle and unemployment hovers at 50 percent.
"There's been no foreign investment in the country since the late 1970s, when the break with China occurred," says William Ryerson, the US ambassador in Tirana. "Albania at the moment is dependent on food coming in from abroad. There's been a land-reform law enacted. Up until this law, the government owned all the land. But people for the large part don't have implements such as tractors and fertilizer to work the land, and machinery that belonged to the state simply wasn't maintained."
With the elections out of the way, "there will be opportunities for investment here," Ambassador Ryerson adds. "An agreement with OPIC [the Overseas Private Insurance Corporation] has been signed, but that won't come into force until Albania reaches an agreement with the IMF [International Monetary Fund]."
In the meantime, slogans such as that found on a sign outside Hoxha's hometown of Gjirokaster - "Let's raise the flag of our heroic party and the monumental work of Comrade Enver Hoxha" - are rapidly disappearing, while automobiles, long banned as a sign of capitalist decadence, are being imported at the rate of 1,500 a month.
A black-market car lot has cropped up across the street from the capital's only skyscraper, the 15-story Hotel Tirana. Dealers come from all over Eastern and Central Europe to sell used Fiats, Peugeots, and Mercedes Benzes to Albanians, who gawk at engines, kick tires, and test-drive the autos in what has become the liveliest spot in Tirana.
But other Albanians have yet to find success. Ekrem Bardha, an Albanian-American entrepreneur from Detroit who came here last year to set up the country's first McDonald's franchise, still hasn't gotten anywhere. Coca-Cola Corporation reportedly canceled plans to build a bottling plant here after months of bureaucratic frustration with the outgoing government.
Tourism has potential in this nation of breathtaking mountains and unspoiled beaches. Shkelqim Bumci, an official of the state Albturist agency, predicts that within a decade, "we'll have 1 million tourists a year."
Yet only 20,000 tourists actually visited Albania last year - 15,000 of them daytrippers from the Greek island of Corfu - and the only major hotel project, a 260-room Sheraton, ended abruptly when its Albanian partner, Iliria Holding, left the country. A deep hole in the heart of Tirana attests to the project's failure.
"They're dreaming," says Bodo Gudjons, a German travel agent and official of the German-Albanian Friendship Society. "There are no investments in the tourist sector, only some dubious firms here."
A more promising area is oil exploration. For the first time, Albania has allowed foreign investors to participate in this once-closed industry. In the last six months, Occidental Petroleum Corporation, Chevron, and Hamilton Oil have all signed agreements for offshore exploration in the Adriatic Sea, as have Italy's Agip and Germany's Deminex.
Another hopeful sector is telecommunications. AT & T, Nynex, and other industry giants are said to be interested in revamping Albania's antiquated phone system, says Agim Muco, general legal counsel for the state phone company. The number of lines out of Albania is very limited.
"Sometimes it takes me half an hour of uninterrupted dialing to reach the United States," says Ryerson. "Obviously, the system is in need of upgrading and replacement. There's business to be done here."