In 1992, after close to fifty years of
communist-imposed
isolation following five centuries of Ottoman domination,
the
Albanian people had little awareness of the outside world
and
possessed Europe's least developed trade network. The
Albanians
faced the daunting task of reviving their moribund
factories and
workshops and learning the realities of modern capitalism
while
building a market economy from scratch. Burgeoning
unemployment,
falling output, acute food shortages, and widespread
lawlessness
eroded most grounds for optimism in the prospects for
rapid
success. Individual Albanian factories could not switch on
assembly lines because idled plants, farms, mines, and
generators
elsewhere in the production chain were not supplying
essential
inputs. For most enterprises, importing these inputs was
impossible because Albania's nascent foreign-exchange
market was
not yet fully operative. Despite Albania's dire
circumstances,
World Bank and European Community economists projected
that the
country's resource base and labor force could provide the
basis
for an escape from poverty if the government, with the
international community's financial help, took urgent
steps to
establish the institutions and infrastructure needed to
support a
market economy and stimulate small-scale private
entrepreneurship
in the farm sector.
The government's immediate objective was to restore a
secure
food supply for the general population and provide income
and
employment for rural inhabitants. Albanian leaders turned
to the
international community for direct food aid and technical
and
material assistance for the farm sector. Boosting
agricultural
output was also a prerequisite for resuming industrial
production
because many factories needed inputs of raw materials
produced in
the farm sector. Overall resumption of production had to
be
coordinated between state enterprises so as to create
economic
demand and establish a smooth flow of supplies. In 1992,
despite
the country's inability to pay its international
creditors,
Albania looked to the IMF, World Bank, and individual
Western
countries to lend the money needed to jump start and
stabilize
the economy. Over the longer term, the Albanian economy's
fate
depended on the country's political leadership restoring
law and
order, attracting private investors from abroad, and
obtaining
credits and aid from Western governments for the
modernization of
industry and agriculture. The last task was especially
important
because the lack of expertise in international trade and
poor
quality of Albania's exports precluded the country's
earning the
foreign exchange necessary to improve infrastructure and
increase
production. Chronic unemployment was almost certain to be
a
reality in Albania until urbanization significantly
slackened
population growth.
Despite Albania's small size and its communist regime's
almost pathological yearning for secrecy, a surprising
amount of
literature is available on the Balkan state's economy. The
best
descriptions of Albania's Stalinist system are Adi
Schnytzer's
Stalinist Economic Strategy in Practice and Örjan
Sjöberg's Rural
Change and Development in Albania. Stavro Skendi's
Albania, Peter
R. Prifti's Socialist Albania since 1944, and Robert Owen
Freedman's Economic Warfare in the Communist Bloc offer
valuable
historical insights into Albania's economic development.
Gramoz
Pashko, the Albanian economist best known in the West, has
also
contributed several clearly written, compelling papers on
Albania's communist economic system, including "The
Albanian
Economy at the Beginning of the 1990s." Both the Economist
Intelligence Unit and Business International publish
regular
studies of the Albanian economic situation, which are
particularly useful to persons exploring the possibility
of
trading with the country or setting up business operations
there.
(For further information and complete citations, see
Bibliography).
Background | | Albania declared its independence from the Ottoman Empire in 1912, but was conquered by Italy in 1939. Communist partisans took over the country in 1944. Albania allied itself first with the USSR (until 1960), and then with China (to 1978). In the early 1990s, Albania ended 46 years of xenophobic Communist rule and established a multiparty democracy. The transition has proven challenging as successive governments have tried to deal with high unemployment, widespread corruption, a dilapidated physical infrastructure, powerful organized crime networks, and combative political opponents. Albania has made progress in its democratic development since first holding multiparty elections in 1991, but deficiencies remain. International observers judged elections to be largely free and fair since the restoration of political stability following the collapse of pyramid schemes in 1997; however, there have been claims of electoral fraud in every one of Albania's post-communist elections. In the 2005 general elections, the Democratic Party and its allies won a decisive victory on pledges to reduce crime and corruption, promote economic growth, and decrease the size of government. The election, and particularly the orderly transition of power, was considered an important step forward. Albania joined NATO in April 2009 and is a potential candidate for EU accession. Although Albania's economy continues to grow, the country is still one of the poorest in Europe, hampered by a large informal economy and an inadequate energy and transportation infrastructure.
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Location | | Southeastern Europe, bordering the Adriatic Sea and Ionian Sea, between Greece in the south and Montenegro and Kosovo to the north
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Area(sq km) | | total: 28,748 sq km land: 27,398 sq km water: 1,350 sq km
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Geographic coordinates | | 41 00 N, 20 00 E
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Land boundaries(km) | | total: 717 km border countries: Greece 282 km, Macedonia 151 km, Montenegro 172 km, Kosovo 112 km
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Coastline(km) | | 362 km
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Climate | | mild temperate; cool, cloudy, wet winters; hot, clear, dry summers; interior is cooler and wetter
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Elevation extremes(m) | | lowest point: Adriatic Sea 0 m highest point: Maja e Korabit (Golem Korab) 2,764 m
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Natural resources | | petroleum, natural gas, coal, bauxite, chromite, copper, iron ore, nickel, salt, timber, hydropower
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Land use(%) | | arable land: 20.1% permanent crops: 4.21% other: 75.69% (2005)
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Irrigated land(sq km) | | 3,530 sq km (2003)
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Total renewable water resources(cu km) | | 41.7 cu km (2001)
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Freshwater withdrawal (domestic/industrial/agricultural) | | total: 1.71 cu km/yr (27%/11%/62%) per capita: 546 cu m/yr (2000)
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Natural hazards | | destructive earthquakes; tsunamis occur along southwestern coast; floods; drought
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Environment - current issues | | deforestation; soil erosion; water pollution from industrial and domestic effluents
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Environment - international agreements | | party to: Air Pollution, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Wetlands signed, but not ratified: none of the selected agreements
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Geography - note | | strategic location along Strait of Otranto (links Adriatic Sea to Ionian Sea and Mediterranean Sea)
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Population | | 3,639,453 (July 2009 est.)
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Age structure(%) | | 0-14 years: 23.1% (male 440,528/female 400,816) 15-64 years: 67.1% (male 1,251,001/female 1,190,841) 65 years and over: 9.8% (male 165,557/female 190,710) (2009 est.)
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Median age(years) | | total: 29.9 years male: 29.3 years female: 30.6 years (2009 est.)
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Population growth rate(%) | | 0.546% (2009 est.)
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Birth rate(births/1,000 population) | | 15.29 births/1,000 population (2009 est.)
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Death rate(deaths/1,000 population) | | 5.55 deaths/1,000 population (July 2009 est.)
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Net migration rate(migrant(s)/1,000 population) | | -4.28 migrant(s)/1,000 population (2009 est.)
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Urbanization(%) | | urban population: 47% of total population (2008) rate of urbanization: 1.9% annual rate of change (2005-10 est.)
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Sex ratio(male(s)/female) | | at birth: 1.1 male(s)/female under 15 years: 1.1 male(s)/female 15-64 years: 1.05 male(s)/female 65 years and over: 0.87 male(s)/female total population: 1.04 male(s)/female (2009 est.)
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Infant mortality rate(deaths/1,000 live births) | | total: 18.62 deaths/1,000 live births male: 19.05 deaths/1,000 live births female: 18.15 deaths/1,000 live births (2009 est.)
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Life expectancy at birth(years) | | total population: 77.96 years male: 75.28 years female: 80.89 years (2009 est.)
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Total fertility rate(children born/woman) | | 2.01 children born/woman (2009 est.)
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Nationality | | noun: Albanian(s) adjective: Albanian
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Ethnic groups(%) | | Albanian 95%, Greek 3%, other 2% (Vlach, Roma (Gypsy), Serb, Macedonian, Bulgarian) (1989 est.) note: in 1989, other estimates of the Greek population ranged from 1% (official Albanian statistics) to 12% (from a Greek organization)
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Religions(%) | | Muslim 70%, Albanian Orthodox 20%, Roman Catholic 10% note: percentages are estimates; there are no available current statistics on religious affiliation; all mosques and churches were closed in 1967 and religious observances prohibited; in November 1990, Albania began allowing private religious practice
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Languages(%) | | Albanian (official - derived from Tosk dialect), Greek, Vlach, Romani, Slavic dialects
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Country name | | conventional long form: Republic of Albania conventional short form: Albania local long form: Republika e Shqiperise local short form: Shqiperia former: People's Socialist Republic of Albania
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Government type | | emerging democracy
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Capital | | name: Tirana (Tirane) geographic coordinates: 41 19 N, 19 49 E time difference: UTC+1 (6 hours ahead of Washington, DC during Standard Time) daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October
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Administrative divisions | | 12 counties (qarqe, singular - qark); Berat, Diber, Durres, Elbasan, Fier, Gjirokaster, Korce, Kukes, Lezhe, Shkoder, Tirane, Vlore
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Constitution | | approved by parliament on 21 October 1998; adopted by popular referendum on 22 November 1998; promulgated 28 November 1998
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Legal system | | has a civil law system; has not accepted compulsory ICJ jurisdiction; has accepted jurisdiction of the International Criminal Court for its citizens
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Suffrage | | 18 years of age; universal
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Executive branch | | chief of state: President of the Republic Bamir TOPI (since 24 July 2007) head of government: Prime Minister Sali BERISHA (since 10 September 2005) cabinet: Council of Ministers proposed by the prime minister, nominated by the president, and approved by parliament elections: president elected by the Assembly for a five-year term (eligible for a second term); four election rounds held between 8 and 20 July 2007 (next election to be held in 2012); prime minister appointed by the president election results: Bamir TOPI elected president; Assembly vote, fourth round (three-fifths majority (84 votes) required): Bamir TOPI 85 votes, Neritan CEKA 5 votes
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Legislative branch | | unicameral Assembly or Kuvendi (140 seats; 100 members elected by direct popular vote and 40 by proportional vote to serve four-year terms) elections: last held 28 June 2009 (next to be held in 2013) election results: percent of vote by party - NA; seats by party - PD 68, PS 64, LSI 4, other 4 note: Parliament in November 2008 approved an electoral reform package that transformed the electoral system from a majority system to a regional proportional system; the code also established an electoral threshold limiting smaller party representation
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Judicial branch | | Constitutional Court, Supreme Court (chairman is elected by the People's Assembly for a four-year term) and multiple appeals and district courts
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Political pressure groups and leaders | | Citizens Advocacy Office [Kreshnik SPAHIU]; Confederation of Trade Unions of Albania or KSSH [Kastriot MUCO]; Front for Albanian National Unification or FBKSH [Gafur ADILI]; Mjaft Movement; Omonia [Jani JANI]; Union of Independent Trade Unions of Albania or BSPSH [Gezim KALAJA]
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International organization participation | | BSEC, CE, CEI, EAPC, EBRD, FAO, IAEA, IBRD, ICAO, ICCt, ICRM, IDA, IDB, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, IPU, ISO (correspondent), ITU, ITUC, MIGA, MINURCAT, NATO, OIC, OIF, OPCW, OSCE, SECI, UN, UNCTAD, UNESCO, UNIDO, UNWTO, UPU, WCO, WFTU, WHO, WIPO, WMO, WTO
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Flag description | | red with a black two-headed eagle in the center; the design is claimed to be that of 15th-century hero George Castriota SKANDERBERG, who led a successful uprising against the Turks that resulted in a short-lived independence for some Albanian regions (1443-1478)
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Economy - overview | | Lagging behind its Balkan neighbors, Albania is making the difficult transition to a more modern open-market economy. Macroeconomic growth has averaged around 5% over the last five years and inflation is low and stable. The government has taken measures to curb violent crime, and recently adopted a fiscal reform package aimed at reducing the large gray economy and attracting foreign investment. The economy is bolstered by annual remittances from abroad representing about 15% of GDP, mostly from Albanians residing in Greece and Italy; this helps offset the towering trade deficit. The agricultural sector, which accounts for over half of employment but only about one-fifth of GDP, is limited primarily to small family operations and subsistence farming because of lack of modern equipment, unclear property rights, and the prevalence of small, inefficient plots of land. Energy shortages because of a reliance on hydropower, and antiquated and inadequate infrastructure contribute to Albania's poor business environment and lack of success in attracting new foreign investment. The completion of a new thermal power plant near Vlore has helped diversify generation capacity, and plans to upgrade transmission lines between Albania and Montenegro and Kosovo would help relieve the energy shortages. Also, with help from EU funds, the government is taking steps to improve the poor national road and rail network, a long-standing barrier to sustained economic growth.
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GDP (purchasing power parity) | | $21.86 billion (2008 est.) $20.61 billion (2007 est.) $19.44 billion (2006 est.) note: data are in 2008 US dollars Albania has an informal, and unreported, sector that may be as large as 50% of official GDP
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GDP (official exchange rate) | | $12.96 billion (2008 est.)
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GDP - real growth rate(%) | | 6.1% (2008 est.) 6% (2007 est.) 5.5% (2006 est.)
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GDP - per capita (PPP) | | $6,000 (2008 est.) $5,700 (2007 est.) $5,400 (2006 est.) note: data are in 2008 US dollars
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GDP - composition by sector(%) | | agriculture: 20.5% industry: 19.8% services: 59.7% (2008 est.)
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Labor force | | 1.103 million (not including 352,000 emigrant workers) (2007 est.)
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Labor force - by occupation(%) | | agriculture: 58% industry: 15% services: 27% (September 2006 est.)
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Unemployment rate(%) | | 12.5% (2008 est.) 13.2% (2007 est.) note: these are official rates, but actual rates may exceed 30% due to preponderance of near-subsistence farming
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Population below poverty line(%) | | 25% (2004 est.)
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Household income or consumption by percentage share(%) | | lowest 10%: 3.2% highest 10%: 25.9% (2005)
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Distribution of family income - Gini index | | 26.7 (2005)
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Investment (gross fixed)(% of GDP) | | 23.1% of GDP (2008 est.)
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Budget | | revenues: $3.458 billion expenditures: $4.175 billion (2008 est.)
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Inflation rate (consumer prices)(%) | | 3.4% (2008 est.) 2.9% (2007 est.)
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Stock of money | | $3.028 billion (31 December 2008) $2.707 billion (31 December 2007)
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Stock of quasi money | | $6.251 billion (31 December 2008) $6.433 billion (31 December 2007)
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Stock of domestic credit | | $8.176 billion (31 December 2008) $7.247 billion (31 December 2007)
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Market value of publicly traded shares | | $NA
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Economic aid - recipient | | ODA: $318.7 million note: top donors were Italy, EU, Germany (2005 est.)
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Public debt(% of GDP) | | 51.9% of GDP (2008 est.) 51.4% of GDP (2007 est.)
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Agriculture - products | | wheat, corn, potatoes, vegetables, fruits, sugar beets, grapes; meat, dairy products
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Industries | | food processing, textiles and clothing; lumber, oil, cement, chemicals, mining, basic metals, hydropower
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Industrial production growth rate(%) | | 3% (2008 est.)
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Current account balance | | -$1.906 billion (2008 est.) -$1.202 billion (2007 est.)
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Exports | | $1.345 billion (2008 est.) $1.076 billion (2007 est.)
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Exports - commodities(%) | | textiles and footwear; asphalt, metals and metallic ores, crude oil; vegetables, fruits, tobacco
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Exports - partners(%) | | Italy 55.9%, Greece 11.6%, China 7.2% (2008)
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Imports | | $4.898 billion (2008 est.) $3.999 billion (2007 est.)
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Imports - commodities(%) | | machinery and equipment, foodstuffs, textiles, chemicals
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Imports - partners(%) | | Italy 32.2%, Greece 13.1%, Turkey 7.2%, Germany 6.6%, China 4.5%, Russia 4.4% (2008)
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Reserves of foreign exchange and gold | | $2.364 billion (31 December 2008 est.) $2.162 billion (31 December 2007 est.)
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Debt - external | | $1.55 billion (2004)
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Exchange rates | | leke (ALL) per US dollar - 79.546 (2008 est.), 92.668 (2007), 98.384 (2006), 102.649 (2005), 102.78 (2004)
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Currency (code) | | lek (ALL) note: the plural of lek is leke
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Telephones - main lines in use | | 316,400 (2008)
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Telephones - mobile cellular | | 3.141 million (2008)
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Telephone system | | general assessment: despite new investment in fixed lines, the density of main lines remains low with roughly 10 lines per 100 people; cellular telephone use is widespread and generally effective; combined fixed line and mobile telephone density is approaching 100 telephones per 100 persons domestic: offsetting the shortage of fixed line capacity, mobile phone service has been available since 1996; by 2003, two companies were providing mobile services at a greater density than some of Albania's neighbors; Internet broadband services initiated in 2005; Internet cafes are popular in Tirana and have started to spread outside the capital international: country code - 355; submarine cable provides connectivity to Italy, Croatia, and Greece; the Trans-Balkan Line, a combination submarine cable and land fiber-optic system, provides additional connectivity to Bulgaria, Macedonia, and Turkey; international traffic carried by fiber-optic cable and, when necessary, by microwave radio relay from the Tirana exchange to Italy and Greece (2008)
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Internet country code | | .al
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Internet users | | 471,000 (2008)
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Airports | | 5 (2009)
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Pipelines(km) | | gas 339 km; oil 207 km (2008)
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Roadways(km) | | total: 18,000 km paved: 7,020 km unpaved: 10,980 km (2002)
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Ports and terminals | | Durres, Sarande, Shengjin, Vlore
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Military branches | | Joint Force Command (includes Land, Naval, and Aviation Brigade Commands), Joint Support Command (includes Logistic Command), Training and Doctrine Command (2009)
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Military service age and obligation(years of age) | | 19 years of age (2004)
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Manpower available for military service | | males age 16-49: 944,592 females age 16-49: 908,527 (2008 est.)
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Manpower fit for military service | | males age 16-49: 800,665 females age 16-49: 768,536 (2009 est.)
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Manpower reaching militarily significant age annually | | male: 34,778 female: 31,673 (2009 est.)
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Military expenditures(% of GDP) | | 1.49% of GDP (2005 est.)
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Disputes - international | | the Albanian Government calls for the protection of the rights of ethnic Albanians in neighboring countries, and the peaceful resolution of interethnic disputes; some ethnic Albanian groups in neighboring countries advocate for a "greater Albania," but the idea has little appeal among Albanian nationals; the mass emigration of unemployed Albanians remains a problem for developed countries, chiefly Greece and Italy
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Trafficking in persons | | current situation: Albania is a source country for women and girls trafficked for the purpose of commercial sexual exploitation and forced labor; it is no longer considered a major country of transit; Albanian victims are trafficked to Greece, Italy, Macedonia, and Kosovo, with many trafficked onward to Western European countries; children were also trafficked to Greece for begging and other forms of child labor; approximately half of all Albanian trafficking victims are under age 18; internal sex trafficking of women and children is on the rise tier rating: Tier 2 Watch List - Albania is on the Tier 2 Watch List for its failure to provide evidence of increasing efforts to combat trafficking in persons in 2007, particularly in the area of victim protection; the government did not appropriately identify trafficking victims during 2007, and has not demonstrated that it is vigorously investigating or prosecuting complicit officials (2008)
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Electricity - production(kWh) | | 2.888 billion kWh (2007 est.)
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Electricity - production by source(%) | | fossil fuel: 2.9% hydro: 97.1% nuclear: 0% other: 0% (2001)
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Electricity - consumption(kWh) | | 3.603 billion kWh (2007 est.)
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Electricity - exports(kWh) | | 0 kWh (2008 est.)
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Electricity - imports(kWh) | | 2.475 billion kWh (2008 est.)
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Oil - production(bbl/day) | | 5,985 bbl/day (2008 est.)
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Oil - consumption(bbl/day) | | 34,000 bbl/day (2008 est.)
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Oil - exports(bbl/day) | | 748.9 bbl/day (2005 est.)
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Oil - imports(bbl/day) | | 24,080 bbl/day (2007 est.)
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Oil - proved reserves(bbl) | | 199.1 million bbl (1 January 2009 est.)
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Natural gas - production(cu m) | | 30 million cu m (2008 est.)
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Natural gas - consumption(cu m) | | 30 million cu m (2008 est.)
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Natural gas - exports(cu m) | | 0 cu m (2008)
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Natural gas - proved reserves(cu m) | | 849.5 million cu m (1 January 2009 est.)
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HIV/AIDS - adult prevalence rate(%) | | NA
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HIV/AIDS - people living with HIV/AIDS | | NA
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HIV/AIDS - deaths | | NA
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Literacy(%) | | definition: age 9 and over can read and write total population: 98.7% male: 99.2% female: 98.3% (2001 census)
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School life expectancy (primary to tertiary education)(years) | | total: 11 years male: 11 years female: 11 years (2004)
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Education expenditures(% of GDP) | | 2.9% of GDP (2002)
|