Cut in prices downgrades higher maize production

Cut in prices downgrades higher maize production

TIRANA, Sept. 20 – Corn production registered an almost record high in Albania this year boosted by favorable weather conditions, but farmers complain the cheaper prices they are being offered is making its cultivation little profitable. With harvesting already in

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High migration, poor skills hampering Albania’s productivity, governor says

High migration, poor skills hampering Albania’s productivity, governor says

TIRANA, Sept. 19 – Containing the migration of qualified workers and upgrading labor force skills in the private sector remain key to boosting productivity in Albania as the Balkan country gradually switches to a new growth agenda, central bank governor

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Eurochambres: Corruption is poison for investors to Albania, region

Eurochambres: Corruption is poison for investors to Albania, region

TIRANA, Sept. 19 – European business representatives say Albania has to tackle corruption and strengthen rule of law in order to be more attractive to foreign investors and attract much-needed investment and know-how that creates new jobs and bridges the

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Tirana-Elbasan highway gets another $16 mln to exceed initial costs by 44%

Tirana-Elbasan highway gets another $16 mln to exceed initial costs by 44%

TIRANA, Sept. 18 – Albania is borrowing another $16 million to carry out emergency intervention in a highway linking Tirana to Elbasan, central Albania, but also serving as a hub to southeast Albania and neighboring Greece and Macedonia, in several

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Kosovo also planning to introduce tolls on highway to Albania

Kosovo also planning to introduce tolls on highway to Albania

TIRANA, Sept. 18 – Kosovo authorities say they are planning to introduce tolls on their part of the Highway of Nation linking Kosovo to Albania but fees will not be applied without a thorough study setting reasonable and acceptable tariffs.

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Tolling on Albania-Kosovo highway resumes amid high police presence

Tolling on Albania-Kosovo highway resumes amid high police presence

TIRANA, Sept. 17 – Drivers crossing the so-called Highway of Nation linking Albania to Kosovo paid tolls on Monday as tolling resumed peacefully but amid high police presence following a five-month suspension triggered by violent protests leading to revised fees

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Albania launches flag carrier in bid to offer cheaper ticket prices

Albania launches flag carrier in bid to offer cheaper ticket prices

TIRANA, Sept. 17 – Albania has launched its Air Albania national airline, a joint venture with Turkey’s flag carrier Turkish Airlines, in a bid to offer lower ticket prices as part of a bigger project to open up new airports

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Advertising cut hits Albania traditional media income

Advertising cut hits Albania traditional media income

TIRANA, Sept. 13 – Albania’s traditional electronic and print media saw their income drop for a second year in a row in 2017 as main advertising revenue declined and online media continued to gain ground emerging as a serious competitor.

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Albania public administration beats private sector in job creation in year’s first half

Albania public administration beats private sector in job creation in year’s first half

TIRANA, Sept. 12 – Albania’s public sector was more efficient in reducing unemployment rates in the first half of this year compared to the key private sector, the generator of about 85 percent of Albania’s jobs. A report published by

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Albania monopoly ordered to revise abusive rents hitting consumer prices

Albania monopoly ordered to revise abusive rents hitting consumer prices

TIRANA, Sept. 11 – Albania’s competition watchdog has ordered a monopoly company managing the country’s largest fruit and vegetable wholesale market to revise its abusive warehouse rental prices that are sharply increasing consumer prices. The decision by Albania’s Competition Authority

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                    [post_content] => TIRANA, Sept. 20 – Corn production registered an almost record high in Albania this year boosted by favorable weather conditions, but farmers complain the cheaper prices they are being offered is making its cultivation little profitable.

With harvesting already in its final stage, farmers across the country have been able to get much better yield compared to last year when production was hit by one of the longest droughts in decades, paralyzing the country’s agriculture sector that heavily depends on rainfall due to lack of irrigation infrastructure.

However, prices farmers are being offered for their corn production are at an average of 28 lek/kg (€0.22), slightly above international prices, but too low considering the huge costs Albanian farmers face at a time when they get no subsidies and cultivation costs are too high due to oil prices being one of Europe’s highest and no excise-free fuel offered to them.

Maize prices in the previous years have ranged from 30 lek (€0.23)/kg at harvest time up to 40 lek (€0.31)/kg just before harvest.

Farmers say tough competition, especially from Serbia, one of the top suppliers of wheat and maize to Albania, is making the cultivation of two traditional field crops in Albania almost unprofitable.

Maize coming from Serbia, which has in several cases proved contaminated and of poor quality, gets to Albania at much cheaper prices due to abundant production and subsidies farmers get there, placing domestic production in serious difficulty.

Albania produced 381,000 metric tons of maize in 2017 at a yield of 6,100 kg/hecatre, one of the lowest yields due to a prolonged drought in summer 2017.

About a quarter of nationwide production is produced in the region of Fier, southwestern Albania.

The country's second largest region, Fier is known as the breadbasket of Albania’s agriculture, producing about a third of total vegetables and a quarter of the country’s field crops, making agriculture in this region a key sector in addition to its oil industry which has slowed down in the past three years due to a slump in international oil prices.

Agriculture is a key sector in the Albanian economy, employing about half of the country’s GDP but producing only about 20 percent of the GDP, unveiling its low productivity which is hampered by fragmentation of farm land into small plots and poor financing and technology employed.

In addition, farmers also complain about high fuel prices and lack of refunds increasing production costs and making them uncompetitive to regional countries providing subsidies.

A government initiative to formalize the sector by providing tax IDs to farmers in return for paying compulsory insurance and benefiting refunds has attracted only few dozens of thousands of farmers so far and the government says it intends to revise the pension system for farmers.
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                    [post_content] => TIRANA, Sept. 19 - Containing the migration of qualified workers and upgrading labor force skills in the private sector remain key to boosting productivity in Albania as the Balkan country gradually switches to a new growth agenda, central bank governor Gent Sejko has warned.

Speaking at a seminar this week, the governor said productivity growth in the country has halved during the past post-global crisis decade amid an economic slowdown and restructuring of the country’s growth agenda toward industry and export-related services.

“The reduction by half of the economic growth pace after the crisis shows both the slowdown in the expansion of demand for goods and services, and the slowdown in the capacity of the economy to provide these products. Our studies have found that the degree of expansion of productivity in the Albanian economy - broadly defined as the capacity of an economy to utilize labor and physical capital to generate output - was reduced to 1 percent in this period, down from a previous 2 percent,” says Sejko.

The Albanian economy grew between 1 to 4 percent annually in the past nine years, compared to a pre-crisis decade of 6 percent annually, the growth rate estimated to bring tangible welfare to Albanian households, one of Europe’s poorest.

With the pre-crisis remittances, consumption and construction-fuelled growth having significantly waned over the past decade, Albania’s new growth agenda during the past five years has focused on new sectors such as tourism, energy, agriculture and also making use of public-private partnerships. The latter have been criticized by international financial institutions as lacking thorough cost-benefit analysis and posing a threat to the country’s debt reduction agenda by creating new government arrears.

Governor Sejko says the level and speed of productivity expansion is directly connected with the level of education and qualification of the labor force.

“The education system reform and the emphasis on vocational training are essential dimensions for the economy’s restructuring, whose benefits will increasingly become clearer in the longer run.  However, Albania still has a lot of work to do in this regard, in particular with regard to containing the migration of its qualified labor force and the renewal of its labor force skills by the private sector,” says Sejko.

Rapidly ageing population and high migration rates pose key threats to Albania’s labor productivity which already remains Europe’s poorest performing, the World Bank has warned in a recent report.

However, the governor is optimistic Albania’s developing economy can still boost productivity without the need for innovation, a must in leading economies, and what it needs is consensus on the country’s development model and a strong will to apply the new agenda.

“Unlike the advanced economies on the technology frontier that see their progress related to their ability to innovate, Albania has considerable space for development through the adoption of the existing technologies and practices. In this respect, our task remains to choose and implement the tested models of development,” says Sejko.

“I am confident that Albania has all the capacity to increase productivity and, in this way, to accelerate the economic growth pace and increase the welfare of the Albanian people.  What is needed now is consensus on the vision for the development of the country and a shared will to implement it,” he adds.

 

Poor productivity

In a report examining job dynamics in the country, the World Bank describes Albania’s labor productivity, measured as GDP output per worker, as the lowest in Eastern Europe at about US$31,000 per worker.

The report says that rapidly ageing population as a result of massive immigration and lower birth rates are expected to have a negative effect on labor productivity growth over the medium to long run.

“A potential concern is that Albania’s population is aging, which over the medium and long term will put pressure on productivity growth. High outmigration implies that part of the productive workforce is abroad – often the most educated, although no recent data exist on this,” says the World Bank report.

Albania has around 1.2 million migrants abroad, almost 40 percent of its resident population, making it one of the countries with the highest per capita migration around the world.

Poor compensation, rule of law and inefficient education and health sectors are the main reasons driving Albania’s most productive labour force abroad, in much higher rates compared to most regional countries.

The World Bank says Albania’s job creation in the past few years has mostly been in self-employment and in less productive jobs than existing jobs, largely benefiting adults and low-to-medium-skilled workers with fewer opportunities for those with higher levels of education.

One out of four jobs in Albania are in the low-productivity trade and repair sector.

About half of the country’s population is also employed in the little productive agriculture sector which due to land fragmentation, poor financing and small level of subsidies generates only a fifth of the country’s GDP.

Meanwhile, finding qualified staff with the right skills and knowledge is becoming an ever increasing top issue for employers in Albania as the country has been facing a new migration wave in the past five years and the population gradually declines and grows older.

A 2017 ‘Skills needs in Albania’ survey with more than 2,500 businesses nationwide shows that unsuitable qualification and poor work culture are the most recurrent concerns for employers in the country.

 

The way out

Improving the productivity of individual firms, infrastructure investment and an emphasis on green growth can help Albania and other Western Balkan regional countries get out of the middle-income trap and establish a new sustainable growth model, London-based EBRD says in a report measuring progress among transition economies.

The European Commission has also identified a series of ongoing obstacles to Albania’s growth and competitiveness and urged the EU aspirant Western Balkan country to strengthen its fiscal consolidation efforts in order to bring public debt to 60 percent of the GDP by 2021.

“Structural obstacles to growth and competitiveness include still unclear land ownership and insufficient enforcement of property rights, a high level (though decreasing) of informality and corruption despite progress achieved through judicial reform, an excessive regulatory burden and unpredictability in the judiciary system, which act as a discouragement to both foreign and domestic investment,” says the Commission in its assessment on Albania’s 2018-2020 economic reform programme.

A late 2017 World Bank report showing that catching up with the average EU income could take Albania and other EU aspirant Western Balkan economies about six decades unless current sluggish GDP growth doubles to 5 or 6 percent, the World Bank has warned in a recent report.

Albania, whose consumption and GDP per capita is at only a third of the EU average, will need 35 years to catch with the EU average income if it continues growing under the current 4 percent rate and 20 years if growth accelerates to an annual 5 percent, World Bank officials have said citing an optimistic scenario.

The Albanian government expects the country’s economy to pick up to 4.2 percent this year after hitting a 9-year high of 3.8 percent last year. However, key international financial institutions expect the country’s growth to slow down to 3.5 to 3.7 percent this year amid lower foreign investment as two major energy-related complete their investment stage and Europe’s single currency trades at a 10-year low against the Albanian national currency with a series of negative effects for the country’s highly euroised economy, mainly hitting Eurozone-destined exports.
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                    [post_content] => TIRANA, Sept. 19 – European business representatives say Albania has to tackle corruption and strengthen rule of law in order to be more attractive to foreign investors and attract much-needed investment and know-how that creates new jobs and bridges the gap with EU members.

Christoph Leitl, an Austrian politician who is the President of Eurochambres, the Association of European Chambers of Commerce and Industry, says corruption in Albania and the Western Balkans is like poison for current and potential investors.

“If there is no law enforcement, there is no legal basis on investment, property and European investors don't come. They seek security for their investment. Corruption is poison and whoever gets poisoned once, no longer comes,” Leitl, tells Deutsche Welle in the local Albanian service.

Leitl, who visited Albania last week to attend a regional workshop on the digital transformation of SME, spoke to journalist Ani Ruci of Deutche Welle on the challenges facing Albania and the region on their road to European integration and economic progress.

Corruption and an inefficient judiciary are two of the top concerns for foreign investors to Albania, according to surveys.

Albania has been the region’s second largest FDI recipient in the past eight years attracting an average of €1 billion a year, but much of the investment has been in low value added energy products such as oil and minerals, the majority of which is exported as raw material.

FDI concern has recently grown as TAP and Devoll Hydropower, the two major energy-related projects that led FDI growth in the past four years, are set to complete their investment stage by the end of this year and no major project replaces them.

 

Below is the full interview Christoph Leitl had with Deutsche Welle in the local Albanian service as translated from Albanian:

 

What was the goal of your visit to Tirana?

-Albania is part of our European economic family, the same way to the five Western Balkan countries with their respective chambers of commerce and industry. I am in Tirana, because Western Balkan countries need to have more European perspective. On the other hand, the EU expects facts and not promises from those countries, especially in two directions; law enforcement and the fight against corruption.

As president of the European Chambers I can ascertain that commercial relations among the six Western Balkan countries have not developed in the past decade. How can you enter the European market at a time when you are not able to have good trade relations in your region? Cooperation among Western Balkan countries has to strengthen. "Together" is one of the key words I always stress.

How would you explain relations between the EU and the Western Balkans from the business point of view?

-There is a lot of sympathy and respect for what this region has managed to handle on its own. The EU can and should help the Western Balkans. Its members, including Albania, participate in several EU pre-accession programs. That strengthens the link between the Western Balkans and the EU. I am critical of Albania in one respect: the main parties and chambers of commerce have to cooperate. When together, you can achieve a lot in Albania and convince the EU that you are ready for accession. If you engage in internal fighting, that will cost you a lot of resources, motivation and question marks will surround Albania's acceptance abroad.

What are the main complaints by EuroChambres members when seeking to invest in Albania or the Western Balkans in general?

- Lack of rule of law and corruption. If there is no law enforcement, there is no legal basis on investment, property and European investors don't come. They seek security for their investment. Corruption is poison and whoever gets poisoned once, no longer comes.

Looking at the Western Balkan member countries. Is 2025 a realistic date or could Western Balkan countries have to wait beyond this timeline?

- There won't be joint accession for Western Balkan countries. Each country will have to fulfil the negotiation chapters on their own and meet EU expectations. For example, Albania is doing a lot to adopt its legislation with the EU. But that does not mean that the legal changes will automatically change the reality. Corruption is never something formal.

Western Balkan leaders stress that if the European perspective is further delayed, then there is a risk that other stakeholders such as Russia, China or Turkey could increase their presence and offers in a region with vulnerable stability and weak economy such as the Western Balkans. To what extent is this danger real from the EuroChambres viewpoint?

- As president of the Global Platform of Chambers of Commerce and Industry, I am aware about what's happening around. Russia is important in the Balkans. The US also has interests in the region. The European economy is open. We expect the same openness by others. We want fair rules and competition. There is no problem if other investors come to the region. We should know that Europe is our identity. We have a joint European interest in the region.

 What should the Western Balkans Regional Economic Area, a key product of the Berlin Process, do in order to strengthen, generate new jobs and improve living conditions for the region's residents?

- More confidence at all levels, be it at municipal, regional or state level. Those three levels are not interconnected and cooperative with each other. Investors seek confidence and security.

Vocational training education, transfer of knowledge and skills are a priority for EuroChambres. Youth in Albania and in the Western Balkans in general even when having already obtained vocational education training target migrating to Germany, Austria, the US, Canada etc. What do you think of this phenomenon?

- They migrate because they are paid two to three times higher and have better life prospects. In order for the younger generation not to migrate, they need to have that perspective in their home countries. The younger generation should have a life prospect, leave and come back. That means planning their return. In fact youth in the region are losing their patience. In 2025, the European perspective could be further delayed.

Is there a risk that the May 2019 European elections could have a negative effect on the Western Balkans enlargement policy?

- Yes, there is. If populist, neo-nationalist and separatist forces at the European Parliament win, the EU's WB enlargement project is placed at risk. New EU members will need much more solidarity, help and support. If there is no political will to handle that, then the European project is in a really tough situation. The European project should not be abandoned, the European identity is now needed more than ever.

 
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                    [post_content] => TIRANA, Sept. 18 – Albania is borrowing another $16 million to carry out emergency intervention in a highway linking Tirana to Elbasan, central Albania, but also serving as a hub to southeast Albania and neighboring Greece and Macedonia, in several extra financing needs since the highway first opened to traffic in 2013.

The new loan deal with the OPEC Fund for International Development comes one year after the government also borrowed an extra $30 million from the Islamic Development Bank to complete the first 14 problematic kilometers of the Arab-funded highway whose progress has been halted by massive landslides and extra financing needs.

The 20-year soft loan will also be used to rehabilitate landslide affected areas in the highway's 4th, 11th and 14th kilometers, in new emergency rehabilitation aimed at increasing road safety by preventing new landslides.

Speaking at a hearing with the parliamentary economy committee this week, Infrastructure Minister Damian Gjiknuri said the highway's cost had increased by an extra $138 million or 44 percent compared to initial estimates of $312 million.

The same thing also happened with the highway linking Albania to Kosovo whose final bill cost an estimated $1.36 billion, two-thirds more than the initial contract.

Experts attribute the sharp hike in costs at the major two infrastructure works to poorly drafted contracts, lack of sufficient supervision and corruption.

Recent projects have switched major road infrastructure to public private partnerships mostly under unsolicited proposals favoring companies that initiate them, despite warning by international financial institutions over lack of cost-benefit analysis and potential government arrears putting at risk the country’s debt reduction agenda.

The Tirana-Elbasan highway is one of the major two publicly funded highways built in the country during the past decade together with the Highway of Nation linking Albania to Kosovo.

Overwhelmingly funded by the Islamic Development Bank with $258 million and other Arab financial institutions such as the Saudi Fund for Development and the OPEC Fund for International Development, the highway has already considerably cut distance between capital Tirana and Elbasan, the third most populated region of Albania, and a hub to the southeastern Albania.

The new four-lane highway that cut travel distance between Tirana and Elbasan from a previous 48 kilometers to only 31 kilometers, has been partially operational since 2013 when a double-bore 2.5 km tunnel was built by Greece’s Aktor for $83 million.

Back in 2014, massive landslides following uncontrolled explosions and difficult terrain led to the evacuation of some 30 households and caused damage to local businesses.
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                    [post_content] => TIRANA, Sept. 18 – Kosovo authorities say they are planning to introduce tolls on their part of the Highway of Nation linking Kosovo to Albania but fees will not be applied without a thorough study setting reasonable and acceptable tariffs.

A Kosovo deputy minister says Kosovo will initiate a feasibility study on applying tolls next year on the highways linking Kosovo to Albania and Macedonia but the implementation of the tolling system is not going to happen before 2020.

"In 2019, we will initiate a feasibility study and wait for one or two years to get ready, get opinions, engage in discussions with citizens and NGOs and impose a tax which will be much lower than the [Albanian] Highway of Nation," Rexhep Kadriu, a Kosovo deputy infrastructure minister has told Radio Free Europe/Radio Liberty in the local Albanian service.

According to him, introducing tolls on the Kosovo highways will be much easier compared to Albania as Kosovo already has parallel roads in good condition as alternatives to the highways to Albania and Macedonia, the latter set to complete by the end of this year.

The alternative road to the Highway of Nation linking Kosovo and the northeastern Albanian town of Kukes to Tirana is a mountain route in poor condition that takes about six hours, three time more compared to the Durres-Kukes-Morine segment launched in 2009.

Tolls on both sides of the highway could significantly increase costs for visitors and businesses, especially Kosovars, the highway’s more frequent users.

Albania already started applying average €5 tolls for drivers crossing the Highway of Nation this week, in a process that resumed smoothly following a five-month suspension triggered by violent protests leading to revised fees for local residents and frequent users.

Kosovo completed its 100 km Prishtina-Morine segment linking Kosovo to Albania in 2013, significantly easing human and trade exchanges on both sides of the two neighbouring Albanian-speaking countries.

Both segments of the Highway were built by the Bechtel-Enka American-Turkish consortium and are estimated to have cost Albanian and Kosovo taxpayers around 2 billion euros, a staggering amount for the modest budgets of the two governments.

Despite the huge positive effects it has had during the past decade, economists say the highway has yet to justify its huge construction costs considering the still modest Albania-Kosovo trade exchanges often hampered by trade disputes.

Serbia’s plans to build a Nis-Merdare-Prishtina highway linking southeast Serbia to the Kosovo capital city could give a huge boost to Albania’s part of the highway and the EU aspirant region as a whole.
                    [post_title] => Kosovo also planning to introduce tolls on highway to Albania
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                    [post_content] => TIRANA, Sept. 17 – Drivers crossing the so-called Highway of Nation linking Albania to Kosovo paid tolls on Monday as tolling resumed peacefully but amid high police presence following a five-month suspension triggered by violent protests leading to revised fees for local residents and frequent users.

Average €5 fees on the country's first toll road were initially applied last March but suspended following a March 31 protest by local residents that turned violent after they burned down booths, opposing the tolls as too high for the country’s poorest region, northeast Albania.

The reintroduction of tolls comes after the government renegotiated fees with the concessionaire and local government officials to apply a 100 lek (€0.78) toll for Kukes residents compared to average tolls of €5 for other highway users, and apply discounts for regular business users.

The new revised fees offer up to 40 percent discount on regular users with 10 to 60 passes a month who can also take advantage of a digital pass system.

Tolls were also delayed for Sept. 17 to allow residents of Kosovo get to Albania at no extra fee during summer and prevent a possible boycott from the country with highest number of tourists to Albania.

The Albanian concessionaire, a partnership between two of the country's largest companies with key operations in the oil and road industries, has made available ten toll both, two of which for Kukes residents, whose car owners and public transport operators benefit reduced fees.

The Albanian Highway Concession says it plans to employ around 200 local residents and apply a series of social projects during its first four years of operation under its 30-year concession contract with the Albanian government.

Local media reported high police presence on Monday amid fears of protests following warnings of protests by politicians and local residents not agreeing to the revised fees and worries that the toll could have a negative effect on tourist flows from Kosovo and trade exchanges with the neighboring ethnic Albanian country.

Yet, there was a small protest led by local party officials and MPs of the main opposition Democratic Party who claimed police and special intervention forces used psychological terror on local residents not to participate in warned protests.

A local business association in Kukes region had warned the re-introduction of tolls risked bringing back a new March 31 scenario when the protest turned violent and tolling equipment were destroyed and set on fire, leading to the arrest of 23 local residents, a handful of whom still remain in prison.

"The whole police and state apparatus had lined up against citizens to protect the theft through the corruptive concession at the Highway of Nation. Police officers put on a show of force and used psychological terror last night (Sunday) and today (Monday) against citizens in order to stop them from protesting," said Agron Shehaj, an opposition Democratic Party MP who led the local protest in Kukes town.

"This day shows that the crime-government-oligarchs-media alliance is a danger for Albania and our future. There is only one escape from it and that's its destruction. That is our duty and the duty of every Albanian with courage and dignity," he added.

Meanwhile, Prime Minister Edi Rama thanked Kukes residents for their civic reaction, promising new investments such an already built airport that has been awaiting to become operational for a decade and a new stadium.

Tolls ranging from €2.5 for motorcycles, to €5 for passenger cars, €11.2 for buses, and €16.2 and €22.5 for mid and high-tonnage trucks have been described as too high by the Albanian and Kosovo business communities, who fear trade exchanges between the two ethnic Albanian countries could receive a severe blow.

The highway concession saves the Albanian government an annual €4 million in maintenance costs but the government will still pay the consortium through taxpayer money in subsidies for traffic guarantees in return for investment and maintenance for the next 30 years.

Tolls on the 114 km highway that will be collected on the 5.5 km twin-bore Thirre tunnel.

Operational since 2009 on the Albanian side and from 2013 in Kosovo, the Highway of Nation linking the two ethnic Albanian countries has given a strong impetus to trade and human exchanges in the past decade following Kosovo’s independence.

With trade barriers still in place, business associations have voiced concern that tolling could serve as an extra tax hampering Albania-Kosovo trade exchanges, which hit a historic high of 29.4 billion lek (€230 million) in 2017 after fluctuating at about the same level of about €160 million in the past five years.

An average of 5,000 vehicles cross through the Highway of Nation, where traffic peaks during summer as Kosovars flock Albanian seaside towns in what is known as patriotic tourism.
                    [post_title] => Tolling on Albania-Kosovo highway resumes amid high police presence
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                    [post_content] => TIRANA, Sept. 17 – Albania has launched its Air Albania national airline, a joint venture with Turkey’s flag carrier Turkish Airlines, in a bid to offer lower ticket prices as part of a bigger project to open up new airports that would also serve the emerging tourism industry in the country.

A test flight carrying high school students of excellence inaugurated the national carrier last weekend with a Tirana-Istanbul flight that will apparently be followed by regular flights linking Albania to Turkey and other major regional and European destinations, including a projected direct flight to New York.

Speaking at a launch ceremony, Prime Minister Edi Rama said the establishment of Air Albania wouldn’t have been possible “without the initiative and generous support of Turkey’s President Recep Tayyip Erdogan,” with whom he has met several times since the ambitious project was first unveiled in mid-2017.

The flag carrier and the opening of new airports will offer better service and cheaper prices, Prime Minister Rama says.

"Air Albania is an instrument to get rid of the past [troubled] legacy, and will offer flights at decent service and very competitive prices. Likewise, the construction of new airports has the same effect," said Rama.

Albania is one of the few European destinations to have a single airport, whose concessionaire charges on airlines using it are often blamed for the high local ticket prices that often force Albanians to choose neighboring airports to reach their destinations.

The launch of a new flag carrier comes seven years after Albania’s former national carrier, Albanian Airlines, where the Albanian government also held a minority stake, ceased its two decades of operations after having its licence revoked.

The launch also comes at a time when air transport at the country’s sole international airport is overwhelmingly controlled by foreign companies and Belle Air, a former private Albanian-owned company that controlled 50 percent of the market went bankrupt in 2013 after almost a decade of operations.

Air Albania is a newly established company where the Albanian government owns a minority 10 percent stake through its state-run Albcontrol enterprise which manages Albania’s airspace and air traffic. A 49 percent stake is held by Turkish Airlines, Turkey’s flag carrier and one of the world's leading carriers where the Turkish government controls almost half of its shares.

The remaining 41 percent stake is held by Albanian-owned MDN Investment, a company based in the southern Albanian city of Vlora, where Albania’s new airport is projected to be built.

Some opposition Democratic MPs have claimed Air Albania is a show of the Prime Minister and only an extra flight by Turkish Airlines, already offering flights to and from Tirana.

However, Albania's Civil Aviation Authority says the partnership with Turkish Airlines will guarantee the Albanian flag carrier access to Turkish Technic, the maintenance, repair and overhaul center of Turkish Airlines, serving 300 destinations in over 120 countries. Albanian staff will also get training from the Turkish Airlines Aviation Academy.

"Air Albania will have access to the deals that Turkish Airlines has with the airports it flies, which means favorable commercial packages," says Krislen Keri, the head of the Civil Aviation Authority.

According to him, similar joint ventures such as Turkey-based SunExpress, a 50/50 partnership between Turkish Airlines and Germany’s Lufthansa, have been already operating successfully for decades.

Established with capital of up to $30 million, Air Albania currently has a single Airbus A319, but plans to order two Airbus A320 aircraft as it gradually launches new destinations that will mainly link Tirana to regional unserved destinations.

 

New airport plans amid price concerns

The launch of the Albanian flag carrier also comes at a time when Albania is planning to open up two new airports in a bid to break the de facto monopoly that the country's sole airport managed by a private concessionaire has on international flights. If materialized, the project is expected to increase market competition, lead to lower ticket prices and also serve the country’s emerging tourism industry through faster access to southern and northern destinations.

While negotiations with a Turkish consortium to build a new airport in southern city of Vlora are in their final stage, the government is also planning to reactivate Kukes airport, a north-eastern Albania airport that has been abandoned following an unsolicited proposal by a local company.

The new airport projects come at a time when concerns over ticket prices in the country have been growing and high prices are considered a key barrier for the emerging tourism industry.

Last summer, the Albanian government announced a call for a consultant to carry out a review of the concession contract it has with the Tirana International Airport whose high charges on carriers are often blamed for Albania having one of the region’s highest ticket prices.

The probe comes after Albania’s sole international airport has already been operating under a build-own-operate-transfer concession contract for the past 13 years and a Chinese consortium has taken over the airport’s operations from the original German-led concessionaire since mid-2016.

While the airport’s exclusive rights on international flights were lifted in mid-2016 paving the way to the operation of the small Kukes airport in northeast Albania in return for extending its concession term for 2 years until 2027, no new airports have been activated in the past couple of years and TIA continues to have a de facto monopoly.

Albania’s competition watchdog has earlier blamed the monopoly conditions under which the Tirana International Airport concessionaire and the aviation fuel company operate for increasing operating costs for airlines and affecting ticket prices.

The Tirana International Airports is one of the most profitable companies in Albania with profit rates of up to 38 percent. The Chinese-led concessionaire saw its net profit climb to about 2.3 billion lek (€18 million) in 2017, up 25 percent compared to the previous year, according to reports filed with the National Business Center.

Some 18 airline companies operate in Tirana, the overwhelming majority of which foreign-owned, linking Tirana to dozens of foreign destinations through direct flights, mainly Italy.

New low-cost carriers have been linking Tirana to Budapest, Amsterdam and more recently to London in the past year in what looks like a policy change under the new Chinese takeover since mid-2016 amid government plans to build new airports.

The Tirana airport handles more than 2 million passengers a year, being one of the country’s main hubs.
                    [post_title] => Albania launches flag carrier in bid to offer cheaper ticket prices
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                    [post_date] => 2018-09-13 14:35:30
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                    [post_content] => TIRANA, Sept. 13 – Albania’s traditional electronic and print media saw their income drop for a second year in a row in 2017 as main advertising revenue declined and online media continued to gain ground emerging as a serious competitor.

Data processed by BIRN news agency in the local Albanian service from the National Business Center shows the top ten TV companies and pay TV platforms had their revenue drop by 4 percent to 10.3 billion lek (about €80 million) in 2017.

Two-thirds of the reported income is generated by two pay TV platforms that reported a total of 6.3 billion lek (€49.5 mln) with the tax authorities, down 4.7 percent compared to 2016.

Income generated by main TVs has been fluctuating at about the same levels for the past four years amid lower advertising by the key mobile operators and commercial banks, the traditional top two advertisers.

While mobile operators have continuously reported a drop in income in the past decade in an ongoing downward trend triggered by tougher competition and smartphone apps replacing traditional phone calls and text messages, commercial banks have posted record high profits in the past couple of years.

The situation is not very optimistic even this year as the sole Albanian-own operator ceased operations in late 2017 stripping the media market of about €1 million in advertising revenue. The banking sector has also been involved in a series of takeover and mergers that are expected to reduce its number to 14 this year, down from a current 16.

Yet, one of Albania’s top construction companies, Albanian-owned Gener 2, has announced a partnership with U.S.-based CNN giant to launch a local news channel by the end of 2018 and “bring CNN standards to the Albanian media market.”

Meanwhile, the traditional print media has seen its advertising drop to a record low in a global trend affected by booming online media.

Albania's top eight newspapers saw their sales and advertising income drop to about 500 million lek (€3.9 mln) in 2017, down 10 percent compared to 2016 as internet income from their websites was unable to compensate the sharp decline in hardcopy sales.

In 2016, one of the country's largest newspaper withdrew from the print media after almost a decade of operation as one of the main print media outlet.

The lower income for main media outlets has also been accompanied with cuts in staff and wages.

Albania’s media is classified as partly free with “the intermingling of powerful business, political, and media interests inhibiting the development of independent news outlets,” according to Freedom House. Local journalism associations report an increase in the number of journalists facing life threats because of their job and media professionals quitting their jobs because of censorship, poor income or perceived danger.

 

 
                    [post_title] => Advertising cut hits Albania traditional media income 
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                    [post_content] => TIRANA, Sept. 12 – Albania’s public sector was more efficient in reducing unemployment rates in the first half of this year compared to the key private sector, the generator of about 85 percent of Albania’s jobs.

A report published by Albania’s state-run statistical institute, INSTAT, shows the number of employees in the public sector rose by a surprising 5,900 to hit a 12-year high of about 170,000 in mid-2018 after fluctuating at about 165,000 for the past seven years.

More than three-quarters of public sector jobs are government-funded while almost a fifth includes self-funded local government units and other state-run institutions, enterprises and agencies.

The hike comes at a time when the private non-agricultural sector, the driver of almost half of total employment, saw its jobs increase by a mere 3,270 compared to the end of 2017 to register a total of 504,615 at the end of the first half of 2018.

Growth in the public sector jobs also comes at a time when Albania has on paper had smaller central and local government units in the past four years following a 2014 territorial and administrative reform and a new Socialist Party-led government made a significant cut to the number of ministries and government agencies in Sept. 2017.

The territorial and administrative reform in force since Sept. 2014 ahead of the June 2015 local elections cut the number of local government units to 61 municipalities, down from a previous 373 municipalities and communes.

Prime Minister Edi Rama also cut the number of ministries to 11, down from a previous 16 as he claimed a second consecutive term of office out of the June 2017 general elections, merging several ministries, and vowing to cut the number of government agencies by a quarter to 104, from a current 141.

However, available data shows the number of employees in the main local government units in the past three years has increased while the cut in the number of ministries following the mid-2017 general elections has not been accompanied with the expected slash in the number of central government administration.

Referring to the 2018 budget, a report by local ‘Open Data’ research center shows that while ministries have cut some few hundreds of jobs, the slash was compensated by an increase in the number of some central government agencies and some newly established justice institutions, taking the number of central government paid employees to 81,753 for 2018, some 40 more compared to last year.

The country’s sole employer until the early 1990s when the country’s communist regime and its centrally-planned economy collapsed, the public sector has been constantly losing ground in the past quarter of a century of Albania’s transition to democracy and a market economy.

The public sector accounted for about 191,000 jobs or 18 percent of the total in the early 2000s when major enterprises were still state-owned and the public administration was overstaffed. Eighteen years on, the number of public sector jobs has dropped by about 27,000 to 164,500 at the end of 2017 and its share in the total employment to about 15 percent.

State-run OSHEE electricity distribution operator is the country’s largest employer with 6,300 employees.

Public administration jobs, where links to officials or bribes are often reported as a must, have become much sought after, competing the private sector where wages have in general remained unchanged and working hours are much longer, often including Saturdays and national holidays with no bonuses.

However, uncertainties remain great even in the public administration when new governments or directors take over, often triggering politically motivated dismissals that cause taxpayers dozens of millions of euros every year.

Albanian incumbent governments or local government units have regularly increased public administration staff during electoral years or pre-election years during the past quarter of a century of transition.

Albania is expected to hold its next local government elections in mid-2019.

 

Official jobless rate at record low

Albania’s official unemployment rate dropped to an almost record low of 12.4 percent at the end of the first half of this year and youth jobless rates were down to 22.6 percent. However, the official numbers don’t include a staggering 462,000 people employed in the largely informal private agriculture sector, where people living in rural areas and possessing land are automatically considered as self-employed in the agriculture sector. Albania had some 36,520 farmers paying social security contributions at the end of 2017, less than a tenth of the total number.

Employing about half of the country’s workforce, agriculture is one of the least productive sectors, generating only a fifth of the GDP, with land fragmentation, lack of infrastructure, poor credit and subsidies as the main barriers to its growth.

High migration rates following an asylum exodus in the past four years and more and more youngsters leaving the country to study or work abroad are also estimated to have contributed to lower jobless rates.

The private non-agricultural sector, where employment is led by trade, the garment and footwear sector as well as call center industry, has seen its workforce in the past 18 years more than double to a total of 475,000 employees at the end of 2017. Employment growth in this key sector has risen by 156,448 in the past four years, according to INSTAT.

However, a considerable number of officially reported jobs in the private sector are a result of nationwide campaign against tax evasion that lifted thousands of workers out of informality and imposed tougher penalties on the shadow economy, estimated at about 30 percent of the country’s GDP.
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                    [post_content] => TIRANA, Sept. 11 - Albania's competition watchdog has ordered a monopoly company managing the country’s largest fruit and vegetable wholesale market to revise its abusive warehouse rental prices that are sharply increasing consumer prices.

The decision by Albania's Competition Authority comes following a probe into Ekma Albania, the Albanian-owned company that has been running the Tirana agri-food wholesale market since 2015 under a deal with the municipality of Tirana.

The watchdog says the company has been charging significantly higher rental rates compared to average prices at the local area just outside the capital city at the entry of the Tirana-Durres highway linking the country’s largest two cities.

Monthly rental prices at the market facilities range from 1,000 lek (€7.8)  to 1,500 lek (€11.8) /m2 and 50,000 lek (€393) to 70,000 lek (€550) for vans and trucks, in prices considered too high by hundreds of local traders who have also earlier staged protests over abusive charges.

Competition authorities say local traders even face significantly higher electricity and water rates compared to standard prices charged by state-run companies on business consumers.

The watchdog says the company has abused its monopoly position at a time when traders have no other alternative to sell their products, leading to excessive profit rates, which according to the company's annual report with tax authorities reached at about two-thirds of its annual turnover.

Authorities say the contracts that the company applies put traders at an unfavorable position, imposing discriminatory and unfair trading conditions by forcing them to negotiate lease contracts each month, and prepay for two months in guarantees without being offered anything in return by the lessor.

The watchdog has given the company a 30-day deadline to renegotiate contracts with local traders at reasonable cost-oriented rental prices also applied in the local area and stop higher electricity and water charges, warning that the company could face a fine equal to 5 percent of its turnover, about €125,000.

According to reports filed with the National Business Center, Ekma Albania, owned by three Albanian businessmen, reported net profit of 323 million lek (€2.5 million) for 2017, up 5 percent compared to 2016, at a profit rate of about 65 percent of annual turnover.

The Tirana agrifood market is the country’s largest and also serves as a distribution point for other markets in the country due to some of the biggest fruit and vegetable importers and traders being based there, indirectly increasing costs for every Albanian.

Albanian households, who have one of Europe's lowest income but face one of the highest prices for their disposable incomes, spend about half of their monthly budgets, some 45 percent, on food and non-alcoholic beverages, the key item in the consumer basket, according to a survey by INSTAT, the state-run statistical institute. Vegetables and fruit, whose prices have soared in the past few years, account for a fifth of spending in this group, which is topped by milk, bread and meat.

Inflation rate in the country has been at 2 percent during this year, about 1 percent below the central bank’s 3 percent target estimated to have a positive effect on the country’s economy, despite imports having become much cheaper due to Europe’s single currency having lost 6 percent and trading at a 10-year low

Albania’s inflation rate has been running below the 3 percent target for five consecutive years, hinting sluggish demand and a slowly recovering economy which last year grew by a 9-year high of 3.8 percent.

 

 

 
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            [post_date] => 2018-09-20 16:14:50
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            [post_content] => TIRANA, Sept. 20 – Corn production registered an almost record high in Albania this year boosted by favorable weather conditions, but farmers complain the cheaper prices they are being offered is making its cultivation little profitable.

With harvesting already in its final stage, farmers across the country have been able to get much better yield compared to last year when production was hit by one of the longest droughts in decades, paralyzing the country’s agriculture sector that heavily depends on rainfall due to lack of irrigation infrastructure.

However, prices farmers are being offered for their corn production are at an average of 28 lek/kg (€0.22), slightly above international prices, but too low considering the huge costs Albanian farmers face at a time when they get no subsidies and cultivation costs are too high due to oil prices being one of Europe’s highest and no excise-free fuel offered to them.

Maize prices in the previous years have ranged from 30 lek (€0.23)/kg at harvest time up to 40 lek (€0.31)/kg just before harvest.

Farmers say tough competition, especially from Serbia, one of the top suppliers of wheat and maize to Albania, is making the cultivation of two traditional field crops in Albania almost unprofitable.

Maize coming from Serbia, which has in several cases proved contaminated and of poor quality, gets to Albania at much cheaper prices due to abundant production and subsidies farmers get there, placing domestic production in serious difficulty.

Albania produced 381,000 metric tons of maize in 2017 at a yield of 6,100 kg/hecatre, one of the lowest yields due to a prolonged drought in summer 2017.

About a quarter of nationwide production is produced in the region of Fier, southwestern Albania.

The country's second largest region, Fier is known as the breadbasket of Albania’s agriculture, producing about a third of total vegetables and a quarter of the country’s field crops, making agriculture in this region a key sector in addition to its oil industry which has slowed down in the past three years due to a slump in international oil prices.

Agriculture is a key sector in the Albanian economy, employing about half of the country’s GDP but producing only about 20 percent of the GDP, unveiling its low productivity which is hampered by fragmentation of farm land into small plots and poor financing and technology employed.

In addition, farmers also complain about high fuel prices and lack of refunds increasing production costs and making them uncompetitive to regional countries providing subsidies.

A government initiative to formalize the sector by providing tax IDs to farmers in return for paying compulsory insurance and benefiting refunds has attracted only few dozens of thousands of farmers so far and the government says it intends to revise the pension system for farmers.
            [post_title] => Cut in prices downgrades higher maize production
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