BoA: TAP, Devoll HPP projects boost Swiss, Dutch FDI to Albania

BoA: TAP, Devoll HPP projects boost Swiss, Dutch FDI to Albania

TIRANA, Oct. 18 – Swiss and Dutch foreign direct investment in Albania have registered a sharp increase in the past couple of years thanks to two major energy-related foreign direct investment which are being channeled through these countries. Data published

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Serbian feminist activist: ‘Albanians and Serbs are so similar in their differences’

Serbian feminist activist: ‘Albanians and Serbs are so similar in their differences’

Albania-Serbia joint projects are rare, especially in arts and culture. Historical stereotypes, lack of sufficient exchanges and funding remain a barrier for the two EU aspirant Western Balkan countries. However, civil society activists have increased efforts to boost mutual understanding

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New value-based property tax set to sharply increase bills for home owners

New value-based property tax set to sharply increase bills for home owners

TIRANA, Oct. 16 – The new property tax the Albanian government intends to apply next January on a value-based formula initially in Tirana and other main cities is set to sharply increase fees households currently pay to local government units,

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Editorial: 33 deputies to rule them all

Editorial: 33 deputies to rule them all

In a departure from tradition, which saw deputy ministers usually get appointed quietly by ministers themselves without much public presentation, the current 33 deputy ministers of the ‘Rama 2’ cabinet were announced as publicly as possible during the Assembly of

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VAT, property tax reforms lead to living cost worries

VAT, property tax reforms lead to living cost worries

TIRANA, Oct. 10 – Albanians will face higher consumer prices as the current 20 percent VAT system expands to small businesses and pay more under a new value-based property tax in 2018, according to some of the major tax policy

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Albanians join regional race to learn German as escape from everyday problems

Albanians join regional race to learn German as escape from everyday problems

TIRANA, Oct. 9 – More and more Albanians have turned to studying German language in the past couple of years, joining a Western Balkan trend of preparing to integrate into the German labor market and escaping high unemployment and low-income

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Decriminalization issues make comeback as DP seeks MPs ousting

Decriminalization issues make comeback as DP seeks MPs ousting

TIRANA, Oct. 4 – Concerns over lawmakers with criminal pasts have made a comeback in Albanian politics, as the main opposition Democratic Party has filed motions with authorities for two MPs to be screened under Albania’s decriminalization law. DP has

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Editorial: The bells toll for Albania’s labor force

Editorial: The bells toll for Albania’s labor force

In the Albanian psyche, it is often said, one avoids to do checkups at the doctor because what you don’t know can’t hurt you. As such, major issues get neglected until there is nothing that can be done about them.

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Consumer price hike expected as gov’t announces plans to include small businesses in VAT system

Consumer price hike expected as gov’t announces plans to include small businesses in VAT system

TIRANA, Oct. 5 – Prime Minister Edi Rama has announced small businesses will also be included in the value added tax system starting next year, a move which he justified with the renewed campaign against informality, but which will apparently

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State-run OSHEE electricity operator becomes Albania’s largest company

State-run OSHEE electricity operator becomes Albania’s largest company

TIRANA, Oct. 4 – State-run electricity distribution operator OSHEE has emerged as Albania’s largest enterprise in terms of turnover and profits, leaving behind major oil companies which made it to South East Europe’s top 100 in 2014, according to a

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                    [post_content] => TIRANA, Oct. 18 - Swiss and Dutch foreign direct investment in Albania have registered a sharp increase in the past couple of years thanks to two major energy-related foreign direct investment which are being channeled through these countries.

Data published by Albania's central bank shows the Swiss FDI stock to Albania grew by six times in the past couple of years, climbing to €647 million at the end of the first half of 2017, up from a mere €98 million in mid-2015. The sharp increase is almost entirely dedicated to a surge in investment by Switzerland-based TAG AG consortium that is building the Albanian section of a major project bringing Caspian gas to Europe.

The Trans Adriatic Pipeline consortium has already completed half of its Albania onshore route works and is on track to start its offshore section across the Adriatic to Italy next year.

Shkelqim Bozgo, the TAP country manager for Albania, says the pipeline scheduled to bring Caspian gas to Europe is already in its peak construction stage and is expected to inject about €800 million in foreign direct investment in the next couple of years.

With construction works already in their peak stage, TAP’s first gas deliveries to Europe are targeted by early 2020.

After the withdrawal of Norway’s Statoil in mid-2015, TAP’s shareholding is now comprised of UK’s BP (20 percent), Azerbaijan’s SOCAR (20 percent), Italy’s Snam (20 percent), Belgium’s Fluxys (19 percent), Spain’s Enagás (16 percent) and Switzerland’s Axpo (5 percent).

One of Albania's main development donors, Switzerland has also recently opened a Swiss-Albanian Chamber of Commerce in Tirana

“I would like to see more Swiss businesses and investments in this country. The potential exists, but there is still a lot to be done to exploit it," Swiss Ambassador to Albania Christoph Graf said at a launch ceremony last September.

Xavier Davard, the President of the new chamber representing several Swiss companies, said “the new Swiss-Albanian Chamber of Commerce will be a great promoter of exchanges between businesses of the two countries and it will contribute to sectors that need expertise from Swiss companies.”

The Chamber initially has five Swiss companies as its founding members including Switzerland-based Trans Adriatic Pipeline (TAP), the SGS vehicles technical control concessionaire, the SICPA tax stamp concessionaire, PWC accounting firm which is one of the Big Four and the SIKA construction chemicals and industrial adhesives company.

Trade exchanges between Albania and Switzerland have been at an average of about 10 billion lek (€74 million) annually in the past couple of years, representing only about 1.1 percent of Albania's trade volume, according to INSTAT, the Albanian state statistical institute.

 

Dutch FDI

Dutch investment to Albania has also sharply increased in the past couple of years, making the Netherlands the second largest foreign investor in Albania.

Bank of Albania data shows Dutch FDI stock to Albania rose to €817 million at the end of the first half of this year, up from about €530 million in early 2015.

The sharp increase in Dutch FDI in the past couple of years is mostly related to a major hydropower plant that is being built by Norway's Statkraft through its wholly-owned Netherlands-based Statkraft Markets B.V.

A wholly state-owned Norwegian company, Norway’s Statkraft has already made operational its first Banja HPP as part of its Devoll HPP project, one of the country largest foreign investment projects and is set to complete its second and final Moglice HPP by 2018.

The Banja and Moglice HPPs, part of the €535 million Devoll Hydropower project, are being built on the Devoll River, about 70 km southeast of Tirana.

The Netherlands has emerged as the second largest foreign direct investor in Albania in the past couple of years and is on track to further increase its presence in the Balkan country thanks to increased investment in the oil industry and most recently retail trade by the Royal Dutch Shell and Spar International retailer.

Dutch companies in Albania also operate in the banking, mail delivery and agriculture.

However, trade exchanges between the two countries remain modest at only about €43 million.

 

FDI concerns  

The Trans Adriatic Pipeline bringing Caspian gas to Europe and the Devoll Hydropower project by Norway’s Statkraft have been the key drivers of FDI in the country in the past three years at a time when oil and mining investment has almost paralyzed following a slump in commodity prices in mid-2014, with a negative impact also on the country’s poorly diversified exports.

Unless no new major projects are undertaken, FDI is set to suffer a sharp decline by 2020 when both TAP and the Devoll Hydropower projects have been made operational, unveiling the need for the Albanian government to offer incentives that could attract FDI in non-energy related sectors, diversifying them.

With no new major investments in sight, the pickup in commodity prices and an ambitious €1 billion public-private partnership investment program the ruling Socialists have unveiled could provide an anchor for the post-2020 period despite concerns over their risks.

The PPP projects, already costing taxpayers dozens of millions of euros in government support to concessionaires, have sparked concerns over their high costs and allegations of corruption, especially in key sectors such as public health. PPPs also bear the risk of creating new hidden debt at a time when Albania’s public debt stands at about 67 percent, a high level for Albania’s current stage of development, and the economy is growing at about 3 percent, almost half of the level required to bring welfare.

Tourism which brings about 4 million tourists and more than €1 billion in revenue, as well as agriculture, an underdeveloped sector that employs about half of the country but produces only about 20 percent of the GDP, are seen as two key industries that foreign direct investment can make more competitive by bringing know-how and boosting employment.

A strong pickup in commodity prices could however make up, triggering investment by Bankers Petroleum, the country’s largest oil investor which last year was taken over by a Chinese company, and Dutch giant Shell, already engaged in oil exploration operations in the country.

Oil prices have currently recovered to above $50 a barrel after hitting a 12-year low of below $30 a barrel in early 2016.

Albania has been the second largest FDI recipient among five EU aspirant SEE economies for the past six years lagging behind only Serbia which is a much bigger economy. Thanks to huge investment in energy-related projects such as oil and hydropower plants, Albania has managed to attract about $1 billion in FDI annually in the past few years.

Greece, the Netherlands, Canada, Italy and most recently China are the main foreign investors in Albania.

The telecommunication, manufacturing and extractive industries have attracted around half of the FDI stock in Albania during the country’s past two decades of transition into a market economy after the collapse of communist regime and its planned economy.
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                    [post_content] => Albania-Serbia joint projects are rare, especially in arts and culture. Historical stereotypes, lack of sufficient exchanges and funding remain a barrier for the two EU aspirant Western Balkan countries. However, civil society activists have increased efforts to boost mutual understanding in the past couple of years through different projects, including arts.

The latest example is the “Kismet” documentary showcasing the challenges facing young women both in Serbia and Albania.

Minja Mardjonovic, an online feminist activist, columnist, freelance writer, who directed the newly released “Kismet” documentary, tells Tirana Times in an interview “Kismet is a story about love, understanding, connecting, co-operation, friendship and sisterhood among young Albanian and Serbian women.”

Her appeal to authorities in both Serbia and Albania is “Open your iron doors for all our ideas, because the youth from both sides really intend to build peace among Albanians and Serbs”.

Full interview by Monika Maric below:

How did you come up with the idea of making this documentary and why did you decide to call it Kismet, a Turkish word of Arabic origin meaning fate/destiny as mentioned in the documentary trailer?

Kismet is a part of one big story. It's an OSCE project about co-operation and connectivity between Albanian and Serbian youth - '' Enhancing regional connectivity among Serbia and Albania youth actors.''  Within that story, I got an opportunity to think about creating a small project with the Albanian team which will be regarded to the mutual issue - the status of youth and common challenges in both societies. As a feminist activist and artist, I believe in many ways of communicating and reaching people about some non-mainstream topics. One of them for sure is video, movie, film. So, from the beginning, the idea was: to create an immortal message for the future generation about Albanian and Serbian women who rejected all prejudices and stereotypes which are imposed upon all of us. Kismet is our daily life. It's a basic stereotype which arises every time a doctor tells a pregnant woman ''It's a girl.'' And our destiny, our kismet as women is to be everything in the common term of WOMAN: to be warriors, to smash prejudices, injustices, to raise our voices, to scream and cry, to refuse to give birth, or just to give birth, to feed, to live, to love and care, to tolerate, to persist, to exist and to die.

Kismet could be a strong metaphor for the imposed truth about how women are predestined just for one thing – the house and children. KISMET is a name of our common problem- gender-based injustice.

Also, besides these typical gender roles, I need to mention one more also so typical and violent example: the role women as sexual objects in the daily life of patriarchal and popular cultures.

What are some of the common challenges facing young women in both Serbia and Albania, are there huge differences?

For example, if you mute the documentary film for a second, you will notice how really it doesn't matter where all these women are from. That's the point. We can't see differences in the context where it is not possible to conciliate. Absolutely, we are smiling and crying in the same way. Conservative and patriarchal structures of our societies make us so similar, too. So, from my point of view, the treatment of women is the best indicator of the level of social and political progress within one society. In that regard, we can really maintain how much Albanians and Serbs are so similar in their differences.

What's the message of this documentary and what is your appeal to decision-makers both in Serbia and Albania about strengthening women's role in the society and fighting cases of abuse, gender inequality, and stereotypes?

Kismet is a story about love, understanding, connecting, co-operation, friendship and sisterhood among young Albanian and Serbian women who decided to express themselves and segments of their life stories through this ''destined'' visual project.

Love is a goal and the sense of everything. Peace in the world is not just a mantra or a stereotypical Miss World sentence; it's a real need and necessity for all human beings.

So, my appeal will be addressed to institutions of the system: “Open your iron doors for all our ideas, because the youth from both sides really intend to build a peace among Albanians and Serbs”.

What were your impressions of cooperation? Was it hard to cooperate with the peers from Albania?

When you have a mutual goal and clear ideas for realization, everything needs to be perfect. You need to listen to the others. And, I think that we did it in the best way! I really believe we finished this as best as we could - “together in co-operation with honest respect, friendship and huge support.”

Which were the biggest challenges during the shooting? Were there any obstacles?

Time is always a big problem. There is little time for a lot of big things. In that sense, the biggest challenge was:  Are we going to do all this for a given period, and how will it look like at the end. All the obstacles were of a technical nature, and it's so common when you are making a film.

What was the reaction of the audience after the documentary premiere in Belgrade and Tirana?

It really was remarkable. We didn't expect a lot of people in Belgrade, nor in Tirana. For both premieres, the film was viewed by more than 200 people, and that’s great success for this kind of movie. For me, it was a wonderful experience, and for sure we deserve all of these nice things that are happening to us now.

What are the general plans for the future? Do you plan to show the documentary in other places throughout Serbia and Albania?

Yes, of course there is a plan. After the premieres in both capitals, Kismet screened for the first time in Belgrade few days ago. We are expecting four more screenings in Serbia and five in Albania, until the end of October. After this, we want to continue the Kismet story through other projects, because we believe in its potential for regional connectivity and co-operation.

Do you have any other near future Serbia-Albania documentary projects?

For now, my kismet is Kismet. (laughs)

How did you find Albania during your stay and what's your message for Serbian tourists to Albania and Albanians who want to visit Serbia. How can knowing each other and direct contact help overcome still existing stereotypes?

Our kismet trip to Albania was a really safe trip, filled with love and adventures, unforgotten experiences and nice memories.

Practically, I am in love with Albania. It's a so wild and beautiful country. You can find everything that you need for pleasure: two undiscovered seas, a lot of unexplored mountains, perfect food and coffee, delicious cakes and perfect gelato, the fast and furious energy of citizens, good parties...

Many dear Albanian friends, attentive and happy people, open-hearted smiles and the recognized Balkans soul are enough reasons because this documentary in the end has one of the most pointful messages: “Go to Albania and meet Albanians, go to Serbia and meet Serbs.”
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                    [post_content] => TIRANA, Oct. 16 - The new property tax the Albanian government intends to apply next January on a value-based formula initially in Tirana and other main cities is set to sharply increase fees households currently pay to local government units, especially for apartments in downtown areas and villas.

While the official coefficient has not been unveiled yet pending the announcement of the 2018 fiscal package, the International Monetary Fund has suggested the Albanian government applies a rate between 0.076 percent to 0.114 percent on the property's market value, which at an average of 0.1 percent increases current fees by up to 5-fold, or even more if the construction site value is taken into account.

A 100m2  apartment owner in Tirana currently pays a fixed annual amount of about €22 at a modest rate of 30 lek (€0.22)/m2 if the apartment was built after 1993 and half of that amount if built in the pre-1993 under communism or earlier, no matter what property’s market value is.

Supposing the apartment’s current market value is at about €100,000 the same owner would have to pay €100 in annual property tax, an almost 5-fold increase compared to the current rate a Tirana home owner pays in monthly installments along with tap water bills.

The IMF, whose relations with Albania have been downgraded to an advisory role after a 3-year binding deal supported by a €331 million loan was concluded in early 2017, has suggested the Albanian government also takes into consideration the value of the construction site which in cases of villas would considerably increase the property tax considering their surrounding areas.

Finance Minister Arben Ahmetaj has announced no higher taxes will be applied for second and third home owners.

The project will be initially applied in the country's biggest municipalities of Tirana, Fier, Durres and Korça and expand all over the country in the next couple of years when a fiscal cadaster is set up.

"I believe that in the next couple of years we will have a solid fiscal cadaster benefiting the real property value, but also local government units to collect the income they deserve to," Ahmetaj has said, unveiling that Albania currently collects only about 0.3 percent of the GDP in property tax and is far from meeting the normal level of 1 percent of the GDP.

Albania's 61 municipalities collected only about 30 million in property tax in 2016, about 40 percent of which in the municipality of Tirana which has been collecting the tax along with the tap water bills since March 2016 to increase its collection efficiency.

Government authorities have not made clear whether the new value-based property tax will also affect business owners, who in Tirana currently pay fees of 13 to 26 times higher compared to home owners.

The property tax levied on business facilities is already high, ranging from 200 lek (€1.46)/m2 in remote areas to 400 lek(€2.93)/m2 for the municipalities of Tirana and Durres, home to about half of the country's population and businesses.

The government says the fiscal cadaster is being developed in cooperation with state-run OSHEE distribution operator and pilot projects are being carried out in four large municipalities in order to strengthen collection by integrating property tax bills into electricity bills.

In its latest country report, the IMF, which helped draft the legislation, warns property taxation reform has lagged at a time when collection rates remain very low by regional standards.

To encourage voluntary reassessment of property valuation, the Albanian authorities undertook a temporary reduction in the capital gains tax on property valuation from 15 percent to 2 percent. The amnesty initially set to expire in late February after remaining effective for six months, was postponed until the end of May 2016, ahead of the June 25 general elections.

The government also plans to extend the 20 percent value added tax on small businesses starting next January as part of its renewed nationwide campaign against informality, in a move which experts say will increase costs for small businesses and in some cases also consumer prices, but place all businesses under equal conditions to avoid abuse with the 5 million lek (€37,000) VAT threshold.

In addition to some easier procedures, the 2018 fiscal package is not expected to bring any other major change in taxes, one of the key concerns for businesses after the 10 percent flat tax regime was lifted in 2014 and the corporate income tax raised to 15.
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                    [post_content] => In a departure from tradition, which saw deputy ministers usually get appointed quietly by ministers themselves without much public presentation, the current 33 deputy ministers of the ‘Rama 2’ cabinet were announced as publicly as possible during the Assembly of the Socialist Party. A typical party meeting was definitely a curious venue and time for a team which according to the Prime Minister himself signals an attempt to look outwards, a break from tradition of picking party people.  The deputies are at the core of his so personal political project called ‘PS Plus’- some loosely defined attempt to govern more inclusively. 

A more careful inspection of the list however shows a consistent group of people with longtime ties to the Prime Minister himself since the period he was a mayor of Tirana, a pool from which he is known to preferably select people renowned for their loyalty. This group is so well known to the public that there are certain nicknames invented to funnily refer to it including “Rama’s women” pointing to the fact that it is a nicely gender balanced bunch. The group also includes lifelong friends of the PM, interestingly placed well outside their expertise field.  This cluster is then sprinkled for fun and show with some oddities such as the 4 deputies from Kosovo, mostly very young, a move that has raised many eyebrows abroad and even in Kosovo itself.  Other oddities are added, and then presented as decisive outsiders. Stir well. Serve chilled. 

First of all, this is not to say that the choices are at fault. Perhaps the majority of them are quite capable professionals, some with impressive education backgrounds and even solid performance track records. However if they are picked for loyalty or even worse for show, one is left to wonder at what really their task list will consist of. Shall they be Rama’s emissaries, a permanent check on the ministers who this time are under strict indicators that will be monitored periodically? 

Finally some consideration should be given to the number itself which will make a little dent in the state budget with all the salaries coming through. The logic is that deputies will take care of specific sectors especially in the ministries that merged different areas of governance becoming mammoth structures, ‘too big to fail.’ In spite of this need, the spiked number of deputy ministers does undermine the effort to consolidate the state. After all does the Ministry of Agriculture and Rural development really need 4 deputies? 

Indeed the ‘PS-Plus’ project including these deputies points at something else. Considered in combination with the much pumped co-governance platform ( with a carefully chosen title The Albania that we want) which the Prime Minister insists on presenting and promoting himself, despite having appointed the former Minister of Interior Tahiri to run it, there seems to be a state of the art project to centralize power. This means concentrating all flows of information, decision making, policy fine tuning, public communication and all else in one single institution, the office of the Prime Minister. In this case one does not know where to start worrying: whether this centralized power will further erode democratic standards or whether the office shall be able even to cope with such a tremendous workload. Well at least we have nothing less but 33 deputies that can help with the second concern.  

 
                    [post_title] => Editorial: 33 deputies to rule them all
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                    [ID] => 134096
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                    [post_date] => 2017-10-10 18:01:03
                    [post_date_gmt] => 2017-10-10 16:01:03
                    [post_content] => TIRANA, Oct. 10 - Albanians will face higher consumer prices as the current 20 percent VAT system expands to small businesses and pay more under a new value-based property tax in 2018, according to some of the major tax policy changes that have been unveiled ahead of the 2018 fiscal package.

The Socialist Party Albanian government has reconfirmed its intention to include small businesses in value added tax system as part of its renewed campaign against informality, saying that only handicrafts traders and municipal-run markets will be excluded from the 20 percent VAT which is expected to trigger a hike in consumer prices starting next January.

"Many enterprises claim to be below the 5 million lek (€37,000) VAT threshold, but in fact exceed that by two or three times. That is inequality, distortion and directly affects citizens," Finance Minister Arben Ahmetaj has said.

"Small businesses will report VAT under a simplified system which means they will report quarterly and not every month," he added.

The expansion of the VAT system has sparked concerns among some experts and the opposition who say a considerable number of small businesses risk going bankrupt amid fierce competition by bigger businesses already issuing VAT receipts.

VAT, levied at a fixed 20 percent rate on almost all goods and services, is the key tax the Albanian government collects, accounting for about a third of total revenue. More than 80,000 businesses nationwide, half of the total, are small businesses with an annual turnover of up to 5 million lek (€37,000), which under current legislation strips them of the obligation to issue VAT receipts.

The 20 percent VAT means small businesses which up to now were stripped of their obligation to issue VAT receipts will incur extra costs in VAT balances and book keeping, curbing their profits by 20 percent unless they apply higher prices.

Levied at a fixed 20 percent, VAT is a considerable burden on final prices with Albania being the region’s sole country not to apply differentiated VAT on basic products.

Albania has one of Europe’s lowest consumer prices but suffers the poorest consumption per capita, according to a report by Eurostat, the statistical office of the European Union.

Economy expert Zef Preçi says a price increase is inevitable in the initial stage of the VAT application as “businesses will try to preserve their profit rates and because prices have a tendency to increase faster than the cost to cover.”

The main opposition Democratic Party says the VAT expansion serves oligarchs and will destroy small businesses.

"That is destructive for small businesses. It will threaten 280,000 jobs directly linked to small businesses. It will destroy and take them to bankruptcy as small businesses don't have the capacity to engage with VAT and its refund and pay all they earn to accountants," Democratic Party leader Lulzim Basha has said. He has proposed a hike in the VAT threshold from the current 5 million lek to 12 million lek (€89,000) to give a boost to the small businesses as the main driver of the Albanian economy.

The now stronger Socialist Party government out of the June 25 elections has undertaken a new nationwide campaign against informality and measures to further ease doing business procedures starting October 2017 in a carrot and stick approach following a tougher stance at the beginning of its first 2013-2017 term.

Meanwhile, a new value-based property tax is set to sharply increase current rates depending on the size and location of the property, although its implementation could be delayed until a fiscal cadaster is set up. Albanians are also expected to pay more for second and third home ownership.

The government says a fiscal cadaster is being developed in cooperation with state-run OSHEE distribution operator and pilot projects are being carried out in four large municipalities in order to strengthen collection by integrating property tax bills into electricity/water bills and collecting property tax based on area under the current law before new legislation is drafted.

Property tax levied on buildings and agriculture land accounts for only about 0.8 percent of total taxes in Albania, a small amount even compared to regional EU aspirant countries.

In its latest country report, the IMF, which helped draft the legislation, warns property taxation reform has lagged at a time when collection rates remain very low by regional standards.

To encourage voluntary reassessment of property valuation, the Albanian authorities undertook a temporary reduction in the capital gains tax on property valuation from 15 percent to 2 percent. The amnesty initially set to expire in late February after remaining effective for six months, was postponed until the end of May 2016, ahead of the June 25 general elections.

In addition to some easier procedures, the 2018 fiscal package is not expected to bring any other major change in taxes, one of the key concerns for businesses after the 10 percent flat tax regime was lifted in 2014 and the corporate income tax raised to 15.
                    [post_title] => VAT, property tax reforms lead to living cost worries
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                    [post_date] => 2017-10-09 18:20:42
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                    [post_content] => TIRANA, Oct. 9 – More and more Albanians have turned to studying German language in the past couple of years, joining a Western Balkan trend of preparing to integrate into the German labor market and escaping high unemployment and low-income jobs in their home countries.

The rising interest to learn German comes amid a declining wave of Albanian asylum-seekers in Germany, Europe’s largest economy, which has made it clear only legal migration though employment contracts is the way to make it in Germany for both qualified and non-qualified workers.

The younger generation is also getting more interested in the German language as they plan to study and work in Germany.

“In Albania there is great interest in the German language, in Germany and in German culture. In the last year the rush on German courses and examinations has steadily risen and the new German Center has about 4,000 German language students - 22 percent more than the previous year. This is another reason why they needed to move into a new larger building [in late 2016],” writes Deutsche Welle.

The desire to learn German has also noticeably increased in other EU-aspirant regional countries such as Serbia, Bosnia and Herzegovina and Macedonia where enlargement fatigue is getting stronger amid EU’s internal problems.

Matthias Makowski, who is responsible for the southeastern Europe region at the Goethe Institute in Athens says "German knowledge in the Balkans has never been as valuable as it is today."

"The importance of German language in the Western Balkans is higher than in other regions around the world. That is because of the opportunities created under German legislation to study, work and live legally in Germany,” Makowski told DW in the local Albanian service few days ago when the Goethe Center in Tirana hosted the first regional conference of Western Balkans German language teachers.

“Many people from the Western Balkans want to migrate to Germany because of their difficult social and economic situation. It's not that they don't love their country, but it’s the economy that forces them to leave it," he adds.

In addition to the Goethe Center, several private foreign language teaching centers offer German classes.

German is taught at almost all public foreign language faculties in Albania while several high schools have established bilingual Albanian-German sections offering German classes for main subjects.

A considerable number of high school students, whose parents can afford taking them to Germany, have already made plans of attending German universities after graduating.

Repatriated asylum-seekers are also among the German language students as they plan to move to Germany legally through employment contracts.

Opportunities have increased as what non-qualified workers need is only an employment contract and no proven language skills.

The number of work visas for Albanians, Bosnians and citizens from other Western Balkans countries grew by 70 percent to 63,000 in the first eight months of this year, being the recipients of about a third of visas issued to third-country nationals, German newspaper Die Welt reports referring to data by the Federal Employment Agency.

"Many people in Western Balkans countries see a job in Germany as the only way out of unemployment in their home countries.  Applicants have to wait for nearly one year until they are issued the work visas by the German embassies in their respective countries,” writes the German daily.

Since early 2016, Germany has been applying easier work visa procedures for the Western Balkans, with its citizen required to having an employment contract as the only condition to be provided with visa.

The easier procedures for non-qualified workers came following an asylum wave and after Germany added Albania, Kosovo and Montenegro on the list of safe countries of origin in late 2015.

The work visas have been mainly issued for jobs in the construction industry, but there is also need for gastronomy and elderly care workers, German media report.

The program applies until 2020 in addition to the Blue Cad program seeking experts and requiring applicants to have an employment contract, the required qualifications and knowledge of German language.

In this year’s German October events, Albania and Germany are marking 30 years of the re-establishment of diplomatic relations. Since the late 1980s just before the collapse of Albania’s communist regime Germany has invested about Euro 1 billion in development projects, becoming the country’s main donor.

Earlier this year, the cabin of a former Czechoslovak LIAZ truck used to smash the wall of the German embassy in Tirana in 1990 when thousands of Albanians entered the embassy to seek asylum and protection from the communist authorities was immortalized in an installation commemorating Albanians’ embassy exodus 27 years ago.

 

Asylum exodus

 

German Ambassador to Albania Susanne Schütz says the German economy needs qualified workers, but travelling to seek asylum is not the right way for Albanians.

"Travelling to Germany with the intention of getting employed, but filing an asylum application upon arriving to the country is not the right way leading to employment, but a cul-de-sac," the German ambassador has told Deutsche Welle in the local Albanian service in an interview.

"Germany has classified Albania as a safe country of origin. That means asylum applications by Albanians as well as citizens from other Western Balkans countries undergo fast-track processing and are practically refused in any case,” she adds.

Rejected asylum-seekers have to return to Albania and get a five-year Schengen ban if sent back forcefully.

“Asylum-seeking is the wrong way. Yet, some 3,500 Albanians sought asylum in Germany in the first half of this year. This is an issue for both Germany and Albania and governments of both countries have to deal with it and provide a solution,” the German ambassador says.

Obvious reasons for Albanian citizens leaving their home country include high unemployment, small income which in some cases is lower than the social benefits as asylum seekers in Germany, lack of trust in state institutions perceived as corrupt and inefficient, real or perceived lack of job perspectives and unrealistic expectations compared to income in Western European countries, primarily Germany, according to 2016 study conducted Tirana-based Cooperation and Development Institute.

French and Dutch concerns over a rising number of Albanian asylum-seekers during the past year have raised concerns about the reintroduction of the visa regime Albania has been enjoying in the Schengen Area since late 2010, forcing the Albanian government to tighten border inspections about suspected asylum-seekers.

The number of Albanian asylum-seekers sharply dropped to about 11,400 in the first half of this year, when France was the top destination, according to Eurostat, the statistical office of the European Union.

The number of first time Albanian asylum seekers to EU member countries more than halved in 2016, but Albania remained for the second year in a row among the top 10 countries of citizenship seeking asylum protection in list dominated by war torn Asian and African countries and Russia.

Eurostat data shows the number of Albanian asylum seekers to EU countries dropped to 28,925 in 2016, down from a record 65,935 in 2015 when the country faced a massive exodus.

Germany was once again the main destination of asylum seekers with about 15,000 or half of total first time asylum applicants in EU member countries, down from a record 54,000 in 2015.

However, only two out of 100 Albanians who applied for asylum in EU member countries during the past couple of years have been granted protection under a final decision.

EU member countries, mainly the UK, France and Germany granted asylum status to some 1,780 Albanians in 2015 and 2016 out of a total applications of about 95,000, Eurostat says.
                    [post_title] => Albanians join regional race to learn German as escape from everyday problems
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                    [post_date] => 2017-10-06 09:57:37
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                    [post_content] => TIRANA, Oct. 4 – Concerns over lawmakers with criminal pasts have made a comeback in Albanian politics, as the main opposition Democratic Party has filed motions with authorities for two MPs to be screened under Albania’s decriminalization law.
DP has asked the Central Election Commission to look into the declaration forms of Aqif Rakipi, an MP of the Party for Justice, Integration and Unity as well as requested the Prosecutor’s Office to verify the past of Gjetan Gjetani, an MP of the Socialist Party. The Democrats suspect the two lawmakers have had troubles with the law neighboring Italy.

Rakipi, a wealthy businessman and a lot of influence in the Elbasan region, has also come to the attention of authorities and the media, shortly after the election in a hit and run crash that left a pedestrian dead in the highway linking Tirana to Durres.
He surrendered shortly after at a police station, and the charges were dropped, as authorities said the pedestrian was at fault, even though Rakipi, the driver, had left the scene.  

DP said it believes PJIU’s Rakipi also has a criminal past in Italy.
“From information made known by informal sources, there is reasonable doubt that Aqif Rakipi should be allowed to run and be elected for a high public function, because of criminal records in the Italian state,” DP said in its request.
Rakipi was elected in the June elections to serve his second term as an MP in the region of Elbasan.

The DP said at the time of the crash Rakipi’s fleeing interfered with the crime scene and has therefore altered the conditions of the investigation.
But the police made a statement saying that despite the fleeing, all the necessary procedural and technical examination of the issue was possible, and the victim walked into high-speed traffic in contravention of the rules.
PJIU said in a statement that Rakipi had been verified by law-enforcement agencies under the decriminalization law, with Interpol and prosecutors giving him a clean sheet on any criminal record outside Albania. PDIU also said Rakipi was open to any investigation, saying the DP was resorting to defamation as a political tactic.

As for SP’s Gjetan Gjetani, who is an MP in the region of Lezha, the DP has requested a verification of his filed self-declaration form, as he is also accused to have criminal records. In his case, too, the DP expressed similar concerns.
Gjetani said he had never left Albania long enough to participate in any criminal activity and that his background was clean.
DP’s requests are made possible based on Article 8 of the law on verification of the information provided in the self-declaration forms, which allows opposition parties to ask the Central Election Commission to make a complete verification of the data.

The Decriminalization Law was passed by parliament in the previous legislature under pressure from international representatives and the opposition Democratic Party, after the Socialist-led coalition fielded a few MPs who were later proved to have had criminal convictions outside Albania. The Democrats accused the Socialists of relying on the criminal underworld and its representatives to win elections.

PD’s latest request has so far been signed by 37 PMs, among which is opposition leader, Lulzim Basha, deputy leader Edmond Spaho, PM Oerd Bylykbashi, etc.
The law for Decriminalization allows the verification of data as many times as it’s requested by 10 percent of MPs, and can be directed to other MPs or members of the Council of Ministers, including the prime minister.
“The Democratic Party is decisive in fighting crime and removing it from Parliament and all state institutions. The Democratic Party asks the Prosecutor’s Office to act immediately and guarantee the implementation of the Decriminalization Law,” noted a statement by the main opposition party.

 
                    [post_title] => Decriminalization issues make comeback as DP seeks MPs ousting
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                    [post_date] => 2017-10-06 09:41:40
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                    [post_content] => In the Albanian psyche, it is often said, one avoids to do checkups at the doctor because what you don’t know can’t hurt you. As such, major issues get neglected until there is nothing that can be done about them.

Like going to the doctor, major trends are often neglected by consecutive Albanian governments, or paid nominal lip service to, until it is too late to do something about them.

Albania’s coming labor force crisis is one such issue. A combination of a rapid decline in birth rates and continued out-migration means Albania is slowly being drained of its people.

Do not let the streets of central Tirana – filled with young people in cafes -- fool you – all the statistics show Albania will soon become a land of old people with one worker having to support the retirement of about two people, an unsustainable system.

Businesses are already feeling the effects of this trend. We have for years heard of high unemployment rates among youths, but increasingly we are also hearing about companies that are unable to find qualified people to fill positions that are available. This is often attributed to a mismatch between the education sector and market needs, but the issue is not that simple. We are simply seeing the numbers game shifting – those with skills and energy that can be used in places like Germany or the UK have left, and those left behind simply can’t compete in today’s global marketplace.

Then there is the question of incentives: A recent report on global worker satisfaction showed Albanians were among the worst placed in Europe – with typical concerns being low wages and job insecurity. With high living costs and high taxes relative to medium income, Albanian workers are very badly positioned to improve their quality of life in Albania. Lack of job security and a moody political environment are also factors that push people out.

Part of the problem is that Albania is poor and as such, of course, it cannot afford to pay its workers more. However, that is only part of the reason things are the way they are. Lack of proper labor management skills and ineffective governance are also to blame.

Nowhere is the pain being felt more than the country’s healthcare sector. Already a country with the lowest per capita doctor numbers in the region, under the current trend, Albania’s medical schools are working full time to supply wealthy European countries with doctors, nurses and pharmacists. Not only is it unfair to Albanian taxpayers who are financially supporting the education of their bright daughters and sons who have gone into medicine – it borders on unethical for the countries that are now heavily recruiting Albania’s healthcare workers.

Better pay, better management and setting priorities is the answer, and Albania’s government must act quickly to limit the damage.

An implementable strategy is needed to help buffer the pain Albania will feel with its coming labor shortage crisis before it joins the European Union. If other Balkan countries that have already joined are any indication, EU membership will only accelerate outmigration of workers.

Also, it is time to stop playing politics with migration. This is an Albanian issue – not a Socialist or Democrat one. It is time to for political actors to come together and help meet this massive challenge, not simply blame the other side for Albania’s shared shortcomings.

 
                    [post_title] => Editorial: The bells toll for Albania’s labor force
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                    [post_date] => 2017-10-05 14:15:03
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                    [post_content] => TIRANA, Oct. 5 - Prime Minister Edi Rama has announced small businesses will also be included in the value added tax system starting next year, a move which he justified with the renewed campaign against informality, but which will apparently increase consumer prices due to higher costs incurred by dozens of thousands of businesses.

Launching a tour of public hearings on the 2018 budget in Fier, a stronghold of the ruling Socialists, Prime Minister Rama said small businesses will continue to be stripped of profit tax, but will all be included in the VAT system to strengthen fight against tax evasion.

The announcement comes as the stronger Socialist Party government out of the June 25 elections has undertaken a new nationwide campaign against informality and measures to further ease doing business procedures starting October 2017 in a carrot and stick approach following a tougher stance at the beginning of its first 2013-2017 term.

"We will place all businesses including small ones in the VAT regime," said Rama, adding the measure was being taken as part of the fight against informality and tax evasion by businesses leading to unfair competition.

"Fight against informality has entered a new stage. We will fight an uncompromised and intensive battle against informality focusing first of all on the big fish," said Rama.

VAT, levied at a fixed 20 percent rate on almost all goods and services, is the key tax the Albanian government collects, accounting for about a third of total revenue. More than 80,000 businesses nationwide, half of the total, are small businesses with an annual turnover of up to 5 million lek (€37,000), which under current legislation strips them of the obligation to issue VAT receipts.

The 20 percent VAT means small businesses which up to now were stripped of their obligation to issue VAT receipts will incur extra costs in VAT balances and book keeping. The costs will apparently translate into higher prices, affecting every consumer.

Levied at a fixed 20 percent, VAT is considerable burden on final prices with Albania being the region’s sole country not to apply differentiated VAT on basic products.

Albania currently applies zero VAT on medicines and introduced last summer a differentiated 6 percent VAT rate on hotel accommodation services, to increase the competitiveness of the country’s emerging tourism sector.

Under the current tax legislation, businesses in Albania pay a progressive profit tax with enterprises with a turnover of up to 5 million lek (€37,000) being stripped of profit tax and VAT.

Businesses with a turnover between 5 million lek to 8 million (€59,000) pay a 5 percent profit tax and have to issue VAT receipt while businesses with a turnover of more than 8 million lek pay a fixed 15 percent corporate income tax. The 15 percent corporate income tax, one of the region's highest, has been one of the main concerns for the business community after Albania abandoned its 10 percent flat tax regime in 2014.

In early 2016, the Socialist Party-led government dropped plans to award a 10-year concession on VAT collection to a private company following strong opposition by business representatives and experts over the transparency of public-private partnerships.

Albania has one of Europe’s lowest consumer prices but suffers the poorest consumption per capita, according to a report by Eurostat, the statistical office of the European Union.

The Eurostat report shows Albania’s price levels for consumer goods and services were at 49 percent of the EU average in 2016, Europe’s second lowest.

However, Albania’s level of economic activity and household material welfare continue to remain one of Europe’s poorest, unveiling growth in the Albanian economy has to sharply pick up in order catch up with its regional competitors.

The GDP per capita, a measure of economic activity remained unchanged at 30 percent of the EU average for the third year in a row in 2016.

Albania’s actual individual consumption (AIC), a measure of households’ material welfare, slightly rose by 1 percentage point to 39 percent of the EU average in 2016 as the country’s economy picked up to about 3.4 percent.

Experts estimate the Albanian economy has to grow above 6 percent annually in order to produce welfare for households. The Albanian economy has been growing between 1 to 3 percent in the past eight years compared to a pre-crisis decade of 6 percent annually.
                    [post_title] => Consumer price hike expected as gov’t announces plans to include small businesses in VAT system 
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                    [post_date] => 2017-10-04 12:15:48
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                    [post_content] => TIRANA, Oct. 4 - State-run electricity distribution operator OSHEE has emerged as Albania's largest enterprise in terms of turnover and profits, leaving behind major oil companies which made it to South East Europe’s top 100 in 2014, according to a regional report.

The annual report measuring the largest SEE companies showed no Albanian company made it to the top 100 for the second year in a row, as the 2014 entrants, Bankers Petroleum oil producer and Kastrati oil trader, have been suffering sharp declines in turnover since the mid-2014 slump in oil prices.

State-run OSHEE distribution operator which turned profitable in 2015 thanks to an aggressive nationwide campaign to curb electricity thefts and collect hundreds of millions of euros in accumulated unpaid bills, was the largest Albanian company in 2016 and ranked the 125th largest SEE company, according to an annual report published by Bulgaria-based SeeNews agency.

Total OSHEE revenue slightly rose by 2 percent to €385.5 million in 2016 as the company’s grid losses dropped and households and businesses continued paying their accumulated unpaid bills in monthly instalments.

While no data is available for 2016, distribution operator, OSHEE, said the company registered profits of about 14.9 billion lek (€109 mln) in 2015 following losses of 4.5 billion lek (€32 mln) in 2014 and a record high of 27 billion lek (€192 mln) in 2013 when the company was taken back under state administration following a failed privatization by Czech Republic’s CEZ.

The company’s financial situation during this year has been negatively affected by a prolonged drought paralyzing the country’s wholly hydro-dependent domestic electricity generation and costly imports of about €100 million affecting planned investment in the dilapidated grid where about 28 percent of electricity is still lost compared to a record high of 45 percent in 2013, just before the company was taken back under state management.

With almost all major former state-run companies privatized during the past 25 years of Albania’s transition to democracy and market economy, the OSHEE distribution and KESH power generation companies remain the two biggest wholly state-run companies.

The state-run sector accounts for only 20 percent of the GDP in the Albanian economy which is expected to grow by about 3.8 percent this year, fuelled by some major energy-related investment such as the Trans Adriatic Pipeline and a big hydropower plant.

The country's largest oil importer and trader, Kastrati, was Albania's second largest company for 2016, but ranked SEE's 164th largest with total revenue declining to €329 million and gross profits to about €9 million.

Back in 2014, Kastrati which has a market share of about 50 percent made it to the SEE top 100 ranking 81st.

The country’s largest oil producer, Bankers Petroleum has seen its revenue drop by about three times since 2014 following the slump in international oil prices, negatively affecting crude oil extraction and exports.

Bankers Petroleum which in Sept. 2016 was fully acquired by China’s Geo-Jade Petroleum Corporation after being run for more than a decade by a Canada-based company, reported income of €151 million and losses of about €80 million for 2016, according to data published in the SEE top 100 companies report.

The top 10 largest Albanian companies is dominated by electricity, oil, mobile, steel and trade companies.

The Albanian subsidiary of France's Spiecapag which is building the Albania section of the major Trans Adriatic Pipeline bringing Caspian gas to Europe ranked the eighth largest company in Albania for 2016 with about €111 million and gross profits of €13.6 million.

The 2016 top 100 SEE list was dominated by Romanian companies, the region’s largest economy.

 
                    [post_title] => State-run OSHEE electricity operator becomes Albania’s largest company
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            [post_content] => TIRANA, Oct. 18 - Swiss and Dutch foreign direct investment in Albania have registered a sharp increase in the past couple of years thanks to two major energy-related foreign direct investment which are being channeled through these countries.

Data published by Albania's central bank shows the Swiss FDI stock to Albania grew by six times in the past couple of years, climbing to €647 million at the end of the first half of 2017, up from a mere €98 million in mid-2015. The sharp increase is almost entirely dedicated to a surge in investment by Switzerland-based TAG AG consortium that is building the Albanian section of a major project bringing Caspian gas to Europe.

The Trans Adriatic Pipeline consortium has already completed half of its Albania onshore route works and is on track to start its offshore section across the Adriatic to Italy next year.

Shkelqim Bozgo, the TAP country manager for Albania, says the pipeline scheduled to bring Caspian gas to Europe is already in its peak construction stage and is expected to inject about €800 million in foreign direct investment in the next couple of years.

With construction works already in their peak stage, TAP’s first gas deliveries to Europe are targeted by early 2020.

After the withdrawal of Norway’s Statoil in mid-2015, TAP’s shareholding is now comprised of UK’s BP (20 percent), Azerbaijan’s SOCAR (20 percent), Italy’s Snam (20 percent), Belgium’s Fluxys (19 percent), Spain’s Enagás (16 percent) and Switzerland’s Axpo (5 percent).

One of Albania's main development donors, Switzerland has also recently opened a Swiss-Albanian Chamber of Commerce in Tirana

“I would like to see more Swiss businesses and investments in this country. The potential exists, but there is still a lot to be done to exploit it," Swiss Ambassador to Albania Christoph Graf said at a launch ceremony last September.

Xavier Davard, the President of the new chamber representing several Swiss companies, said “the new Swiss-Albanian Chamber of Commerce will be a great promoter of exchanges between businesses of the two countries and it will contribute to sectors that need expertise from Swiss companies.”

The Chamber initially has five Swiss companies as its founding members including Switzerland-based Trans Adriatic Pipeline (TAP), the SGS vehicles technical control concessionaire, the SICPA tax stamp concessionaire, PWC accounting firm which is one of the Big Four and the SIKA construction chemicals and industrial adhesives company.

Trade exchanges between Albania and Switzerland have been at an average of about 10 billion lek (€74 million) annually in the past couple of years, representing only about 1.1 percent of Albania's trade volume, according to INSTAT, the Albanian state statistical institute.

 

Dutch FDI

Dutch investment to Albania has also sharply increased in the past couple of years, making the Netherlands the second largest foreign investor in Albania.

Bank of Albania data shows Dutch FDI stock to Albania rose to €817 million at the end of the first half of this year, up from about €530 million in early 2015.

The sharp increase in Dutch FDI in the past couple of years is mostly related to a major hydropower plant that is being built by Norway's Statkraft through its wholly-owned Netherlands-based Statkraft Markets B.V.

A wholly state-owned Norwegian company, Norway’s Statkraft has already made operational its first Banja HPP as part of its Devoll HPP project, one of the country largest foreign investment projects and is set to complete its second and final Moglice HPP by 2018.

The Banja and Moglice HPPs, part of the €535 million Devoll Hydropower project, are being built on the Devoll River, about 70 km southeast of Tirana.

The Netherlands has emerged as the second largest foreign direct investor in Albania in the past couple of years and is on track to further increase its presence in the Balkan country thanks to increased investment in the oil industry and most recently retail trade by the Royal Dutch Shell and Spar International retailer.

Dutch companies in Albania also operate in the banking, mail delivery and agriculture.

However, trade exchanges between the two countries remain modest at only about €43 million.

 

FDI concerns  

The Trans Adriatic Pipeline bringing Caspian gas to Europe and the Devoll Hydropower project by Norway’s Statkraft have been the key drivers of FDI in the country in the past three years at a time when oil and mining investment has almost paralyzed following a slump in commodity prices in mid-2014, with a negative impact also on the country’s poorly diversified exports.

Unless no new major projects are undertaken, FDI is set to suffer a sharp decline by 2020 when both TAP and the Devoll Hydropower projects have been made operational, unveiling the need for the Albanian government to offer incentives that could attract FDI in non-energy related sectors, diversifying them.

With no new major investments in sight, the pickup in commodity prices and an ambitious €1 billion public-private partnership investment program the ruling Socialists have unveiled could provide an anchor for the post-2020 period despite concerns over their risks.

The PPP projects, already costing taxpayers dozens of millions of euros in government support to concessionaires, have sparked concerns over their high costs and allegations of corruption, especially in key sectors such as public health. PPPs also bear the risk of creating new hidden debt at a time when Albania’s public debt stands at about 67 percent, a high level for Albania’s current stage of development, and the economy is growing at about 3 percent, almost half of the level required to bring welfare.

Tourism which brings about 4 million tourists and more than €1 billion in revenue, as well as agriculture, an underdeveloped sector that employs about half of the country but produces only about 20 percent of the GDP, are seen as two key industries that foreign direct investment can make more competitive by bringing know-how and boosting employment.

A strong pickup in commodity prices could however make up, triggering investment by Bankers Petroleum, the country’s largest oil investor which last year was taken over by a Chinese company, and Dutch giant Shell, already engaged in oil exploration operations in the country.

Oil prices have currently recovered to above $50 a barrel after hitting a 12-year low of below $30 a barrel in early 2016.

Albania has been the second largest FDI recipient among five EU aspirant SEE economies for the past six years lagging behind only Serbia which is a much bigger economy. Thanks to huge investment in energy-related projects such as oil and hydropower plants, Albania has managed to attract about $1 billion in FDI annually in the past few years.

Greece, the Netherlands, Canada, Italy and most recently China are the main foreign investors in Albania.

The telecommunication, manufacturing and extractive industries have attracted around half of the FDI stock in Albania during the country’s past two decades of transition into a market economy after the collapse of communist regime and its planned economy.
            [post_title] => BoA: TAP, Devoll HPP projects boost Swiss, Dutch FDI to Albania
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