Editorial: The protest that determines the fate of the opposition

Editorial: The protest that determines the fate of the opposition

TIRANA TIMES EDITORIAL The Albanian opposition led by the Democratic Party has announced a large national protest to be held this week on the 16th of February. In fact the opposition has more than enough material to use in legitimizing

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Prolonged drought plunges hydro-dependent electricity sector into crisis

Prolonged drought plunges hydro-dependent electricity sector into crisis

By Ervin Lisaku TIRANA, Feb. 12 – Albania’s hydro-dependent domestic electricity sector is officially in crisis. An ongoing prolonged drought since mid-2018 has led to domestic electricity generation meeting only 30 percent of the country’s electricity needs and the rest

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“Albania’s PM should run his own country,” Kosovo PM says

“Albania’s PM should run his own country,” Kosovo PM says

TIRANA, Feb. 8 – Kosovo Prime Minister Ramush Haradinaj said on Friday Kosovo’s 100 percent tax on Serbian and Bosnian imported goods will remain unchanged, despite Albanian Prime Minister’s Edi Rama’s request for the opposite. “Prime Minister Rama can’t have

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Editorial: A foreign policy all over the place

Editorial: A foreign policy all over the place

TIRANA TIMES EDITORIAL There is a big and important difference between a foreign policy of 360 degrees- a comprehensive, strategic point of view that seeks to have an open collaborative approach to all partners with the aim of increasing potential

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New airport, Air Albania projects with Turkey stuck in limbo

New airport, Air Albania projects with Turkey stuck in limbo

By Ervin Lisaku TIRANA, Feb. 7 – Albania’s ambitious plans to build a new airport south of the country and launch a flag carrier in cooperation with Turkish investors and the Turkish government are heading toward failure. Negotiations with a

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Albania Investment Corporation initiative triggers gov’t interference concerns

Albania Investment Corporation initiative triggers gov’t interference concerns

By Ervin Lisaku TIRANA, Feb. 6 – The proposed establishment of an Albanian Investment Corporation as a state-run company aimed at facilitating public or private investment in remaining non-privatized assets in a bid to attract new investment and create employment

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Editorial: Elections, the need for fighting impunity

Editorial: Elections, the need for fighting impunity

TIRANA TIMES EDITORIAL This week brought new revelations into the now exposed and painful topic of the connections between Albanian politicians and organized crime. The latter seems to be a fountain of resources, votes and local influence from which skilled

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The Highland Warrior – Samurai of Northern Albania

The Highland Warrior – Samurai of Northern Albania

By Christopher Tushaj The Kângë Kreshnikësh, or Songs of the Highland Warriors, are a fragile, living library of ancient Indo-European oral tradition of folk tales, myths, and legends in the highlands of Northern Albania. With the aid of the one-stringed lahuta

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IMF warns of PPP, arrears risks to Albania’s mid-term growth outlook

IMF warns of PPP, arrears risks to Albania’s mid-term growth outlook

TIRANA, Jan. 29 – The International Monetary Fund has reiterated its warning over the growing use of public private partnerships and the accumulation of new unpaid government bills to the private sector as a threat to the country’s GDP growth

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Albanian football association in legal battle with gov’t over ‘denied’ UEFA tax refunds

Albanian football association in legal battle with gov’t over ‘denied’ UEFA tax refunds

By Ervin Lisaku TIRANA, Jan. 30 – Failure to settle amicably a tax dispute on the under-construction National Arena stadium, the new home of Albania’s national side in the Albanian capital city Tirana, has taken Albania’s football association and the

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                    [post_content] => TIRANA TIMES EDITORIAL 

The Albanian opposition led by the Democratic Party has announced a large national protest to be held this week on the 16th of February. In fact the opposition has more than enough material to use in legitimizing and powering the protest. The popular discontent is palpable and high. There have been many unearthed corruption scandals with fictitious tenders, fraud documents as well as quit a few wrongfully calculated political and public moves.

The Rilindje governance model has been destroyed and no effort of replacing the cabinet with anonymous servants or painting facades with glossy propaganda can any longer salvage its reputation. The discontent has spread from the supporters of the opposition into the larger public and even among the ranks of the Socialist Party especially those who don’t feel represented by the new guard of the loyalist to the chief of the cabinet.

The protest’s declared objective is to make possible the change of government since the opposition does not trust that this one can even hold free and fair elections. This extremely ambitious objective has an embedded element of fallibility in it. Achieving it might require a level of aggressiveness and lawlessness which is all but certain to turn into a boomerang. Not achieving it will decrease the legitimacy and trust in the opposition to a degree that it renders it obsolete.

Herein lies the biggest question of how the opposition believes and plans to materialize the objective.

First, they can opt for a violent scenario, confronting with the police, charging at the state offices. That would destabilize the country at least in the short term and cause irreparable harm both domestically and in the international area. Moreover it has a strong potential not only to backfire by losing to a large degree the popular support. Indeed all sides, especially the state police, must show maturity and moderation and have the protest as a completely free and democratic practice of the citizens devoid of any dangerous exercise of violence.

Alternatively the opposition can chose to re-establish their ‘tent’ camped in front of the Prime Minister’s Office, which secures a long term pressure. It is questionable though what exactly this might achieve given that the DP has declared it will not boycott the local elections in June. They can use it to exert some pressure on the international community on the eve of the decision about opening the negotiations. However it is now almost public knowledge that that specific outcome depends much more on the dynamics within the EU and especially on the relevant EU Parliament elections in May.

Finally the protest might be a massive peaceful gathering that disperses at the end of the day.  It can succeed to convey the considerable scale of popular revolt but go no further. In this case the opposition would face the problem of media and the public questioning its long term strategy and legitimacy. It would deepen the already visible cracks within the opposition, between its two major parties and with other smaller allies.

The decision taken for the conduct of this protest will determine the long term course of the Albanian opposition: whether it will steer slowly towards the next general elections or upset the status quo profoundly in order to seek new power arrangements. The protest will also be decisive for the position of the leader of the DP and his vision for the next 2-3 years. Saturday will be a day to watch very closely.
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                    [post_content] => By Ervin Lisaku

TIRANA, Feb. 12 – Albania’s hydro-dependent domestic electricity sector is officially in crisis. An ongoing prolonged drought since mid-2018 has led to domestic electricity generation meeting only 30 percent of the country’s electricity needs and the rest being covered in costly imports, in a situation that is putting state-run electricity operators in financial straits and that could also have implications for planned investment in the outdated distribution grid where about a quarter of electricity is lost.

With weather forecasts for the next few months unveiling a grim picture with little rainfall, Albania is expected to continue relying on imports to meet its domestic needs although rising temperatures will significantly reduce consumption.

The situation looks similar to 2017 when a prolonged drought forced the country’s authorities to make costly imports of around €200 million and also led to budget reviews to financially assist state-run KESH power utility and OSHEE distribution operator meet the country’s electricity needs.

Water levels and flows are at almost minimal levels at the northern Albania Drin Cascade, where the three largest state-run hydropower plants generate about two-thirds of the country’s hydropower.

The situation is the same for another 100 smaller privately-run hydropower plants generating around a third of the country’s electricity, hinting an emergency need to diversify domestic electricity generation.

The Fierza HPP, a 500 MW plant that has been operational since the late 1970s under communism as the country's largest electricity producer, had water flows of 123m3/s last January, half of its historical average for January and generated an average of 64.2 GWh, about two-thirds less than its average production, according to KESH power utility.

Water levels at the Fierza reservoir dropped to about 266 meters above the sea level last January, some 30 meters below its peak rate, but yet 26 meters above its stoppage point.

The OSHEE distribution operator, which also handles electricity imports, says the prolonged drought has cost the company an average of €1 million a day in electricity imports during the first 40 days of this year.

"During January 2019 we bought around 390,000 MWh at a total cost of €35 million [20 percent] VAT excluded. The same situation also appeared during February 1 to 7 when a total of 50,000 MWh was contracted for €3.8 million," Elton Sevrani, the head of OSHEE's commercial department has told local Top Channel TV.

The average January cost at around €90/MWh is much higher compared to cheap electricity produced by state-run operators and the average €68/MWh regulated price set to local HPPs with a capacity of 15MW.

"Electricity costs have increased by 60 to 70 percent compared to January 2018, but we hope we will be able to reduce that cost during spring. Reducing costs per unit implies more opportunities to maintain and invest in the distribution grid and in no way increasing costs for final customers," says the OSHEE official.

OSHEE distribution operator buys electricity from KESH utility at 2.1 lek (€0.017)/kWh, €17/MWh, in prices that includes production and transmission costs, and sells it at 9.5 lek (€0.076) for household consumer and much higher for business consumer, making it the country's largest operator in terms of annual turnover and profits generated.

Since early 2013, the OSHEE distribution operator has been under state-management following a short-term failed privatization by Czech Republic’s CEZ when grid losses peaked at 45 percent amid a dispute that ended in the Albanian government paying back to CEZ, €95 million for its 2009 Albania investment when it acquired a 76 percent stake in distribution operator for €102 million.

A late 2015 nationwide campaign to cut off illegal connections to the grid and collect huge accumulated unpaid debts was key to the company’s rise from a loss-making operator to the country’s most profitable company in the past few years.

Albania handled 2018 pretty well as heavy rainfall in early 2018 filled the almost empty reservoirs of state-run and private hydropower plants, guaranteeing the country’s domestic electricity needs.

State-run power utility KESH also exported electricity worth around €60 million for the first half of 2018, in weather-related exports that also had a key impact on Albania’s exports increasing by around 14 percent last year despite the Euro’s free fall against the Albanian lek hitting Eurozone-dominated exports by reducing profits for local producers.

Lower electricity production is expected to have a negative effect on Albania's GDP growth for 2019 when international financial institutions expect growth to slow down to 3.5 to 3.7 percent, down from a decade-high of 4.2 percent in 2018, on lower foreign direct investment and spillover effects from a slowdown in main trading partners, especially Italy, which faced recession in the second half of 2018, although registering positive growth of around 1 percent for the whole of 2018.

Ample electricity generation that fully met the country’s domestic needs and led to exports was the key driver of Albania’s GDP growth for the first half of 2018.

Albania’s current sole reliance on hydropower is considered one of the top threats to the country’s economy, especially in case of adverse weather conditions, increasing the need for costly electricity imports.

Albania has been trying to diversify its wholly hydro-dependent domestic electricity generation system through the launch of a major solar power plant and the re-activation of a thermal power plant built a decade ago by converting it into a natural gas-fired plant and link it with the under-construction Albanian section of the Trans Adriatic Pipeline ahead of first Caspian gas flows by 2020.
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                    [post_content] => TIRANA, Feb. 8 - Kosovo Prime Minister Ramush Haradinaj said on Friday Kosovo’s 100 percent tax on Serbian and Bosnian imported goods will remain unchanged, despite Albanian Prime Minister’s Edi Rama’s request for the opposite.

“Prime Minister Rama can’t have requests, as he is governing Albania, but he can have his own stand, which is respectable. No one can have requests. He had his own opinion that the tax is better avoided,” Haradinaj said at Kosovo’s “Pressing” TV show.

According to Haradinaj, this and other topics, including the idea of border correction between Serbia and Kosovo, were discussed during a dinner among Albanian and Kosovo leaders, at Hashim Thaci’s new residence.

Haradinaj revealed that it was Edi Rama who initiated this dinner, initially foreseen to be held in Tirana and then held in Pristina.

“The meeting was Rama’s initiative. It was a careful conversation. The same topics: the tax, dialogue [between Kosovo and Serbia under EU mediation], final settlement options. These were the topics, but there was no change of attitude. It was a dignified conversation,” Haradinaj said. 

Haradinaj highlighted that despite Rama’s good intentions, he should step down his efforts to take decisions for Kosovo.

“I respect everyone’s opinion. Rama can say what he wants. His responsibility is Albania. I see him being alright so far, but he doesn’t have to assign himself more weight than he can carry. We are our own decision-makers,” Haradinaj said. 

 
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                    [post_content] => TIRANA TIMES EDITORIAL

There is a big and important difference between a foreign policy of 360 degrees- a comprehensive, strategic point of view that seeks to have an open collaborative approach to all partners with the aim of increasing potential benefits while respecting norms and a foreign policy that is all over the place- a scattered ad hoc array of hasty actions, improvisations and performances.

The latter seems to be now the reigning approach for the Albanian executive who is currently everywhere, moving speedily and chaotically, with no clarity or mature objectivity in sight: one day it is trying constantly to borrow legitimacy and credit by hastily following and even taking to extremes policies and stances perceived as backed by the current administration in the United States, the other day its already on to a spectacularly curated visit to Saudi Arabia. The Prime Minister, haunted by his past life comments on then candidate Trump, rushes to recognize the new President of Venezuela even before major EU countries do so, as if the Albanian recognition would determine their fate, then it holds speeches in the Parliament presenting   himself as the mediator who picks the calls of advisor Bolton.

This kind of foreign policy resembles a big circus tent where uncoordinated actors perform clumsily under the alleged management of the 28 year old Kosovo-born ‘brilliant book reader turned into minister’ Gent Cakaj when he takes a break from reshaping the Balkans’ history or finding fresh jokes of rebuttal to Ivica Dacic.  In fact it is under the de-jure and de-facto rule of the Chief of the Executive who is juggling many balls in the air and risks to drop them all.

These are decisive times for the European future of the region. The Republic of North Macedonia just signed the accession protocol with NATO. In a couple of month the EU Council will decide upon the accession negotiations for both countries, Albania and Macedonia. It is the time for clarity and focus and not scattered attempts at buying diversions from domestic problems, winning special credit for being aggressive with policies that are in fact much debated in the EU itself such as hardline anti-Iran measures and most importantly toying with ill-timed nationalism.

These unpredictable patterns and moves are unproductive and moreover even confusing to all the important allies and partners. This paper has argued before that Albania cannot realistically play the giant in international relations and in the global arena therefore it should not do so. By trying to do is just making itself look unreliable and even ridiculous at times.  In addition when talking on behalf of Kosovo, Albanian politicians are repeating mistakes that legitimize Serbian narrative against Kosovo’s distinct independent statehood and bother the Kosovo political class.

Albania can and should benefit from keeping on its toes, scanning potential assistance and investments from trusted partners all over the globe, respecting commitments to alliances while being creative in it economic and cultural diplomacy. This is 360 degrees foreign policy. What we are witnessing with the conduct of the key foreign policy players today is not it. They just seem to be all over the place.
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                    [post_date] => 2019-02-07 16:31:50
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                    [post_content] => By Ervin Lisaku

TIRANA, Feb. 7 - Albania’s ambitious plans to build a new airport south of the country and launch a flag carrier in cooperation with Turkish investors and the Turkish government are heading toward failure.

Negotiations with a Turkish consortium that has built Istanbul's third airport, set to become one of the world's largest, have so far failed to produce an outcome and plans to launch the much-rumored Air Albania national carrier with Turkish Airlines, where the Turkish government has a 49 percent stake, have also received a blow following a test flight from Tirana to Istanbul last September.

 

New airport

In early 2018, the Albanian government said it received a bid by a consortium of three Turkish companies made up of Cengis, Kalyon and Kolin Construction to build a new airport in Vlora, southern Albania, in an effort to launch the country's second international airport and challenge the Tirana International Airport, the country’s sole airport, by attracting low-cost carriers and offer new alternatives to Albanian passengers, currently facing the region’s highest ticket prices.

The ruling Socialist Party majority even approved a bill in Parliament, paving the way for fast-track contract negotiations with the Turkish consortium

However, about one year on, negotiations have failed to produce a final deal that would pave the way for the construction of a new airport that would also serve the country’s emerging tourism industry.  Former infrastructure minister Damian Gjiknuri hinted in late 2018 the airport project would go on with or without a deal with the Turkish consortium.

"We are negotiating over the Vlora airport. If we don't conclude the negotiations soon, we will attempt every kind of method, including funding by the state budget within the limits of public private partnership spending to build this airport because lack of an airport cannot hold back the future of tourism," former Infrastructure Minister Damian Gjiknuri said last November in a hearing with the parliamentary economy committee.

The airport is set to be built just outside the southern Albanian coastal city of Vlora at a site which is part of a protected lagoon and ecosystem, in a 2-hour drive, some 133 km from Tirana, making it competitive only in case it attracts low-cost carriers.  Environmentalists have warned the proposed site within the Narta-Vjosa Protected Landscape, one of the largest near-natural wetland complexes along the Adriatic coast and where one of Europe’s last wild rivers flows and the endangered Dalmatian pelican feeds, is incompatible with preserving the local ecosystem.

Albania is also planning to reactivate an airport northeast of the country through a recently awarded PPP and also intends to build a smaller airport in Saranda, southernmost Albania, along the Albanian Riviera, to ease access to a region that takes a about a five-hour drive from Tirana.

The ambitious plans are aimed at supporting the country’s emerging tourism industry that has been attracting more than 5 million tourists and generating around €1.5 billion in income, according to official figures.

The Tirana International Airport, which until mid-2016 had exclusive rights on international flights, handled around 3 million passengers in 2018, mostly Albanians travelling to and from Italy, the host of half a million Albanian migrants. The airport is also serving a rising number of European and North American tourists, many of whom with ethnic Albanian roots.

However, due to expensive ticket prices and low number of low-cost carriers, more and more Albanian passengers have been travelling through neighboring Kosovo, Macedonia or Montenegro airports in the past few years.

 

No news about ‘Air Albania’ 

Plans for Air Albania are in limbo as aircraft returns to Turkey, wrote Switzerland-based ch-aviation airline intelligence provider this week.

The flag carrier carried test flights with students and journalists last September and ambitious plans to launch flights to regional countries with the support of Turkish Airlines have so far failed to materialize and prospects remain grim.

At a test flight ceremony last September, 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.

Prime Minister Rama has earlier unveiled the ‘Air Albania’ national carrier will initially connect Tirana to regional unserviced countries such as Kosovo, Macedonia, Montenegro and Bosnia and Herzegovina and several Western Europe destinations and even add a direct link to New York by the end of 2019.

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 earlier 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.

Murat Herdem, a news coordinator and columnist for the Turkish aviation website Airporthaber, had warned the Turkish Airlines cooperation with Air Albania was a bluff and bound to fail.

In an article in August 2018, before initial tests were carried out, Murat Herdem, predicted the cooperation was bound to fail the same as happened with B&H Airline, Bosnia and Herzegovina's national carrier.

"The way how the partnership has started is the same. The partnership is being carried out through a political orientation and not as a commercial activity which could cost Turkish Airlines millions of euros in losses," Murat Herdem said.

Turkish Airlines pulled out of the Bosnian national carrier in 2012 after acquiring a 49 percent stake in 2008. The withdrawal came following a disagreement with the Bosnian government over the airline’s management, incurring losses from its Bosnia investment.

The economic slowdown that Turkey is facing could have also hampered ambitious investment plans in Albania’s new airport and national carrier.

One of the fastest growing emerging economies, Turkey is one of Albania’s strategic partners, top investors and main travel destinations. Turkey's economy faced a slowdown in 2018 after the Turkish lira lost a sharp 40 percent against the US dollar, triggering double-digit inflation.

Turkey's economy slowed down to 3.5 percent in 2018, almost half of what it grew in 2017, and is projected to maintain the same 3.5 percent growth rates over the next couple of years.
                    [post_title] => New airport, Air Albania projects with Turkey stuck in limbo
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                    [post_date] => 2019-02-06 13:57:00
                    [post_date_gmt] => 2019-02-06 12:57:00
                    [post_content] => By Ervin Lisaku

TIRANA, Feb. 6 – The proposed establishment of an Albanian Investment Corporation as a state-run company aimed at facilitating public or private investment in remaining non-privatized assets in a bid to attract new investment and create employment has been met with skepticism by economy experts and the opposition over fears that the novelty structure could fail as a state-run enterprise and violate property rights.

Proposed legal changes already approved by the finance ministry but pending further review before a final approval in Parliament envisage the establishment of the Albanian Investment Corporation as a state-run commercial enterprise where international development finance institutions can also hold shares in a bid to carry out joint investments with private investors and help the country’s economy grow faster.

The government argues large-scale investment projects with an impact on economic growth require the use of state-run assets and mobilization of private capital and cannot be implemented without the considerable involvement of authorities in providing permits and making the assets available. Authorities also commit of conducting the initial costly preparatory and pre-investment stages to transform ideas into attractive projects that can obtain financing and allow the state-run enterprise to also undertaking part of the risk through borrowing and investing.

Expected to be set up with an initial state capital of 368 million lek (around €3 mln) in 2019, the Corporation is also entitled to borrow from financial institutions by placing as collateral its state-owned assets without direct implications for the state budget whose fiscal consolidation agenda with a target of reducing public debt to a more affordable 60 percent of the GDP by 2021 leaves little room for new borrowing to initiate major investment projects.

Albania’s public debt currently hovers at around 70 percent, including unpaid bills of €200 million equal to 1.5 percent of the GDP, in what is considered a high level for the current stage of Albania’s economic development. The public debt level excludes potential liabilities that could arise from rising use of the much-rumored public private partnerships, many of which lacking transparency and clear cost-benefit analysis after being initiated by private investors through unsolicited proposals.

The government says the draft law has been compiled with the Center for International Development at Harvard University in a bid to equip state authorities with the capacity to carry out strategic investment by mobilizing private capital through cooperation with the international financial institutions and the private sector.

Differently from private-run companies, the proposed Corporation will be excluded from public procurement rules, which means it can handle projects on state-run property through direct negotiations with investors.

 

State-run assets

While Albania has privatized most of its key public assets during the past quarter of a century of transition to a market economy, state-run enterprises still account for around a fifth of the GDP and employment.

The government is the major electricity producer and sole electricity supplier, it controls the railway system, currently in a critical condition and pending first major investment in the key Tirana-Durres section linking Albania’s two largest cities and sole international airport. State-run companies also conduct around 10 percent of oil extraction, the remaining 90 percent is carried out by private investors on concession contracts. The government also has a minority interest at an oil refiner that has changed hands several times following a failed privatization a decade ago. It also has a minority stake in Albtelecom fixed-line, mobile and internet service provider, whose majority stake is held by Turkish investors.

However, the major assets that the Albanian government owns are coastal lands and former military facilities that could be used to attract much-needed investment in the emerging tourism sector where unclear property titles is one of the main barriers holding back foreign investors to develop high-end tourist resorts, taking advantage of the tax incentives that the Albanian government is offering.

 

Legal initiative

The Corporate Investment initiative comes at a time when Albania has extended until December 2019 incentives on strategic investment to both foreign and domestic investors as it prepares to draft a new comprehensive law that will provide the same protection to both Albanian and foreign investors and specify the country’s strategic sectors.

It also comes as two major energy-related investment projects that drove growth and kept FDI at high levels during the past four years are set to complete by the end of 2019, leaving a huge gap that has to be filled by new projects to keep GDP growth above 4 percent as the government expects in its mid-term outlook.

Under the current legislation set to expire by the end of 2019, investors have to invest a minimum of €30 million to gain the status of strategic investor with an ‘assisted procedure’ and a minimum of €50 million for the ‘special procedure’ status in order to benefit of easier rules and incentives for key investment in energy and mining, transport, electronic communications and urban waste sectors.

The investment thresholds in tourism, agriculture, special economic zones, and special priority zones range from €1 million to €5 million to get the assisted procedure status.

In a bid to promote elite tourism investment, Albania has been offering incentives for a 10-year period  on luxury accommodation units for investments ranging from €8 million to €15 million for four and five-star units that will have to be carried out by internationally renowned chained-brand hotels or local companies under management or franchise contracts with them. The move has already attracted several international brands such as US-based giants Marriot and Hyatt that have already signed contracts to manage key 5-star hotels in Tirana, and the already operational 4-star Hilton Garden Inn.

 

A Chance or risk?

Economy expert Selami Xhepa say the state-run Investment Corporation is a good idea but that will be difficult to apply considering past and current experience with the management of state-run enterprises marred by inefficiency and corruption allegations.

“A state-run financial corporation gives no reason to think that its governance will be oriented for an open, transparent and economically efficient use of public property. In addition, the draft law says that its [Advisory] Board will only have one state representative and the remaining members will be from the private sector, creating an open conflict of interest,” Xhepa says in an op-ed named “Investment Corporation, a chance or risk” published with local media this week.

The economy expert says the corporation’s attribute to place state assets as collateral when getting credit could also create implications for the state-budget in case of loan defaults in order to avoid public property being taking over by creditors.

“This corporation also gets the attribute of selling public property, by avoiding current legislation on privatizations. Despite the government’s positive intentions to find mechanisms that accelerate the country’s development, considering the format that this corporation is being established, it will mostly create more problems about the quality of economic governance and the country’s governance in general,” says Xhepa.

According to him, if the government sticks to Investment Corporation proposal, the minimum that has to be done is “completing this initiative with the legal standards of transparency and corporate governance that should be an integral part of the draft law.”

“Personally I would favor privatization processes in public properties and the completion of the property compensation and restitution process as well as the registration of state-run properties to place them in an asset development agency. We have created enough institutions that can assume larger development responsibility, not as financial corporations, but to a larger extent as negotiators and monitors of investment projects carried out on public assets,” he adds.

Opposition Democratic Party MP Jorida Tabaku is highly more skeptical about the Investment Corporation initiative which she calls "the theft of public property through a special law."

A deputy head of the parliamentary economy committee, Tabaku says that stripping the corporation of the public procurement rules, makes Prime Minister Edi Rama the eventual owner of the public assets with a final say on deciding on how and with whom to develop the asset and also places private property at risk through the “mechanism of seizure for strategic investment.”

Recent legal changes adopted by the ruling Socialists foresee that real estate registration for agricultural land will be refused in case the land has been destined as strategic investment area or illegal constructions have been built on it, in a provision that mostly affects coastal areas where major tourist investments are planned.

 

Long-standing property issue

Albania is trying to give a permanent solution to the long-standing issue of unclear property titles through legal changes which it says will bring an end to the chaos of property ownership in the country during the past quarter of a century of transition.

Recent legal changes that are about to undergo further review following a suspensive veto by the President, envisage the merge of three property institutions into a single Cadastral Agency that will handle real estate registration, legalization and state-run property affairs under easier procedures expected to provide a solution for more than half of the country’s immovable property with ownership problems, in a situation that has severe consequences for the property owners themselves, but also the country’s business climate.

The complicated property issue is a result of a controversial agrarian reform in the early 1990s following the collapse of the communist regime and subsequent non-transparent privatization of state-run property as well as dozens of thousands of illegal constructions built either on private or state-run land during the past 27 years, a considerable part of which already legalized and registered with real estate registration offices.

Albania has 4.4 million immovable properties, of which 3.8 million are registered with immovable property offices and 600,000 unregistered. Of the 3.8 million registered properties, 2.5 million need to be revised or re-registered, says ALUIZNI, Albania’s Agency for Legalization,

The situation is more problematic in agriculture, a key sector that employs almost half of the country’s population, but where only half of the land distributed on a per capita basis to some 438,000 households in the early 1990s has managed to get registered in a key barrier for the development of larger farms, access to credit and subsidies.
                    [post_title] => Albania Investment Corporation initiative triggers gov’t interference concerns
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                    [post_date] => 2019-01-31 19:11:53
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                    [post_content] => TIRANA TIMES EDITORIAL

This week brought new revelations into the now exposed and painful topic of the connections between Albanian politicians and organized crime. The latter seems to be a fountain of resources, votes and local influence from which skilled politicians draw especially during local electoral campaigns and to which they have to give back in multiple forms of protections, favoritism and lucrative deals with public funds. During general elections when matters get bigger and more decisive politicians have to enlist in this crime coalition also the bigger serious guns, the monopolies, oligarchs and media (often merged into each other.)

One important matter is the ongoing investigation on the alleged links between the Avdylaj crime syndicate and the current mayor of Durres, Vangjush Dako. The list of telephone intercepts that verifies his numerous conversations, dinners, lunches and exchanges with the two Avdylaj narco-brothers is damning at least and if the prosecution makes the case very gravely incriminating.  The narco-group seems to extend its tentacles all over various areas in Kavaja and Shijak in addition to Durres and count in their special friends’ list many directors of local government offices and national agencies.

Of course the Durres mayor is not alone in this mega dark enterprise. Part of the same topic are also the facts discovered in the manipulations of local elections in Dibra where again strongmen and political parties join hands effectively in overturning historical trends of voters with the right kind of pressure.

This list of now public interceptions is a clear and uncontested piece of evidence of electoral fraud at a large scale. From these facts the model is clear: Organized crime syndicates in many Albanian localities are fully in charge of managing the electoral process, controlling its stakeholders and eventually determining the winners. In this process they have in fact mined the entire premises of a modern democratic system which relies fully on free and fair elections. The facts brought forward by a domestic investigation have been republished by the Voice of America outlet, which have vested them even with more legitimacy.

This case merits quick and effective justice and full punishment. This case is the perfect example that needs to show the most dire consequences and harsh verdicts in order to urge political parties to depart from this dark and destructive symbiosis that has captured the state and paralyzed any form of development both political and economic. Otherwise the perception of impunity will wash away all remaining hope and sense of civic responsibility among voters who will again fall prey to these tactics of vote buying, coercion and manipulation.

Another process is approaching fast, the local elections at the end of June 2019. The polarization and lack of political dialogue between the two main parties so far has impeded the talks on electoral reform despite many urges form the international organizations. So far there are no additional rules in the process that would increase control and accountability. However the justice structures have enough clear and credible materials at hand to make a decisive step in steering this future electoral process and the other ones after it into the right direction.

Finally the case needs to be made over and over again that citizens also should be empowered to refute this model, no matter their vulnerabilities against the system. Elections are the genesis point and is they are comprised all what follows cannot guarantee their security, wellbeing and development. On the contrary it will be the first obstacle.
                    [post_title] => Editorial: Elections, the need for fighting impunity
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                    [post_date] => 2019-01-31 19:10:44
                    [post_date_gmt] => 2019-01-31 18:10:44
                    [post_content] => By Christopher Tushaj

The Kângë Kreshnikësh, or Songs of the Highland Warriors, are a fragile, living library of ancient Indo-European oral tradition of folk tales, myths, and legends in the highlands of Northern Albania. With the aid of the one-stringed lahuta (lute), a bard is tasked with keeping alive the memory of exemplary men and their heroic deeds in epic form, lauding the maintenance of the sacred values of besa (oath), burrni (chivalry), and trimni (bravery) expressed in their Kanun (tribal law). The Highland Warrior, a character inspired by the heroic archetype, is challenged through his journey to uphold his Albanian code of honor in the face of insurmountable odds. The listener is carried to a metaphysical world where the warrior wills through thick and thin for the protection of his most valuable possession: his identity and spirit. Regulated by his commitment to his moral character and devotion to the sacred tenets of the Albanian ethical value system of the Kanun: a strict code of chivalry that fuses elements of ancient pre-Christian European pagan traditions and religious tenets: righteousness, heroism, respect, honesty, self-sacrifice, fraternity, loyalty and honor. A Highland Warrior once taken this Besë, is expected to keep his oath. Shqiptaret vdesin dhe besen nuk e shkelinAlbanians will die before they break their honor “Ta jap shpirtin, ta fali djalin, por mbi besë nuk shkeli...” I’ll give you my soul, and my own son, but I’ll never break my word.

The Highland Warriors Epics are an incredibly emotional, powerful and dramatic depiction of a contemporary society with ancient European cultural and linguistic roots. It gives a time, place, rhyme and reason to the origin, inspiration and reality of the Albanian people. The imagery representing the collective Albanian unconscious, formulates the basis of our traditional societal structure, the hierarchy and obligations to the shpi (home), vllazni (brotherhood) and fis (tribe). These stories speak to our deepest psychological motivations, our inner archetypes, helping others to bridge the gap between the virtues of myth, legend and man. They transmit the will, heroic resilience and determination of the Albanian spirit and grant the listeners a guide to righteousness during the trials and tribulations in our often-difficult history. These characters mirror the fading ember of a once roaring fire for their identity, a source of great pride and self-respect.

The Kenge Kreshnikesh communicates the accounts of people, ordinary and extraordinary, mythical and legendary, who lived true to this faith, even to the point of their own demise. In contrast to the Samurai, pertaining only to a middle and upper warrior class who accompanied the elite in Feudal Japan, principles of the Highland Warrior, applied to all members of Albanian society: men, women and children. In this case, the Highland Warrior could be a cousin, uncle, brother or father (and in many cases, women, lest us not forget the story of Nora from the Kelmend tribe). These songs mirror real life events as well: what about the young boy, conscious of his duty to uphold his personal and family honor, sacrificed his life to save a Jew who was at gunpoint by the Nazis during World War II? What about the father in Kadare’s book who murdered his own son, honoring the sacred covenant of protecting the guest at any cost? The list goes on and on, and the Kenge Kreshnikesh are exist to immortalize these for generations to come.

The Highland Warriors hold the potential to be perfect role model for Albania’s international recognition, on par with the strong associations of Western mantras when uttering the words ‘Ancient Greece’ (birth place of democracy). The Kenge Kreshnikesh, like the Homeric Epics of Iliad and the Odyssey, mirrors true the structure of a pre-state tribal society both within and outside of the oral tradition. Albania is now on the road to being recognized as the crucible for the infancy stages of modern democracy. Kazuhiko Yamamoto, Japanese medical doctor, professor of medical anthropology and author of the Ethical Structure of the Albanian Customary Law, proposes that the ethical structure of the Kanun to be the original foundation of ethics in human society today, noting that the structure of the Homeric society (oath, honor, guest, blood, and food) consists found in the Iliad and Odyssey belongs to the same category of societal ethics without state power.

Even the tongue of the Highland Warriors speaks truths about Albania’s connection to its’ pre-Greek Homeric antiquity. Academic study of Albanian morphology and Proto-Albanian can highlight and analyze the rare, archaic morphological features of the Gheg dialect preserved in the Highland Epics, possibly revealing groundbreaking information for historical linguists engaged in the reconstruction process of Proto-Indo-European (PIE), the mother tongue of over 440 languages stretching from China to Europe. Conducting research on last glimpses of authentic performances of the Highland Epics in the Gheg dialect (the oldest dialect of the oldest surviving Indo-European language in Europe) can help validate Albanians as a people as being recognized as an integral part of their undeniable European identity. Albania’s cultural recognition relies upon a concise narrative by which fully encompasses all of the Albanian people, what makes them Albanian, and the highland epics have this potential. It can serve for many functions: towards integration into European Union, strengthening our ability of custom tailored rule of law, governance and democracy development projects within Albania. The Kângë Kreshnikësh, the oldest surviving syncretic art form in Europe, has valuable potential for awakening our consciousness to an invaluable cultural wealth, that is, the power of belief and faith to make a change for one’s self and their future. This cult of heroes has persisted through obscurity and over millennia, but this ancient art form, along with its spiritual connection, are hanging on by the small threads of the memory of a time once before. This tradition, along with its beloved ethical value system, are under renewed threat and dying in front of modern challenges: it is safe to say that an essential part of the Albanian identity and an intangible piece of world cultural heritage is set to be lost forever.
                    [post_title] => The Highland Warrior - Samurai of Northern Albania
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                    [post_date] => 2019-01-30 12:52:32
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                    [post_content] => TIRANA, Jan. 29 – The International Monetary Fund has reiterated its warning over the growing use of public private partnerships and the accumulation of new unpaid government bills to the private sector as a threat to the country’s GDP growth and debt reduction agenda over the next five years.

In a newly released report following a visit to the country last November, IMF representatives expect Albania's economy to slow down to 3.7 percent in 2019, down from an expected decade of 4 percent in 2018, and linger around 3.9 to 4 percent over 2020-2023. The IMF forecasts are around 0.5 percentage points lower compared to the Albanian government’s more optimistic baseline scenario of growth gradually picking up to 4.5 percent by 2022.

However, lack of transparency in the PPP decision-making and the accumulation of new government arrears at around 1.5 percent of the GDP are rated as key internal risks to Albania’s mid-term fiscal consolidation path whose main target is reducing public debt to more affordable levels of below 60 percent of the GDP by 2021 compared to around 70 percent currently.

“The rapid increase in PPPs has raised fiscal risks, and [IMF] staff proposed further steps to control these. In addition to the existing stock of PPPs of 31 percent of GDP (covering more than 220 projects, including concessions in energy of more than 23 percentage  points), the 2019 budget documents foresee a pipeline of potential new PPPs capped at 15 percentage points of GDP,” the IMF says.

The IMF estimates Albania’s public debt will not drop to below 60 percent of the GDP before 2023 in a forecast which differently from the Albanian government’s estimates also includes central and government arrears, but excludes potential liabilities that could arise from rising use of PPPs.

“It will also be critical to ensure value for money through a competitive bidding process for all projects by halting the acceptance of unsolicited PPP proposals. While annual PPP-related government spending is projected to remain below the legal limit of 5 percent of tax revenues, this ceiling leaves little room left for additional government-funded PPPs, especially given the need to incorporate risks from contingent liabilities,” says the IMF.

Albania is planning to scrap the use of controversial unsolicited proposals for public private partnerships in the road sector but continue allowing it for a series of other sectors it considers strategic, only partly meeting IMF and World Bank recommendations of scrapping the controversial procedure.

The practice of awarding bonuses for unsolicited proposals is also set to be replaced by financial compensation in case the company initiating the project through a feasibility study fails to win a tender in a bid to place bidders under equal competition when tender procedures are held despite concerns of tailor-made criteria favoring certain companies marring the public procurement process.

Albania recently cancelled a €244 million 21-km highway that was set to be built on a PPP contract over allegations that the winning Albanian company was involved in an offshore scandal through a phantom company that claimed another €30 million in public road and electricity tenders before it had them cancelled over falsifying links to a newly established US company which it claimed had two decades of experience in the construction sector.  The winning company owned by a so-called Albanian ‘oligarch’ was awarded the highway project through an unsolicited proposal and a bonus putting it at an advantage in a tender with virtually no competition.

The €244 million highway project linking Kashar, an industrial area just outside Tirana, to northern Albania Thumane village was part of a major €1 billion controversial PPP program that the Albanian is implementing to upgrade road, education, health infrastructure in a major project that has been criticized for lack of transparency and hidden costs that could likely affect Albania's plans to reduce public debt.

 

Gov’t arrears 

The International Monetary Fund also warns the accumulation of new government arrears are hurting private economic activity and undermining trust in the public sector.

"Budgetary arrears—mostly related to VAT refunds, central government payments for road construction, and local governments—have posed a perennial problem in Albania, undermining trust in the tax administration and the government more broadly. The prevention and control of arrears requires strengthening revenue forecasting (including of VAT refunds) and cash management, and improving commitment controls, particularly by the Road Authority," says the IMF.

The IMF says the stock of central and local government arrears rose to 24.6 billion (around €196 million) in Sept. 2018, representing 1.5 percent of the GDP, almost double compared to 2016 when Albania started accumulating new unpaid government bills.

Albanian authorities say that VAT refund arrears, representing almost half of total stock of arrears are mainly related to large energy-related investment such as TAP and the Devoll Hydropower and will be cleared as soon as the projects come to an end by 2020.

Local government units also accumulated arrears worth around 7.1 billion lek (€56.7 mln) at the end of the third quarter of 2018, representing 0.4 percent of the GDP. The arrears, mostly related to investment projects, are considerably below a stock of 9.4 billion lek (€75.4 mln), 0.6 percent of the GDP, in 2016 just before a mid-2015 territorial and administrative reform cutting the number of local government units to 61 municipalities.

Albania cleared around €500 million in arrears over 2013-15  in payments estimated to have strengthened private sector balance sheets and reduced the level of non-performing loans that soared to 25 percent in mid-2014.

 

External threats

The IMF warns risks related to main trading partners Italy and Greece, a hike in interest rates following a decade economic slowdown-triggered lower interest rates could affect Albania’s trade, investment flows as well as borrowing costs.

“Over the medium-term, risks are tilted towards the downside. Albania is strongly exposed to the increasing risks to growth in Europe, notably in its main trading partners. A downturn in these countries could spill over through lower exports, remittances, and foreign direct investment,” says the IMF.

“Moreover, the expected tightening in global financial conditions would raise Albania’s cost of financing. On the domestic side, public debt is high, while low domestic savings and the absence of large institutional investors amplify dependence on foreign sources of financing,” it adds.

Albania's relations with IMF, a Washington-based lender of last resort, were revised to advisory in early 2017 following a three-year binding deal accompanied by a loan.
                    [post_title] => IMF warns of PPP, arrears risks to Albania’s mid-term growth outlook 
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                    [post_date] => 2019-01-30 12:29:17
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                    [post_content] => By Ervin Lisaku

TIRANA, Jan. 30 – Failure to settle amicably a tax dispute on the under-construction National Arena stadium, the new home of Albania’s national side in the Albanian capital city Tirana, has taken Albania’s football association and the government to court where football officials are seeking back €2 million in value added tax refunds.

Albania’s football association says failure to get back €2 million in VAT refunds from UEFA funding of €10 million risks the completion of the National Arena stadium. The so called ‘tower stadium’ was initially scheduled to become operational in early 2019 ahead of Albania’s first Euro 2020 qualifiers in March, but delays in construction works and a tax dispute have now postponed plans for initial tests to mid-2019 and the stadium is likely to be ready for next September or November when Albania play their closing home Euro qualifiers against Iceland, Andorra and France.

The legal battle at the first instance Tirana Administrative Court comes after a tax appeals body of the finance ministry turned down a complaint over VAT refunds due to delays in applying with tax authorities to get back the 20 percent amount.

Both the Albanian football association and the government are joint venture partners in the enterprise set up in 2014 to oversee the construction of the new stadium in the country.

The majority 75 percent stake at the “Qendra Sportive Kuq e Zi’ company [The Red and Black sports center named after Albania’s national side jersey] is held by the football association with the remaining 25 percent minority stake held by the Albanian government.

"We were told by tax authorities that our [VAT refund] application was delayed for several days, but I don't think this is the case to cancel it. We appealed it with the finance ministry and it was again refused,” Football Association President Armand Duka said in a TV interview in late December 2018.

“I have talked to the Prime Minister and from the conversation I had with him, he is between two fires. The football association has obtained 100 percent of the stadium funds from UEFA and there can be no such financing where state authorities seek to take advantage of UEFA donations," he added.

According to Duka, last December’s visit to Albania by UEFA’s Secretary General Theodore Theodoridis, who also reportedly met Prime Minister Edi Rama, was also related to the tax dispute over funds donated by the European football’s governing body.

In an announcement on its website, the Tirana Administrative Court says the football association is seeking the cancellation of decisions by the Tirana Regional Directorate and the tax appeals body at the finance ministry and the initial trial was planned for Jan. 22, 2019.

However, unless settled amicably, the legal battle in Albania's three-tier administrative court system could take years due to a huge backlog of cases at the Administrative Appeals Court and the Administrative College of the Supreme Court, currently both functioning with limited staff due to a judiciary reform having ousted several judges for failing to justify their assets and delays in the establishment of the new justice bodies leading to key vacancies.

With construction works already in their final stage following the mid-2016 demolition of the old “Qemal Stafa” stadium, the football association has earlier warned failure to get back the €2 million tax refund would call the stadium completion into question.

The football association has hinted of politically motivated reasons behind the blockage, apparently related to incumbent football association head Armand Duka claiming a fifth consecutive term of office in early 2018 in a contested race by main rival Bashkim Fino, a former Prime Minister and current ruling Socialist Party MP.

 

New ‘tower’ stadium

The new ‘National Arena’ stadium is a €50 million public private partnership deal with a capacity of 22,000 seats that will also feature commercial, entertainment and accommodation facilities in a high-rise tower next to it. The Albanian football association has invested €10 million through UEFA funding.

An Albanian-owned company has invested €40 million to build the stadium in return for being offered public land and a permit to build a 24-storey tower next to it that will host commercial facilities, including a hotel that will be managed by US-based hotel giant Marriott International through a franchise deal with the developers, benefiting tax cuts as a high-end tourism investment in a popular downtown Tirana area.

The new National Arena stadium is being built on the site of former ‘Qemal Stafa’ stadium in Tirana, which ceased being used for international matches in 2013 after failing to meet international standards. Unlike the old stadium, the new facility has no athletics track, a key barrier for some of Albania’s athletes like Luiza Gega, a medal-winning middle-distance runner.

Former ‘Qemal Stafa’ stadium served as Albania’s national stadium for over 70 years since 1946 when it was inaugurated for the Balkan Cup as an Italian-designed facility.

Lacking a permanent home, the Albanian national football team has in the past five years played their home matches at the newly reconstructed Elbasan Arena and Shkodra stadiums, both reconstructed through government funding of around €14 million.

The Albanian football association which has invested around €10 million in the stadium project through UEFA funds will also get considerable facilities, but not have its headquarters there. The new football association headquarters that will also serve as an accommodation center for the national side are already being built elsewhere in Tirana at a former sports complex.

Albania will start their Euro 2020 qualifiers on March 22, 2019 with a home encounter against Turkey, a much more experienced national side, but who have been struggling to qualify for major tournaments during the past decade following a golden period in the 2000s.

Having missed a chance to keep qualifying hopes alive through the inaugural UEFA Nations League by finishing bottom in their League C, Group 1, and having also lost much of their Euro 2016 qualifying campaign shine during the past couple of years, Albania will be trying for another miracle qualification in a tough group stage where France are undisputed favorites for a top finish and Iceland, Turkey and Albania will rival for a second spot that also earns direct qualification for the Euro 2020 finals.
                    [post_title] => Albanian football association in legal battle with gov’t over 'denied' UEFA tax refunds 
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            [post_content] => TIRANA TIMES EDITORIAL 

The Albanian opposition led by the Democratic Party has announced a large national protest to be held this week on the 16th of February. In fact the opposition has more than enough material to use in legitimizing and powering the protest. The popular discontent is palpable and high. There have been many unearthed corruption scandals with fictitious tenders, fraud documents as well as quit a few wrongfully calculated political and public moves.

The Rilindje governance model has been destroyed and no effort of replacing the cabinet with anonymous servants or painting facades with glossy propaganda can any longer salvage its reputation. The discontent has spread from the supporters of the opposition into the larger public and even among the ranks of the Socialist Party especially those who don’t feel represented by the new guard of the loyalist to the chief of the cabinet.

The protest’s declared objective is to make possible the change of government since the opposition does not trust that this one can even hold free and fair elections. This extremely ambitious objective has an embedded element of fallibility in it. Achieving it might require a level of aggressiveness and lawlessness which is all but certain to turn into a boomerang. Not achieving it will decrease the legitimacy and trust in the opposition to a degree that it renders it obsolete.

Herein lies the biggest question of how the opposition believes and plans to materialize the objective.

First, they can opt for a violent scenario, confronting with the police, charging at the state offices. That would destabilize the country at least in the short term and cause irreparable harm both domestically and in the international area. Moreover it has a strong potential not only to backfire by losing to a large degree the popular support. Indeed all sides, especially the state police, must show maturity and moderation and have the protest as a completely free and democratic practice of the citizens devoid of any dangerous exercise of violence.

Alternatively the opposition can chose to re-establish their ‘tent’ camped in front of the Prime Minister’s Office, which secures a long term pressure. It is questionable though what exactly this might achieve given that the DP has declared it will not boycott the local elections in June. They can use it to exert some pressure on the international community on the eve of the decision about opening the negotiations. However it is now almost public knowledge that that specific outcome depends much more on the dynamics within the EU and especially on the relevant EU Parliament elections in May.

Finally the protest might be a massive peaceful gathering that disperses at the end of the day.  It can succeed to convey the considerable scale of popular revolt but go no further. In this case the opposition would face the problem of media and the public questioning its long term strategy and legitimacy. It would deepen the already visible cracks within the opposition, between its two major parties and with other smaller allies.

The decision taken for the conduct of this protest will determine the long term course of the Albanian opposition: whether it will steer slowly towards the next general elections or upset the status quo profoundly in order to seek new power arrangements. The protest will also be decisive for the position of the leader of the DP and his vision for the next 2-3 years. Saturday will be a day to watch very closely.
            [post_title] => Editorial: The protest that determines the fate of the opposition
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