Despite the stagnation in economic relations in the past two years, the volume of trade exchanges remains high at euro 70 million per year and Greece continues being Albania’s second most important trade partner, says Greek ambassador to Tirana
TIRANA, Nov. 26 – The establishment of a joint economic commission will give a new impetus to Albanian-Greek economic relations and exchanges, Greek Ambassador to Albania Nicolas Pazios said this week in Tirana at the sixth Greek-Albanian business forum. The ambassador noted that despite the stagnation in economic relations between the two countries in the past two years, the volume of trade exchanges remains high at euro 70 million per year and Greece continues being Albania’s second most important trade partner.
Addressing the forum, Albania’s Labour and Social Affairs Minister Spiro Ksera called on Greek investors to continue investing in Albania, citing the close links between the two neighbouring countries, the low transportation costs, knowledge of Greek language, the close mentality and improvement of legal framework as some of the facilitations Albania offers.
“Albania still has unexplored business potentials, a favourable business climate providing security and becoming more and more competitive in the region and wider. The Labour Minister hailed the contribution to reducing unemployment. According to him, the volume of Greek investments in Albania reaches Euro 1.2 billion with telecommunication, banking, energy, textile and food, construction and services as priority sectors.
As Albania’s second top trade partner, top foreign investor and the major source of remittances from an estimated more than half a million Albanian migrants, the impacts of the Greek crisis have considerably affected Albania in the past four years. Albania has had less trade exchanges with Greece, less remittances and foreign direct investment.
With more than 600,000 immigrants, the Albanian community in Greece is the biggest migrant community there and accounts for 10 percent of the neighbouring country’s total workforce. However, since 2008 when Greece went into recession the migrant community there was the first to be affected as the construction and agriculture sector where most Albanian men work were severely affected. Reports show a considerable number of Albanian men are relying on their wives’ income who usually work as caretakers and risk renewing their staying permits because of being under no contract and not paying insurance.
Reuters reports nearly 200 Greek-owned businesses registered in Albania in 2010-2011, a jump of nearly a third from the previous two years as Greek entrepreneurs abandon their shrinking home market with its uncertainty and high costs for lower taxes and cheaper labor in neighbors.
“It is remarkable that even Greek businessmen who had never before thought of doing business in Albania express a certain interest these days,” said Spiros Economou of the Greek Embassy in Albania’s capital Tirana.
Central bank data show Greece remains the key foreign investor in Albania despite being in recession since 2008. Greece’s total foreign investments at the end of 2010 were estimated at 724 million Euros, down from 771 million euros in 2007 before the neighbouring country plunged into recession. Greek businesses are present in almost every sector of the Albanian economy, including strategic ones such as telecommunications, the banking system, energy, industry, construction, trade and tourism, significantly contributing to the country’s economic growth.
Italy ranks second with 401 million Euros of FDI at the end of 2010, according to Bank of Albania data.
ACIT: Greek crisis, a ‘Social Bomb’ for Albania
A huge wave of migrants returning home, lower trade exchanges, investments and remittances are some of the most obvious impacts the economic crisis in neighbouring Greece, the top investor and second most important trade partner, has had in Albania in the past five years, according to a recent study conducted by The Albanian Centre for Competitiveness and International Trade (ACIT). The study has found that around 180,000 Albanian migrants, or 18 to 22 percent of the total Albanian migrants in Greece, have returned home during the past five years, and there are few advisory and information services for investment and job opportunities.
The report warns Greece’s possible Eurozone exit and its return to drachma would further affect Albanian exports to the neighbouring country and remittances from migrants there.
“As the Greek economy continues to remain in recession and the unemployment figures remain above 22%, the Albanian migrants working in Greece that will return to Albania will put under pressure the already fragile health and education system. Albania in the short term cannot increase its social security net or invest in its health system as it is significantly lowering public spending in order to maintain its public debt at less than 60% of GDP. This pressure might create room for a ‘social bomb’ in terms of a high demand for service that is poorly funded,” says the report.
