Albania needs a stable political climate to create a trustworthy business environment and a thriving economic climate.
TIRANA TIMES EDITORIAL
As Albania’s electoral campaign intensifies, all key actors should have a close look at the business climate in the country. Improving the ability of businesses to thrive can help Albania overcome the effects of the European economic crisis. Making their lives harder has the opposite effect.
Unfortunately, Albania’s politicians often see elections as due-or-die affairs, and because elections affect every aspect of Albanian society, every time there is an election, there is a sense of uncertainty among economic actors. Businesses and people delay investments until after the elections, and we are seeing trends that reflect that. Albanian’s national currency is loosing ground against all major currencies, for example, a sign of less confidence in the economy as a whole.
However, the long-term trends of the political climate and governance are more worrying. In a recent survey of the American Chamber of Commerce in Albania (read more about this on our cover story), 67 percent of respondents think that the business climate was bad or very bad during 2012, a normal non-election year.
Perhaps more worrisome, the report also found the business climate in the country is deteriorating as member companies – a wide and important section of the country’s economy נperceived government bureaucracy, informal economy, monopoly or unfair competition and corruption being at high or very high level during 2012.
Beyond politicizing business and economy issues – as the opposition and the government often do – businesses based in Albania over and over say they face increasing barriers in doing business and in their relations with the government.
More than half of the members of the American Chamber of Commerce in Albania, which counts among its members not only American companies, but also a wide and important section of the country’s Albanian business community, further consider the current business climate in Albania as unfavorable and two-thirds of them expect it to deteriorate, according to results the AmCham Business Index.
This is worrisome, particularly because these results are part of a trend. In April, a survey published by the German-Albanian Chamber of Commerce (DIHA) showed 64 percent of surveyed companies perceived the economic situation negatively for 2013, a sharp increase compared to last year.
Yet, we must keep things in perspective, and note that they are not entirely negative – in fact Albania has come a long way in the past two decades. AmCham businesses, for example, had a positive perception on factors like order and safety, infrastructure, energy supply and private property. A majority of the German businesses already here, 87 percent of companies which invested in Albania, said they would invest again in the country.
Against this backdrop, one cannot emphasize enough the importance of improving perceptions of doing business in Albania both locally and globally.
In the German case, but we suspect other investors as well, officials have noted there is a lack knowledge – but also an image problem. That image problem can quickly spread locally as well, if some of the concerns expressed in the survey are not addressed.
These include incorrect application of tax laws and frequent amendments of laws that result in an unstable legal environment and make it difficult to predict the cost of doing business in the coming years.
Which ultimately leads to the chief message Albanian politicians should project in their campaign and in their governance following the elections: Albania needs a stable political climate to create a trustworthy business environment and a thriving economic climate.
