Editorial: High tax policies, failure to produce economic growth behind Albania's social unrest

Tirana Times
By Tirana Times April 6, 2018 10:11

Editorial: High tax policies, failure to produce economic growth behind Albania's social unrest

Story Highlights

  • With real democracy in decline for years, the government is often finding itself in a bubble, taking decisions, particularly on things that affect citizens’ finances, with little public consultation.

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Much of the news this week has focused on the Kukes-Durres highway toll clashes, the ensuing arrests and related protests. While these events are important, they are a symptom of a larger problem: A series of government policies that are tearing the social fabric of Albania by failing to produce economic growth while squeezing Albanian citizens and small businesses hard through taxes and then channelling the funds to unproductive and shady ventures fraught with questions over cronyism and ethics.

Albania's Socialist government led by Prime Minister Edi Rama, in power nationally since 2013 and locally in Tirana 2000-2011, has implemented an aggressive campaign of tax hikes on businesses and individuals that has failed to translate into better state services. In addition, Albanians now face ever higher electricity, fuel and water bills, which too are also loaded with taxes. All this means less money in the hands of the common Albanians and small businesses, translated into economic decline. In addition, hundreds of thousands have left the country in recent years, citing lack of hope for jobs and quality of life at home.

Moreover, the government is increasingly relying on private-public-partnerships, long-term concessions which in theory are supposed to be more efficient and cheaper, but in practice have become a major way to channel money out of taxpayers' pockets and into large companies that keep the government in power -- the owners of which are referred to as "the oligarchs" in Albanian media.  

This comes as there is an increasing gap between those who govern and those who are governed in Albania. With real democracy in decline for years, the government is often finding itself in a bubble, taking decisions, particularly on things that affect citizens' finances, with little public consultation.

Relying on opinion polls showing that it still has majority support among voters and the fact that the political opposition is weaker than it has been decades, Prime Minister Rama has continued to be arrogant against critics and the people themselves, hoping that apathy and an opposition in tatters means he can take measures that benefit a few on the back of many without any consequences. But that free ride has ended. The Kukes protest shows the poorest Albanians will no longer put up with the state's ever-heavier hand. And they are not alone, as more and more Albanians refuse to participate in the rigged political and economic system taking roots in Albania today.

In previous editorials, this newspaper has warned of the ill effects on the fabric of Albanian society that come from the decline of democracy and the increasing income inequality. This a good time to ponder where governance in Albania took a wrong term and reconsider tax hikes and other policies that lowered economic freedom and produced no economic growth and well-paid jobs.

It's time for Albania's government to return to lower taxes and regulations and freeing the market to allow wide and fair participation.

 

Tirana Times
By Tirana Times April 6, 2018 10:11