The year of Albania’s centennial will likely be politically stable and economically lukewarm, but it will also be key to the country’s future.
TIRANA, Jan. 05 – Twenty-twelve is special for Albania and Albanians, as the country celebrates the 100th anniversary of Albania’s independence. The past century has seen dramatic developments, some of which have placed the country’s very existence at risk. Others have seriously affected the state’s ability to function and its political legitimacy. These events were not necessarily all worldwide calamities like the two World Wars, but also peacetime developments, like Albania’s international relations with Yugoslavia between 1945 and 1948, and the fall of Albania under communist rule, a national disaster for all Albanians. The dictatorship that established itself led to the gradual erosion of the state’s legitimacy, seizing citizens’ liberties and property.
That legacy has affected Albania’s political transition quite a bit, and partly explains why Albania has not yet been able to produce a fully functioning democratic state. In addition, these past two decades of transition, have had their own critical events for the state, such as the early 1990s, as an extremely poor Albania opened to world again, and then 1997, when Albania became an almost failed state.
Albania’s centennial should serve as a point for serious reflection on how to deal with the present and the future, focusing particularly with the state of democracy in this country, starting with finding and sticking with best model for development.
Politics: Presidential selection, new parties and EU integration
Politically, 2012 will be very important for at least three reasons.
First, parliament is scheduled to select the next president of the republic, Albania’s head of state. Based on the constitution, amended overnight with little discussion by the two major political parties, the president can be elected by a simple majority in parliament, thus there will be no consensus required by the opposition.
These amendments to the constitution were an egregious case of playing a zero sum game that has been a dominant feature of Albanian politics in the last two decades. (The opposition gave consent for the constitutional changes on how the president is selected thinking it would win the 2009 elections, and would be able to have all key leaders for its own: the prime minister, the president and the Tirana mayor. As things turned out, it lost all three instead.)
If the constitution would mandate that the president be selected by four-fifths majority, then consensus between the majority and the opposition would be mandatory, providing more checks and balances. But the fact that the president can now be selected only by a majority vote means there is a risk the nominated candidate might lack the stature, forward vision and unifying feeling the post of head of state demands. Nonetheless, the choice of the majority might still surprise and the selection remains to be seen.
Second, the political scene in 2012 could see important changes if we keep into account that two new political parties with potential support will likely enter the scene. President Bamir Topi has clearly indicated that after he ends his mandate he will be back in politics, and the Albanian press indicates his supporters are already working on the new party structure. Also on the right of the spectrum, the Red and Black Alliance is expected to become a political party in time to compete for the scheduled 2013 elections. With these two new potential parties standing at the center and center right, the bipolar status quo of the Democrats and Socialists could become shaky.
Thirdly, it is not impossible to celebrate Albania’s centenary celebrations as an official candidate for EU membership. It would be perfect occasion to get the status, after being rejected twice by EU officials, but Albania needs to do its homework, as Brussels has indicated over and over that the status is not a gift simply handed over before one is ready.
Twenty-twelve will be a difficult year for Albania, particularly due to the global economic crisis. Albanians returning home from abroad will need to be reintegrated. European experts note there could be serious implications on the fragile Albanian economy and the politicization of the issue has not helped. Things have become so polar, government supporters almost treat those wanting to discuss economic difficulties as traitors to the nation, while opposition supporters often portray a far grimmer picture than the reality on the ground.
Economy: Growing in the middle of a crisis
Even though the World Bank and the Albanian government give differing forecasts about Albania’s economic growth in 2011 and 2012, they do agree on an important point: Albania saw positive growth in 2011 and will continue to do so in 2012.
The government claims that by the time all the figures are compiled Albania will be firmly into economic growth for 2011, at a positive 3.9 percent. It is even more optimistic for 2012, forecasting 4.3 percent GDP growth.
Finance Minister Ridvan Bode says the Albanian economy has faced the global economic crisis well so far, flourishing in the middle of hardship thanks to reforms carefully undertaken by the government. He adds recent reports by Moody’s, Standard and Poor’s and the International Monetary Fund all support his view.
The Albanian government acknowledges that the economies of several neighboring countries are in bad shape, with some hitting negative growth and recession, again, but it also points out that Albania has and will continue to be different. Bode goes as far as calling it “the Albanian economic miracle.”
The country’s prime minister, Sali Berisha, goes even further when he says the Albanian economy is second only to Germany in Europe when it comes to economic growth percentages, even though he recognizes that the sizes and the circumstances of the two economies are quite different.
The opposition, however, says these claims are ridiculous. It has called on the government to take extreme measures to avoid the effects of the crisis. Opposition leader Edi Rama says it is laughable to claim Albania’s per capita income is 9,000 dollars, which would mean a family of four has 3,000 dollars per month income on average. Mr. Rama says that sort of figure only exists in the dreams of the vast majority of Albanians.
Albania is in fact increasingly facing a large income gap. About 50 percent of savings in banks are currently held by 4 percent of the population.
Notwithstanding the politicization of economic issues between the government and opposition, independent and international financial institutions predict Albania’s economy in 2011 and, very likely in 2012 as well, will be stable, even marking some growth at time in which neighboring Greece and Italy are forecast to see recessions.
The government claims the economy of Albania has been immune from the global crisis thanks to the deep reforms and economic model it has implemented.
However, independent analysts see the limited impact of the global financial crisis on Albania in light of the low integration the Albanian economy has with the larger global and European economies.
And last, but not the last, it’s also important to point out that some of this immunity stems from the large scale of informal economic activity in Albania.
Professor Jens Bastian, a former research fellow at Eliamep and Alfa Bank, says the Albanian economy is unlikely to be fully immune from the financial crisis. He adds that’s the case particularly because the economic crisis in Greece and Italy are negative developments that have affected and will continue to affect Albania’s economy.
Experts at the Albanian Institute for International Studies say remittances suffered significant declines in 2011, and a growing number of Albanians are returning home from Greece and other European countries.
The government, however, claims it will be able to preserve its forecast for economic growth – which Minister Bode says will be 20 percent higher in 2012 than in 2011 thanks to the economic model of development and reforms Albania’s government has undertaken in recent years.
However, while there is a lot of talk about “Albania’s special model” it is not entirely clear what it means and how it works so well at a time of a wide economic crisis.
Lutfi Dervishi, an independent analyst, says comparing the Albanian and German economies makes him think about something that happened event several decades ago. In the 1960s Albania faced Germany in football match. The German coach went to observe the Albanian team before the match to try to better understand Albanian football.
Afterward he commented that his only observation had been that Albanians played very well, but he could not understand what their model or schematic plan was.
The key question for now remains: How will the economy be in 2012?
Albania will definitely feel the effects of the eurozone crisis. The depth of the effects will depend on what happens next in Greece and Italy. What happens there will have immediate effects on remittances from Albanians abroad as well as on the number of Albanians that decide they are better off to return home than continue to live in their host countries.
Tens of other factors could impact the Albanian economy, energy prices being key. Although by the end of 2011 the situation improved somewhat, the entire Balkans faced an energy crisis due to the autumn dry spell that affected hydro electric production. The international price of oil could also go much higher, which compounded with new taxes can make it more expensive than ever for Albanians and businesses to fill their vehicles as the pump.
