By Franz-Lothar Altmann
A good indicator to measure where a country stands concerning its transformation from a centrally planned economy to a functioning market economy is the Bertelsmann Transformation Index (BTI) which is published every two years since 2006. Seven main indicators consisting each of additional sub–indicators scaling from 1 (worst) to 10 (best) provide the possibility not only to see where a country stands compared to others, but over the years offers a picture about progress or regress of that very country. In the case of Albania in 2006 the country ranked number 48 among 128 transforming countries in the field of economic transition with an average mark of 5.8. Among the Southeast European countries only Moldova was worse with 4.7! 10 years later, the BTI 2016 will place Albania economically at position 32, now better than Bosnia and Herzegovina, Kosovo and Moldova, with a mark of 6.61! Also compared to 2014, when Albania marked 6.39 in the BTI, the country shows progress. These seem to be relative good news, and in fact during the European-wide financial crisis of the years 2008 to 2014 only Albania (and Kosovo) experienced no negative macroeconomic growth rates! But a closer look at the sub-marks for Albania displays in particular doubts concerning sustainability of economic performance and transformation efforts, because the sustainability mark of 5.0 is clearly the worst among the economic indicators for Albania.
In fact, the country report of the European Commission of November 2015 states that Albania is only moderately prepared in developing a functioning market economy. Little progress concerning macroeconomic stability and growth (in the first quarter of 2015 GNP rose by 2.8%) cannot hide that a significant number of challenges remains. 21% non-performing loans (June 2015), 17.5% unemployment plus high employment in the informal sector of the economy characterize the still difficult and unsatisfactory economic state of affairs.
Given this overall not really gloomy economic situation, the sudden increase of the number of migrants from Albania to the EU in the first half of 2015 should not surprise. Statistics from the German Federal Office for Migrants and Refugees (BAMF) comparing the period January to October of the years 2014 and 2015 placed the group of Albanians in the previous year at position five with 6,118 asylum-seekers, in 2015 this number has increased to 48,865, an increase by 700% placing Albanians at position two ahead of Kosovars and people from Afghanistan and Iraq! There has been a steady outflow of young people from their homeland over the years which can be explained by the generally low standard of living and the bleak perspectives. There should be undertaken a more profound inquiry into the causes, motivations and decisions of Albania who left or are willing to leave their country.
In principle one can distinguish between two groups of migrants, the first one consisting of people from the poor countryside who make up the so-called poverty migration. The second group consist of professionals, skilled people, who are lousily paid and thus expect much higher salaries in the EU countries. Now, what are the effects of that migration for the countries of origin, here Albania, and for the receiving countries?
For Albania a first effect of migration is that it helps to reduce the pressure on the labor market, i.e it is lowering the number of unemployed. This holds primarily if people from the first mentioned social group, the poor and unemployed, decide to leave. If skilled people, professionals, emigrate, then this causes a regrettable brain drain for the country! A short look at the neighboring country Bosnia and Herzegovina shows that in 2014 alone from the health sector 1,000 persons have left, doctors and nursing staff! Comparable figures for Albania could not be found, but that such an outflow is extremely painful for countries that anyhow suffer from undersupply and low standards in the health sector is obvious. On the one hand, every expertise, and also the latest country report of the European commission, claims and promotes significant investment in human capital, in higher education and in restructuring the vocational education and training, in order to improve Albania’s competitiveness. This, however, poses the question whether such investment in education and job training also might prepare for better opportunities for emigration? It even leads to an, in principle counterproductive, question whether it is in the interest of a country of emigration if certificates and qualifications of its educational sector are recognized abroad? Here the viewpoints of the persons concerned are clear, but from the macroeconomic view for the respective country this consideration is very ambiguous!
What certainly must be seen positively is the fact that the remittances of those working abroad contribute substantially to domestic GDP of the emigration country by supporting consumption of the private households. And another positive effect comes up when migrants decide to return to their homeland bringing back improved skills and experiences that can be applied after return in their homeland.
On the side of the countries of destination again the distinction must be made between professionals and better educated, and those uneducated and unskilled who often even lack basic schooling. Concerning the first group, in many of the northern EU countries, in particular also in Germany, there is a lack of certain professions, mainly in distinct service sectors. In the past immigrants have helped to fill gaps in the health sector and in services of caretaking for the elder people. The German economic wonder after WWII was to a large extent supported by the well-organized inflow of so-called guest workers, at first from Italy, and then from Spain and also from former Yugoslavia. This fact still provides positive arguments when at present the discussion on refugees and migrants becomes more and more frightening.
Unskilled, less educated, unlearnt migrants, on the other hand, provide support for negative prejudices, in particular if those remain unemployed receiving support from the Social Security funds for longer time or even for good. Hence the public opinion tends to argue that these people, the migrants, only came in order to enjoy Social Security benefits. In addition, the general fear is often voiced among domestic unemployed that these people might compete for low-paid jobs. So the outcome of reflections on this rather heterogeneous situation is as such that some politicians in the destination countries argue that labor market access should be relaxed, a second group is calling for a market-oriented flexible selection of labor permits, whereby a third group still tends to restrict immigration almost completely disregarding the requirements of their economies because of fear of growing cultural diversity and thereby loss of national identity.
Taking all these arguments together, an assessment about the effects of migration on the respective economies and societies in both, the sender countries and the countries of destination, remains open. In the short run for a country of emigration it might alleviate the pressure on the domestic labor market, but in the long run in particular the loss of young people and the brain drain of professionals certainly bear negative consequences. In the countries of destination the inflow of better educated laborers is welcome if it matches existing gaps on the labor market. Furthermore, the immigration of young people has a positive effect on demography which in all northern countries is characterized by a constant shrinking of the domestic population. However, it remains obvious that migration should not happen uncontrolled, in the interest of both, the countries of origin and the countries of destination.
