Tirana, 5 April 2008. The latest report from the National Bank of Greece (NBG) confirms that immigrants are making a positive contribution to the Greek economy. According to the report, “Immigration has played a very important role in supporting both domestic demand and the productive potential of the Greek economy.” NBG reported that the one million immigrants from South-eastern Europe have boosted the flexibility of Greece’s relatively rigid labour markets, raising potential output growth and supported consumption following their integration and assimilation into the economy.
500,000 Albanian migrants in Greece
It is difficult to estimate the total number of Albanian immigrants in Greece because many of them work and reside in the country illegally. The Albanian government calculates that approximately 500,000 Albanians are living and working in Greece. According to estimates from the Greek Ministry of Foreign Affairs in 1998, approximately 470,000 Albanians were living in Greece. The 2001 Census in Greece indicated the presence of 433,249 Albanian immigrants, although it is estimated that the real number of Albanians in Greece is higher. It is reasonable to assume that figures given by the Albanian government are close to reality because the Albanian emigration to Greece continued even after 2001 and there have been no indications of any substantial return migration.
Euro 2 milliard
in Greek banks
In the last 15 years, the number of Albanians in Greece has constantly increased. Even more important, to a very large extent these Albanian migrants are becoming upwardly mobile as they work in better paying jobs including construction, industry and services, and increasingly steer clear of agriculture and seasonal jobs. At the same time, many of these Albanians have been reunited with their families and plan to stay for longer periods in Greece. All these factors are influencing their saving habits.
No one doubts that Albanians have a high propensity to save. In 1999, it was estimated that each Albanian migrant in Greece saved at least $2,340 annually. In 2004, the average annual savings rose to Euros 5,390 per household and there is no secret they have deposited huge sums in Greek banks. By way of indication, in 1992, or only two years after the initiation of the first massive wave of emigration, Albanian migrants in Greece had already deposited an estimated $80 million in Greek banks. By the end of 2007, it was calculated that Albanian migrants in Greece had deposited some Euro 2 milliard in Greek banks.
Albanian migrants prefer to deposit their savings in Greece, or other host countries, because of economic instability, underdevelopment of the home banking sector, lack of investment opportunities in Albania, bad memories from the collapse of Ponzi schemes in 1997, and other reasons. Further, because the Albanians are unused to modern saving forms and diversification of risk, they usually save only in time deposits with a small percentage of their savings invested in stocks and bonds.
Migrant remittances and the Albanian economy
Remittances are fuelling the Albanian economy and financing the huge and increasing Albanian trade deficit. Albanian remittances during the period 1993-2003 are five times higher than the inflow of foreign investment; they represent 15 percent of GDP and 64.3 percent of its imports. In one of its 2005 report, IOM arrived at the same conclusion. “Remittances are substantially higher than the value of Foreign Direct Investment, Foreign Economic Aid and exports.” Again, these numbers are based on official data and they show only the amount of money transfers via banks.
These Euro 2 milliards saved in Greek banks are equal to 30 percent of the Albanian GDP. Nevertheless, the Albanian state and Albanian banks do very little to convince Albanian immigrants to save in Albanians banks or to invest even more in the Albanian economy, instead of simply financing the everyday consumption of their families and relatives. In general, the savings of Albanian migrants represent a pool of capital estimated to be in the area of Euro 4.75-5.38 billion (87-98.5 percent of the Albanian GDP for 2003). Modest assumptions on their multiplying effect estimate their total impact between 156 and 177 percent of the Albanian GDP for 2004.
