Everything must go, says the prime minister, as the government tries to raise cash for it compensation projects and state budget. Government says its privatization plan also aims to fight corruption and bureaucracy.
TIRANA, Feb 6 -The government will privatize all but the most essential public companies and services, Albania’s prime minister said this week.
Looking to finance major public works projects and facing an increasing public debt, the government seems to be turning to its long-term privatization plant to raise the funds and fulfill its plans for a full private-sector dominated economy.
“We must complete the privatization of all assets necessary, with the exception of [hydro-electric power] dams, schools and hospitals. All other assets must be privatization,” Prime Minister Sali Berisha said in a meeting the government’s key economic experts.
Mr. Berisha’s official reasoning for the move is avoiding the corruption and bureaucracy that often come with public enterprises.
“This process is necessary and vital, first of all, to take off the chain of corruption in public enterprises,” Mr. Berisha said. “In this process, we also aim to increase asset management in Albania to a new level.”
In Albania, and elsewhere, one of the major goals of privatization is to improve management. But the prime minister also admitted that privatization process itself could become pray to corruption if not done properly.
The prime minister did not mention the financial crisis directly in his comments, but economic experts say the writing is on the wall נthe government needs cash, and it needs it fast.
Some austerity measures are already in place as the Finance Ministry decided to freeze up its summer non-priority expenditures and investments.
Tax and customs revenue is expected to decline as a result of the economic crisis, and that could be another reason the government is turning to privatizations.
Albania’s government has been down this road before. In 2009, it used privatization funds to finance the deficit.
But Mr. Berisha chose to focus on other government projects that would benefit.
“The funds created by the process will be a great opportunity for government to compensate former land owners,” he said.
Because Albania’s property claims issues have been so disruptive to the country’s economic climate, the government is involved in a program to financially compensate former property owners who lost it during the years of Communism and the ensuing maze of property rights legislation.
By law, 10 percent of privatization revenues go to fund compensating the former property owners, 10 percent got go to those persecuted under Communism, and the rest of the money goes to the state budget, wherehalf the money goes to increase investment and half toward reducing the public debt.
The government currently has a number of public assets in various companies awaiting privatization. Albetrol, oil and gas production company as well some remaining assets of Albtelekom are ready to go immediately.
