Despite concerns, some 81 percent of the companies continue preferring Albania as a country to do business and would pick it up again to invest again if they were given the opportunity
TIRANA, May 28 – German-Albanian companies perceive economic, legal and administrative factors in Albania as highly negative. In a survey conducted by the German-Albanian Chamber of Commerce and Industry in Albania (DIHA) companies said they perceived fight against corruption and criminality as a top issue. Some 52 percent of the surveyed companies say they are highly dissatisfied and another 36 percent dissatisfied with the fight against corruption and criminality in Albania, describing it is the top and most immediate duty for the Albanian government. “This is an important condition to improve economic factors in the long-term. Other improvements the companies demand involve investments in infrastructure and vocational training education,” says the survey published this week.
Despite concerns, some 81 percent of the companies continue preferring Albania as a country to do business and would pick it up again to invest again if they were given the opportunity.
Around 36 percent see the economic situation in 2012 as negative while the remaining 64 percent think it is satisfying. As far as their personal business is concerned, 17 percent have become pessimistic compared to no negative perceptions in 2010 and 2011.
Almost half of the companies said they increased investments in 2011 and expect to hire more staff in 2012. One in four companies reports lower profits.
Some 26 DIHA member companies participated in the survey carried out in February 2012. Half of the surveyed companies operate in the services sector, 16 percent in the trade and construction, 10 percent in the energy, water and water management and 6 percent in the processing industry, having a similar share to the current structure of the private sector in Albania.
Despite significant progress made in legislation in recent years and the favourable business climate, German investors in Albania see a huge gap between the adopted good laws and their implementation. This is admitted by the secretary general of the German-Albanian Chamber of Commerce and Industry in Albania (DIHA), Annette Kasten, who has told Deutsche Welle in the local Albanian service that land ownership, bureaucratic procedures, and the need to improve legislation on SMEs are some of the main obstacles for German investors.
“Although Albania has a real estate registration office, there are many disputes on land ownership, which is bad signal for foreign investors,” said Kasten, adding that bureaucracy with confirmation of employees and VAT receipts also remained an obstacle.
“There is also urgent need to improve the legal framework on small and medium-sized enterprises because they create opportunities for production and massive employment and are related to the development of agriculture and tourism, two vital sectors to attract investors and develop the country’s economy,” added the DIHA official.
The German-Albanian Chamber of Commerce and Industry in Albania (DIHA) says that apart from agriculture and tourism, German companies are also interested in Albania’s logistics and infrastructure including maritime transport and energy.
A top donor in energy, water supply and sewerage, as well as support to SMEs, Germany is a key trade partner for Albania. Germany is currently Albania’s second most important destination for textile exports and the top destination for the exports of medicinal plants.
German companies in Albania are actively engaged in other important sectors such as transport, construction, production and retail sales. The Tirana International Airport (TIA), run by The Hochtief Airport GmbH, is the chief partner in a consortium that rehabilitated and now operates the country’s only international airport at Rinas, being Germany’s biggest investment in Albania.
The KfW Entwicklungsbank is also engaged in the funding of big infrastructural projects, mainly water supply and sewerage ones, as well as energy, financing regional interconnection lines linking Albania to Montenegro, Macedonia and Kosovo.
German-owned ProCredit bank also plays an important role, offering loans to SMEs and most recently to renewable energy projects.
Annual Bank of Albania data available in Euro show Albanian exports to Germany, dominated by textiles and medicinal plants, have been continuously rising from an estimated 15 million euros in 2004 to 33 million euros in 2010.
Meanwhile, Albania’s demand for German products, dominated by vehicles and machinery, dropped in 2009 and 2010 as the global crisis impacts engulfed the country. Central bank data show imports from Germany rose from an annual 114 million euros in 2004 to 216 million euros in 2008 but dropped to 209 million euros and 189 million euros in 2009 and 2010.
