TIRANA, Nov. 8 – Twenty-five years after the collapse of the communist regime and its centrally planned economy, some key sectors of the Albanian economy continue to remain underdeveloped with a negative impact on the country’s ailing economy in the past eight crisis years, according to a 2016-2017 Transition Report by London-based European Bank for Reconstruction and Development.
The report shows some segments of the corporate, energy, sustainable resources, infrastructure and financial sectors still have some indicators representing little or no change from a rigid centrally planned economy, although Albania’s private sector now accounts for a majority of 80 percent of the GDP.
On a 1 to 4+ scale with 1 representing little or no change relative to a rigid centrally planned economy and 4+ representing the standards of an industrialized market economy, Albania scored 1 in private equity, -2 in capital markets, 2 in insurance and other financial services, and -3 on banking and finance to micro, small, medium-sized enterprises, with no change compared to last year’s ranking in the financial sector.
In the infrastructure sector, Albania is rated at 2 and 2+ for its underdeveloped railways and water and wastewater infrastructure and at -3 for its urban transport and railways infrastructure.
Although very rich in natural resources, Albania’s management underperforms with water and materials efficiency scoring 2. The country is rated best at sustainable energy with 100 percent of its domestically produced electricity coming from hydro-dependent electricity.
Albania’s natural resources and electric power are rated at -3 and +2 respectively.
“Albania is no longer on negative watch, as some progress has been made with the approval and implementation of key legislation on renewable energy and energy efficiency,” says the report.
The country ranks better on the corporate sector with ICT being placed on a positive watch and the agribusiness and real estate rated at -3.
The general industry, rated at +2, has been removed from the watch list in this year’s report.
Albania’s ratings are in line with other EU aspirant Western Balkans countries.
“Developments in corporate sectors have been mixed over the last year. In Albania, a moratorium on the issuance of building permits has created difficulties in the construction sector, resulting in the country being removed from the positive watch list for general industry,” says the Transition report.
“Spectrum liberalisation in Albania has resulted in Albania being put on positive watch. AKEP, which regulates the sector, has allocated spectrum licences to several companies for the provision of 2G, 3G and 4G services and lifted existing restrictions on the use of certain bandwidths,” it adds.
The report notes Albania and Montenegro have adopted legal and regulatory frameworks that foster competition and investment, but not yet achieved good levels of broadband penetration due to ICT service prices still being relatively high.
The data show that there is a clear urban-rural divide in many countries in terms of access to bank accounts, particularly in countries with higher levels of inequality.
“In Albania, for instance, the rural/urban nature of a person’s place of residence is more important than his/her income, gender and level of education combined,” says the report.
