Investors are concerned about the present economic outlook of Albania, pessimistic about the future and very cautious about taking next steps with their business endeavors in this country. The data comes from the yearly publication of the Economic Survey of the German
Chambers of Commerce in Central and South Eastern Europe (DIHA report). The report has been examined by local media and other actors for the signals it gives in relation to the business and investment climate in the country.
Reports which originate from outside parties are very valuable for all those who are interested in realistic and functional analysis of the situation at a time where political actors have various and contradicting interpretations of the reality. If the source happens to be foreign investors, people with a personal stake in the truthful economic enquiry, then the
reports become even more precious. If one considers the current report in its details, many pessimistic signs come to the limelight: On a ranking of all the countries of Central and Eastern Europe as likely investment destinations, Albania is positioned well towards the end,
surpassing only Kosovo with a slight margin. The fact that Albania is as likely a destination for investment as a country of less than 10 years of existence, with significant border and recognition problems is very unsettling. A full third of German investors who operate in Albania would not repeat their endeavor again.
The lack of rule of law and the problematic situation of Albanians justice sector are a constant minus sign in all the estimations and evaluation of the international business community that operated or considers being present in Albania. So is corruption in all its forms.
However, Rolf Castro Vasques, who presented the report in the capacity of President of DIHA, highlighted another interesting fact that influences the overall negative estimation: the lack of a stable administration that communicates with investors in the long term. While in other countries the contact points of investors are not touched by power changing hands
in the executive, in Albania they have to consider the risk that their dialogue counterparts in the administration may be different people every time.
The tax environment seems to be a problem too but not in the expected way.
Investors seem to mind more the selective tax controls that they are submitted to,
much more often that their Albanian counterparts, rather than the level of taxation per se. other factors which seem to have deteriorated in the judgment of the German businesses are availability of skilled staff, transparency of public procurement as well as fight against
corruption. Each identified problems is in itself a major ringing alarm bell.
The same sentiments are echoed in another interview this week of the President of the American Chamber of Commerce, Mark Crawford who comments on the leave of some key American and Canadian businesses from Albania. Citing lack of stability and continuity in policy including taxation, Crawford sees the departure of these businesses among
other things as a caution signal to other potential investors.
The community of foreign investors justly points the finger at some systemic issues which are real obstacles to economic development of Albania.
Many of the negative elements are not changed from year to year signaling lack
of progress to address the problems.
Half of the German businesses judge the current economic outlook as bad.
The overwhelming expectation of about 80 percent of these businesses that the
economic situation will not change or even will deteriorate spells more challenges
and more hardship for citizens in Albania.
The executive administration is now in its third year and seems to go on inertia
of focusing on PR and campaign style actions. The much acclaimed structural reforms have yet to pay off in terms of economic gains and improvement of climate for economic activity. While the government may be justified to take the apocalyptic accusation of the opposition
with a grain of salt, it should invest serious effort to scrutinizing independent serious reports form a target group of major importance: foreign investors.
Efforts to consolidate the system and provide security to all investors should not be compromised by frequent and haphazard changes both in policy and in the human resources that manage the communication between decision makers and economic players. Albania has yet to painstakingly find its economic niche and offer a real competitive advantage.
However unless these changes start to come soon, the independent observer of the Albanian economic situation is right to conclude that the future is not something to look forward to.
