TIRANA, Feb. 13 – Germany says Albania has to guarantee a fair business environment in order to attract investment from Europe’s leading economy.
The critical comments came this week by Susanne Schutz, the German Ambassador to Tirana, speaking at annual meeting with DIHA, the German Association of Industry and Trade in Albania.
“Albania still has untapped potential in many sectors, first of all in tourism, renewable energy, modern agriculture and services. We now see increased interest in Albania by German enterprises. Investors want to hear success stories by companies that are already present on the Albanian market. What investors seek in Albania is legal security, transparency and a well-functioning, efficient and not corrupt administration,” said the German ambassador.
“Unfortunately, often German and other foreign investors who already have experience with the Albanian market, have recently expressed serious doubts and increased concerns over a ‘fair’ environment in the Albanian economy. I would like to invite everybody to reinvigorate their enthusiasm which was revived in Tirana in May 2015 by Chancellor Angela Merkel during the opening of the German-Albanian economic conference,” she added.
Back in mid-2015 when German Chancellor Angela Merkel visited Albania, one of the country largest foreign direct investments, the Tirana Business Park, a €100 million investment by Germany’s Lindner Group, opened its doors near the Tirana International Airport just outside the capital city, in a bid to serve as prime location for office spaces.
Europe’s largest economy, Germany is Albania’s third main trading partner, one of the top ten investors in the country, and a key source for tourists to the country.
Germany has also emerged as a top destinations for Albanian migrants in the past five years, initially in a wave of ungrounded asylum-seekers, but more recently seeking to legally move and integrate by learning German and obtaining job contracts.
Underlining the need to improve conditions at home so that the migration appeal reduces, DIHA president Stephanie Sieg said the “fight against corruption, bureaucracy, unemployment should be a common priority for the government, businesses and the society.”
Poor fight against corruption and crime, lack of transparency in public procurement, lack of legal security and unpredictability of economic policies due to frequently changing tax laws and regulations are the top concerns for German businesses operating in the country, in barriers that remain almost unchanged to the previous years, according to a 2018 survey by DIHA, the German Association of Industry and Trade in Albania.
German investors perceive the country’s business climate to have considerably improved in the past few years, but yet rate Albania one of the least attractive South East Europe destinations, according to a DIHA survey.
German companies in Albania are engaged in important sectors such as banking, construction, production, retail sales and logistics.
Inviting German investors to explore Albania opportunities and pledging support, Albania’s new economy minister Anila Denaj said Albania and Germany have a full legal framework in every sector of the economy.
“Germany is a strategic partner for Albania and as such it has a leadership role in the region and is a promoter of EU integration in the Balkans. It was a supporter of Albania’s NATO accession and has continuously supported economic reforms in the country,” she said.
Albania has been trying to reform the business climate by reforming its largely perceived corrupt justice sector, settling the long-standing property issue and ease the tax burden, one of the region’s highest.
German investment to Albania has remained almost unchanged at around €130 million in the past four years, according to Albania’s central bank.
Meanwhile, trade exchanges between the two countries, largely dominated by Albanian imports of machinery and equipment, rose to around 63 billion lek (€505 mln) in 2018 to account for 6.6 percent of Albania’s total and rank Germany the third main trading partner after traditional Italy and Greece, according to INSTAT, the state-run statistical institute.
Germany was also one of the main sources for tourists to Albania in 2018 when an estimated 142,000 tourist, a considerable number of whom of ethnic Albanian roots, visited Albania.
Regular direct flights link Tirana to Munich and Frankfurt.
The largest donor in Albania’s transition to democracy and a market economy, Germany has provided key development support in sectors such as energy, sustainable development, water supply, waste management, vocational training education and SMEs through the German Development Bank, KfW, and the German Agency for International Cooperation, GIZ.
Germany started providing development support to Albania in the late 1980s when Albania’s communist regime was about to collapse and just before Germany reunified following the collapse of the Berlin Wall, in support that has reached about €1 billion in the past three decades.
