Faced with many challenges, new Albanian government likely to need assistance from international agencies in implementing its program
TIRANA, Sept. 25 – Albania’s has a new government has made many pledges, but it takes over a country in economic difficulty, with many people in below the poverty line and a growing public debt.
International organizations say they are ready to assist the new government meet such pledges, like creating new jobs, lower taxes for businesses and a progressive tax on personal income, a better and kind of free-for-all health system and a better urban planing, stronger crime fighting and radical reforms in the law-enforcement agencies.
The United Nations Resident Coordinator in Albania Zineb Toumi-Benjelloun and other U.N. agencies’ heads met with the newly appointed Foreign Minister Ditmir Bushati praising the ambitious program presented by the new cabinet. They also expressed UN’s commitment to support the government in implementing the new reform agenda aimed to bring the country closer to EU membership.
Bushati highlighted that the government’s program sets clear priorities in the area of economic sustainable environment, social development, rule of law and protection of human rights, which are also in line with the objectives set forth in the Government of Albania-UN the Program of Cooperation.
Bushati expressed the commitment to deepen cooperation with the UN Agencies in Albania. He also asked for UN’s technical assistance to consolidate Albania’s reporting process on the Human Rights Conventions. He asked to intensify cooperation with International Organization for Migration in support of Albanian Migrants and development of specific projects in support of Albanians returning from migration recently.
An International Monetary Fund mission is visiting Albania and will give its public advice Friday at the end of the visit.
Similar meetings are being held with World Bank representatives.
Albania’s government has a serious challenge ahead נpaying debts and unreimbursed VAT totaling $400 million to the private businesses. That seems to be one big step to break a deadlock hurting the economy, according to new Prime Minister Edi Rama.
Both the World Bank and the International Monetary Fund have advised the previous government to pay the money because it was hurting businesses and linked it to rising bad loans.
Rama pledged to “re-pay this debt as soon as possible.” But he did not say where he is to find the money.
Albania’s economy has had a continuously dropping annual GDP growth with just 0.9 percent in the second quarter of this year compared to the same period of 2012. Last year it was 1.7 percent and it is expected the same this year from about 6-7 percent five years ago.
The tiny western Balkan country has been negatively affected by the recession in nearby Italy and neighboring Greece where most of its immigrants reside.
The country’s progress will be restricted by the government’s unfavorable fiscal position and weak fixed investment, which will ensure that growth, remains below potential for some time to come. Inflationary pressures will remain subdued over the coming months due to easing agricultural prices and low demand-pull price dynamics.
Albania’s current account deficit will narrow to 8.6% of GDP in 2013 and 8.2% in 2014, from 9.9% in 2012, as goods exports continue their gradual recovery and sluggish domestic demand restricts import growth. Ongoing corruption and rising regional tensions may also slow the country’s political progress going forward.
Rama said that an international audit of state finances will be conducted by one of four big international companies that will present the real picture of the economy and state of the public and private money.
