TIRANA, Jan, 24 – Government says it will continue increasing pensions for around 540,000 beneficiaries even this year, a measure expected to become effective starting from next July. According to the Labour Ministry, pensions in 2011 will increase by 5 percent for urban areas and 10 percent for rural areas.
Last July, government also increased pensions by an average of 6 percent despite the difficult financial situation which forced it to make considerable budget cuts of around 39 billion lek (390 million dollars). Public sector wages also underwent a 2 to 12 percent increase, with medical staff benefiting the highest increase and pubic administration employees receiving high monthly wages only a 2 percent increase.
Last December, pensioners which often complain that what they receive is not enough even to pay electricity and water bills, were the only category which did not receive the usual year-end reward. The decision seems to have been affected by the huge damage caused in the northern Shkodra and Lezha regions following massive flooding caused by heavy rains and water discharges from the hydropower plants.
Social Insurance Institute data show Albania had 540,422 pensioners in 2009 around 6,000 more than in 2008. In July 2010, minimum pensions for urban areas increased to 10,690 lek (around 100 dollars), up from 10,276 lek while for rural areas to 6,980 lek, up from 6,344 lek previously. Men working in public administration usually retire at 65 while women at 60.
Data made available only for the 2005-2009 period show social security revenue collected by the Social Insurance Institute increased to 2.86 billion lek in 2009. up from 2.635 billion lek in 2008 when revenues dropped by 1.29 billion lek compared to 2007.
Last year, World Bank officials warned the Albanian pension system could put government in financial difficulty in the next few years because of the low rate of contributions. The current ratio is 1.4 contributions to 1 pensioner at a time when a stable pension scheme requires at least 3 contributions for one pension. World Bank representatives say Albania needs to undertake long-term sustainable reforms in the pension system.
Meanwhile, the country’s employment offices expect to create 12,000 new jobs under mediation programmes and offer vocational training to 500 young men and women who will later be hired by private companies.
The Swedish government has also offered assistance to computerize the employment services in Albania. During a recent meeting with SIDA director Britta Olofsson, Albania Labour Minister Spiro Ksera announced a cooperation agreement would soon be signed to computerize employment services and extend it to all regional offices.
Recent changes to the Labour Code, which require a qualified majority vote of two-thirds will be a key challenge this year considering the ongoing political stalemate between the majority and the opposition over the June 2009 general election and failure to approve important laws since then. Changes to the country’s Labour Code approved by the National Labour Council are aimed at improving safety and health regulations at workplaces and preventing discrimination to bring it closer to EU legislation following problems under the current law.
Unemployment
Albania’s unemployment rate registered a slight increase for the second quarter in a row in 2011 but remained one of the lowest in the region, at 13.5 percent at the end of September 2010, if official data provided by the country’s Institute of Statistics (INSTAT), often described by opposition and some experts as controversial, are taken for granted.
Data published by INSTAT in a labour force survey showed the unemployment rate at the end of the third quarter of 2010 climbed to 13.52, up from 12.76 percent during the same period in 2009, but down 0.26 percent compared to the second quarter of 2010.
Data show private companies hired only few hundreds of new employees in the third quarter of 2010, a sign proving the financial difficulties small and medium-sized enterprises as well as corporations are experiencing.
The unemployment rate registered its sharpest increase at the end of 2009 when it climbed to 13.75 percent, up from 12.68 percent at the end of 2008.
Experts say the situation is a result of the crisis in the construction sector which continued its poor performance even in the first three quarters of 2010 registering sharp negative growth rates.
Regional comparison shows Albania’s unemployment rate at 13.5 percent at the end of September 2010 is far better compared to Macedonia, Bosnia and Herzegovina and Kosovo, standing at 4 percent more than the EU 27’s average of 9.6 percent.
However, INSTAT data do not include rural areas, whose population is considered self-employed in the agricultural sector because of possessing land.
