Another measure attracting foreign investors to Albania is the recent government decision to lift customs duties for the textile industry
TIRANA, June 6 – The recent political crises in some North African and Middle Eastern countries is helping Albania attract more foreign investors in the textile and footwear products, which are the country’s top exports. A number of Italian companies which formerly worked in Tunisia and Egypt have moved to Albania following the escalation of political crises and turmoil in these countries. Sources from the National Chamber of Clothes Producers say Albanian textile companies have signed several new contracts with Italian companies during the past two months. Five new contracts have been signed in Durres, whereas 5 others were concluded in Tirana and Shkodra. Another measure attracting foreign investors to Albania is the recent government decision to lift customs duties for the textile industry. Last April, in an effort to strengthen the country’s top export sector by attracting more foreign investors and creating more jobs, the government decided to remove the 12.5 percent customs duty applied to the garment and footwear industry. Prime Minister Berisha stated that the duty free industry will also bring lots of foreign investors which had previously worked in the Arab countries currently suffering from the wave of political turmoil which has swept the region. Though these changes to the industry are expected to negatively impact budget revenues this year, they are predicted to increase employment and narrow the trade deficit by next year. Latest INSTAT data show the exports list from January-April 2011 was topped by “textile and footwear products” which rose by 16 percent year-on-year reaching 21.6 billion lek. Second came “minerals, fuel and electricity” whose exports rose by 36 percent to 16.3 billion lek, up from 13.9 billion lek in the first four months of 2010. Albania’s manufacturing industry, which consists mainly of textile and footwear companies whose products are mainly exported to Italy and Greece, has overcome the 2009 crisis since the first quarter of 2010– registering significant growth. More than half of manufacturing businesses operating in Albania declared lower sales and profits in 2009, according to a study conducted by Albanian Center for International Trade (ACIT). Falling demand in foreign markets, the increase in manufacturing costs and breach of contracts by foreign partners were the main factors contributing to the poor performance of these manufacturers in 2009. Italy remains Albania’s main destination for textile and shoe exports, followed by Germany and Greece. The garment and footwear industry employs more than 50,000 workers. Government officials say Albania is first in Europe for the lowest tax burden on foreign direct investment, and has the lowest minimum wage at 19,000 lek (190 dollars per month) as well as the youngest population in Europe with an average age of 31 years.
