Ruli explains the ‘Albania 1 euro’ initiative

TIRANA, Sept. 18 – Minister of Economy, Trade and Industry Genc Ruli presented to a roundtable the idea of ‘Albania 1 euro’ project the government of Prime Minister Sali Berisha has launched.
Ruli said that the country’s economy had shown stability during the last years preserving a 6 percent GDL growth per year. The fiscal and monetary policies have been very careful an inflation has been kept under control at the 2-4 rate, exchange rate has been also stable. In 2005 the income per capital were $2,673. budget deficit has been constantly reduced aiming that in three years it reaches the levels of the neighboring countries in the region. Fast increase of crediting speaks of the good situation of the local businesses. Through an efficient management of the macro-economic policies and the deepening of the structural reforms the country aims at significantly increasing the domestic income be they public or private. It is forecast they reach in three years 27 percent of the GDP compared to 24 percent now. It is also expected a higher foreign direct investment due to the structural reforms, improvement of the business climate and reducing the administrative steps. “They cannot be held in continuality if our reforms will not aim promoting foreign investment and increasing exports,” said Ruli.
Increasing FDI in the next years becomes a top priority. Until now they were mainly based with the privatization process. But the government is planning new ways to attract them in the future. Concession could be one of the main ways for them. The FDI remains low in Albania compared to the region. That comes because of the negative inheritance of the economic and political risk in the country and other obstacles to the business, especially corruption and the low quality of service from public administration, according to the minister.
The regulatory reform undertaken from the government aims at creating a favorable environment to the business, transparent and friendly to new investment, be they domestic or foreign ones. More efforts should e done to improve the legal context. The country has lacked a fair competition and that has affected attracting foreign investment. The prime minister has already created a task force that has prepared the institutional context to coordinate the reform which strongly fights bureaucracy and other obstacles to the business.
Business registration has been cut from 30 days to eight days, also with improved steps in the procedure. There have been equalized the tariffs for the registration and other notary public steps and it is aimed to make complete liberalization of this process. There will be a new model for registration just with one step. In three years there will be created the National Center of Business that will serve as a one-stop-shop for business registration, said the minister. Business registration will be reduced from 47 days it was before this government came to power to one day.
The licensing process has been another direction in this context. It will be held in two stages: a reconsideration to reduce administrative obstacles and the other on reconsidering the legal context for each sector. It will aim to adapt the Albanian laws with “Acquis communitaire” of the European Union. There have already been completed the amendment of the laws for the sectors of mines and hydrocarbons. Same may be said for the sectors of transport, health, agriculture and food and the concrete steps are being prepared. “This reform will bring a very important impact on the mentality of the public administration and the business community on transparency and collaboration in compiling the policies and strategy,” said the minister.
Fighting corruption remains a big priority together with reforms in the judiciary. Property ownership and infrastructure situation remain the main obstacles at the moment, said Ruli. Property ownership hampers the application of many projects and that directly affects the lack of FDI in our country. The price of land and ownership have increased the cost to the business.
That was one of the main reasons why the government undertook the ‘Albania 1 euro’ project recently. The initiative will be translated into a package of facilitated services offered to investors, who should fulfill some criteria. The package will present a list of public assets and the sector for investment. They will be sold, rented, given by concession with 1 euro. Other public services like training the labor force, registration and so on will be offered for just 1 euro. the package aims at attracting investment in priority sectors like products oriented for export or to replace imports, energy, and employment in the least developed areas in the country. Guaranteeing the infrastructure is a very attractive element which will make the government work more. Modernizing such an infrastructure is a long-term process, said Ruli. Creating industrial parks will have a fast impact. The government is defining the industrial zones as one of the most important duties for the country’s development.
The high price of energy has been one of the main obstacles, but the recent price fall starting July 1 with 33 percent less will help the process a lot, said the minister. There have been undertaken a series of reforms in order to secure a regular supply of energy. The minister said they were working to create a geographical balance for energy, including resources, through promoting and urging private investment in the sector. It is aimed to increase production especially from the small hydropower stations. Considerable investment are being done in the transmission sector so that our country links to the regional one. The most important projects in this sector are building a new power plant in Vlora, constructing the 400 kV Elbasan-Tirana-Podgorica line and the 400/220/110kV station in Tirana, restructuring primary equipment in eight substations of 400 and 220 kV; and the building of a new checking center. The government has also decided to fastly privatize the distribution sector for KESH, a process assisted by the U.S. company “Hunton & Williams.”
Albania’s integration into the regional network of oil and gas is another important step to be undertaken. Porto Romano in Durres and Fier may serve as areas for oil and gas terminals, that may also serve to the AMBO project. Privatization of telecommunication, oil, and mines remain top priorities to attract FDI, together with a great effort to improve the country’s image.
“All the reforms are essential elements that lower the cost of investment and contribute in promoting domestic and foreign investment,” said Ruli. “The government remains open to suggestions from the business.”