The NATO factor to double FDI in Albania

TIRANA, April 07, 2009؂ecoming a NATO member with full rights may have the highest economic effect for Albania. According to Ilir Zhilla, head of Albanian Union of Economic and Industrial Chambers, the NATO membership guarantees Albania’s reputation as a safe environment to invest in. History of past new entrances in NATO is indeed promising. In one of many example, Romania, according to Zhilla, enjoyed a huge increase in FDI immediately after its NATO membership. Albania has long suffered a crippled image in foreign investors’ eyes due to events in 1997 where Albanians lost 1.2 billion USD in pyramidal schemes which saw the state collapse within days and anarchy reign in the country for months. Despite a strong comeback of state institutions and economic reforms in the years after, the small country has yet to see satisfactory foreign investment, usually ranking dead last in the region.
Entrance in NATO should be the turning point, as many hope. Indeed, the NATO effect has already had some impact before April 4th when the country officially became a member. The Albanian government has already signed major contracts with foreign companies in sectors such as energy, mining, and other industries. A 500 million EUR investment to reinvent the railroad system and travel is expected to be signed with the China Railroad Construction Corporation. The country has great investing potential in real estate, construction, and tourism, all undeveloped, but with great natural resources waiting to be used or enjoyed.
Doing Business 2009, a yearly report from the WB that measures countries’ reforms in promoting business environment, Albania was ranked in the top most improved countries in 2008. Crans Montana held its 4th economic forum in Tirana in as many years, just 2 weeks ago. Currently, Albania is considered by many to have the most business friendly fiscal system in Europe, despite warning from financial institutions that such fiscal liberalization might cause a collapse in state budgetary balances.