Albania looks to raise its investment game

By bne IntelliNews February 28, 2014

Guy Norton in Zagreb -

Albania is strongly committed to improving the business climate in an attempt to create sustainable long-term economic growth in the country: that was the clear message delivered by Albanian Prime Minister Edi Rama in a confidently delivered speech at a high-level regional forum, "Investing in the West Balkans", hosted by the European Bank for Reconstruction & Development in London on February 24, which featured no less seven prime ministers from the region.

While Albania has registered relatively respectable economic growth since the onset of the global debt crisis and associated economic downturn in 2008 - GDP increased by an average of 3% in 2009-2011 - in the last two years economic growth has since slumped to less than half of that level.

But Rama, who heads a left-wing coalition which came to power after winning the June 2013 parliamentary elections, claimed in his speech in London that new policy initiatives recently introduced by his administration would help to establish the conditions for sustainable long-term growth over the next 20 years. "We are making a major effort to change the economic future of Albania," said Rama, adding: "We aim to be better today and even better tomorrow."

In an acknowledgment that Albania needs to replace its traditional reliance on remittance payments from the Albania diaspora - before the 2008 financial crisis cash sent home by Albanian expatriates, principally working in Italy and Greece, accounted for 12-15% of GDP but has since dropped to 6-8% - Rama said Albania was targeting a major increase in foreign direct investment (FDI) as a result of an improved business climate. "The message for Albania is that the days of its old economic model are over, we know that it's unsustainable. No economic model can function without FDI," said Rama. "It's said that admitting you need a cure means you are halfway to discovering a solution. We intend to go all the way to finding that solution."

Instead of relying on remittances and what he termed "irrational public spending" to prop up the Albanian economy, Rama said that the authorities in Tirana were looking to target greatly increased investment in a number of key sectors - agriculture, manufacturing, mining, energy generation, oil and gas, and tourism.

He admitted that the challenging business climate in Albania had hitherto meant the country failed to realise its full economic potential. "There are huge gaps [in development] between Albania and other economies in the region - our tourism industry lags far behind for example. Albania is a country blessed with many natural endowments and we are committed to developing those gifts in a sustainable manner."

Getting connected

As well as pushing through socio-economic reforms to boost the competitiveness of domestic economy, Rama said Albania was also looking to boost its connectedness with the regional and global economy, admitting that, with a population of just over 3m, Albania needs to boost its trading ties with the 25m-strong Central European Free Trade Agreement and the 500m-strong EU markets.

Albania's EU aspirations received a boost last year when the European Commission recommended that Albania be granted EU candidate status, on the condition that it continues to fight corruption and organised crime. Rama said that EU accession was the county's main politico-economic objective.

Speaking at the same EBRD conference, Arben Ahmetaj, Albania's trade minister, said the economic downturn in the country's main trading partners, Greece and Italy, had been deeply felt in the country, and that as a result "Albania's economy is underperforming its potential".

While historically the bulk of FDI in Albania has been targeted towards the financial services and mining sectors, the government was looking to boost overseas investment in such previously neglected areas as the upgrading and expansion of its rail, road and port network. "We want to create an Albania of opportunity... to improve the image of Albania to one of economic success and openness to investors."

In particular he said the country was looking to facilitate the ease of doing business in Albania through a series of reforms to the taxation system, a clampdown on the black economy and the slashing of red tape.

Finally, Damian Gjiknuri, the energy minister, pointed to the fact that Albania is looking to leverage the potential of the energy sector in the country with a new energy law that he claimed would "create a truly free market for independent producers."

He said the country had already attracted investment commitments from companies from Norway, Turkey and Israel for power plant projects. "Energy is a key sector for any economy... and in Albania represents a great opportunity."

Related Articles

Macedonia kept on hold as Balkans edges towards EU goal

Clare Nuttall in Bucharest -   Macedonia’s EU accession progress remains stalled amid the country’s worst political crisis in 14 years, while most countries in the Southeast Europe region have ... more

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... more

INVISIBLE HAND: Rhetorical wizard Draghi conjures up a QE battle

Liam Halligan in London -   Mario Draghi is being hailed, once again, as a rhetorical wizard. The president of the European Central Bank has done it again. After the October meeting of the ECB’s ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.