As it awaits the beginning of EU accession negotiations later this year, Albania’s drive to reform its economy and state institutions has been making the headlines – sometimes for all the wrong reasons. While the country has made great progress on fronts like energy sector reform and public procurement, much-debated judicial reforms have divided the parliament and achieved little progress to date.
But political infighting is not an option if the country wants to achieve its goal to become a member of the EU, Albanian President Bujar Nishani tells bne IntelliNews in an interview. “Reforms belong to the Albanian people, not to politicians. We need a more open political dialogue and better coordination between ruling and opposition parties. The political decision-making process has to be effective enough for us to pass these reforms,” the head of state says.
The apple of discord has been constitutional amendments affecting the powers of institutions like the Supreme and Constitutional courts and the Prosecutor General’s office. Reforms to the appointment process are also planned, in order to limit political influence over the judiciary. Reforming the judiciary is essential to launch negotiations for EU accession – Albania has held EU candidate country status since June 2014, but negotiations have yet to start – as it will dictate the pace of other essential reforms such as combating corruption. Observers are hopeful that Tirana will pass the judicial reform by July, and that this reform will accelerate accession negotiations.
Ranking 88th out of 168 countries in Transparency International’s 2015 Corruption Perceptions Index, Albania is among the most corrupt countries in Southeast Europe – a problem that is only aggravated by the presence of organised criminal groups. While acknowledging the importance of tackling these issues, Nishani remains upbeat about solutions. “We cannot overcome corruption overnight, it is a process that will require time. So we have to focus on mechanisms that will ensure the long-term success of our fight against it, such as stronger institutions, an independent judiciary and cultivating our human capital,” he says.
No time to rest on its laurels
When analysing the Albanian economy and politics it is important to bear in mind where the country is coming from, Nishani advises. 25 years ago Albania was one of the most isolated countries in the world and the third poorest. Now a middle-income economy and a member of Nato with aspirations to join the EU, Albania is on track to achieving average economic growth of 3.5% to 4.0% per year in 2016-2017, according to the International Monetary Fund (IMF), following a few disappointing years with subdued growth.
After signing a three-year, €330mn agreement with the International Monetary Fund (IMF) in 2013, the administration of socialist Prime Minister Edi Rama has been reasonably compliant with requirements to enhance tax collection and crack down on tax evasion; to strengthen financial supervision; to reform the power sector with “impressive results” in containing distribution losses, increasing bill collections, and improving financials at state-owned electricity companies; and to push forward with fiscal reforms. The IMF credits the success of these reforms with paving the way for a double sovereign Eurobond issuance in November 2015 and March, but Nishani believes that there is still work to be done. “Good legislation is important, but it is even more important to make sure that the law is enforced. We do not want skin-deep reforms.”
Underlining Tirana’s reform drive is the desire to attract more foreign direct investment (FDI), which reached €869mn or 50% of GDP in 2014, down by 8.8% from 2013. Energy continues to underpin the country’s economic growth agenda and to attract a large share of FDI, but Nishani believes that tourism, transport and agriculture hold great potential, and urges foreign investors to take more interest in them. But for that to happen, “Albania needs to create a brand for its offering and for its agricultural exports. We have the basics to do well in these areas – beautiful destinations, good quality products – but we have to train our hospitality workers and our farmers in how to market themselves and to attract customers from abroad,” he says.
Meanwhile, the Albanian diaspora, which is larger than the country’s population of 2.7mn, could and should become a source of investment, not just of remittances, Nishani believes. While remittances account for some 15% of GDP, they have been declining in recent years. “The Albania diaspora has changed over time; it has become better educated and more skilled and now has the ability to share its know-how and wealth with its country of origin. We have to make more efforts to reach out to the diaspora; perhaps it is time to set up a ministry for diaspora affairs.”
A 180-degree change
Given its past isolationism, Albania’s outward-looking foreign policy is all the more impressive. Political and economic integration with its neighbourhood are the pillars of Tirana’s foreign policy and economic development nowadays, which have two important goals according to Nishani: EU accession and boosting Albania’s role as an energy transit point to EU countries.
“EU accession is a process that will help strengthen our institutions and develop our economy. Besides, regional infrastructure projects such as [transport] Corridor VIII, which runs from Albania’s Adriatic coast to Bulgaria’s Black Sea shore, facilitate our inclusion in the union and contribute to our economy. [...] EU accession is our only alternative at the moment, but we understand that it will be a lengthy process and we are focusing on meeting the targets set for us instead of the final goal,” Nishani says. “Consolidating our economy and society will be our reward. If we receive the offer to join [the EU], it will be an added benefit.”
Nishani appears to share the enthusiasm of his Montenegrin counterpart Filip Vujanovic, who also granted bne Intellinews an interview, for EU accession. How is it possible to look forward to joining a bloc that is teetering on the edge, if news about Brexit and the refugee crisis are anything to go by? “The EU can only solve the challenges it faces if it stays together,” Nishani says, and Albania wants to join in seeking common solutions for problems like organised crime and refugee inflows. “European history teaches us a valuable lesson about the importance of unity.”
Meanwhile, Albania is joined by neighbouring Montenegro, Kosovo, Bosnia & Herzegovina and Serbia in aspiring to EU membership, and this fact alone brings a certain unity, solidarity and exchange of best practices to accomplish political and economic reforms, he adds.
The Albanian government is working to address the possibility of refugee inflows after Macedonia and several other Balkan countries decided to close their borders. The Albanian government has built shelters on the border with Greece to accommodate refugees if the need arises, but Nishani believes that solving the refugee crisis entails dealing with the source of the problem, which is the civil war in Syria. At the same time, the refugees could bring Europe together in tackling the two-pronged issue, which has a humanitarian aspect but is also a potential security threat, in the best and most humane way possible, Nishani says, somewhat idealistically, about the issue that has divided Europe for months.
Lastly, the Trans Adriatic Pipeline (TAP), a 878km gas pipeline that will transport 10bn cubic metres of Azerbaijani gas from the Greek-Turkish border to Italy through Albania, is a great opportunity for Tirana to position itself as an energy node in Europe, Nishani believes. “Besides, it will stabilise our electricity generation capabilities, which are reliant on coal and hydropower at the moment... I have visited the construction site [for TAP], where pipes are currently being delivered, and I was impressed by the high standards of engineering involved in the project. I am optimistic about its timely implementation,” Nishani says.