Developments in Albania

Published: 24 June 2009 Updated: 5 October 2015

Since 1992, Albania has evolved from a totalitarian regime with centralized planning to a young democracy based on market economy. Still, Albania remains one of Europe's poorest countries.

The isolation from the outside world resulted in Albania ending up far behind other Eastern Bloc countries when communism fell. The Kosovo crisis (1998-99) became indirectly a turning point for the country's development. The large presence of foreign personnel meant that the country started to become integrated with the rest of the world. Both the administration and the economy got a boost in the right direction thanks to the influx of foreign expertise and capital.

The transition from a planned, state system to a market economy was fast in the 1990s, but political unrest contributed to major setback in the economy. In the 2000’s, however, growth has been high and the country has been able to rise above absolute poverty.

Poverty despite growth

Today, Albania is classified by The World Bank as a middle-income country. Despite this, about on out of four Albanians continuous to live in relative poverty and the child mortality rates are still the highest in the region. One out of seven children under five years suffer from malnutrition. According to World Bank estimates, more than a third of all households lacks running water, sewage and central heating.

Development assistance has been important since the early 1990’s. The programs has focused on privatizations, measures against inflation, poverty alleviation and infrastructure investments.

Still, tens of thousands of families in Albania dependent on remittances that relatives working abroad are sending home. Around one million people are estimated to have left the country during the last decade.

Albania is also a country where child labour remains a severe problem. The law allows children aged fourteen to take part in "light work", but as “light” is not clearly defined the result is that children are exploited in labour that can be both heavy and hazardous.

Since 2009, Albania is a member of NATO. In 2014, Albania received official status of as a candidate country to the EU. A key issue for the EU is the commitment from Albania’s political leaders to continue reforming laws and administrative procedures. Another problem is that legal proceedings in both criminal and civil cases remains slow and that the judiciary system is weak.

Widespread black economy

Albania is rich in minerals. Copper, chromium, nickel, zinc and iron are mainly mined in the mountainous areas in the north. Corruption remains a big problem. The informal economy is estimated to represent up to half of the GDP. According to the Government, over half of the total produced electricity is stolen, either through illegal connections or by customers who are not paying their bills.

There is also an extensive illegal drug smuggling and human trafficking between Greece, Albania and Italy. In 2014, several senior executives at the Central Bank where arrested, after more than five million Euros had been stolen from the bank.

Political struggle between right and left

Since the fall of the communist dictatorship, there has been a bitter fight between parties from the right and the left in Albanian politics. The Conservative party and the Socialists have alternated in power.

Despite a formally democratic system, politicians have had difficulty in establishing a democratic culture and almost all elections held have been characterized by irregularities. In 2013, however, the socialist Edi Rama was elected in a process the EU regarded as free and fair.

A clan society

Weak national institutions are the main reason for violations of human rights. According to the Swedish Foreign Ministry's most recent Human Rights report on Albania, the country is, despite recent progress, still a clan-dominated society characterized by high levels of violence.

However, Albania has also often been commended for not fomenting nationalism in neighbouring countries. Instead, Albania has contributed to peaceful solutions. In 2014, Pope Francis visited Albania and praised the country as a model of peaceful coexistence between Muslims and Christians.

Page owner: Department for Europe and Latin America

  • tip a friend
  • share
Tip a Friend heading