The tensions created in Albania by the ongoing political conflict are putting the country's economic prosperity at serious risk, mainly due to the stop in the expansion and investment plans.
Representatives of business organizations - as reported by the Albanian business magazine Monitor - argue that as a result of this situation the public administration is limiting its services, that the banks are freezing the loan plans and that the commercial activities are registering negative trends.
Despite the situation in the country, the government - as often happened in Albanian history in times of crisis - has recently signed contracts and concessions (Milot-Balldren, Orikum-Dukat and the hospital laboratory service) that affect the state budget in the long term and which, above all, are not included in the current national priorities.
Furthermore, the fiscal crisis is getting worse due to hidden debts in the state budget, which in turn risk increasing due to decreases in revenues. A very high bill that the political situation in the country - continues Monitor - is making the national economy pay.
"The political crises, albeit slight, have a price that the national economy will eventually have to pay. The consequences of what is happening now will have a long-term effect."- said Arben Shkodra, general secretary of the union of Albanian producers.
Tensions that are also driving foreign investors away, as reported by lir Trimi - executive director of AmCham Albania (American Chamber of Commerce) - to Monitor:
"No one will invest or undertake commercial initiatives in a country where political and economic risks are high.
Investors make a detailed analysis before entering a country's market, controlling all macroeconomic factors, fiscal policies, the workforce and the judicial system.”
A few days ago the foreign investors association presented the results of the survey on the commercial environment in the country, which showed that for foreign companies the main deterioration was the political climate (32 points with 0 which is the maximum value) followed by transparency in government procedures (38), laws and security (41) and the system for public procurement procedures (42).
The same concern was highlighted by the American Chamber of Commerce in Albania, which in a survey in April had indicated as one of the main concerns "the internal political climate":
"This indicator showed a decrease of 3,02% compared to a year ago, reflecting the concern of members of the American Chamber of Commerce for the climate in which they are working. "- added Ilir Trimi.
A risk also for tourism
The political crisis also threatens to undermine Albania's image abroad, especially in the tourism sector, a sector that in recent years has registered one exponential growth thanks to an ever increasing number of visitors:
"The situation is dramatic. Our partners abroad are very concerned about the cancellations that their customers are doing. We do not know what number it is but we know that the number of cancellations is very high."- he told the magazine Monitor Kasa Rahman, director of the Albanian Tourist Union who every year collaborates with numerous agencies in the countries of northern Europe.
Political crises produce tax losses
Between the 2011 and the 2013, the last two years of the mandate of the democratic government of Sali Berisha, several decisions were taken whose negative is still perceptible today. The Berisha government, in fact, signed the first public-private partnership (PPP) concessions in some sectors, such as fuel and customs scanning, with the aim of improving the sectors in question.
However, the quality of the fuel continues to be the same while in customs it continues to pass illegal goods despite customs scanners. As if that were not enough, the two concession contracts together with others caused the public debt to jump to 70%, or ten percentage points more than the standards a country in transition should have.
The same situation is recurring today: the Rama government has only worsened the model by granting concessions in the form of PPPs in the field of health, education, infrastructure, etc. In all EU countries, PPP obligations can reach 3% of GDP, a value that in Albania actually amounts to 15% currently.
Adapt to survive
Albanian companies, grown and passed through numerous political crises, have developed different models that guarantee survival in such situations, as Arben Shkodra describes for Monitor:
"Businesses are managed by avoiding bureaucratic procedures with the public administration and creating action plans, aimed at avoiding channels that threaten direct risks.
In these situations the attention of companies turns to emergency expenses and to the preservation of revenues, while at the same time avoiding enlargement plans.
However, the current one is a crisis of the democratic system, as well as the routine one of politics. Individuals have placed themselves above institutions and the democratic order has been largely compromised. "
The consequences of the malfunction of the judicial system
Albania has begun a reform of the judicial system for over a year, which has left the country without fundamental bodies such as the Constitutional Court and the High Court.
This situation of weak rule of law is hindering economic prosperity and is preventing foreign investors from entering the Albanian market. In fact, in the last five years no large companies have approached the Land of Eagles, while some already present, such as Bankers Petroleum and Airport Partners, have sold their assets to the 2016.
The lack of the rule of law has also had repercussions in the treatment of property, a source of conflict for thousands of Albanian families and which is now also undermining the sustainable development of the country.
Moreover, the current situation has strengthened criminal organizations that are parallel to the state: many companies, especially outside the cities, in addition to paying taxes and taxes are forced to pay "the lace" to criminal groups in exchange for non-violence.
The activities of the criminal organizations have produced a large amount of recycled money, which does not allow many companies and consumers to compete with these organizations by creating - together with the widespread corruption at all levels of the government - a situation in which the political class divides the revenue with these "economic oligarchs", leading to ever-decreasing well-being in the lower levels of society.
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