Best Practice Options: Albania Philip Martin, Susan Martin, and Ferruccio Pastore* ABSTRACT The Cooperative Efforts to Manage Emigration (CEME) site visit to Italy and Albania – organized in cooperation with the Centro Studi di Politica Internazionale (CeSPI), an Italian independent research institute – took place in June 2002. Albania is a country of 3.1 million people with a GDP of $4.1 billion that switched in the early 1990s, after 45 years of communism, from economic autarky to a peculiar form of market economy, and experienced some of the world’s highest emigration rates in the 1990s. Some 600,000 to 700,000 Albanians, or almost one-fourth of Albanians, and half of Albanian professionals, emigrated. As a result, the labour force is only 38 per cent of the population, versus 50 per cent in most industrial countries (UNDP, 1996, 2000). The major destinations of Albanian migrants in the 1990s were Greece, which had 400,000 to 600,000 Albanians in 2002, and Italy, which had 144,000 legal residents and probably some tens of thousands illegals at the end of 2001.1 Many Albanians have become legal residents of Greece and Italy as a result of regularization-legalization programmes. Albania is also a transit point for third country nationals attempting to reach the rest of Europe via Albania. Of particular interest to the CEME members were efforts by the Italian and Albanian governments to cooperate in managing the flows of Albanian and transit migrants. When the CEME visit was made, Albania was experiencing rapid, yet unbalanced economic growth as a result of $615 million in remittances from Albanians abroad (estimates: Bank of Albania annual report, 2001), and aid * University of California, Davis, Department of Agricultural and Resource Economics, Davis, California; Georgetown University, Walsh School of Foreign Service, Institute for the Study of International Migration, Washington, DC; Centro Studi Politica Internazionale, Rome, Italy. Published by Blackwell Publishers Ltd., © 2002 IOM 108 Cowley Road, Oxford OX4 1JF, UK, and International Migration Vol. 40 (3) SI 1/2002 350 Main Street, Malden, MA 02148, USA. ISSN 0020-7985 104 P. Martin, S. Martin, and Pastore from the European Union (EU) and other sources. The spending of remittances and aid has fuelled a building boom, but there was no clear sense of how Albania would use the window of opportunity opened by remittances and aid to develop a viable economy. The optimistic scenario is that remittances and investments from Albanians abroad will produce an economic take off based on value-added food production and tourism in the “Switzerland of the Balkans”. The pessimistic scenario is that corruption and divided government will prevent the development of a successful economic strategy, and that low wages, high unemployment, and inadequate services such as health care and education will prompt the continued emigration of young and educated Albanians. Potential best practices include: joint Italian-Albanian marine patrols to discourage smuggling and trafficking in small “fast boats”; Italy granting Albania at least 6,000 work visas a year to publicize that there is a legal way to work in Italy, helping to discourage illegal migration; and bilateral and international assistance to enable Albania to develop laws and institutions to deal with foreigners transiting Albania, and foreigners requesting asylum in Albania. Albania does not, on the other hand, appear to be a best practice in managing the use of remittances to aid economic development. Although remittances play an important role in basic subsistence and construction of housing, there have been fewer efforts to encourage investment of these funds in infrastructure or productive activities. The banking system needs substantial reform to become a venue for transfer of remittances and source of credit for enterprise development. Albania would benefit from a more systematic examination of the lessons learned in other countries about the investment of remittances for economic development. ALBANIA: HISTORY, POLITICS, AND ECONOMICS Albania, or Shqiptarë (land of eagles), a mountainous and traditionally isolated Balkan country between Kosovo and Greece, is 50 miles east of Italy across the Adriatic Sea at its narrowest point. The 2001 census reported 3.1 million residents, including almost 350,000 in Tirana and 100,000 in Dürres. Albania is the most rural and agricultural country in Europe with 1.8 million Albanians living in rural areas, and agriculture accounting for more than half of GDP. About 70 per cent of Albanians are Muslims, 20 per cent are Greek Orthodox, and 10 per cent are Roman Catholic (Morozzo della Rocca, 1997; Pastore, 1998). Albania became an independent nation on 28 November 1912. When Albania’s present borders were fixed in 1921, about one-third of Albanians were outside the country, mostly in Kosovo. Enver Hoxha led the communist resistance to the occupying Axis powers during World War II, and his Albanian Workers’ Party (AWP) ruled Albania between 1946 and 1985. Hoxha first allied Albania with Best practice options: Albania 105 Stalin to offset the efforts of Tito’s Yugoslavia to include Albania, then switched to China as chief supporter, and finally led Albania into ever-deeper isolation. Albania is physically isolated by mountains from its neighbours: Kosovo and Serbia to the north, Macedonia to the east, and Greece to the south-east, which, along with the strong cultural and psychological impact of Italian TV, helps to explain why many Albanians look across the Adriatic to Italy.2 After Hoxha’s death in 1985, Albania began to liberalize, but too slowly for students and others, whose protests led to the downfall of communism in 1990. However, in the March 1991 elections, the AWP, renamed the Socialist Party of Albania (SPA), took power and denounced Hoxha’s isolationist rule. Hope for quick economic improvement was dashed by political squabbling, leading to mass emigration. In March 1991 Italy accepted a first group of 23,000 Albanian migrants; in August another group of 20,000 was treated in the opposite way and repatriated without exceptions. In the same period around 30,000 migrants arrived in Greece. In March 1992, the opposition Democratic Party of Albania (DPA) came to power and generated some initial optimism, but in the long run, it produced more economic chaos, a breakdown of law and order, and more emigration. Between 1992 and 1995, there was an economic recovery and rising imports of consumer goods to which Albanians were obtaining access for the first time; many families’ incomes came from remittances and smuggling goods and fuel into Yugoslavia during UN sanctions.3 However, near the end of 1996, a new wave of political instability was created by the collapse of “pyramid” or Ponzi investment schemes, in which unregulated institutions accepted deposits, and paid high interest rates to early investors with deposits made by later investors. When the scheme collapsed, there was rioting, including looting of military arsenals, and mass emigration in early 1997, as many people lost their life savings and crime rose sharply.4 Also, thanks to an Italy-led multinational mission (Mission “Alba”) order was restored and emigration slowed; later on, joint Italian-Albanian patrols (Missione di Polizia Interforze) contributed to the reduction of the number of migrants. The numbers detected as they arrived in Italy reduced from a peak of 46,000 in 1999 to 7,500 in 2001.5 In subsequent elections, the SPA returned to power, and has been the dominant political party in the past five years.6 However, there was a dispute between the dominant SPA leaders in 2001-2002, and the opposition DPA refused to take seats in Parliament to protest what it said were unfair elections, continuing a pattern of unstable politics. There is an important north-south divide in Albania with political consequences. The Geg highlanders in the north, who are closely related to the ethnic Albanians of Kosovo, have relatively poor land and a more tribal, traditional culture. The Tosks in the south developed a village based in coastal areas, and were more open to the outside world. The northern regions have long been the largest, although certainly not the only, emigration basin. 106 P. Martin, S. Martin, and Pastore Albania’s most important bilateral relationships are with Italy and Greece; they are its leading trade partners, and places with large numbers of Albanian migrants. On the regional and international level, Albania has benefited from its cooperation during the NATO’s air war against Yugoslavia (Serbia- Montenegro) in March-June 1999. The EU, the US, and Russia in June 1999 launched a Stability Pact for South-Eastern Europe with three “working tables”: democratization and human rights; economic reconstruction, development, and cooperation; and security – including a special emphasis placed on migration and asylum. Corruption remains a problem, with police, customs, prosecutors, and judges accused of being susceptible to bribes.7 Italy has taken the lead in equipping and retraining Albanian police. There has been an attempt to make continued EU aid contingent on reduced crime and corruption. The EU is committed to turning Albania into a crossroads for the Balkans, with highway Corridor 8 running east- west from Durres to Macedonia, and Corridor 4 running from north-south, from Montenegro to Greece. Albania hopes to join both the EU and NATO, and the EU and the US are involved in Albania’s development. In 1999, the EU launched a new Stabilization and Association Process (SAP) with five South-Eastern European countries, including Albania, and it has provided Albania with about $900 million in assistance between 1991 and 2001. The US is building defence facilities in Albania, aiming to prevent Albania from becoming a Balkans base for Islamic terrorism. The effort to achieve a self-sufficient economy for 4 million people in a small and mountainous country left Albania further behind most other transition economies in the 1990s.