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Investing in ALBANIA 2011 the Conference Is Supported By INVESTING IN ALBANIA 2011 The conference is supported by Platinum Sponsor FOREWORD Foreword HE DRITAN MISHTO, CONSUL GENERAL OF ALBANIA IN NEW YORK ear Participants, The First US- of the favourable conditions, foreign Albania Investment Forum, that investments increased by a margin of Dtakes place on the twentieth 300%. Albania’s potential in the field of anniversary of the reestablishing of energy is huge and ambitious projects are the diplomatic relations between the currently under implementation. two countries marks an opportunity to present Albania “the economic miracle” According to Lonely Planet, Albania is to American investors and to build upon ranked as the top tourist destination to the momentum of interest in Albania. Our be visited during 2011. Albanian tourism is friendship dates back to the beginning diversified: coastal, mountain, cultural, etc of the 20th century, in a crucial time and due to investments in infrastructure for Albania, when President Woodrow it rapidly developing. Located between Wilson delivered his strong support and the Adriatic and Ionian Seas, Albania is saved our country. After strengthening the becoming one of the most attractive political relations and consolidating the destinations in the world with beautiful democracy, Albania approaches today as a and unexplored beaches, snowy mountain serious economic partner for the United peaks and a wealth of lakes and rivers. In States, with a lot of potential in energy, addition, our fascinating history provides tourism, transportation, agriculture and some of the world’s archeological other fields. wonders, such as Butrinti and Berat. Based on the deep reforms of the Albania has so much to offer to the government, Albania has achieved potential investor. In this guide you will an admirable economic stability. find useful and important information An uncompromising fight against about the country, its rich history and its corruption, creating transparency, economic development. simplifying administrative procedures, embracing digital technology, investing I hope that this guide will aid you in your in infrastructure, privatisations, a low next investment. tax regime, creating the solid base of the Albanian economic model. We are the first country in the world where HE Dritan Mishto, 100% electronic procurement systems Consul General of Albania are applied. During 2007-2010, because in New York 2011 | INVESTING IN ALBANIA 1 INTRODUCTION Introduction INTRODUCTION BY AtAM SANDHU CHIEF EXECUTIVE, DEVELOPING MARKETS ASSOCIATES ear reader, It gives me great and analysis of its continued emergence as pleasure to present to you the a competitive European economy. DAlbania Investment Report for 2011, a guide to Albania and its investment It is still the case that many people have climate and a follow-up to the report little or no knowledge of what Albania produced for last year’s highly successful is today. Some will have an outdated UK-Albania Investment Forum, which was perception of the country based on its held in London in November 2010. history and the previous struggles of the region as a whole. The reality, however, is We are honoured to welcome to New that when one visits the country, he or she York a senior government delegation will consistently find a welcoming, open- from Albania, led by HE Sali Berisha, minded population and a progressive Prime Minister of Albania and including government, committed to creating a vital, Hon Edmond Haxhinasto, Deputy Prime healthy Albania. We hope this forum and, Minister and Minister of Foreign Affairs in extension, this report, showcase the and a number of key ministers from true face of Albania and the numerous the government. We are also delighted opportunities therein. to welcome HE Dritan Mishto, Consul General of Albania in New York who has I would like to express my sincere thanks been a key partner in designing this Forum. to all those who helped make the Forum and this report possible and in particular This investment forum provides an to the many sponsoring companies excellent platform for the panellists to today who have demonstrated their speak to the FDI community about the commitment to the country by growing business opportunities that supporting today’s activities. exist in Albania and to forge sound and productive relationships for the future. I sincerely hope that you will take the We intend to give a thorough briefing of opportunity to read this timely report Albania today, about the transformations on Albania and explore the opportunities that have taken place, and the vision and presented therein. prospects for the future of the country. This report includes snapshots of the key Atam Sandhu sectors in Albania, including a detailed Chief Executive economic overview of the country in 2011 Developing Markets Associates 2 INVESTING IN ALBANIA | 2 011 CONTENTS Contents 04 ECONOMIC OVERVIEW 12 AGRICULTURE 15 ENERGY 19 INFRASTRUCTURE 22 REMITTANCES 24 TOURISM 27 POLITICAL HISTORY Publisher: Chris Gerrard Contributors: Tom Minney and Moin Siddiqi Art Director: Steven Jones Conference Team: Deanne Lintorn, Rebecca Isaacs, Clodagh Ryan Conference Directors: Atam Sandhu, Leon Isaacs Correspondence Developing Markets Associates Ltd (DMA), 150 Tooley Street, London, SE1 2TU email: [email protected] | web: www.developingmarkets.com | www.moneymove.org | www.sendmoneypacific.org DMA acknowledge the assistance of all the individuals and organisations who have contributed to this publication. The views expressed herein are the opinions of the authors, and do not necessarily represent the Embassy of Albania, the Government of Albania or DMA. All rights reserved. No part of this publication may be reproduced or transmitted in any form without the written permission of the publisher. Published by Developing Markets Associates Ltd (DMA). Printed by Gap Printing. Picture credits: istockphoto.com © Developing Markets Associates Ltd 2011 | INVESTING IN ALBANIA 3 ECONOMIC OVERVIEW A decade of achievement BY MOIN SIDDIQI, ECONOMIST oday’s Albania bears no US$4,200 sees Albania continue to make debut in international financial markets in resemblance to its past history of steady economic progress. 2010 with the placement of a Eurobond T a centralised planned economy. sent a powerful signal to global investors The country has been one of the fastest- The EU’s Progress Report 2009 reflected of growing maturity and its ability to tap growing regional economies, enjoying that Albania had made progress in a private capital in order to help finance a surge in foreign direct investment number of areas, though it stressed the critical infrastructure projects, especially that has also contributed to stability in need for further institutional reforms in transport and electric power – the key the Balkans. Albania became a member and restructuring. to sustained growth. of North Atlantic Treaty Organization (NATO) in 2008 and formally applied Albania graduated from the International The pursuits of macro-prudential for the European Union ‘candidate’ Development Association (IDA) (the soft policies and well-anchored structural status in 2009, following ratification financing arm of the World Bank Group) reforms, focusing on privatisations, of its Stabilization and Association lending in mid-2008, and has entered the fiscal probity, trade liberalisation, the Agreement, originally signed in 2006. rank of ‘upper-middle income’ countries. business climate, energy and financial Today, with a GDP per capita of More significantly, Albania’s successful sectors, have boosted Albania’s credibility 4 INVESTING IN ALBANIA | 2 011 ECONOMIC OVERVIEW among the Bretton Woods Institutions. by keeping inflation within the Bank of should continue its strong economic Successive governments over recent Albania’s (BoA) 3+1 target band. performance thanks to modest exposure years have sought to address issues such to global markets and low levels of as infrastructure deficiencies and social The International Monetary Fund (IMF) credit to GDP. deprivation, whilst strengthening market commented: “The monetary policy reforms and improving governance and framework of an inflation target and Growth over recent years has been institutions, with the end-goal of gaining EU flexible exchange rate is a fundamental driven by structural transformation, membership. The move to full European strength of the Albanian economy.” based on the movement of labour from integration offers future generations A subdued inflationary environment the low productivity agricultural sector opportunities for increased economic bolsters confidence in the Lek and to services and construction, and, to prosperity through intra-regional trade leads to higher capital inflows (especially some extent, manufacturing. The non- and investments, as well as preserving workers’ remittances). The annual inflow tradable sectors such as construction and democratic institutions and safeguarding of remittances has fluctuated between services – led by banking, transports and the rule of law. 11-14% of GDP and has been an retail trade – now represent over 60% important source of domestic demand. of GDP. A combination of higher capital The World Bank in its Country inflows (mainly private transfers) and Partnership Strategy for the fiscal year The International Monetary Fund (IMF) robust domestic demand has sustained 2011-14 commended: “Albania has been noted that prudent measures helped the expansion of these sectors. a development success story in many mitigate the contagious impact
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