Albania - Future trends

With its economy reviving from the collapse of 1997, Albania remains essentially a developing country requiring heavy investment for its modernization. Without significant progress in coping with crime and weak state institutions, its internal stability is not yet guaranteed. Reforms are needed to enforce democracy and develop favorable conditions for foreign investment. Albania has strong potential for growth due to its youthful population and the large number of guest workers , many of whom may return with capital and know-how once domestic conditions improve. Proximity to Italy and Greece, abundant natural resources, and potential tourist attractions are additional factors that may encourage development. EU membership is not yet an issue for Albania, but with the accession of Balkan neighbors, its chances will grow.

The Socialist Party is expected to stay in power after the election in 2001 and GDP is likely to keep its growth rate of 7 percent driven by the privatization of power, the Savings Bank, hotels, and other government assets. Inflation will be low and unemployment will gradually decline, but many Albanians will continue to support their families by working abroad. Import dependency will diminish as domestic industry slowly picks up and the development of tourism and increasing money transfers may alleviate the trade deficit situation. However, Albania will remain dependent on international aid for the foreseeable future.