Albania formerly had a state-controlled, centrally planned economy, with emphasis on industrial development and socialized agriculture. Under Workers Party directives, short-term and long-range plans were formulated by the Economic Planning Commission, a government agency. By the mid-1980s, the economy was virtually under complete state control; enterprises were either directly owned by the state or managed through cooperatives.
From 1951, Albanian economic development was directed by five-year plans, most of which stressed heavy industry. A sweeping economic reform program was announced in 1992. It called for widespread private ownership of farmland, state-owned companies and housing, and the removal of trade restrictions and price controls. Yet after nearly a decade of post-Communist rule, Albania remains by far the poorest country in Europe. For much of the 1990s, economic reforms were stifled by rampant corruption. Only after the collapse of pyramid investment schemes did the situation begin to improve. Nevertheless, Albania relies heavily on foreign aid and seeks to secure more funding for infrastructure improvements.
Economic development in the early 2000s was stimulated by the construction and service industries: the lack of housing under communism led to a demand for new housing construction, and the development of tourism in Albania's seaside resorts has fueled the service sector. The country is undergoing an economic restructuring program with the International Monetary Fund (IMF) and World Bank. A three-year Poverty Reduction and Growth Facility program with the IMF was negotiated in 2002, in the amount of some $38 million. In 2003, Albania entered into negotiations with the European Union (EU) for a Stabilization and Association Agreement.