IBNA Analysis/MPs of the Democratic Party in Albania, analyze the figures of the 2015 draft budget, which they consider to be the budget of the impoverishment of Albanians. In this analysis, IBNA has the insights of the former minister of Finance, Ridvan Bode, Jorida Tabaku MP and expert Sherefedin Shehu. Optimistic forecasts by the minister of Finance, Shkelqim Cani
By Edison Kurani
The government project for next year’s state budget and the new tax package, are seen by experts of the opposition as plans to directly damage the wellbeing of Albanians.
Democrat MP, Sherefedin Shehu analyzes the figures of expenses, saying that these figures decrease significantly for classes in need. He says that on the other hand, the budget increases with 30% for the expenses of PM Edi Rama and several ministries. Meanwhile, he criticizes what he considers to be a significant drop of public investments with the new budget.
Jorida Tabaku MP, former vice mayor of Tirana, says that there’s a serious drop of funds for the local government. She says that there are cuts for former political dissidents and land owners. According to her, government figures indicate a social allowance 10 times lower for former political dissidents compared to 2013.
Ridvan Bode MP stops on the structure of the 2015 draft budget, considering it as a “bigger government mess”. He considers the situation dramatic, while saying that the government has planned 500 million USD for operative expenses in less than two years.
Minister of Finance, Shkelqim Cani has a different stance from the opposition. He says that with the 2015 draft budget, the aim is to reduce public debt. Mr. Cani says that the government has a number of ambitious reforms in the program.
Shehu: Funds for social allowance go down, funds for the Prime Minister go up by 30%
Former vice minister of Finance in Berisha’s government, Sherefedin Shehu, who is a notable economy expert, says that the fresh rise of taxes that the government is planning to make in January, will have a direct impact on the citizens. He says that he’s concerned about what he calls a threat toward the economic growth of the country.
“The rise of taxes will be a cost which will impoverish all Albanians. But, to this visible and direct burden will also be added the threat that this budget poses to economic growth, because the distribution of funds in the 2015 budget contributes neither to the wellbeing of the Albanian citizens, nor to the economic growth of the country and creation of new jobs”.
Mr. Shehu also expresses his concern about the investment figures for which he says that they’re zero. “Investments will see zero growth. The Prime Minister’s budget increases by 30% and his administration increases by 170 people. Increase of investments is zero, while administrative expenses increase by 12%. But, the irony consists on what happens with social welfare. This allowance is reduced for the citizens, although they can barely buy food with it. From 21 billion ALL this year, the fund will go down by 19.8 billion ALL in 2015”.
“In general, citizens are threatened by recession or economic slowdown, because in circumstances when taxes increase, public investments go down and not only there isn’t economic stimulus for the business, but on the contrary, there are difficulties. Besides increasing taxes for citizens, this budget also mismanages their taxes, because this budget doesn’t support those sectors that secure economic growth, mainly infrastructure and agriculture. On the other hand, we have a budget based on a high level of public debt, which threatens or risks the future of the stability of public finances”, concludes his analysis, democrat MP, Sherefedin Shehu.
Tabaku: Cuts in funds for the local government, land owners and former political dissidents
Albania currently has 373 local government units (municipalities and communes). In the new budget, the government has provided a new distribution of funds. Jorida Tabaku MP says that we have to do with a reduction of funds for the local government, which according to her, it’s the first time that it happens. She says that 254 local government units or 68% of the total, will see a 25% to 29% reduction of unconditional transfer for 2015 compared to 2014. “Only 11 local government units out of a total of 373 will see an increase of the unconditional transfer next year and out of them, only one is led by the Democratic Party, municipality of Vora, while the others are led by the Albanian left”, says Mrs. Tabaku.
MP Jorida Tabaku says that the budget also reduced funds for people who have been trying for so many years to be compensated by the state. According to her, 2015 will see ten times less funds for former political dissidents and land owners. Tabaku says that the government doesn’t have any plans for the distribution of the financial and physical fund. “The new budget doesn’t indicate that we will have physical compensations, which were trumpeted so much in the electoral program. On the other hand, we have no changes in the scheme of compensations although it was part of the electoral program and although the court of Strasbourg has set a deadline within which the government must pay its obligations to land owners”.
Ridvan Bode: This budget makes the government mess even bigger
Former minister of Finance, Ridvan Bode and current opposition MP, says that the new budget will impoverish Albanians even more. He explains his conviction: “The 2015 budget will occupy 31.5% of the GDP of the country. This indicates that the government’s mess is even bigger”.
Bode says that in all periods of pressure by the global crisis, Albania’s public finances have preserved a low level of expenses, because the principle of small governance and a small and dynamic economy was applied.
He suggests that the increase of 3.2% of GDP or by 500 million USD of budget expenses in these two years, is bad news for the economy and the citizens. Here he addresses a question: “Budget expenses go up by 500 million USD, but who benefits from this?”
Bode suggests that “it would be acceptable if the government used these 500 extra million USD in order to put the deficit under control, or the public debt or remedy the social problems caused by the progressive increase of taxes and government charges. This way, the government could find a reason and an argument to publicly negotiate with the business community and the citizens who will pay more taxes”.
But, the notable economist suggests that “in reality, the opposite happened” and explains his conviction: “The government increased budget expenses by 500 million USD, by consolidating non productive structures in the budget expenses. Thus, it has increased operative expenses by 16% and it has blocked those items which would make sense if the government would intervene in them in order to guarantee a more cautious economic growth of the country”.
Mr. Bode makes a gloomy forecast for the economy of the country and in general for the Albanian people: “Poverty and misery will be evident in many Albanian households and in 2015, this poverty will grow even more. On the other hand, this budget doesn’t guarantee sufficient reserves to face and compensate at a given moment that difference and deficit that will arise from the non-realization of incomes or by further economic slowdown of the country”.
Cani: The 2015 budget will send the Albanian economy into the right trajectory
Minister of Finance, Shkelqim Cani has a different positioning to the opposition. He assures that the government has a number of ambitious reforms in this program and says that the reduction of public debt is aimed with the 2015 budget.
“The 2015 budget continues the path of fiscal consolidation and the right trajectory of the Albanian economy. The path being followed for the reduction of public debt is the right one in the medium and long term period”, assures the minister.
He says that public debt, which is currently at 71% of GDP, will gradually decrease. “In 2017, debt will be reduced and until 2019 it will go down to 60%”, says Mr. Cani.
He adds that the long term plan is for the debt to reach optimal limits for countries like Albania. /ibna/