Drastic fall of remittances in Albania

Drastic fall of remittances in Albania

Tirana, April 17, 2014/Independent Balkan News Agency

The value of remittances in Albania has marked the lowest figure in the past 23 years. The fall in remittances has come as a result of the fact that emigrants have not been very inclined to send money to Albania like they have done other years. Official sources from the Bank of Albania say that in 2013, remittances from emigrants were no more than 500 million Euros, thus marking the lowest level in the past 10 years.

Expert on economic issues, Aranita Brahaj from Open Data Albania, says for IBNA that this fall relates to the social effects of emigration. She also mentions another factor such as the fall on interest rates, what makes Albanians residing in Albania and in the country where they have emigrated, to withdraw the money and deposit them in the banks of the countries where they live.

Direct foreign investments exceed remittances

For the period 2010-2013, the value of foreign direct investments is higher than the value of remittances. At the end of 2013, direct foreign investments registered their maximum value in the past 10 years, amounting to 923 million Euros.

“The fast growth of investments during 2013 has come as a result of several privatizations taken place in the first half of the year, consisting on the purchase of two power plants by Turkish iron processing company, Kurum”, says Mrs. Brahaj. The privatization amounted to 110 million Euros.

But what’s the ratio of remittances on direct foreign investments. Both of these indicators show incoming fluxes in the balance of payments and are both important indicators for the growth of a national economy.

In a period of 10 years, from 2002 until 2012, the ratio of these two values appears to be interesting. In 2002-2006, direct foreign investments were inferior to remittances from emigrants. In these 4 years, emigrants sent home 3 to 4.5 times more funds than direct foreign investors.

2006-2013 is a period marked by a progressive growth of the values of foreign direct investments.

Why this constant fall in Albania

Experts say that there are many causes that have led to a drop in remittances.

One of the factors relates to the fact that it’s becoming more and more difficult to find a job in the EU member countries. A part of the Albanian emigrants have started to come back to Albania and invest in their own country.

Another important factor is the integration of emigrants in the countries where they have moved to years ago, mainly Greece, Italy, Germany and USA.

Many emigrants who moved abroad in the ‘90s, emigrated there for work, in order to survive and send money over to their families. Many of the emigrants were not married and took care of their parents and other relatives.

As the years went by, most of them took their families in the countries where they lived and worked, while those who were not married, started families. These two factors had a serious impact in the fall of remittances, as incomes from emigrants no longer leave the country where they work. Instead this money is being spent there.

The integration of emigrants in the countries where they live is seen by analysts as a factor for the drop in remittances.

“In the past, the main concern for emigrants was to feed themselves and the relatives that they had in Albania. In the past few years, this problem has no longer existed. Emigrants have integrated and try to live like the citizens of the countries where they live in. Their aid for their relatives has significantly fallen, but the latter’s need for financial assistance from abroad has also fallen. All this obliges emigrants to spend their money in the country where they live or by traveling as tourists in different countries of the world, mainly in places that offer tourist attractions”, says for balkaneu.com an expert of the Bank of Albania.

Emigrants speak

This claim is also backed by emigrants. Erald, a 31 year old from Tirana has been living for 12 years in Venice, Italy. He works along with several other Albanians by managing a bar near “San Marco”, an area largely populated by tourists.

Erald says that he arrived in Italy as a student, but abandoned his studies and like his friends, they decided to work. In the past few years they rented a bar.

“We work and live in Venice. I and several other friends are single and we want to be like this for another few years. One of us is married and is expecting a child”, says the 31 year old, while he has to leave for a few moments to take the order of a group of girls who just sat on a table outside the bar.

“We work 6 or 7 months and then the intensity of work starts to drop. This is why we don’t work at least 4 months a year”, adds he.

When asked if he uses this period to visit Albania, he replies: “No, I can go to Albania for a few days. We mainly visit countries where there is tourism. It’s been three years that during the winter, we go to Thailand and stay there for three months. We go together, but this year we won’t have our friend who is expecting a child”, says he, clearly manifesting his excitement about the journey that he’s expecting to embark on in the next few days.

EU recession, a later knock-on effect on Albania, emigrants disappointed

Growing rates of unemployment in the European Union as a result of the crisis have produced their impact on Albania, although a late one.

The majority of Albanians who work abroad are in Italy and Greece, two of the countries where unemployment has become a serious problem.

Most of the emigrants who have returned into the country come from Greece, where the effects of the recession are greater.

Kristo is a 45 year old man from Saranda who has stayed in Greece for more than 15 years. He’s disappointed by the situation which differs a lot compared to a few years ago.

“When we moved to Athens in 1996, the situation was completely different. Everything was cheaper and with Drachma, things were better. Since 2001, when Euro was introduced, the situation changed for worse, but the past three years have been the worst ones. I could no longer stay. Neither me, nor my wife had a stable job. I could not provide my sons with money during the time that they were in school and my daughter was unemployed. I gathered my stuff and a few savings that I had and decided to return home”, says Kristaq who has not opened a small fast-food outlet in the coastal southern town.

He admits that his return to Albania doesn’t solve his financial problems, but says: “The truth is that we didn’t get away from poverty, but at least, here we are in our country, in a small and not a very demanding town and the taxes that we have to pay are not that high”. /ibna/