IBNA Analysis/Pros and cons on the economic development in Albania

IBNA Analysis/Pros and cons on the economic development in Albania

The economic situation at the focus of the minister of Finance, Arben Ahmetaj and the opposition’s official, Jorida Tabaku. In this special report by IBNA, minister of Finance, Arben Ahmetaj analyzes the recent economic developments in the country. He comments the IMF report, the data published by INSTAT, the report of the Bank of Albania and the constant accusations of the opposition which sees the economic situation as the worst ones in the past 25 years. Meanwhile, Jorida Tabaku MP explains why according to her, the situation is very serious and that everything served by the government is demagogy.

Tirana, 2 June 2016/Independent Balkan News Agency

By Edison Kurani

Economic development in Albania seems to be sustainable and recently it has seen positive growth. This is not only confirmed by Albanian authorities, but also by the International Monetary Fund. In a recent report, IMF confirms a sustainable growth and the positive trend of the Albanian economy.

In contrast with the government and IMF data, opposition in Albania sees the situation as being critical. Jorida Tabaku, former deputy mayor of Tirana and current opposition MP, says that everything served by the majority is demagogy. “In front of this aggravated economic situation, the government has chosen the easiest way out, ministerial propaganda to convince Albanians that they are living an economic spring”, she says.

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Minister of Finance, Arben Ahmetaj analyzes the economic developments by explaining why according to him, the situation has changed.

Ahmetaj says that the Albanian economy and the Albanian consumer have left the crisis behind.  “Consumers and businesses have left behind the inherited crisis of debts amounting to 726 million USD from the old government. They have left behind the old mentality of an old government which did nothing but fine them and with the positive growth trend, confidence on the Albanian economy is strengthening”, Mr. Ahmetaj says.

Optimistic news come from INSTAT, the Albanian Institute of Statistics which in the recent hours has published the register of companies. According to this register, 9849 new businesses have been registered from January to May 2016, in only five months. This figure is 24% more than a year ago.

For the opposition, these figures are untrue. Mrs. Tabaku refers to other figures. “Business National Center shows a growth of the number of businesses which have unregistered in these five months by 25% compared to a year ago. Meanwhile, unemployment has increased by 17,7%. The youth of the country want to leave Albania, which is getting older and older thanks to the successful policies of this government of renaissance”, Mrs. Tabaku says ironically.

In an effort to compare these figures, Mr. Ahmetaj comments the opposition’s evaluations for a slowdown of business and closure of many of them in the recent months.

According to Mr. Ahmetaj, the opposition’s claims that foreign businesses are leaving, are an urban legend. “This legend is refuted by the important figures published by INSTAT. In the last five months, from January until May, 680 new foreign businesses have been registered, while in 2015 their number was 640. Thus, foreign investors continue to show their interest for the Albanian economy”, says minister of Finance, not mentioning the opposition’s figure which only shows the number of closed businesses and not the number of new ones which have opened.

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The Bank of Albania has also issued a new report. The Bank says that the last two quarters of 2015 have seen a positive growth of consumption. Also, the Bank of Albania says that the first quarter of 2016 has seen a positive growth of consumption.

Mr. Ahmetaj is happy with these figures. “Consumption has increased for three quarters in a row”, he says.

But the opposition sees a very grey situation. And the figures issued by BoA are quite the opposite of the ones that the DP announces.

Mrs. Tabaku also quotes INSTAT figures. “Data from the Institute of Statistics report for a drop in consumption during 2015 for the first time since 1998”. Tabaku also uses the data issued by the European Commission. “They show that we are one place before last in the region with a fall of -0.2% in 2015 compared to 2014. Albanians have consumed 0.17% less than in 2014 last year and currently, the country is on the verge of the deflation catastrophe. Meanwhile, the government keeps on saying that we have come out of the crisis”.

For Mr. Ahmetaj, these figures are urban legends. “The made up legend of the fallen consumption is refuted with these figures and this trend. These are consumption figures, everything indicates a growth in the past three quarters spanning out in 2015 and 2016”, he insists.

The minister says that the Albanian economy is like that creature “which comes out of the dark on zero level and starts to go up”. “It has now left darkness behind and of course, the economic cycle, referring to all figures seems very positive.

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Another important indicator in the economy is export and import. Even for foreign trade there are black and white colors. Minister Ahmetaj says that the import figures have increased significantly.

As far as exports are concerned, INSTAT shows that there is a growth in volume with 4,35% for the first months of 2016. This figure too is considered as optimistic by Ahmetaj.

But Tabaku also quotes INSTAT figures when she says that there’s a fall of 6% of exports for the past four months of 2016, “which in a monetary value they amount to 6,2 billion ALL less in revenues”.

Tabaku however admits that imports have grown. But even there, she finds a “glitch”. “The effect of the growth of import has come as a result of the recent serious investment in the country which is TAP. An investment which is the best answer for the full failure that this government has had in foreign investments, which last year were 5,7% less than in 2013”.

Mr. Ahmetaj insists that the growth of imports doesn’t come from the import of the pipes of the Trans Adriatic Pipeline. “We have removed the TAP effect and the growth is 7%, which is a positive sign that the Albanian economy has made a positive turn once and for all, in spite of the artificial pessimism that the opposition wants to create”.

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IMF doesn’t only see positivity in the performance of the Albanian economy. It criticizes the way the tax administration behaves with the business. IMF representatives say that “one of the main obstacles for more optimism and expansion in the private sector relates to the tax administration.” According to them, “the way the tax administration communicates with the private sector is seen by the business sector as a punitive manner and incoherent”.

In frequent public declarations, businesses say that the tax administration puts pressure on them. This prevents domestic businesses to expand and foreign businesses to come.

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Amid these figures and declarations, both majority and opposition make promises for the public.

Mrs. Tabaku says that if the DP comes back in power, “it will bring back a destroyed economy on the right tracks”.

But how will the opposition do this? Tabaku has an answer: “Through tax concessions, expenses that favor businesses and growth of consumption, we will offer Albanians employment, better salaries, a prosperous economy and a better future”. Tabaku says that flat tax will be 9% or the smallest in the Balkans. Meanwhile, she also unfolds the “remedy” for a boom of investments. “We will work as a government that intervenes less and less in the life of businesses and we will offer the country international competition”.

In spite of the situation that the opposition presents and the promises that it makes, the government says that the crisis has been overcome and that economic growth is evident. According to Ahmetaj, this fact is a direct indicator that “the Albanian economy is heading toward a consolidated growth trend and without any doubt, it has all the possibilities to achieve a 3,4% growth target”.

Like the opposition, the government too makes a promise, an interesting one for that matter, but full of mystery. Ahmetaj only reveals a small part: “We will soon introduce a very positive package for businesses, in order to continue and do what we have done, improve the economy of Albania and continue and improve the business climate”. /balkaneu.com/