IBNA Special Report
Tirana, May 21, 2014/Independent Balkan News Agency
Small and medium sized enterprises are promoters of economic development and employment, and to a certain extent, innovation. But, economy experts say that time has come for the Albanian economy and Albanian enterprise to reach another level.
Minister of Economy, Arben Ahmetaj says that it’s necessary to have an “economic leap”: “We must go from a level of natural business ideas seen in 20 years, to innovative ideas that help in what the government, enterprises, international institutions say every day, the economic leap”.
He says that “in order to challenge the economic environment in the positive sense, we must make innovative leaps, in ideas, technology and structure”.
The distant year 2038 and the distance that becomes even longer
The World Bank has made a very significant calculation. It has taken the economy of the European Union and the Albanian one and has put them into two comparative tracks to see where they arrive, where one meets the other, in the aspect of GNP per capita of their citizens.
The calculation shows that if Albania has a 6% economic growth a year and European Union has a 1% economic growth a year, then in 2038, GNP per capita will be the same.
But it’s been at least 7 years that Albania doesn’t have a 6% economic growth. Its economy has slowed down to 2-2.5%. This is the prognosis even for this year.
Minister Ahmetaj, prominent expert of economic affairs, confirms these facts and adds: “You see at the challenge that we have in front of us? We must achieve an economic growth of 6%. We must move forward faster, otherwise the country will remain last”.
Albania, below the Balkan average in terms of SMEs
Development of SMEs has an index in the Balkan region. Albania is under the average development of the region. The region’s index of the development of small and medium sized enterprises is 3.7 out of a maximum of 5. Albania’s index is 3.1.
This fact is confirmed by minister Ahmetaj: “This means that we have a situation where small and medium sized enterprises are under the average, but this is bad and good. It’s bad because we’re below the average and it’s good because we have a big gap to fill”.
Ahmetaj suggests that in order for this economic leap to happen, there must be innovation. “It’s up to enterprise to be innovative and the government to promote and facilitate”.
But how can this economic leap be achieved?
The government says that the financial instruments are in place. Recently, the financial instrument has become even more interesting and challenging for the banking logic, because it doesn’t require collateral.
If an enterprise addresses to the bank, the first question that will be made relates to the collateral that it holds.
At last, investment funds without collateral
Recently, Albania has launched the “Enterprise Expansion Fund” (ENEF), supported by the European Bank for Reconstruction and Development.
Head of EBRD in Tirana, Fabio Serri says that ENEF is for the Albanian businesses and companies and expressed the readiness of EBRD to collaborate with banks in this direction.
“The instrument regards banks as partners and EBRD wants to work with banks”, says Mr. Serri.
Minister of Economy, Arben Ahmetaj says that this instrument called “Innovative Fund” comes at the right time in the Albanian economy, because it will supply ideas, innovation and finance, need for development.
Ahmetaj also offers other details on the project: “This financial instrument is fantastic. It doesn’t require collateral. The instrument will oblige all of us, enterprise and government, to think more about the new structure of SMEs”.
“This is the answer for all of those who wonder where is the money needed to invest. The economic environment has the necessary financial instruments, somewhere sufficient, somewhere not, but the money is there and it’s rightly called Innovative Fund”.
60 million Euros allocated
Expansion Enterprise Fund is a financial instrument for the countries of Western Balkan. Its objectives are to increase competitive ability and the quality of the product, innovation, introduction of technology and other applicable products to achieve the best use of labor force, biggest productivity and improvement in efficiency. This fund aims at introducing standards for the governing of corporations, encouraging companies to apply a higher standard in business behavior. The ENEF value is 60 million Euros. This amount aims to meet the growing needs to fund local SMEs, supported a little or at all by other funding sources. /ibna/