Patriotic and economic criteria for the Nation’s Road

Patriotic and economic criteria for the Nation’s Road

By Eduard Zaloshnja

When the road linking Rreshen to Morina, or the so called Nation’s Road, was built, nobody in Albania doubted the patriotic value of this road segment. The things that were discussed at that time were the high cost of the road (1.3 billion euros), high interest rate loans and the 220 million euro abuse which was discovered by the State High Audit and the Prosecution and which went unpunished.

Two other things are being discussed now: 1. The completion of the Nation’s Road according to European standards (some bridges and other elements have remained uncompleted, while escarpments, barriers and overpasses should be improved); 2. Expensive maintenance of the highway.

But there may be different discussions depending on the criteria used for the analysis; patriotic or economic.

Patriotic criteria

If the population of Kosovo was 90% Serbs (and not 90% Albanians), perhaps the highway linking Rreshen to Morina would have not been built for another 100 years. At the most, authorities could have built a road linking Rreshen to Kukes, similar to the one linking Milot to Rrreshen. But, the fact that in Kosovo, 90% of the population is Albanian (who suffered for almost half a century under Serb rule), is a strong patriotic argument in regards to affording costs, the completion and the maintenance of the road linking Rreshen to Morina.

If this argument is used, every Albanian taxpayer (from Konispol to Vermosh) should be made clear that their taxes will go toward the payment of the interest charges of the money that was borrowed to build the highway, to complete the highway according to European standards and for its maintenance.

The interest charges paid for the current loan that was used to build the Nation’s Road, amount to around 80 million euros a year. If we add here the interest charges of a new loan (for the completion of the highway) and maintenance expenses on top of the charges for the old loan, the annual cost is over 110 million euros. (with 110 million euros a year, the government can increase all pensions in Albania by 25%).

Are Albanians ready to pay these costs out of their own pockets (through the taxes that they pay to the state) in order for Albanians coming from Kosovo to be able to travel freely here in an improved and well maintained highway? If people in Albania (from Konispol to Vermosh) agree on this, then this is an easy solution for the state–the costs are covered by the budget.

Economic criteria

If only a minority of Albanian citizens agree for the costs for the improvement and maintenance of the Nation’s Road to be covered by their taxes, then the economic criterion comes into play. In this case, the question is: is it effective for the Albanian economy to cover the above mentioned expenses through the state budget?

But, if we only use the economic criterion, the budget expenses made on roads justify themselves, when they make a significant contribution for economic growth, which is further associated with a net increase of incomes from taxes. In other words, if more money goes in the state treasury than coming out of it, the budget expense for a particular project is economically justified. In the case of the Nation’s Road, the economic benefit for import and export is minimum. Trade volume between Albania and Kosovo is less than 3% of the volume of foreign trade for both countries.

As far as tourism is concerned, Albania attracts a significant number of citizens from Kosovo during the two months of summer. In other months, the number of tourists coming to Albania from Kosovo is relatively unimportant from an economic point of view. In fact, in the recent years, the number of tourists travelling by charter planes from Poland, Ukraine, Czech Republic, etc, is becoming more and more important for hotels which in the past used to be overpopulated by Albanians of Kosovo. Meanwhile, the number of Albanians and Slavs from Macedonia is also growing. This category of tourists is using Qafe Thana-Rrogozhina road segment to continue their journey toward the coast.

Under these circumstances, from an economic point of view, Albanian taxpayers shouldn’t have to pay for the improvement and the maintenance of the Nation’s Road. Those who have to pay for this are Albanians of Kosovo. (Residents of the district of Kukes, being some of the poorest in the country, may be exempted from the toll charge or they could pay a minimum charge).

Meanwhile, as far as to who must handle the collection of toll charges for the Nation’s Road and the completion of its maintenance is concerned–the state or the private sector–there needs to be another long analysis. Nonetheless, from a strict economic perspective, the charges should be collected.

What should be done of the road tax that Albanians pay on each liter of fuel? Perhaps it could be partially used on the Nation’s Road.

Budget revenues from road tax amount to around 200 million euros a year. These 200 million euros should be used to improve and maintain hundreds of roads in Albania, linking Tirana to Durres, Shkodra to Tirana, Tirana to Korça, Gjirokastra to Saranda, Burrel to Milot, etc, etc. The improvement and maintenance of these hundreds of roads may improve road security and the economy of Albania more than the improvement and the maintenance of the Nation’s Road.

But, has the tax collected in the form of road tax been used cautiously by Albanian governments? This is another question which has a very long answer…

Rama’s electoral calculations

As a regular user of opinion polls, Rama may have conducted one prior to introducing the Nation’s Road. That opinion poll could have indicated that only a minority of voters could have agreed to use taxpayers’ money for patriotic reasons, in order to complete and maintain the Nation’s Road. (“Let those who use it pay for it”, may have been one of the response given by the majority of respondents.)

In such scenario, Rama’s cynical electoral calculations (as it’s the case for the majority of Albanian politicians), may have also taken into account the small relevance of the district of Kukes–this constituency has only 3 seats in Parliament, 2 of which are always won by the DP.

However, following the violent protests of the residents of Kukes, Rama launched a signal that they will benefit special charges for the use of the road.

The author’s personal view: In this article, I have analyzed two possible criteria for the funding of the completion/maintenance of the Nation’s Road. But what is my personal view? I think that there needs to be a solution which satisfies both the patriotic criteria and the economic criteria. In other words, there needs to be a lower charge for the Albanians of Kosovo and an almost zero charge for the residents of Kukes. The money for the funding of this solution need to be found in the efficient management of the 200 million euros generated from the road tax.