Is Albania in a competitive position with its neighbors in 2025?

Albania holds a potentially competitive position compared to its neighbors in several areas, yet it still faces numerous challenges that must be addressed to enhance its competitiveness at the regional and international levels.

Despite efforts to improve its economic and political conditions, Albania remains at a stage where further advancements are necessary to reach parity with many of its regional neighbors.

Key areas where Albania could compete

1. Tourism
   Albania enjoys a clear advantage in tourism due to its beautiful beaches, natural wealth, and cultural heritage. Tourism has been a growing sector over the past three years and presents a strong competitive field against countries like Greece, Montenegro, and Croatia. Albania offers more affordable and less saturated tourism experiences compared to these more developed tourist destinations.
2. Strategic Location
   Positioned between Europe and Asia, Albania can serve as a key transit point for international goods transport, especially through its ports. Enhancing road and port infrastructure could position Albania to compete with regional players like Greece and Serbia in attracting investment and developing its logistics and transport sectors.
3. Agriculture and Food Production
   Thanks to its natural resources and favorable climate, Albania has the potential to become more competitive in agriculture. Products like olive oil, vegetables, and fruits can rival similar products from southern Italy and Greece, particularly in regional and broader markets.
4. Renewable Energy Potential
   Albania holds great potential in renewable energy production, especially in solar power. Compared to neighboring countries with limited renewable energy resources, this could be a significant competitive advantage. With proper investment, Albania could become a regional leader in clean energy.

Critical challenges to overcome

To fully leverage these potentials and attract investors, Albania must achieve positive outcomes in several key areas:

• Infrastructure Development
  A complete and well-integrated infrastructure system is essential to catalyze economic activity. Albania still has weak and fragmented infrastructure. Roads, railways, and air and sea transport networks require significant investment to improve connectivity with international markets and raise transport efficiency. Despite increased investments, unfinished infrastructure continues to limit Albania’s competitive edge compared to better-connected neighbors.
• Rule of Law and Anti-Corruption
  Both Albanian citizens and foreign investors remain concerned about corruption and ineffective enforcement of the law. These concerns hinder Albania’s ability to compete with neighbors that have created more stable legal and institutional environments. Failure to address these issues leaves Albania in a weaker competitive position, especially against politically and economically more stable countries.
• Education and Human Capital
  Albania still struggles with developing its human capital and raising workforce skills. Compared to countries like Serbia, Greece, and Croatia — which have more developed education and vocational training systems — Albania risks falling behind. Without substantial investments in education and training, it will face difficulties attracting foreign investment and building a competitive labor force.
• Political Stability and Market Rules
  Unclear policies and frequent changes in governance have impacted Albania’s business climate and economic stability. Neighbors like Serbia and North Macedonia have made efforts to stabilize their political and legal systems, providing a more secure environment for investors and entrepreneurs.

Albania has several competitive advantages — especially in tourism, renewable energy, and agriculture — thanks to its natural assets and strategic location.

However, to attain a stronger regional competitive position, the country must address significant challenges, such as improving infrastructure, combating corruption, and developing human capital.

If Albania continues to invest in and improve these areas, it could enhance its competitiveness with neighboring countries and secure a more prominent role in the region and beyond.