To provide new chances for all of UsALTax
The International Monetary Fund (IMF) in spring projections estimates that economic growth in Albania should achieve to 3.7 percent this year (2019) from 4.2 percent in 2018. But, by the Ministry of Finance and Economy (MoFE), the economic growth projection, based on the data of the first semester, is estimated close to 4.3 percent of Gross Domestic Product (GDP).
It is the most accepted economic perception, based on macro data’s that Albanian economy has rebounded during last five years. Growth in 2018 reached 4.2 percent and prospects for sustained growth are positive over the medium term. Inflation has remained stable and is below 2 percent. Enhanced exports are one milestone of the pathway to prosperity. And Public debt is decreased based on MoFE declaration at the level of 67.2% of GDP.
This progress firstly has been achieved through government’s efforts to stabilize the economy, and secondly with support from Albanians living abroad, the private sector, and international partners.
This progress is supported firstly by developing infrastructure, which is crucial to ensuring sustained growth. The expectation of Ionian corridor implementation projects and the connectivity of internal roads with the aim of reaching the touristic areas and agriculture developments are the first examples of this progress. The infrastructure projects are the “logo” of Albania’s efforts to deepen economic ties to the rest of the region and the pathway to prosperity.
Investment to upgrade the aero – port infrastructure could create a new trans-shipment hub for the region and also to facilitate the movement of tourists to Albania. If seen in this context, the aeroportual projects in Vlora, Kukes, Durres counties could be not just one big change in the development of the Ionian corridor within Western Balkans, but also a close step with South of Europe.
In the same vein, secondly is energy sector. The increase rate of hydro and solar electricity generation has contributed in country’s stronger growth. But, the ongoing investment in the electricity transmission not only will link the internal parts of the country; it will also open doors to regional’s power networks by enabling cross-border energy trading. But, the challenge for the near future is ahead: to produce low-cost renewable energy for the European market.
Tourism and the other services related as a third support remain essential to economic growth previsions for the future. Regarding tourism, it is great to see Albania attracting record numbers of visitors in 2018. Advanced hospitality tradition, accompanied with new hotels, quality and very impressive cost for culinary services, surrounded by improved overall infrastructure, and other facilities will attract more tourists and will help rebrand the country’s tourism offerings, including by branching out into eco-tourism and water sports. The ongoing expansion of transport infrastructure will facilitate tourism, including better connections to the region. These connections, importantly, will also allow goods to move around the region and help develop trade-related services, including re-exports.
To fully benefit from all these coherently policies and project developments in Albania, which aim to fill the infrastructure shortcomings, logistical costs, is the necessity of fully addressing the gap, between Albania achievements and regional achievements in the infrastructure, trade and investments in order to maximize the returns on important public investment, and consolidate the growth of private sector activity and lending that is integral to sustainable development. At the moment, it is important to note that this growth driven by the private sector should be oriented through responsible lending by financial institutions, but also by the cash-generating Albanian or diaspora abroad. Although attempts have been made by the government to reorganize these resources, there is still a more comprehensive policy and exit from the framework of formal propaganda.
Trade integration in regional context and especially the trade relationship in this moment, when Kosovo is implementing the trade barrier through tax policy will also help frame the corporate governance policy of the country’s public-owned enterprises and private ones. In many cases, the long-term viability of those companies will depend on increasing their regional orientation.
Regional integration and cooperation are particularly important for improving the structure of the economy and enhancing competitiveness. The reason behind this idea is the use of the strongest points of every regional countries economy to make feasible the trade integration and to push on the other hand the improvements in infrastructure and in the capitalism culture together with growing these important sectors of the economy.
In the future, sophisticated technological solutions (including artificial intelligence) will be needed to modernize the actually productive and contributive economic sectors. The ICT and know-how will help to create bigger sectors than right now. This is especially important for small and fragile economic environments like Albania and other neighboring countries. Agriculture, tourism and food processing industries coherently with technology growing up will be better able to meet national goals of GDP expansion and creation of new export markets.
Regional economic integration and cooperation will also strengthen Albania’s external position. Exports, private capital inflows, and remittances from Albanians working abroad are rebounding and are likely to increase further with regional integration, since the overall economic environment is in the time to have better ROI. This is helping also to reinforce foreign exchange reserves and strengthen confidence in the Albanian exchange future market.
But, what could to be done better than in the past years?
Firstly, unlocking financial credit from domestic financial market is the critical moment of big change and challenges. This can be addressed by resolving the Albania’s public debt situation, which looks that need for more efforts than done in the past through increasing the fiscal administrative capacities. If the public debt will be in the decrease trend, also will push the public investments to foster more impact the private sector, and as a consequence to give more room for internal financial market
Secondly, fostering education system and addressing social needs is another priority. This means focusing better on the weak part of society through programs aimed at aiding vulnerable households and creating jobs for unemployed youth. By lowering debt service costs, debt relief can also create budget room to address these needs as well as other budget priorities, including the reform of state-owned enterprises.
Thirdly, but strongly linked with the most chronically disease in these last 3 decades is strengthening the rule of law and increasing accountability and transparency, that will also be crucial steps toward sustainable growth. The vetting process is revealing the extent of mismanagement, corruption and misappropriation of political power during all the 30 years period. The vetting process is revealing the extent of mismanagement, corruption and misappropriation of political power during all the 30 years period. The process is necessary to finish this year, because the economy need all this therapy in the same treatment way which the medical staff carries out the blood transfusion for the sick body. More focused efforts will be needed to recover losses from abused domestic natural resources for the personal interest of a bunch of morally consumed politicians and their collaborators.
At the end, we repeat the need for inclusive and sustainable growth that lifts up the prospects of women, young people, the poor, and those who live in rural areas, and that raises the expectations of future generations.
If we all embrace that spirit, we can generate economic growth, raise living standards, and provide new chances for all of Us.