Towards a new economy that we can look into the eye

The economic downturn in Albania this year came as a warning hurricane effect. Albania could not have come out better or worse from this economic downturn, because the reason for the earthquake damages before the pandemic, but especially the latter overcame the shortcomings of the performance of the economy in the background. Just like after a hurricane where there is no more talk of a quiet and undisturbed life, we all now speak with the vocabulary of survival.

As economies have entered the recovery phase, gaps are still being seen between the performance of our economy and those of the region. The only part of our economy that can still speak with certainty about the future is the part about rebuilding earthquake-stricken areas. 

In fact, beyond the following difficulties, we (government) need to talk to the citizens about the economic order that will change from the pandemic, which will affect everything and everyone. 

While economies reopen in advance, uncertainty remains about the course of the pandemic. The government needs to show through legal action that fiscal support for businesses and individuals needs to be transformed into an improvement in the overall climate to make business more adapted to the needs of the time and the demands of the future. 

Fiscal support needs to shift to markets that are one level higher than they are today. The abandonment of routine budget programs, which have consumed funds and have not created the expected effects on the labor market should be reformatted to adapt to the labor market requirements for employees with new skills in terms of technology and ability to compete in the markets around Albania. 

Increasing public investment starting with the maintenance and growth of projects that have a higher return on investment than others can create jobs and boost economic growth. 

But, to create this fiscal space that enables budget programs it is necessary that at least for 2021 the de facto model of taxpayers’ compliance with taxes is improved starting with a new panel of capable executives and at the height of the challenge for this tax model. Meanwhile, tax policy when it is still in time for changes in the budget law 2021 should take into account higher taxes for richer individuals and their families, but also the progressive taxes for high-profit businesses. 

Progressiveness should already begin to be applied broadly to capital, as to date progressive taxation has benefited at the expense of the middle class. Income from the rich earning from the capital they own would help pay for health services and education, which are hit by the crisis and have impairments that clearly show that their quality is declining. The pandemic is not over and only talking about the fiscal deficit and the high level of public debt does not address anything that helps this year. 

What is worthwhile is to think about how to create some fiscal space to get out of the impact of the crisis, which means how to avoid unemployment for periods after 2020, but also how to ensure that the crisis does not sit idly by recalled us by similarity the years following 1997.

In this approach, continuity with public investment and assistance to lower-income families should be a continuum that should not be affected by the 2021 budget plan. 

The government needs to change the modeling of the economy by starting to think about how it will emerge from the new transition to a new economy that we can look at and feel as it is and not as it is described to us. As the government increases public investment and applies fiscal measures to spur recovery, the new policy should make the economy more inclusive and roomier for all categories of businesses and employees.