ECONOMY

Albania gaining strength

Albania plans to sell its first foreign-currency bond in May, a sign its economy has overcome the legacy of a half-century of communist-imposed isolation, Prime Minister Sali Berisha said. Albania will raise as much as -200 million with the bond, undeterred by the subprime crisis that has driven up interest rates for emerging-market borrowers, Berisha said in a Bloomberg Television interview in Brussels on Wednesday. «I think it will be in May,» Berisha said. «We have to talk with the International Monetary Fund.» Berisha, 63, said Albania, with 3.1 million people and a gross domestic product of just $10 billion, is evolving from the «North Korea of Europe» into a destination for Western investors and travelers. Albania is counting on future membership in the European Union and NATO to anchor democracy and bring the economy up to Western standards. The economy expanded an estimated 6 percent in 2007, inflation was 2.5 percent, the budget deficit was 3.9 percent of GDP, and foreign investment equaled 5.2 percent of GDP, the IMF says. Growth will top earlier forecasts of 6 percent this year, driven by an influx of foreign capital, increased exports and tourists discovering 400 kilometers (250 miles) of undeveloped Adriatic Sea coastline, the prime minister said. «We’ll be more than 6 percent this year,» Berisha said. «I’m convinced that we’ll have faster growth.» Albania had a turbulent 20th-century history. It was trampled first by Mussolini, then by Hitler, in World War II. The strongman who led the revolt against the Nazis, Enver Hoxha, turned the country into a Stalinist fiefdom, then broke with the Soviet Union and allied himself with China. When the communist regime was swept away in 1991, impoverished Albania had none of the economic links with the West that smoothed the transition to democracy in more advanced republics in Southeast Europe, such as Slovenia. Organized crime is «a very serious problem» in the cash-based Albanian economy, the European Commission said in November. It added that drug trafficking is a «serious concern» and Albania is still a «significant” transit country for people smuggling. Albania ranked 105th on Transparency International’s corruption perceptions index in 2007, tied with Burkina Faso and Djibouti. Still, it moved up from 111th the year before and has a cleaner reputation than Ukraine or Russia. Power outages are common in Tirana, the capital, running water is a luxury in wide swaths of the country, and economic output per person is -2,309, less than a fifth of the EU average. That figure, though, has risen from $204 per person at the end of the communist epoch, Berisha said, adding that «no country has profited more from freedom than mine.» Albania will loosen the state’s grip on the economy by selling three more government-owned companies to private investors by July, Berisha said. The government will open the bidding today on the sale of Armo Sha, an oil refiner, Berisha said. The other companies set to find buyers are Insig, an insurer, and the distribution arm of Kesh, the state power utility. «All of them will be completed before the end of July, and there will remain very few things unprivatized,» he said. Albania reaped praise from the North Atlantic Treaty Organization yesterday for helping to maintain order in the Balkans at a time when Kosovo, the mostly ethnic Albanian enclave in neighboring Serbia, prepares to declare independence. Widespread rioting and looting brought about the near-collapse of the Albanian state in 1997, and the influx of 500,000 refugees from Kosovo during the 1999 NATO air war imported additional strains. Voice of moderation Albania is a «voice of moderation in the region,» NATO Secretary-General Jaap de Hoop Scheffer said after Berisha made the case for Albania to be invited to join the alliance at a summit in April this year. Albania needs to show its democracy is on a firm footing by pressing ahead with the overhaul of election rules and the justice system, NATO says. Observers say NATO entry would reinforce confidence in the economy. NATO membership would send «a signal that it’s safe to do business here,» Ann-Margret Westin, the IMF’s representative in Tirana, said in a telephone interview. «If it is a ‘yes,’ it will be a positive signal for foreign direct investment.»