Albania in the Context of the European Economic and Political Crisis

In September of 2012, a group who had been political prisoners during the Enver Hoxha regime (the Albanian Stalinist dictator from 1944-1985) went on hunger strike against the then current Democratic Party’s government. It lasted for nearly a month. Two of them set themselves on fire. One of them died. Their demands were: full monetary compensation for their years of imprisonment during the dictatorship; free access to health care and free housing; social integration and moral dignity. None of their demands were met, nor did an Albanian Spring take place.

The Democratic Party, led by Sali Berisha, had governed the country for two terms since 2005 with the slogan, “For a European Albania”. They lost the recent June 2013 general election to the Socialist Party. The first time the Democrats came to power was in 1992, after the fall of the last Socialist People’s Republic in Eastern Europe. Their political capital was based on the support of political prisoners from the dictatorship era, and on many Albanians’ aspiration for a future European Albania.

In a sense, the 2012 hunger strike signified a moral crisis of Albanian liberal democracy, even though ‘a European Albania’ remains one of politics’ main ideological and rhetorical tropes. In the name of European integration, Albania has been following a neoliberal agenda for nearly 21 years, as have most of the countries coming out of the Eastern Bloc, at the behest of the international community. The Albanian political establishment approaches the ambassadors of the European Parliament and of America as the ‘subject supposed to know’, and they are presented to the Albanian public as paternal figures. But what happens when there is a crisis in the subject supposed to know itself, as with the economic crisis of 2008?

Great Chaos in Heaven, All Quiet on the Albanian Front
When in 1956 Nikita Khrushchev denounced the Stalinist crimes and hinted towards a more liberal Soviet Union of the future, he was in turn denounced by the Albanian dictator Enver Hoxha who broke off relations with the Soviet Union, remaining more loyal to Stalin’s crimes than the Soviets themselves. If this historical paragon is applied loosely it could throw light on today’s relationship between the Albanian political establishment and the political atmosphere in Europe.

While there is an economic crisis radically changing the political coordinates in Europe – with the growth of far-right and far-left political parties like Golden Dawn and Syrizia in Greece, the rise of independence movements like the ones in Scotland and Catalonia, and the emergence of horizontal social movements like the Indignados in Spain – in Albania, Europe is presented as if all was quiet on the Western front. Even a discourse of ‘Austerity Measures’ and so forth does not gain much attention from the Albanian public. As many political analysts point out, we have been under austerity for such a long time this has become our normal state of affairs.

Yet throughout the crisis, the (now former) Prime Minister Sali Berisha has proclaimed that Albania was the only country in Europe – second to Germany – with a strong and growing economy. Economic growth was above 3% during the first years of the crisis and is currently at 2.7%. Just as suspected by many economists, the lack of substantial integration into the global economy and the presence of a considerable informal economy have protected Albania from the crisis in the short term, deferring the whole burden to the future.

Current Economic Problems
One third of the Foreign Direct Investment in Albania came from Greece. Greece and Italy were the country’s primary trading partners and where most of the Albanians who migrated after the fall of the Socialist People’s Republic went. Prior to the crisis, the remittances from Albanian immigrants represented around 14% of GDP. Once the crisis hit Italy and Greece hard, an ever-increasing number of Albanians returned from these two countries. They invested and saved their money in Albania, which in the short term increased small investments and helped the banks raise their liquidity. The Prime Minister claimed that these returning Albanians would help the small business sector and refresh the Albanian economy with the skills gained abroad.

In reality, the opposite happened. Most of the former migrants had worked in agriculture or as unskilled laborers in Greece and Italy, and the small businesses they opened in Albania failed – mostly due to their lack of diversity and their proprietors’ lack of experience in business. The bad loans in the banking system have increased to 25% and a cultural phenomenon of private debt between Albanian citizens is becoming a growing problem obscured in most statistics. The official unemployment rate is 12.8%, but it is estimated to be considerably more than that since a lot of Albanians (including most returning migrants) do not declare their employment status to the relevant institutions.

Another crucial problem that has appeared lately is in the energy sector, considered a strategic factor in the development of the economy. Energy provision in Albania was privatized in October 2008 and handed over to the CEZ company, until it was renationalized in January 2013. Interestingly, CEZ is one of the 3 companies that provide energy in Bulgaria, and who were a cause of great unrest there earlier this year due to the rise in electricity prices. The Albanian government took control of the situation early enough, but the profit losses in the energy system and high prices are still unresolved problems that could cause popular unrest in the near future.

Solutions and Ideological Polarization
The Democratic Party has responded to the crisis by moving even further to the right on the ideological spectrum. It has cut the state administration by 10% and, as suggested by the IMF, eliminated the ‘13th–month’ wage that previously went to public employees as a bonus. Most of its public investments have been concentrated in infrastructure, building roads and highways. It has liberalized the market for private investments in healthcare and education, even offering to finance private universities with public money through an uncanny scheme. As for the tax system, it has followed the flat rate of tax model, applying 10% on personal and corporate income. On the question of nationalism, the former Prime Minister proclaimed himself a patriot in rhetoric throughout 2012, the 100th anniversary of Albanian independence. Yet, he did not pursue any radical action in the sphere of international relation with our neighbors, as many would expect from a Balkan prime minister in times of economic crisis.

The Socialist Party and its ally the Socialist Movement for Integration seem to occupy the opposite end of the ideological spectrum to the Democrats. This is part of the reason they won the general election in June. The Socialist Party promised the Albanian electorate free universal health care, progressive taxation on personal income, considerable investment in agriculture, the revision of concessions licenses in the energy sector, and state control over the oil produced in Albania. Yet, it was its ally that made the difference in the election, with a huge growth in the size of the electorate that was unexplainable to most political analysts. It was the Socialist Movement for Integration (SMI) that attracted the electorate that was unsatisfied with the Democratic Party, although they had governed with the Democrats in the last term themselves. The SMI changed partners just prior to the elections, making the shift of the electorate sound paradoxical and absurd to those who do not know the extent to which the vote is manipulated in Albania: through promises of finding jobs for family members via nepotistic means, and by buying votes for a certain amount of cash.

While there is a political polarization in terms of rhetoric that has been taking place in Albania over the last two years, it is important not to over-state what has actually taken place. There is a great dichotomy between appearance and reality in Albanian politics. After all it was not the rhetorical polarization that decided the elections but the third party, the Socialist Movement for Integration. Gaining support through nepotistic means, buying votes in return for cash, or using various coercive and threatening means during the elections, are widespread phenomena in Albania. Albania is far from experiencing a real political struggle and polarization like the ones we currently see in Europe.