I. INTRODUCTION

The name "Albania" is derived from an ancient Illyrian tribe, the Albanoi, who inhabited part of

modern-day Albania from around 1225 BC to AD 200. Albanians call their country Shqipëri

(Skip-AIR-ee), "Land of the Eagle." For almost 500 years, Albania was controlled by the Turks

of the Ottoman Empire. The Albanians fought to resist being controlled by the Turks. Their

national hero, Skanderbeg, led the Albanian people's resistance to the Ottoman Empire in the

1400s in at least twenty-five fierce battles. It was only after Skanderbeg died in 1468 that the

Turks were able to claim victory. They then ruled for 445 years. The Turks were Muslims, and a

majority of Albanians became Muslims during this period. Albania won independence from the

Ottoman Empire in 1912. Its present-day boundaries were confirmed following World War I

(1914–18) at the Paris Peace Conference in 1919.

Albania has twelve counties which are distributed among districts. The counties are appointed by

council of ministers. Every district has its own administration and governor who is elected by

District Council. Municipalities are the administrative bodies under the districts and the

countries.

2 GEOGRAPHY

LOCATION

Albania is one of the Balkan countries that form a peninsula bordered by the Adriatic, Aegean,

and Black Seas. The word "Balkan" means mountain in Turkish, and the Balkan countries take

their name from the Balkan Mountains. Albania is about the same size as the state of Maryland.

Albania's dimensions are 230 miles (370 kilometers) long by about 90 miles (144 kilometers) at

its widest point. Albania's western edge borders the Adriatic Sea, about 50 miles (80 kilometers)

from the "boot" of Italy. The coastline features some areas of scenic white sandy beaches. Along

the coast the summers are hot and dry, while the winters are rainy.

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3 DEMOGRAPHY

There are an estimated six million Albanians in Europe. The 1991 census for the Republic of

Albania gives a total population of 3,255,891. In addition there are about two million Albanians

in Kosovo, about five-hundred thousand in the Republic of Macedonia, and about one-hundred

thousand in Montenegro. It is estimated that about one-hundred thousand people from the

traditional Italo-Albanian communities in southern Italy can still speak Albanian. Figures for

Albanian settlements in Greece are unavailable because the Greek government does not

acknowledge the existence of an Albanian minority there. All these figures are estimates and

fluctuate because of the extremely high birthrates of Albanians and the high level of emigration

from Albania and Kosovo. An estimated three-hundred thousand emigrants from Albania now

live in Greece, and about two-hundred thousand reside in Italy. In addition, there are about two-

hundred thousand Albanians, mostly from Kosovo, living in central Europe (mainly Switzerland

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and Germany). In the last ten years, Albanians have emigrated to most other countries in Europe,

as well as the United States, Canada, and Australia.

4 LINGUISTIC AFFILIATION

The Albanian language, shqip , is Indo-European, although it is not a member of any of the

major branches of the Indo-European family. Despite its Indo-European affiliation and presence

in the Balkans since ancient times, it is difficult to pinpoint the exact ancestry of the Albanian

language because of the radical transformations that have taken place within it through the

centuries. Among these transformations has been a substantial reduction in word length and

extreme morphological alterations. Whether the Albanian language stems from Illyrian or

Thracian, both, or neither is a matter of contention. The theory of the Illyrian origin of the

Albanian people is the one most widely accepted in Albania and has been raised to the level of a

national and state ideology. There is little evidence to prove or disprove this theory, since little is

known about the Illyrian language. Since ancient times, very substantial strata of Latin and of

Slavic and Turkish have been added to Albanian, making the older strata more difficult to

analyze.

Albanian is a synthetic language that is similar in structure to most other Indo-European

languages. Nouns are marked for gender, number, and case as well as for definite and indefinite

forms. The vast majority of nouns are masculine or feminine, though there are a few neuter

nouns. The nominal system distinguishes five cases: nominative, genitive, dative, accusative, and

ablative; the genitive and dative endings are always the same. Attributive genitives are linked to

the nouns they qualify by a system of connective particles. Albanian verbs have three persons,

two numbers, ten tenses, two voices, and six moods. Unusual among the moods is the

admirative, which is used to express astonishment. Among other particular features of Albanian

and other Balkan languages are a postpositive definite article and the absence of a verbal

infinitive. Although Albanian is not directly related to Greek, Serbo-Croatian, Romanian, or

Bulgarian, it has much in common with all those Balkan languages after centuries of close

contact.

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Prayer room at the Mosque of Etem Bay, in the capital city at Tirana.

Ironically, because the Belgrade authorities willfully destroyed the Albanian-language

educational system in Kosovo in the mid-1980s, an increasing number of young people there,

educated in "underground" schools, no longer speak and understand Serbo-Croatian.

5 FOREIGN RELATIONS OF ALBANIA

Albanian foreign policy since its independence has maintained a policy of complementarism by

trying to have friendly relations with all countries. Albania is a member of more than 48 different

international organizations including the United Nations, the Council of Europe, the North

Atlantic Treaty Organization, The Organisation of Islamic Cooperation., the Organization for

Security and Cooperation in Europe, the International Monetary Fund, the World Trade

Organization andLa Francophonie. The main factors defining Albanian foreign policy consist of

geopolitical location, population, economic crisis, and ties with Albanian diaspora throughout the

world. Albania has concentrated on maintaining good relations with its Balkan neighbours,

gaining access to European-Atlantic security institutions, and securing close ties with the United

States. On 14 January 2011, Albania signed a pact with Italy for a corporal foreign strategy.

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6 MILITARY OF ALBANIAMilitary branches:

Land Forces Command, Air Forces Command, Training and Doctrine Command (2010)

Military service age and obligation: 19 years of age (2004)

Manpower available for military service:

males age 16-49: 731,111

females age 16-49: 780,216 (2010 est.)

Manpower fit for military service:

males age 16-49: 622,379

females age 16-49: 660,715 (2010 est.)

Manpower reaching militarily significant age annually:

male: 31,986

female: 29,533 (2010 est.)

Military expenditures:

1.49% of GDP (2005 est.)

country comparison to the world: 99

7 CURRENCY OF ALBANIA

The currency used in Albania is called as the Lek. This currency is denoted with the currency

sign Lek and the ISO 4217 Code for the Albanian Lek is ALL. The Lek, is the official currency

of the Albania . It is divided into 100 smaller units called qindarkë. The constitution of Albania

provides that the Albania government shall have the power to print the Albanian Lek and

qindarkë coins to be used as a legal tender in Albania. The Albanian Lek bank notes and

Qindarkë coins are both designated as "legal tender" in payment of debts. The Albanian Lek bill

uses the decimal system, consisting of 100 equal units. The symbol Lek, usually written before

the numerical amount, is used for the Albanian Lek.

Currently printed bank notes denominations are 200, 500, 1000 and 2000 lekë 5000 lekë and the

coins are minted in the denominations of 5, 10, 20, 50, 100 lekë 1 lek.

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8 ECONOMY OF ALBANIA

The economy of Albania has undergone a transition from its communist past into an open-market

economy in the early 1990s. Although the country is rich in natural resources, the economy is

mainly bolstered by agriculture, food processing, lumber, oil, cement, chemicals, mining, basic

metals, hydropower, tourism, textile industry, migrant remittances, and the informal economy.

The collapse of communism in Albania came later and was more chaotic than in other Eastern

European countries and was marked by a mass exodus of refugees to Italy and Greece in 1991

and 1992. The country attempted to transition to autarky, but this eventually failed. Attempts at

reform began in earnest in early 1992 after real GDP fell by more than 50% from its peak in

1989. Albania currently suffers from high organised crime and corruption rates.

The democratically elected government that assumed office in April 1992 launched an ambitious

economic reform program to halt economic deterioration and put the country on the path toward

a market economy. Key elements included price and exchange system liberalization, fiscal

consolidation, monetary restraint, and a firm income policy. These were complemented by a

comprehensive package of structural reforms including privatization, enterprise, and financial

sector reform, and creation of the legal framework for a market economy and private sector

activity. Most agriculture, state housing, and small industry were privatized. This trend continued

with the privatization of transport, services, and small and medium-sized enterprises. In 1995,

the government began privatizing large state enterprises. After reaching a low point in the early

1990s, the economy slowly expanded again, reaching its 1989 level by the end of the decade.

Albania remains a poor country by Western European standards. According to Eurostat,

Albania's GDP per capita (expressed in PPS – Purchasing Power Standards) stood at 25 percent

of the EU average in 2008.

Results of Albania's efforts were initially encouraging. Led by the agricultural sector, real GDP

grew by an estimated 11% in 1993, 8% in 1994, and more than 8% in 1995, with most of this

growth in the private sector. Annual inflation dropped from 25% in 1991 to single-digit numbers.

The Albanian currency, the lek, stabilized. Albania became less dependent on food aid. The

speed and vigor of private entrepreneurial response to Albania's opening and liberalizing was

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better than expected. Beginning in 1995, however, progress stalled, with negligible GDP growth

in 1996 and a 9% contraction in 1997. A weakening of government resolve to maintain

stabilization policies in the election year of 1996 contributed to renewal of inflationary pressures,

spurred by the budget deficit which exceeded 12%. Inflation approached 20% in 1996 and 50%

in 1997. The collapse of financial pyramid schemes in early 1997 – which had attracted deposits

from a substantial portion of Albania's population – triggered severe social unrest which led to

more than 1,500 deaths, widespread destruction of property, and an 8% drop in GDP. The lek

initially lost up to half of its value during the 1997 crisis, before rebounding to its January 1998

level of 143 to the dollar. The new government, installed in July 1997, has taken strong measures

to restore public order and to revive economic activity and trade.

Albania is currently undergoing an intensive macroeconomic restructuring regime with the

International Monetary Fund and the World Bank. The need for reform is profound,

encompassing all sectors of the economy. In 2000, the oldest commercial bank, Banka

Kombetare Tregtare/BKT was privatized. In 2004, the largest commercial bank in Albania—then

the Savings Bank of Albania—was privatised and sold to Raiffeisen Bank of Austria for US$

124 million. Lagging behind its Balkan neighbors, Albania is making the difficult transition to a

more modern open-market economy. Macroeconomic growth has averaged around 5% over the

last five years and inflation is low and stable. The government has taken measures to curb violent

crime, and recently adopted a fiscal reform package aimed at reducing the large gray economy

and attracting foreign investment. The economy is bolstered by annual remittances from abroad

representing about 15% of GDP, mostly from Albanians residing in Greece and Italy; this helps

offset the towering trade deficit. The agricultural sector, which accounts for over half of

employment but only about one-fifth of GDP, is limited primarily to small family operations and

subsistence farming because of lack of modern equipment, unclear property rights, and the

prevalence of small, inefficient plots of land. Energy shortages because of a reliance on

hydropower, and antiquated and inadequate infrastructure contribute to Albania's poor business

environment and lack of success in attracting new foreign investment. The completion of a new

thermal power plant near Vlore has helped diversify generation capacity, and plans to improve

transmission lines between Albania and Montenegro and Kosovo would help relieve the energy

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shortages. Also, with help from EU funds, the government is taking steps to improve the poor

national road and rail network, a long-standing barrier to sustained economic growth.

Reforms have been taken especially since 2005. In 2009, Albania was the only country in

Europe, together with San Marino and Liechtenstein, to have economic growth; Albanian GDP

real growth was 3.7%. Year after year, the tourism sector has gained a growing share in the

country's GDP.

Data published as of July 2012 by the National Institute of Statistics, INSTAT, show the

economy contracted by 0.2 per cent in the first quarter of the year - a downturn blamed mainly

on the euro zone debt crisis.

GDP (purchasing power parity):

$25.23 billion (2011 est.); country comparison to the world: 117

$24.74 billion (2010 est.)

Albania has an informal, and unreported, sector that may be as large as 50% of official GDP

GDP (official exchange rate):

$12.85 billion (2011 est.)

GDP - real growth rate:

2% (2011 est.); country comparison to the world: 150

3.5% (2010 est.)

GDP - per capita (PPP):

$7,800 (2011 est.); country comparison to the world: 129

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GDP - composition by sector:

agriculture: 20.7%’ industry: 19.7%; services: 59.6% (2011 est.)

Labor force:

1.053 million (2010 est.); country comparison to the world: 142

Labor force - by occupation:

agriculture: 47.8%; industry: 23%; services: 29.2% (September 2010 est.)

Unemployment rate:

13.3% (2011 est.); country comparison to the world: 139; 13.7% (2010 est.)

note: these are official rates, but actual rates may exceed 30% due to preponderance of near-subsistence farming

Population below poverty line:

12.5% (2008 est.)

Household income or consumption by percentage share:

lowest 10%: 3.5%; highest 10%: 29% (2008)

Distribution of family income - Gini index:

34.5 (2008); country comparison to the world: 88

26.7 (2005)

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Investment (gross fixed):

29.9% of GDP (2011 est.); country comparison to the world: 20

Budget:

revenues: $3.289 billion; expenditures: $3.738 billion (2011 est.)

Taxes and other revenues:

25.6% of GDP (2011 est.); country comparison to the world: 122

Budget surplus (+) or deficit (-):

-3.5% of GDP (2011 est.); country comparison to the world: 114

Public debt:

59.7% of GDP (2011 est.); country comparison to the world: 42; 57.1% of GDP (2010 est.)

Inflation rate (consumer prices):

3.5% (2011 est.); country comparison to the world: 84

Central bank discount rate:

5% (31 December 2010 est.); country comparison to the world: 66

5.25% (31 December 2009 est.)

Stock of narrow money:

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$3.024 billion (31 December 2011 est.); country comparison to the world: 117

$2.648 billion (31 December 2010 est.)

Stock of broad money:

$9.951 billion (31 December 2011 est.); country comparison to the world: 107

$5.813 billion (31 December 2010 est.)

Stock of domestic credit:

$9.208 billion (31 December 2011 est.); country comparison to the world: 99

$7.953 billion (31 December 2010 est.)

Agriculture - products:

wheat, corn, potatoes, vegetables, fruits, sugar beets, grapes; meat, dairy products

Industries:

food processing, textiles and clothing; lumber, oil, cement, chemicals, mining, basic metals, hydropower

Industrial production growth rate:

3% (2010 est.); country comparison to the world: 105

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Current account balance:

-$1.595 billion (2011 est.); country comparison to the world: 135

-$1.404 billion (2010 est.)

Exports:

$1.954 billion (2011 est.); country comparison to the world: 143

$1.548 billion (2010 est.)

Exports - commodities:

textiles and footwear; asphalt, metals and metallic ores, crude oil; vegetables, fruits, tobacco

Exports - partners:

Italy 48.8%, China 8.4%, Turkey 6.7%, Greece 5.6%, Spain 5.4%, India 4.9% (2010 est.)

Imports:

$5.076 billion (2011 est.); country comparison to the world: 129

Imports - commodities:

machinery and equipment, foodstuffs, textiles, chemicals

Imports - partners:

Italy 34.8%, Greece 12.9%, China 6.2%, Turkey 6%, Germany 4.6% (2010 est.)

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9 SOCIAL INSTITUTIONS

A GENERAL ROLES AND STATUSES

The relative status of women and men: Albania is a patriarchal society based on male

predominance. Women are accorded subordinate roles. The communist Party of Labor did much

to emancipate women during a revolutionary campaign in the late 1960s and early 1970s, but

many of the gains of that social revolution have been reversed since the introduction of

democracy and a free market economy. Old traditions have revived, and despite legal equality

and acceptance in the workforce, women have much less representation in public life than they

did under the former regime.

B MARRIAGE, FAMILY, AND KINSHIP

Marriage: Marriages in Albania are socially and legally restricted to heterosexual couples. They

often are arranged at an early age in the countryside, traditionally by the parents of the groom

with the help of a matchmaker rather than by the couple. Remaining unmarried is looked on as a

great misfortune. In some mountain regions, the bride was stolen from her family, that is, spirited

away by an armed bridegroom or by his male relatives and companions. This usually symbolic

though occasionally real theft of a bride was also a common custom among the Italo-Albanians

of Calabria. In other regions, it was customary to purchase a wife. In zones such as Mirditë and

the northern mountains, the father, brother, or another male relative of the bride still presents the

groom with a bullet wrapped in straw. The new husband is thus free to kill his wife with the

approval of her family if she proves to be disobedient.

Albanian weddings are impressive festivities. They are virtually the only popular celebrations

observed today and thus are taken very seriously. Whole villages and, in towns, hundreds of

people may be invited to take part in a wedding banquet. The celebrations can last several days.

Traditionally, weddings take place during the full moon to ensure offspring. Monogamy was

always the rule in Albania, but polygamous marriages existed up to the beginning of the

twentieth century in some areas, particularly if the first wife was not able to bear a son. Live-in

concubines were not uncommon in the mountains up to World War II. Albanian women were as

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a rule faithful to their husbands. Since a wife was considered the property of her husband,

adultery amounted to theft. Thus, cases of adultery were punished severely under traditional law.

Premarital and extramarital sex was more prevalent in the northern highlands, the part of the

country with the most rigid moral code. Divorce is now a common phenomenon.

C) EDUCATIONAL SYSTEM

Albania, as an official EU candidate country, has much progress to make toward the EU’s

education benchmarks before its accession. While education improvement in Albania is

supported by its government and growing economy, the country still faces many obstacles to

matching the educational outputs of its neighbors in Western Europe. Albania has a per capita

GNP of $5,316 USD (PPP), which is the lowest in South-eastern Europe and among the lowest

in the region of Central and Eastern Europe and the Commonwealth of Independent States

(CEE/CIS). Its annual growth rate has hovered around 5.2% since 1990. While Albania’s

economy continues to grow, its total government expenditure is the lowest in Southeastern

Europe with only 3% of its budget allocated to education and 3.7% to health. The average

standard of living in Albania is among the lowest in the sub-region, with 25.4% of the population

living below the national poverty line and 50% of the population living on less than $4.00 USD a

day. The national unemployment rate - 15% - is in comparable range to the poorest countries in

the region. Yet its child labor rates are the highest in the region with almost 30% of boys and

20% of girls working before the legal age.

Albania has taken significant strides to close the gaps in equity in its education system and it has

made many accomplishments in primary education. It has achieved gender parity in primary

education, with a Gender Parity Index (GPI) of 1.0. Girls’ participation in education remains

high throughout upper secondary education, with a GPI of .98 – and far surpasses that of boys in

tertiary education; 50% more girls enroll in higher education than boys (GPI=1.5).The bigger

gaps in educational opportunity are based on geographic location and economic status.

Throughout primary education, children living in rural areas have higher rates of participation

than those children living in urban areas. Rural children have higher attendance rates, higher

enrolment rates, and higher survival and completion rates. However, by secondary school the

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situation changes dramatically. Half as many rural children (13.6%) attend secondary education

as urban children (27.2%), and rural children’s attendance rates (13.6%) are half that of urban

children’s (27.2%) in secondary school.

Primary Education

The Albanian literacy rate hovers at around 99% and efforts are ongoing to maintain this.

Although education is only compulsory for the first 9 grades, most young people stay on through

to grade 12. The academic year, divided into two semesters begins in september / october and

ends in june / july. Primary education lasts for 9 years following a non-mandatory period spent at

preschool.

Secondary Education

Secondary education known as regular takes a further three years to complete. The focus is on

academic teaching and preparation for university. Many schools have recently been rebuilt and

are being equipped with modern technologies.

Vocational Education

Vocational education, which is an alternative to regular school takes between 2 to 5 years

depending on whether a simple diploma or a full trade qualification is desired. Considerable

effort by the state in this direction is adding muscle to a growing economy.

Tertiary Education

There are a significant number or universities in Albania both public and private, and these are

well dispersed in the major cities. The University of Tirana was the first when founded in 1957,

and today has a student population approaching 15,000 and a teaching staff of nearly 900.   Its

faculties include economic sciences, foreign languages, history & philology, medicine, natural

sciences, law, social sciences, and physical education, and its international reputation is growing.

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D) POLITICAL SYSTEM

ALBANIA WAS THE LAST COUNTRY in Eastern Europe during the early 1990s to undergo a

transition from a totalitarian communist regime to an incipient system of democracy. Because

Albania was isolated from the outside world and ruled by a highly repressive, Stalinist-type

dictatorship for more than four decades, this transition was especially tumultuous and painful,

making a gradual approach to reform difficult. Following the establishment of the People's

Republic of Albania in January 1946, Albania became a rigid police state, dominated completely

by the communist party and by Marxism/Leninism. Although Albania operated under the facade

of constitutional rule, the communist party, led by Enver Hoxha, who was also president of

Albania, actually controlled all aspects of the political, social, and economic systems. Hoxha

pursued a repressive internal policy, while at the same time implementing a highly isolationist

foreign policy. His reliance first on the financial aid and political protection of a sequence of

patron states, then insistence on Albania's economic self-reliance, and a highly centralized

economic system caused Albania to lag far behind its neighbors in terms of economic

development.

Between 1990 and 1992 Albania ended 46 years of xenophobic Communist rule and established

a multiparty democracy. The transition has proven challenging as successive governments have

tried to deal with high unemployment, widespread corruption, a dilapidated physical

infrastructure, powerful organized crime networks, and combative political opponents. Albania

has made progress in its democratic development since first holding multiparty elections in 1991,

but deficiencies remain. International observers judged elections to be largely free and fair since

the restoration of political stability following the collapse of pyramid schemes in 1997. In the

2005 general elections, the Democratic Party and its allies won a decisive victory on pledges of

reducing crime and corruption, promoting economic growth, and decreasing the size of

government. The election, and particularly the orderly transition of power, was considered an

important step forward. Although Albania's economy continues to grow, the country is still one

of the poorest in Europe, hampered by a large informal economy and an inadequate energy and

transportation infrastructure. Albania has played a largely helpful role in managing inter-ethnic

tensions in southeastern Europe, and is continuing to work toward joining NATO and the EU.

Albania, with troops in Iraq and Afghanistan, has been a strong supporter of the global war on

terrorism.

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Politics of Albania takes place in a framework of a parliamentary representative democratic

republic, wherein the Prime Minister is the head of government, and of a multi-party system.

Executive power is exercised by the government. Legislative power is vested in both the

government and parliament, the Assembly of the Republic of Albania (Kuvendi i Republikës së

Shqipërisë). Since 1991, the introduction of pluralism, the party system is dominated by the

Democratic Party of Albania and the (post-communist) Socialist Party of Albania. Its official

journal is Albanian Official Journal.

EXECUTIVE BRANCH

The head of state in Albania is the President of the Republic. The President is elected to a 5-year

term by the Assembly of the Republic of Albania by secret ballot, requiring a two-thirds majority

of the votes of all deputies. Bujar Nishani was on 11 June 2012 elected president by a simple

majority of deputies in the assembly, after it had failed on three earlier occasions to agree on a

nominee. He took the oath of office on 25 July 2012. The President has the power to guarantee

observation of the constitution and all laws, act as commander in chief of the armed forces,

exercise the duties of the Assembly of the Republic of Albania when the Assembly is not in

session, and appoint the Chairman of the Council of Ministers (Prime Minister). Executive

power rests with the Council of Ministers (cabinet). The Chairman of the Council (Prime

Minister) is appointed by the President; ministers are nominated by the President on the basis of

the Prime Minister's recommendation. The People's Assembly must give final approval of the

composition of the Council. The Council is responsible for carrying out both foreign and

domestic policies. It directs and controls the activities of the ministries and other state organs.

Legislative branch

The Assembly of the Republic of Albania (Kuvendi i Republikës së Shqipërisë) is the lawmaking

body in Albania. There are 140 deputies in the Assembly, of which 100 are directly elected by an

absolute majority of the voters, and 40 are chosen by their parties on the basis of proportional

representation. The President of the Assembly (or Speaker) has two deputies and chairs the

Assembly. There are 15 permanent commissions, or committees. Parliamentary elections are

held at least every 4 years.

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The Assembly has the power to decide the direction of domestic and foreign policy; approve or

amend the constitution; declare war on another state; ratify or annul international treaties; elect

the President of the Republic, the Supreme Court, and the Attorney General and his or her

deputies; and control the activity of state radio and television, state news agency, and other

official information media.

Judicial Branch

The court system consists of a Constitutional Court, the Court of Cassation, appeals courts, and

district courts. The Constitutional Court comprises nine members appointed by the People's

Assembly for maximum 9-year terms. The Constitutional Court interprets the constitution,

determines the constitutionality of laws, and resolves disagreements between local and federal

authorities. The remaining courts are each divided into three jurisdictions: criminal, civil, and

military. The Court of Cassation is the highest court of appeal and consists of 11 members

appointed by the People's Assembly and serving 7-year terms. The President of the Republic

chairs the High Council of Justice (HCJ) charged with appointing and dismissing other judges.

The HCJ was expanded in late 1997 to comprise 13 members from among the various branches

of government. A college of three judges renders Albanian court verdicts; there is no jury trial,

although the college is sometimes referred to in the Albanian press as the "jury."

Tax Rate

The Legal and physic persons in the Republic of Albania are subject to the following

taxes:

Type of Tax Tax Rate Tax rateProfit Tax 10%Personal Income Tax 10%Withholding Tax 10%Value Added Tax 20%

Profit Tax: All companies (foreign or not) which are registered in the trade register and pay VAT

are subject to the profit tax. The Resident taxpayers are subject to taxation only for incomes

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generated (produced) in the territory of the Republic of Albania. A legal person is considered

resident in Albania if:

a)he has a permanent residence (central offices) in the Republic of Albania

b) he has an efficient center of business management in the Republic of Albania The tax rate for

profit tax is 10%.

LEGAL SYSTEM

Albania is a Parliamentary Republic. Sovereignty in the Republic of Albania belongs to the

people. The Constitution is the highest law in the Republic of Albania, and was adopted by

popular referendum on November 28, 1998. The system of government is based on the

separation and balancing of the legislative, executive and judicial powers. The unicameral

Parliament (Kuvendi) represents the legislative branch. The executive branch is represented by

the President as the Chief of State, Prime Minister as the Head of Government, and the Council

of Ministers. The judicial branch is composed of the Constitutional Court, the Supreme Court

and multiple Appeal Courts and District Courts. The unicameral Parliament (Kuvendi) consists

of 140 seats, 100 of which are determined by direct popular vote. The remaining 40 seats are

distributed by proportional representation. All Parliament members serve a four-year term. The

internal structure of Parliament is composed of the Speaker, Deputy Speakers, Bureau of

Parliament, Parliamentary Groups, and Parliamentary Commissions.

The President is the head of state and is elected by a three-fifths majority vote of all Parliament

members. The President serves a term of five years with the right to one re-election. Although

the position is largely ceremonial, the Constitution does give the President authority to appoint

and dismiss from office some civil servants in the executive and judicial branches and to issue

decrees.

The Prime Minister is appointed by the President and approved by Parliament. The Prime

Minister serves as the Chairman of the Council of Ministers, which consists of the Prime

Minister, Deputy Prime Minister, and 18 ministers. Members of the Council of Ministers are

nominated by the Prime Minister and approved by the President. The Council of Ministers

introduces to Parliament draft laws necessary for implementing the Constitution, and issues

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decisions, instructions, regulations and orders to implement the body of laws approved by

Parliament.

THE JUDICIARY SYSTEM

The Constitutional Court: The Constitutional Court was created on the basis of the Constitution

and law no. 8577, date 10.2.2000 "On organization and operation of the Constitutional Court"

establishes the organization and operation of the Constitutional Court. The Constitutional Court

is composed of nine members, appointed by the President of the Republic with the consent of

Parliament. They are appointed for nine-year terms and do not have the right to be re-appointed.

The Constitutional Court reviews the compatibility of laws and normative acts of central and

local bodies with the Constitution or international agreements, which, after ratified by

Parliament, prevail over Albanian law. All Constitutional Court decisions are published in the

Official Gazette, along with dissents.

The High Council of Justice (in Albanian and English).

The High Council of Justice is composed of 15 members- the President of the Republic, who

chairs the High Council of Justice, the Chief Justice of the Supreme Court, the Minister of

Justice, three members elected by the Assembly, and nine judges from any level in the court

system who is elected by the National Judicial Conference

The Supreme Court (in Albanian and English)

The Supreme Court is organized and operates in compliance with law no. 8588, date 15.3.2000

"On the organization and operation of the Supreme Court of the Republic of Albania." The

Supreme Court is the highest court of appeal and is composed of 17 judges appointed for a nine-

year term by the President with the consent of Parliament. The Supreme Court is organized in

civil and criminal panels. The criminal panel tries military and criminal cases and the civil panel

tries commercial, administrative, family, labor cases and the like.

Courts of Appeal

20

Courts of Appeal sit in six different regions of the country and review complaints against

decisions of Courts of First Instance. These courts sit in three judge panels. The Courts of

Appeal function in regions defined by the President of the Republic, based on a proposal of the

Minister of Justice after consulting the High Council of Justice. The assignment of cases to

judicial panels at all levels of the judicial system is done by lottery according to procedures

provided by law. To be appointed a judge in the Courts of Appeal, one must possess full legal

competence, hold a law degree, have no criminal record, have a "good reputation," and be at

least twenty-five years old. Judges of the Courts of Appeal are nominated by the High Council of

Justice and appointed by the President of the Republic.

Courts of First Instance

The Courts of First Instance try according to rules provided in the Codes of Civil Procedure and

Criminal Procedure, where the composition of the judges' panel is also defined. Courts of First

Instance are organized and function in thirty-six judicial districts throughout the country.

Military Courts

Military Courts are organized and function within the judicial system according to powers

defined in law. Military Courts are composed of Courts of First Instance and a Court of Appeal.

Military Courts try military cases. The military Court of Appeal reviews in the second level

complaints filed against decisions of the Military Courts of First Instance. The Military Courts

try cases using panels of three judges.

Bar Association

The Bar was established on the basis of a 1990 reform (Law no. 7382, date 8.5.1990 For the

Advocacy in the People's Socialist Republic of Albania, and amendment of article 9, 10 and 14

of the Code of Penal Procedure, by law no. 7387, date 8.5.1990. The Bar consists of collegiums

of advocates. Membership is restricted to persons with a law degree and who have at least three

years experience as lawyers. The Minister of Justice may grant exceptions from these

requirements. Advocates do not have a monopoly on the presentation of cases in court.

Individual citizens remain free to present their own case in court.

21

E) SOCIAL ORGANIZATIONS

SYMBOLISM

The national and ethnic symbol of the Albanians is the eagle, which was used in that capacity in

the earliest records. The eagle appears in a stone carving dating from 1190, the time of the so-

called first Albanian principality, known as Arbanon, and was used as a heraldic symbol by a

number of ruling families in Albania in the late Middle Ages, including the Castriotta (Kastrioti),

the Muzakaj (Myzeqe), and the Dukagjini. A black double-headed eagle also was placed by the

national hero Scanderbeg on his flag and seal. This form of the eagle, deriving from the banner

of the Byzantine Empire, has been preserved as an ethnic symbol by the Arberesh of southern

Italy. In the late nineteenth century, the double-headed eagle was taken up by the nationalist

movement as a symbol of resistance to the Ottoman Empire and was used on the banners of

freedom fighters seeking autonomy and independence. The current flag, bearing this black

double-headed eagle on a red background, was officially raised on 28 November, 1912 to mark

the declaration of Albanian independence in Vlorë and has been used since that time by the

Republic of Albania and by Albanians everywhere as the national symbol.

In Albanian oral literature and folklore, the eagle appears as a symbol of freedom and heroism,

and Albanians often refer to themselves as the "Sons of the Eagle." The popularity of the eagle

among Albanians derives from the similarity between the words shqipe (eagle) and the terms for

the Albanian language, an Albanian person, and Albania.

Another beloved symbol is the Albanian prince and national hero Scanderbeg (1405–1468). His

real name was George Castriotta (Gjergj Kastrioti). Sent by his father as a hostage to the Turkish

Sultan Murad II (ruled 1421–1451), he was converted to Islam and, after being educated in

Edirne, was given the name Iskander (Alexander) and the rank of bey. In 1443, after the Turkish

defeat at Nish by John Corvinus Hunyadi (1385–1456), Scanderbeg abandoned the Ottoman

army, returned to Albania, and embraced Christianity. He took over the central Albanian fortress

of Kruja and was proclaimed commander in chief of an independent Albanian army. In the

following years, Scanderbeg successfully repulsed thirteen Ottoman invasions and was widely

admired in the Christian world for his resistance to the Turks, being accorded the title  Athleta

Christi by Pope Calixtus III (ruled 1455–1458). Scanderbeg died on 17 January 1468 at Lezha

(Alessio), and Albanian resistance collapsed a decade afterward. In 1478, his fortress at Kruja

was taken by the Turks, and Albania experienced four centuries of Ottoman rule. For Albanians, 22

Scanderbeg is the symbol of resistance to foreign domination and a source of inspiration in both

oral and written literature. It is common in the homes of Albanian families living abroad to find

not only an Albanian flag but also a bust or portrait of Scanderbeg.

HISTORY AND ETHNIC RELATIONS

Emergence of nation: Albanians are a native Balkan people, although their exact origin is

unclear. The national ideology insists on an unequivocal ethnic relationship with the ancient

Illyrians. As little is known about the Illyrians and there are no historical records referring to the

existence of the Albanian people during the first millennium C . E ., it is difficult to affirm or

deny the relationship. Albanians entered postclassical recorded history in the second half of the

eleventh century, and only in this age can one speak with any degree of certainty about the

Albanian people as they are known today. In his History written in 1079–1080, the Byzantine

historian Michael Attaleiates was the first to refer to the Albanoi as having taken part in a revolt

against Constantinople in 1043 and to the Arbanitai as subjects of the duke of Dyrrachium.

Similarly, the historian John Scylitzes refers (ca. 1081) to the Arbanites as forming part of the

troops assembled in Durrës by Nicephorus Basilacius. It can be assumed that the Albanians

began expanding from their mountain homeland in the eleventh and twelfth centuries, initially

taking possession of the northern and central coastline and by the thirteenth century spreading

southward toward what are now southern Albania and western Macedonia. In the middle of the

fourteenth century, they migrated farther south into Greece, initially into Epirus, Thessaly

(1320), Acarnania, and Aetolia. By the middle of the fifteenth century, which marks the end of

this process of colonization, the Albanians had settled in over half of Greece in such great

numbers that in many regions they constituted the majority of the population. Despite these

extensive settlements, the Albanians, largely a herding and nomadic people, do not seem to have

created any substantial urban centers. There were no noticeable Albanian communities in the

cities of the Albanian coast during the Middle Ages. Durrës was inhabited by the Venetians,

Greeks, Jews, and Slavs; Shkodra, by the Venetians and Slavs; and Vlorë, by the Byzantine

Greeks. It is estimated that a considerable proportion of Albanians were assimilated by the time

of the Turkish invasion; in other words, the Albanians had been largely marginalized in their

own country. Only during the Ottoman period did they began to settle in towns and acquire some

of the characteristics of a nation rather than those of nomadic tribes.

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Ethnic relations: The Balkan peninsula is inhabited by a multitude of ethnic groups, and

relations among them have never been good. Exacerbated nationalism and age-old rivalry for

territory and supremacy have always created ethnic tension. This is especially true in regions

with mixed settlement patterns, where ethnic groups are not separated by clear-cut political

borders. While ethnic relations between Albanians and Greeks along their common border have

improved substantially over the last decade, that cannot be said of relations between Albanians

and their Slavic neighbors in the former Yugoslavia. In Kosovo, the Albanian majority was

reduced to the status of an oppressed colonial people after the Serb conquest of the region at the

beginning of the twentieth century. The open conflict that broke out in 1997 was, however, not

initially one between Kosovo Albanians and Kosovo Serbs but between Kosovo Albanians and a

hostile Serb regime in Belgrade. Relations between Albanians and Macedonians in the western

part of the Republic of Macedonia have been tense since the declaration of Macedonian

independence and the downgrading of the status of Albanians there to that of a "national

minority."

Land tenure and property: Albania is a mountainous country with an extremely high birthrate,

and there is not enough farmland. Agriculture was reprivatized in the early 1990s after the fall of

the communist regime, and many properties were returned to their former owners. Most families,

however, received extremely small plots barely large enough to survive on. Property disputes are

common and have been a major cause of blood feuding. Although most political parties have

strategies for the further privatization of industry and nonagricultural land, many problems

remain.

Commercial activities, major industries and trade: aside from agricultural output, Albania is a

major producer of chrome. There are also significant deposits of copper and nickel and some oil.

The country is still reeling from the radical transformation from a socialist to a free market

economy, and commercial activity has not attained its potential. Virtually all the major industries

went bankrupt and collapsed in the early 1990s when a free market economy was introduced.

Some mines, chrome in particular, are still in production, but most have stagnated under pressure

from foreign competition. Among the few sectors of the economy that are doing well is the

construction industry. Domestic building materials are now widely available on the local market

and increasingly on foreign markets. The European Union is the major trading partner, with

Italy, Greece, and Germany leading in imports and exports. The national trade deficit has been

24

compensated to some extent by foreign exchange remittances from Albanian emigrants working

abroad.

SOCIAL STRATIFICATION

Classes and castes: Under the communist regime, which called for absolute equality and the rule

of a single working class, there were in fact three social castes. The ruling caste was composed

of the extended families of politburo members and related communist families and clans. The

majority of the population was in the working class. The

Workmen at a metallurgical plant in Elbasan, Albania. Much of the Albanian industrial sector

collapsed with the introduction of a free market economy in the early 1990s.

lowest caste consisted of once prosperous farming families, the precommunist middle class, and

opponents of the regime. Many of those families were sent to the countryside into internment or

internal exile and were denied access to many professions and to education for their children.

This caste system broke down with the fall of the communist regime and has been replaced by a

system where status is determined exclusively by wealth.

URBANISM, ARTITIECTURE AND USE OF SPACE

The traditional architecture of Albania almost disappeared during the Stalinist dictatorship of

1944– 1990. The old towns and bazaars of Tirana and many other urban centers were demolished

and replaced by socialist prestige objects or uniform housing blocks. In the late 1960s and early

1970s, virtually all the churches and mosques were razed or transformed beyond recognition.

25

The Catholic cathedral of Shkodra, for instance, was transformed into a sports hall with a

volleyball court, and that of Tirana into a movie theater. With the exception of Berat and

Gjirokastër, which were declared museum cities, little of the traditional flavor of Albanian towns

can now be found. Most of the older public buildings that survived the communist period in

Tirana, such as the main government ministries

Agricultural workers travel between Tirana and Kavajë. While Albania has a large rural

population, most families in the countryside can barely raise enough crops to feed themselves.

and the university, date from the Italian period (1930s–1940s). The main thoroughfare of Tirana

from Scanderbeg Square to the university was constructed by the Italians as a symbol of Italian

fascism. The lack of zoning regulations led in the 1990s to chaos in construction and the use of

space, destroying the little that survived the communist regime. Old villas have been demolished,

and most parks and public gardens disappeared under a myriad of kiosks and cafés.

10 RELIGION

Religious belief: Albania is on the border dividing three religions: Roman Catholicism, Greek

Orthodoxy, and Islam. According to the last reliable statistics on religion (1942), among a

population of 1,128,143, there were 779,417 (69 percent) Muslims, including the Bektashi;

232,320 (21 percent) Orthodox; and 116,259 (10 percent) Catholics. One can estimate today that

approximately 70 percent of Albanians in the republic are of Muslim, including Bektashi,

background; about 20 percent, mostly in the south, are Orthodox; and about 10 percent, mostly in

the north, are Catholic. In 1967, all religious communities were dissolved when a communist 26

government edict banned the public practice of religion. The law was rescinded only in

December 1990 during the collapse of the regime. Despite the return of religious freedom, there

seems to be more interest in the revival of Christianity and Islam among foreign missionaries and

groups than there is among Albanians. Albanians have never had a national religion with which

to identify as a people. For the last century and a half, national (ethnic) identity has predominated

over religious identity, and this is unlikely to change in the coming years in a small and

struggling nation surrounded by hostile neighbors. Organized religion still plays only a marginal

role in public life. Religious fervor is extremely rare, and religious extremism is virtually

unknown.

THE ARTS AND HUMANITIES

Literature: The foundations of a national literature were laid in the second half of the nineteenth

century with the rise of a nationalist movement striving for Albania's independence from a

decaying Ottoman Empire. The literature of this so-called Rilindja period of national awakening

was characterized by romantic nationalism and provides a key to an understanding of the

Albanian mentality today.

At the beginning of the twentieth century, the Catholic education facilities set up by the

Franciscans and Jesuits in Shkodra under the auspices of the Austro-

Hungarian Kultusprotektorat paved the way for the creation of an intellectual élite that produced

the rudiments of a more sophisticated literature which expressed itself primarily in poetry. The

culmination of Albanian literature before World War II appears in the works of the Franciscan

priest Gjergj Fishta (1871–1940), once lauded as the national poet. From 1945 to 1990, for

primarily political reasons, Fishta was ostracized from the Albanian literary world and the

mention of his name was forbidden.

Virtually all prewar Albanian literature was swept away by the political revolution that took

place during and after World War II. Most prewar writers and intellectuals who had not left the

country by 1944 regretted their decision to stay. The persecution of intellectuals and the break

with virtually all cultural traditions created a literary and cultural vacuum that lasted until the

1960s and whose results can still be felt.

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With Albania's integration into the Soviet bloc during the 1950s, Soviet literary models were

introduced and slavishly imitated. Writers were encouraged to concentrate their creative energies

on specific themes, such as the partisan struggle of the "national liberation war" and the building

of socialism. Despite the constraints of socialist realism and Stalinist dictatorship, Albanian

literature made much progress in the 1970s and 1980s. One of the best examples of creativity

and originality in Albanian letters then and now is Ismail Kadare (b. 1936), the only Albanian

writer with a broad international reputation. Kadare's talents both as a poet and as a prose writer

have lost none of their innovative force over the last three decades. His influence is still felt

among the young post communist writers of the 1990s, the first generation to be able to express

itself freely.

11.. LIVING CONDITION

A FOOD AND ECONOMY

Food in daily life: After half a century of Stalinist dictatorship, food culture is virtually

nonexistent. For decades, there was little on the market beyond basic staples, and today, dire

poverty has left most Albanians with little more to eat than bread, rice, yogurt, and beans. In as

much as it has survived at all, Albanian cuisine is meat-oriented. Traditional dishes, which

usually are reserved for guests and special occasions such as weddings, are easier to find among

Albanians living abroad.

Food customs at ceremonial occassions: Despite their poverty, Albanians are exceptionally

generous and hospitable. A person invited to dinner will be given enough to "feed an army,"

even though the host may go hungry the next day. It is not unusual for an Albanian family to

spend a month's salary to feed a visitor. Meals for guests or for ceremonial occasions such as

weddings usually involve copious amounts of meat, washed down with Albanian raki , an

alcoholic beverage. Animals were formerly slaughtered and roasted on a spit for religious

holidays such as the Muslim celebration of Great Bayram and the Christian feast days of Saint

Basil on 1 January, Saint Athanasius on 18 January, Saint George on 23 April and 6 May, Saint

Michael on 29 September, Saint Nicholas on 6 December, and Christmas on 25 December.

These customs have largely died out, although some regional dishes have survived. The

Orthodox of southeastern Albania still eat qumështor , a custard dish made of flour, eggs, and

milk, before the beginning of Lent. During the annual spring festival ( Dita e Verës ), in central 28

Albania on 14 March, the women of Elbasan and the surrounding regions bake a sweet cake

known as ballakum Elbasani . Members of the Islamic Bektashi sect mark the end of the ten-day

fasting period of matem with a special ashura (pudding) made of cracked wheat, sugar, dried

fruit, crushed nuts, and cinnamon.

B) HOUSING

During World II, about 61,000 buildings of all types were destroyed, including 35,400 dwellings.

Housing was generally primitive in rural areas and poor elsewhere. After the war, housing

continued to be a problem for a variety of reasons: primary emphasis on industrial construction,

shortages of materials and skilled labor, and lack of or inadequate assistance for private building.

Moreover, the increase of urban population worsened an already desperate situation.

Consequently, new housing construction was concentrated in Tiranë, Vlorë, Elbasan, Shkodër,

Durrës, and Korçë, as well as in other industrial and mining sites.

Nearly 29% of all housing currently available was built during the period from 1961-1980.

According to the preliminary results of a 2001 census, there were about 520,936 residential

buildings in the country containing about 783,640 dwellings. About 30% of the dwelling spaces

were block flats constructed and owned by the government during the Communist era. Most

public housing was privatized during the period from 1992–93. A 1998 Household Living

Condition survey indicated that about 74% of rural households did not have an indoor toilet and

54% did not have access to running water. In comparison, 18% of urban households were

without an indoor toilet and 5% lacked running water. The most common form of housing

construction is a concrete frame filled with brick or block in-fill.

C) CLOTHING

Traditional Albanian clothing (Albanian: veshjet tradicionale shqiptare, veshjet kombëtare,

veshjet popullore or kostumet kombëtare) includes more than 200 different kind of clothings in

all Albania and Albanian inhabited lands. This is due to the division the Albanian principalities

in the Middle Ages. To this day, some conservative old men and women mainly from the North

wear traditional clothing in their daily lives. Instead, older women from the South usually wear

29

all black outfits. Almost every region in Albania has its own traditional dress with women

clothing being particularly colorful and rich in detail.

The Albanian Dress consist of the following elements:

Headgear

Men

The following head dresses are in use for men:

Qeleshe: a type of hat worn by men of Northern Albanian and Kosova. In central Albania

(Tirana, Durrës, Kavaja) it is cone-shaped, and in North Albania and Kosovo round.

Albanian hat: worn typically during the 15th to 18th centuries[3] and immortalized in

Onufri's paintings

Fez: a Turkish felt hat where upper flat manner un meischt red manner.

Qylafë: a woolen high hat worn in southern Albania.

For Women

The following headdress are in use for women:

Kapica: a headdress for women.

Langi, other names include: peshqira, riza, marhamë, pashnik

Lëvere: right shaped headdress.

Kryqe : square shaped headdress.

Pants and upper body covers

Fustanella : raditional skirt-like garment worn by men.

Tirq:long pant worn by man.

Brekusha: for man and women.

Xhubleta: Only worn by women.

Mbështjellëse- Only worn by women.

D) HEALTH CARE IN ALBANIA

The Albanian healthcare system is predominately public, centralized and rigidly structured. The

State is the major provider of health services, health promotion, prevention, diagnosis and

treatments for the citizens. The system often has difficulties in meeting the healthcare needs and

requirements of patients. New technologies and developments in medicine are often not available

to medical professionals and staff in Albania, especially for those outside the capital.

30

In Tirana, medical care at private hospitals and clinics has certainly improved in recent years,

however, medical facilities outside Tirana have very limited capabilities, often providing

inadequate standards of care due to a lack of medical specialists, diagnostic aids, medical

supplies, and prescription drugs. The private sector is still developing and covers most of the

pharmaceutical and dental services as well as some clinics for specialized diagnosis, again

mainly being located in Tirana.

E) SOCIAL SECURITY CONTRIBUTION

The Albanian social security system is administered by the Public Institute of Social security,

which is under the jurisdiction of the Council of Ministers. The employer contributions include

contributions to the work accidents indemnities and unemployment fund. Employees are also

liable to a percentage for both health and social security contributions.

The pension system in Albania that had been created in the interwar period was after the WW II

adapted to the pension model operative in other Soviet-bloc countries. After Albania’s return to

market economy in 1993, it was modernized and constructed as the pay-as-you-go tier. Only in

2006 was the system modified, in such a way that voluntary payments to III tier were introduced.

However, due to the poverty of Albanians and their traumatic experiences one is not inclined to

think that this tier will grow at a fast rate. The discussions about the introduction of the second,

fully capital public pension tier have not lead to any substantial action. The advantageous

demographic situation of the country does not translate into, as could be expected, favourable

ratio of those who pay contributions to those collecting pension benefits. This has very much to

do with the fact that Albania’s agriculture, which is large sector in the country’s economy,

meagerly contributes to the pension system. Comparing Albania’s pension system to those of

other countries, it is worthwhile to notice the special treatment that is given to women who have

given birth to six or more children.

12.FOREIGN POLICY

Albanian foreign policy since its independence has maintained a policy of complementarism by

trying to have friendly relations with all countries. From May 2012, Albania chairs the Council

of Europe until November. The Council of Europe has 47 members and for 2011-12 is

prioritising: human rights with a particular focus on the child; promoting human rights and the

rule of law in the interest of democracy and stability; and strengthening of local and regional

31

democratic processes. Albania is a member of a number of international and regional

organisations and initiatives, including NATO, the Organisation for Security and Cooperation in

Europe (OSCE), the UN, the Stability Pact, the Atlantic Charter, and the World Trade

Organisation (WTO). Albania joined NATO on 1 April 2009, following formal agreement to its

accession at the Bucharest Summit in April 2008, and is a contributor of troops to the

International Security Assistance Force. Albania applied to become a candidate country for

accession to the European Union (EU) in 2009 and is recognised by the EU as a "potential

candidate country". In November 2010 and October 2011 the European Commission concluded

that Albania had made progress toward accession criteria, but that this was insufficient to

warrant being granted EU candidate status. The Organisation for Security and Co-operation in

Europe (OSCE) has a mission in Albania led by Ambassador Eugen Wollfart.

13 INVOLVEMENT OF ALBANIA IN INTERNATIONA ORGANIZATIONS

Albania has association with many more international organizations such as Black Sea Economic

Cooperation, International Atomic Energy Agency, and International Fund for Agriculture

Development, International Labor Organization, The World Bank, UNESCO, UNICEF, United

Nation, United Nations Conference on Trade and Development, WHO, etc. Albania joined the

United Nations on 8th of October, 1962.

The accession of Albania to NATO took place in 2009. Albania's relationship with the North

Atlantic Treaty Organization (NATO) began in 1992 when it joined the North Atlantic

Cooperation Council. In 1994, it entered NATO's Partnership for Peace, which began Albania's

process of accession into the alliance. In 1999, the country received a Membership Action Plan

(MAP). The country received an invitation to join at the 2008 Bucharest Summit and became a

full member on April 1, 2009.

Albania is currently pursuing a path of greater Euro-Atlantic integration. Its primary long-term

goals are to gain EU membership and to promote closer bilateral ties with its neighbors and with

the U.S.

14 FOREIGN TRADE

The Albanian economy suffers from a trade deficit, albeit a declining one. In 2010, Albanian

exports totaled $1.194 billion while imports totaled $3.602 billion – which decreased

significantly from $4.898 billion in 2009 when exports remained at a similar figure of $1.345

32

billion. Italy dominates both imports and exports, while Greece is its second two-way trading

partner.

Albania Exports

Albania exports textiles and footwear, asphalt, metals and metallic ores, crude oil, vegetables,

fruits and tobacco. Its primary export trading partners Italy are (55.9% of exports), Greece

(11.6%), China (7.2%) Italy (27.6%), Greece (14.8%), Turkey (7.4%), China (6.8%), Germany

(5.6%), Switzerland (5%) and Russia (4.2%).

Albania Imports

Albania's primary imports include machinery and equipment, foodstuffs, textiles and chemicals.

It imports from Italy (32.2% of imports), Greece (13.1%), Turkey (7.2%), Germany (6.6%),

China (4.5%), Russia (4.4%) Italy (27.6%), Greece (14.8%), Turkey (7.4%), China (6.8%),

Germany (5.6%), Switzerland (5%), Russia (4.2%).

15 MULTINATIONAL OPERATIONS IN ALBANIA

With fiscal reforms under way, progress in the fight against corruption, low inflation rates and a

negative trade balance, Albania is attracting more foreign direct investments (FDIs) with high

profitability and low labor costs. Because of the ability of FDIs to generate jobs and contribute to

long-term economic development, the government has made attracting them a priority.

Experts expect to see investments mainly in the energy sector this year, as well as the natural

resources and tourism sectors. Hydro and thermal power plant construction, along with the

privatisation of the state-run electricity distribution division and oil and insurance companies,

offer opportunities to foreign companies looking to invest in Albania.

FDI IN ALBANIA IN THE GLOBAL CONTEXT.

Global FDI inflows doubled in the 2005-2007 period (in nominal terms) but fell back to the 2005

level of €802 billion ($1.1 trillion) in 2009 (table I.1). Inflows to South-East Europe followed the

global trend, peaking in 2007. FDI flows to Albania during the period, however, developed

mostly independently of the global and regional trends showing a continuous increase,

extending beyond 2009. In dollar terms, however, FDI inflows to Albania declined slightly, due

to the appreciation of dollar with respect to the euro and the Albanian Lek. The share of FDI

inflows to Albania in the world total remains marginal, at 0.1% in 2009, even though it grew to

33

ten times its share in 2000 (figure I.1). The country’s weight as a host to FDI in the South-East

European region has, however, grown remarkably since 2006, especially since 2007, when

inflows to the South-East Europe decreased while flows to Albania kept growing.

16 INDIA - ALBANIA RELATIONS

Diplomatic relations were established in 1956 with the Indian Ambassador resident in Rome

concurrently accredited to Tirana. They were suspended in 1964-65. In 1984, Albania signalled

its interest for better relations with India and was taken to accredit the Indian Ambassador in

Bucharest was accredited concurrently to Tirana, from 27 April 1990. Bilateral political relations

between India and Albania are cordial and friendly. Foreign Office consultations were held in

February 2003 in Tirana and in New Delhi in January 2006. Albania opened an embassy in New

Delhi in early 2008. The Foreign Minister and Speaker of Albania paid their first visits to India

in 2008 and 2010, respectively. A Protocol on Foreign Office Consultations exists and

discussions have taken place on a Double Taxation Avoidance Agreement (DTAA) and a

bilateral Investment Promotion and Protection Agreement (BIPA).

Bilateral Trade and Investments

Trade between India and Albania is minimal, and is dominated on the Indian side by export of

Indian pharmaceuticals. Bilateral trade between India and Albania during 2010-11 was US $

11.70 million (India’s exports were US$ 11.58 million and imports were US $0.12 mn) India

also exports coffee chemical industry products; vegetable products; mechanical,electrical

machinery and equipment; textiles; tires and plastic products. There are three shops in Tirana

that exclusively sell Indian products (fashion garments, furniture, furnishings and souvenirs)

imported via Turkey and Greece. India imports chemical industry products and metal alloys.

India offers 2 slots annually to Albania under ITEC. Albanian diplomats have trained at the

Foreign Service Institute of the Ministry of External Affairs. Albanian TV has telecasting Indian

documentaries. Consular matters Visas are now issued by the Albanian Mission in New Delhi.

Albanians apply for visas at the Indian Mission in Bucharest. Air links with India Travel routes

to Albania from India are through Rome, Frankfurt, Vienna, Istanbul or Dubai. The Indian

34

community in Albania is miniscule (less than 20). Occasionally Indian personnel have been used

to complete construction projects. The international airport of Albania is named after Mother

Teresa who is regarded as an Albanian national personality.

17 SWOT ANALYSIS FOR INVESTMENT IN ALBANIA

STRENGTHS

CATCH UP GROWTH POTENTIAL

EMERGING MARKET

ACCESS TO REGIONAL MARKET (CEFTA)

GOVERNMENT SUPPORT

Liberal model adopted

Clear EU prespective

Relatively low labor cost

Young and skilled labor force

WEAKNESS

Property Rights

Corruption

Rule of Law

OPPORTUNITIES

Consumer maket

Energy power generation

Tourism

Mining

Information Communication Technology

Agro business

Manufacturing sector

Services

THREATS

Euro zone crisis

35

Banking sector

Currency

Corruption

36