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|Authors: ||Muco, Klodian|
|Internal Tutor: ||GAROFOLI, GIOACCHINO|
|Tutor: ||MEKSI, ERMELINDA|
|Title: ||L’analisi del modello di sviluppo albanese nel periodo post-comunismo: il cambiamento economico e la specializzazione.|
|Abstract: ||This dissertation examines the model of economic development in Albania during the political-economic transition of 90-ies, mainly with regard to the economic change, trading specialization and restructuring of economy.
The main hypothesis of this study is the possibility to enable the development of the country through the export orientation as well as the potential restructuring of the actual manufacturing structure, focusing especially on new sectors such as industry, and also not overlooking those in which Albania has already paved its way of development, like agriculture. Also, by a thorough analysis of conditions, on a national and international scale, it is expounded on the reality that characterized Albania after the fall of socialist system, and highlighting strong points and lost possibilities in the realm of economic development process. With the analysis of the characteristics of this process, we have intended to highlight the problems and difficulties that have been evident during the transition period in Albania.
We have mainly carried out a thorough analysis of primary problems which have hindered the economic development of the country for a long time, from the beginning of ’90-ies and onwards. In addition, we have evaluated the policies and instruments of economic development, which on one hand, may be important for the economic policy in the following years, but on the other side, they serve to comprehend the conditions that favor investments. These investments indicate the role that a good investment plays in the civil society, with reference to the aspect of employment and increase of people welfare.
Concerning the employment in question, it is noted that the undertaken reforms during the beginning of `90-ies, have not produced the expected effects. Economic transformation in Albania was more difficult than being considered. Or rather, first monetary reforms that their primary aim was to stabilize the inflation, licensing inhibition (staff dismissing) by the public enterprises and public enterprises privatization, did not build a solid base in order to enhance the economic development of the country.
The economy and price liberalization initiating since 1992 along with massive privatization of public enterprises induced in a paradoxical way a paralyzation of the country’s production and a substantial deterioration of the trade balance. Albania was transformed from an isolated country that had “embraced” the motto: to produce everything by ourselves, had to abandon this philosophy, by becoming day by day dependent on import, with a high unemployment rate and with a social context of extreme economic poverty, a thing which stimulated the domestic population to emigrate towards industrial and developed countries. Consequently, these reforms have generated effects, which are nowadays being reflected in trade exchanges. Trade liberalization and the interference lack of the state in the economy, after 40 years of protectionism, brought about the restructuring of domestic production, in which the industrial sector was the most damaged. This phenomenon was at that period called the deindustrialization of the country. In fact, it is detected that all production activities were redimensioning or completely disappearing in the field of heavy, chemical, textile and food industry. With a primitive technology, the enterprises were not able to produce qualitative products that competed in the market, and under such circumstances, there occurred the shrinkage in the production activities towards their final closure. A part of light industry continued in the years to come to produce less than the production capacities at their disposal. Whereas, in the sector of agriculture, agrarian reform fragmented the enterprises and this led to direct management of rural areas families and consequently losing the quality and production technology. The lack of technology caused the decline of productivity and market competition, which later would rise to auto-consumption production.
In the following years, after the fall of communist regime, home policy-makers demanded a rapid polarization economy in those sectors reflecting comparative advantages for Albania that derived from the raw material availability such as: chrome, iron-nickel, petroleum and copper, geographical position and the level of a very low pay.
The main objective of this study is precisely the analysis of the typical economic aspects and the decisions made by the governance in the aforementioned period with the aim and hope to present a detailed and clear panorama of the economic transition and with its progress in Albania. In the first phases, Albania experienced what was later defined by the World Bank as a growth without development.
The study of the economic development model in Albania for a long-term period, allows on one hand the clear designation of different approaches followed by the governments in order to manage the economic policy, while on the other side, it highlights the choices and “errors” made by the economic policy. Based on these data, we have attempted to define the instruments and strategies that a certain state applies to generate a substantial change of the development model, from the labor intensive production, remittances, financings or aids by the international institutions and the raw material export, to a new development model which focuses on raw material transformation, production growth in various sectors of economy, the import decline and export increase.
In this study, it is demonstrated that through raw material transformation such as petroleum processing, is guaranteed the home market demand, the export and consequently the improvement of trade balance.
Furthermore, this study shows the geography of trade exchanges where Italy was the primary trade partner of Albania: exports towards Italy and Greece made up to 83% of the total export and 44% of total imports in 2006. 72% of exports and 26% of imports went and came from Italy. After 2006, with the membership of Albania in CEFTA (Central European Free Trade Agreement), it is observed a redimensioning of import-exports in favor of the countries of CEFTA. Generally speaking or either in particular, it is observed an increase of imports from China and exports towards Spain and Turkey. As far as the construction of trade is concerned, due to the membership of Albania in CEFTA, this is relevant for the “meat” product and no other.
From the qualitative and quantitative analysis of the Albanian economy, it is noticed that during transition, with the pass of time, Albania has made a good performance of the economic growth (with the exception of last years that growth has been retarded). Anyhow, it is clear that this growth is probably not stable with time and it does not possess the accurate capacities to generate incomes and enough employment for the domestic population. For this reason, we can say that the Albanian economy is facing a crossroad: it should go ahead with a “low” development direction which enables (as it occurs nowadays) sufficient rise in employment with a low pay and being concentrated in the sector which does not control autonomously in the future. Otherwise, it should choose a direction with a high development, by promoting the hidden capacities which are expected to give a hop in sectoral as the only ones, by ensuring simultaneous stability of the future incomes and the possibility to itself govern the progress of the country development.
In this dissertation, we have noted that the policies and strategies implemented by the Albanian governments in the years of transition have not fully worked out. This has occurred due to an increase in the gross production, real incomes in economy and employment, but on the other side these have not been sufficient in order to narrow the existing gap in developed countries. The employment and incomes are very low and as a result, they do not develop important complementarities and sectoral interdependencies. Most of all, they do not stimulate consumption and investments in order to consolidate production and promote domestic product export.
This study concludes in an analysis of the economic policy implemented in Albania during the recent years, in which the state shows a low protagonism in the economic development. Also, several strategies for development have been compiled and their application has encountered several problems. The economic and industrial policy in the country does not intend to create other new sectors, but rather the consolidation of the existing ones, considered as significant for the economic development of the country.
Whereas, with the investigation of the structural problems of the economy, the government has acknowledged that free market has not fully guaranteed investments and capital in new and existing activities, so as to engender a rise in productivity, i.e. development.
Governments have avoided their intervention in the economy and have regarded the market as the best mechanism for the income distribution, an issue that is questioned by our analysis.
As a conclusion, we can say that structural reforms should be coupled with horizontal policies that reinforce the institutions, technical competencies and above all policies of structural transformation. Accordingly, good governance on one hand should fight corruption and on the other hand, revitalize the economy of the country.|
|Keywords: ||Albania, trasformazione economica, specializzazione economica, transizione|
|Subject MIUR : ||SECS-P/01 ECONOMIA POLITICA|
|Issue Date: ||2015|
|Doctoral course: ||Economia della Produzione e dello Sviluppo|
|Academic cycle: ||27|
|Publisher: ||Università degli Studi dell'Insubria|
|Citation: ||Muco, K.L’analisi del modello di sviluppo albanese nel periodo post-comunismo: il cambiamento economico e la specializzazione. (Doctoral Thesis, Università degli Studi dell'Insubria, 2015).|
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