Albania (04/02)

For the most current version of this Note, see Background Notes A-Z.


Republic of Albania

Area: 28,748 sq. km. (slightly larger than Maryland).
Major cities: Capital--Tirana (700,000). Others--Durres (400,000), Shkoder (81,000), Vlore (72,000).
Terrain: Situated in the southwestern region of the Balkan Peninsula, Albania is predominantly mountainous but flat along its coastline with the Adriatic Sea.
Climate: Mild temperate--cool, wet winters; dry, hot summers.

Population (July 2001 est.): 3,510,484.
Growth rate (2001 est.): -0.88%.
Ethnic groups: Albanian 95%, Greeks 3%, and others 2% (Vlachs, Romas, Serbs, Montenegrins, Macedonians, Egyptians and Bulgarians).
Religions: Muslim 70%, Albanian Orthodox 20%, and Roman Catholic 10%. Official language: Albanian.
Health (2001 est.): Life expectancy--males 69.01 years; females 74.87 years. Infant mortality rate--39.99 deaths per 1,000 live births.

Type: Parliamentary democracy.
Constitution: Adopted by popular referendum November 28, 1998.
Independence: November 28, 1912 (from the Ottoman Empire) Branches: Executive--President (chief of state), Prime Minister (head of government), Council of Ministers (cabinet).
Legislative--Unicameral People's Assembly or Kuvendi Popullor--140 seats (100 members elected by direct popular vote; 40 by proportional vote; all serve 4-year terms).
Judicial--Constitutional Court, Court of Cassation, multiple appeals and district courts.
Suffrage: Universal and compulsory at age 18.
Main political parties: Agrarian Party (PA); Albanian National Front (PBK); Albanian Republican Party (PR); Albanian Socialist Party (PS); Christian Democratic Party (PDK); Democratic Alliance (PAD); Democratic Party of Albania (PD); New Democrat Party (New DP); Liberal Democratic Union Party (PBL); Movement of Legality Party (PLL); Party of National Unity (PUK); Party of Albanian National Front (PBK); Social Democratic Party (PSD); Unity for Human Rights Party (PBDNJ).

Flag: flag of albania

Real GDP growth (2001 est.): 7.8%.
Inflation rate (2001 est.): 2%.
Unemployment rate (2001 est.): 18%.
Natural resources: Oil, gas, coal, iron, copper and chrome ores.

Albania shares a border with Greece to the south/southeast, Macedonia to the east and Yugoslavia and Kosovo to the north. Eastern Albania lies along the Adriatic and Ionian Sea coastlines. Albania's primary seaport is Durres, which handles 90% of Albania's maritime cargo.

Many scholars believe the Albanian people are the direct descendants of a group of tribes known as the Illyrians, who arrived in the Balkans around 2000 BC. After falling to Roman authority in 165 BC, modern-day Albania remained under the control of various foreign powers until the dawning of the 20th century.

Following the split of the Roman Empire in 395, the Byzantine Empire established its control over present-day Albania. It was during this time (11th century) that the Byzantine Emperor, Alexius I Comnenus made the first recorded reference to a distinct area of land known as Albania and its people.

Ottoman supremacy in the Balkan region began in 1385 but was briefly interrupted in the 15th century, when an Albanian warrior known as Skenderbeg united his countrymen and fought-off Turkish rule from 1443-78. Upon the Ottomans' return, a large number of Albanians fled to Italy, Greece and Egypt and many of the Albanians who remained (about two-thirds of the Albanian population), converted to the Islamic faith.

At the end of the 19th century, efforts by the Turks to suppress Albanian nationalism failed. Albanians had created The League of Prizen, attempting to unify Albanian territory and established the current-day Albanian alphabet. Following the conclusion of the First Balkan War, Albanians issued the Vlore Proclamation of November 28, 1912, declaring independence. Albania was internationally recognized as an independent state in 1913. Its territorial integrity was confirmed at the Paris Peace Conference in 1919, after U.S. President Woodrow Wilson dismissed a plan by the European powers to divide Albania amongst its neighbors.

Following the Second World War, in which both Italy and Germany occupied Albania, communism became the prevailing political ideology within Albania and remained an influential part of its culture for the next 50 years. Led by Enver Hoxha, Albania adhered to a strict Stalinist philosophy, alienating many of its fellow communist states.

Hoxha's death in 1985 and the fall of communism throughout south central Europe led to widespread changes within Albanian society. The Albanian Government began to seek closer ties with the West in order to improve economic conditions, and initial democratic reforms were introduced including multi-party elections in 1991. Pursuant to a 1991 interim basic law, Albanians ratified a constitution in 1998, establishing a democratic system of government based upon the rule of law and guaranteeing the protection of fundamental human rights.

In 1992, after the sweeping electoral victory of the Democratic Party, Sali Berisha became the first democratically elected President of Albania. Berisha began a more deliberate program of economic and democratic reform, but progress on these issues was stalled in the mid-1990s following the collapse of several pyramid schemes. Anarchy in early 1997, as a result of the pyramid schemes, alarmed the world and prompted intensive international mediation.

The general elections of June 1997 brought the Socialists and their allies to power. President Berisha resigned from his post, and Socialists elected Rexhep Meidani as the President of the Republic. Socialist Party Chairman Fatos Nano was elected Prime Minister, a post which he held until October 1998, when he resigned as a result of the tense situation created in the country after the assassination of a prominent leader of the Democratic Party, Azem Hajdari. Pandeli Majko was then elected Prime Minister, and he served in this post until November 1999, when he was replaced by Ilir Meta. Albania approved its constitution through a popular referendum which was held in November 1998, but which was boycotted by the opposition. The general local elections of October 2000 marked the loss of control of the Democrats over the local governments and a victory for the Socialists.

Although Albania has made strides toward democratic reform and maintaining the rule of law, serious deficiencies in the electoral code remain to be addressed, as demonstrated in the June 2001 parliamentary elections. International observers judged the 2001 elections to be acceptable, but the Union for Victory Coalition, the second-largest vote recipient, disputed the results and boycotted parliament until January 31, 2002. The Socialists re-elected Ilir Meta as Prime Minister in August 2001, a post which he held till February 2002, when he resigned due to party infighting. Pandeli Majko was re-elected Prime Minister in February 2002.

The unicameral assembly (Kuvendi) consists of 140 seats, 100 of which are determined by direct popular vote. The remaining seats are distributed by proportional representation. All members serve 4-year terms.

As a result of the June 2001 parliamentary elections, the current Speaker of Parliament is Namik Dokle. The Speaker has two deputies, who, along with 13 parliamentary commissions, legislate Albanian affairs.

The President is the head of state and elected by a three-fifths majority vote of all Assembly members. The President serves a term of 5 years with one right to re-election. The next presidential election is scheduled for June 2002.

The Prime Minister is appointed by the President and approved by a simple majority of all members of the Assembly. The Prime Minister serves as the Chairman of the Council of Ministers (cabinet), which consists of the Prime Minister, Deputy Prime Minister and other ministers. Members of the Council of Ministers are nominated by the Prime Minister and approved by the President.

Albania's civil law system is similar to that of other European countries. The court structure consists of a Constitutional Court, a Supreme Court, and multiple appeal and district courts. The Constitutional Court is comprised of nine members appointed by the Assembly for one 9-year term. The Constitutional Court interprets the Constitution, determines the constitutionality of laws, and resolves disagreements between local and federal authorities. The Supreme Court is the highest court of appeal and consists of 11 members appointed by the President with the consent of the Assembly for 9-year terms. The President chairs the High Council of Justice (HCJ) which is responsible for appointing and dismissing other judges. The HCJ is comprised of 15 members--the President of the Republic, the Chairman of the High Court, the Minister of Justice, three members elected by the Assembly, and nine judges of all levels elected by the National Judicial Conference.

The remaining courts are each divided into three jurisdictions: criminal, civil, and military. There are no jury trials under the Albanian system of justice. A college of three judges, who are sometimes referred to as a "jury" by the Albanian press, render court verdicts.

Principal Government Officials
President--Rexhep Meidani
Prime Minister--Pandeli Majko
Deputy Prime Minister/Minister of Labor and Social Affairs--Skender Gjinushi
Minister of Foreign Affairs--Arta Dade

Albania's transformation from a centrally planned economy to a market orientated system began in earnest in early 1992 after real GDP fell over 50% from its peak in 1989. The democratically elected government that assumed office in April 1992 launched an ambitious economic reform program meant 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.

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. The Albanian currency, the lek, stabilized, and Albania became less dependent on food aid. The speed and vigor of private entrepreneurial response to Albania's opening and liberalizing was better than expected. Beginning in 1995 however, progress stalled, with negligible GDP growth in 1996 and a 9% contraction in 1997. Inflation approached 20% in 1996 and 50% in 1997. The lek initially lost up to half of its value during the 1997 crisis before rebounding in January 1998.

Within recent years, the Albanian economy has shown signs of recovery. Since 1998, the GDP has increased each year approximately 7% to 8%. The Albanian Government and the International Monetary Fund predict a GDP growth of 7%-8% for 2001 with an inflation rate of approximately 2%. The growth in the economy has been driven by the expansion of the construction and service industries. The lack of housing under communism precipitated a major demand and a spurt in new housing construction. Increase in tourist activity in many of the seaside resorts has helped expand Albania's service industry.

The agricultural market, which comprises close to 53% of the GDP, also grew due to diversification of production. The economy is further bolstered by remittances from Albanians abroad, which account for as much as 25% of the GDP. Most of these remittances come from workers in Greece and Italy.

Although the Albanian economy shows many signs of strength, several other issues remain to be addressed before Albania can fully realize macroeconomic stabilization. Albania will need to take greater advantage of its natural resources and its close proximity to west European markets in order to counter a growing trade deficit. Due to a decline in industrial production and a surge in electrical imports, Albania had a $814 million trade deficit in 2000.

Furthermore, Albania must become a more efficient energy producer and build an adequate energy infrastructure in order to both keep pace with demand and encourage business growth. Constant electrical shortages and outages plagued the 2000-01 winter in Albania, forcing many to rely on only 5 to 6 hours of electricity per day. Electrical shortages reappeared during the 2001-02 winter, producing similar hardships.

Albania played a role in resolving several of the inter-ethnic conflicts in south central Europe during the 1990s. Albania is part of the international Strategic Force (SFOR) serving in Bosnia and provides logistical assistance for Kosovo Force (KFOR) troops.

Albania is part of the North Atlantic Treaty Organization's (NATO) Membership Action Plan (MAP), and is currently working with the international community on restructuring its armed forces. In 1999, Albania spent $42 million on military expenditures, roughly 1.5% of its GDP. Military spending for 2002 is estimated to remain consistent with 1999 figures.

Albania is currently pursuing a path of greater Euro-Atlantic integration. Albania re-established diplomatic relations with Yugoslavia following the ouster of Slobodan Milosovic. And although the status of Kosovo remains a key issue in Albanian-Yugoslavian relations, both nations are committed to resolving the issue peacefully.

In an effort to promote regional trade, Albania along with Macedonia, Bulgaria, Croatia, Yugoslavia, and Romania agreed in June 2001 to establish a free trade area in south central Europe by the end of 2004. Under the agreement, participating countries will eventually eliminate tariffs on agreed goods. Albania and Macedonia completed the terms of their free trade agreement January 11, 2001.

Last year, the European Union agreed to open negotiations in early 2002 with Albania on a Stabilization and Association Agreement. Albania is a member of a number of international organizations, including the Organization for Security and Cooperation in Europe, the United Nations, and the Stability Pact.

The U.S. closed its mission to Albania in 1946 after relations began to sour under the Hoxha regime but reopened the embassy in 1990. Since re-establishing ties, the U.S. has committed more than $300 million to Albania's humanitarian needs and economic and political transformation. In 1999, the U.S. provided $30 million through the Support for East European Democracy (SEED) Act. In the proceeding 2 years, the U.S. gave approximately $66 million to Albania under the SEED program. The $30-million Albanian-American Enterprise Fund (AAEF), launched in 1994, is actively making debt and equity investments in local businesses. Also, a bilateral investment treaty between the U.S. and Albania was signed in 1995 and entered into force January 3, 1998.

Principal U.S. Embassy Officials
Ambassador--Joseph Limprecht
Deputy Chief of Mission--Elizabeth Shelton
Political/Economic Section Chief-- Thomas Yazdgerdi
Political Officer--Thomas Selinger
Economic/Commercial Officer--Kirsten Brooks
Consular Officer--Donald Moore
USAID Director--Howard Sumka
Public Affairs Officer--Deborah A. Jones
Defense Attache--Northmore Hamill III
Regional Security Officer--James Pelphrey
Administrative Officer--A. Daniel Hernandez

The embassy is located at 103 Tirana Rruga Elbasanit, Tirana; telephone: [355] (4) 247-285; facsimile: [355] (4) 232-222.