A first look at Albania’s fundamentals in 2021
When I landed in Tirana in August 2015 I never thought I would be writing these lines in April 2021. The small Balkan republic has improved relatively speaking, but so have Europe’s other laggards Kosovo, Moldova and Ukraine. Tirana home to about a third of the Albanian population is still in 2021 Europe’s second most polluted city and Europe’s second worst city for expatriates in Mercer quality of city living 2019 only ahead of Minsk. Albania’s university system remains Europe’s worst and the malfunctioning job market fosters a dynamics of corruption, nepotism where nepotism and cronyism (not merit and ability) dictate who is hired.
I learned the language hiring Albania’s best instructor Bato Bega in 2017 and 2020, author of the widespreadly used method and manual “Let’s Learn Albanian”. In a nation of less than three million which maintains the absurdity of 12 public television channels there is not a single television program that teaches foreigners the local language. Thank you Bato Bega for being my instructor and my friend.
Albania, a nation with an area of 28,748 km2 and only 362 km of coastline, has a population in 2021 of 2,872,000 which will shrink to 1,088,000 in 2100 according to Population Pyramid in what is the World’s most dramatic shrinkage. Albania’s population hit a maximum of 3,286,000 in 1990. Fertiliy rate was 1.68 in 2018 down from 6.5 in 1960 when Albania had Europe’s highest fertility rate. Net migration was -136,000 in 2012 and -70,000 in 2017. Net migration rate per 1,000 is -3.24 in 2021 the World’s #182 best and Europe’s worst ironically only ahead of the more prosperous Baltic republics Lithuania #198 and Latvia #205, Montenegro #201 and of course dysfunctional Moldova #220. In migrant integration policy index 2020 Albania scores 43/100 (halfway favorable). According to Insead global talent competitiveness index 2020 Albania ranks #38 in tolerance of minorities but #91 out of 132 nations in tolerance of immigrants, #123 in brain gain and #111 in brain retention. Migrant stock was only 57,000 in 2015 or 1.98 percent of the population.
In Economist Intelligence Unit democracy index 2020 Albania ranks #71 among 167 nations and is considered for the first time a flawed democracy. Voter turnout in parliamentary elections has however sunk from 98.9 percent in 1991 -when Albanians possibly thought democracy was the solution to all their trouble- to 46.8 percent in 2017. I write these lines a few days ahead of the 2021 parliamentary election in which premier Edi Rama is running for a third consecutive mandate, another anomaly in a nation of anomalies. Albanians used to the strong rule of king Zog and Enver Hoxha, surely have found in Edi Rama yet one more strong ruler, the unquestionable owner of Albania’s decrepit socialist party. In the Global Peace Index 2020 Albania ranks #55 among 163 nations a position that has maintained since 2009.
According to Freedom House in 2020 Albania is partly free noting that “corruption and organized crime remain serious problems despite recent government efforts to address them”, I am however not sure to what government efforts Freedom House is referring to besides Albania’s socialist party’s futile attempt, similar to Spain’s socialist party a corrupt political organization cannot possibly know the means to fight corruption. In Heritage Foundation index of economic freedom 2021 Albania ranks #66 squeezed between Mexico and Barbados. Heritage notes that “Albania needs to strengthen rule-of-law institutions and improve its scores for property rights, judicial effectiveness and government integrity”, Heritage loses the picture in the analysis of small republics in the Balkans, the Caucaus and Central Asia, foregoing and foresaking more fundamental aspects such as overall improvement of infrastructure, healthcare and education, or the fight to reduce the informal economy and raise tax revenue. Joining the European Union in the absence of major improvement will only accelerate Albania’s demographic shrinkage, as I explain in Chapter 33 Romoltrania section Moldova.
When Albania left behind Enver Hoxha’s (apparently harsh) communist regime in 1990 China’s per capita income was 38 percent Albania’s, in 2019 thirty years later Albania’s per capita income is 87 percent China’s. Between 1990–2019 China’s per capita income multiplied by a factor of 17, Albania’s by a factor of 5.74. Enver Hoxha’s regime was particularly close to Mao Zedong’s China until the split that consumed in 1978. After the turbulent 1990s that put Albania on the brink of war, Albania’s per capita income grew from PPP $3,862 in 2000 to $9,636 in 2010 and $14,648 in 2019 fourth lowest in Europe ahead of Kosovo, Ukraine and Moldova and behind Bosnia Herzegovina. GDP per capita growth has been positive between 1998–2019, 4.3 percent in 2018, 2.9 percent in 2019 and -7.5 percent in 2020. Income inequality index Gini was 0.332 in 2017. In Oxfam inequality index 2020 Albania ranks #80 overall, #59 in public services, #124 in progressive tax and #78 in workers rights. Unemployment rate was 11.7 percent in 2020. Youth unemployment rate was 27 percent in 2019 down from 39.6 percent in 2015. I discuss youth unemployment in detail in Chapter 2 Atlantis section Cabo Verde and in Chapter 3 Balkanland section Kosovo.
In the Tax Complexity Index 2016 Albania ranks #97 among 100 nations. Tax revenue was only 18.3 percent of GDP in 2019. Budget deficit was -2 percent of GDP in 2017. Public debt dropped from 73.2 percent in 2016 to 71.8 percent in 2017. According to Statista public debt to GDP will drop to 56 percent in 2022.
Albania may be a nation of corruption and organized crime but unlike Britain or Switzerland it is certainly not a nation of cheaters and thiefs: Albania is not included among the top 133 nations in the financial secrecy index 2020 or among the 70 top nations in the corporate tax haven index 2021.
International visitors were 6,406,000 in 2019 a large percentage from Kosovo. Tourism receipts were $2.45 billion in 2019. In the World Economic Forum travel & tourism competitiveness report 2019 Albania ranks #86 among 140 nations, showing weak performance in travel & tourism policy #95, infrastructure #88, natural & cultural resources #94, business environment #109, health & hygiene #74, international openness #116, price competitiveness #89, air transport infrastructure #105, cultural resources and business travel #118.
Albania runs its own currency the lek. Inflation rate has been moderate since 1999. Net trade in goods and services has been negative since 1982 and amounted to -$2.1 billion in 2019. Foreign direct investment was $1.2 billion in 2019. Remittances were $1.47 billion in 2019.
In the World Economic Forum global competitiveness report 2019 Albania ranks #81 among 141 nations, showing weak performance in organized crime #113, social capital #123, judicial independence #136, efficiency of legal framework in challenging regulations #133, efficiency of legal framework in settling disputes #128, property rights #112, intellectual property protection #130, government ensuring policy stability #107, transport infrastructure #120, road connectivity #122, efficiency of train services #103 (there are no trains in Albania), electricity supply quality #109 (current cuts are frequent), reliability of water supply #102 (tap water is not potable, Albanians must buy bottled water), macroeconomic stability #104, debt dynamics #114, ease of finding skilled employees #102, domestic competition #120, distortive effect of taxes and subsidies on competition #113, extent of market dominance #130, border clearance efficiency #111, flexibility of wage determination #120, financial system #102, insurance premium #101, non-performing loans #120, entrepreneurial culture #126, companies embracing disruptive ideas #132, innovation capability #110, interaction and diversity #114, diversity of workforce #115, state of cluster development #133, research and development #126, scientific publications #128, research institutions prominence #117, buyer sophistication #107.
In Insead global talent competitiveness index 2020 Albania ranks #76 among 132 nations showing weak performance in cluster development #116, R&D expenditure #94, tertiary-educated unemployment #120, active labor market policies #98, investment in emerging technologies #116, external openness #102, migrant stock #106, brain gain #123, tolerance of immigrants #91, social mobility #109, sustainability #104, brain retention #111, global knowledge skills #104, senior officials and managers #111, talent impact #116, innovation output #90, high-value exports #124 down from #110 in 2019. A former dean of engineering of Polytechnic University of Tirana (Albania’s best in 2021) revealed in 2015 that out of 10 engineering graduates (at the master’s degree level) one finds work right away, four struggle and find employment within the year, and five never find related work and are certainly either severely underemployed or unemployed. Many university graduates find work as cashiers in supermarkets and in a best case scenario as telephone operators rendering service in Italian.
In Transparency International corruption perceptions index 2020 Albania ranks #102 among 180 nations up 2 noches since 2012. In the police corruption perceptions index Albania ranks #58 among 100 nations, a strong performance confirmed by the World Economic Forum global competitiveness report in which Albania ranks #69 in reliability of police services . In the World Bank cost of doing business ranking 2019 Albania ranks #63 among 190 nations showing weak performance in dealing with construction permits #151, getting electricity #140, paying taxes #122. In Yale environmental performance index 2020 Albania ranks #62 among 180 nations showing weak environmental performance in air quality #81 (particularly bad in the capital city Tirana), household solid fuels #100, solid waste management #133, biodiversity habitat index #165, fisheries #108, agriculture #94, wastewater treatment #92.
Primary education completion rate was 100 percent in 2019. Lower secondary education completion rate was 92.8 percent in 2019. In EF English Proficiency Index 2020 Albania ranks #43 among 100 nations with a proficiency considered moderate. Rezana vrapi (rezana.vrapi@qsha.gov.al, rezana2004@gmail.com) is Albania’s OECD PISA 2021 national coordinator. In OECD PISA 2018 Albania placed #55 overall among 78 nations ahead of Montenegro #61, North Macedonia #62, Bosnia Herzegovina #67 and Kosovo #75 but behind Serbia #46, #48 in math, #59 in science and #61 in reading.
According to Webometrics there are 41 universities operating in Albania in 2021, an excessive number none of which are included among the World’s top 1,000 in 2021 according to QS World University Rankings 2021. In QS EECA Rankings 2021 Albania places five universities in the band #351–400 including four public universities and only one private university (Epoka). Albania has in 2021 Europe’s worst university system (excluding Montenegro, too small in comparative terms) behind Kosovo’s and Moldova’s. Kosovo ranks University of Prishtina in the band #301–350. Moldova ranks Technical University of Moldova in the band #251–300 and Moldova State University in the band #301–350. According to Insead in 2020 Albania ranks its university system #75 among 132 nations.
Life expectancy was 80.1 years in 2018. Hospital beds per 1,000 were 2.9 in 2013 down from 4.2 in 1980. Physicians per 1,000 were only 1.21 in 2016. Nurses per 1,000 were 3.6 in 2016 down from 4.4 in 2012. Health expenditure per capita was only $274 in 2018. According to Bloomberg in 2019 Albania ranks the World’s 43rd healthiest nation up from #50 in 2017. In Bloomberg health efficiency index 2020 Albania is not included among the top 56 nations, Serbia ranks #44. In the World Happiness Report 2020 Albania ranks #105 up from #107 in 2019, Albania was in 2020 Europe’s unhappiest nation.
According to the Institute for Health Metrics and Evaluation, the thre leading causes of death in Albania in 2019 were ischemic heart disease, stroke and lung cancer, with the incidence of lower respiratory infect, other cardiovascular diseases, prostate cancer and colorectal cancer increasing as cause of death between 2009–2019. Prevalence of diabetes increased from 4.5 percent in 2010 to 9 percent in 2019. Traffic related mortality per 100,000 dropped from 15.1 in 2013 to 13.6 in 2016 stil exceptionally high (in the European context). I discuss traffic policy and road safety extensively in Chapter 13 Cubistmo section Dominican Republic. Homicides per 100,000 dropped from 5.38 in 2012 to 2.28 in 2018.
In the Global Hunger Index 2020 Albania ranks #24 among 107 nations with a level of hunger considered low. Prevalence of stunting in children under 5 dropped from 17 percent in 2012 to 11.3 percent in 2020 but is still exceptionally high in the European context. The proportion of undernourished in the population increased from 3.5 percent in 2012 to 3.6 percent in 2020.
In Mercer quality of city living ranking 2019 Tirana ranks #175 among 231 cities and remains Europe’s second worst city for expatriates only ahead of Minsk #188. In 2020 Tirana was the World’s #31 most polluted city and second most polluted in Europe only behind Tetovo in North Macedonia #1. In 2004 The Guardian prints the piece “welcome to Tirana, Europe’s pollution capital” reminding that in the 1980s there were only 2,000 cars in communist Albania. Edi Rama, mayor at the time said “it is time the government clamped down on air pollution and got some of these vehicles off the road”. 17 years later in 2021 Tirana is still Europe’s second most polluted capital, politics has done nothing to fix the problem, period.
Military expenditure was 1.47 percent of GDP in 2020, it should be under 1 percent in a nation where public schools lack heating in the winter and apartment buildins lack potable tap water. In GlobalFirePower Military Strength Index 2021 Albania ranks #113 among 140 nations with active personnel of 10,000 and a defense budget of $200 million. Agim Ismaili (agim.ismaili@dbpsh.gov.al) is head of the prison administration in 2021. According to World Prison Brief prison population total was 4,641 in 2020, prison population rate per 100,000 was 164 in 2020 down from 205 in 2015 and prison system occupancy level was 84 percent in 2019.
