Background Note - Albania

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PROFILE

OFFICIAL NAME:
Republic of Albania

Geography
Area: 28,748 sq. km. (slightly larger than Maryland).
Major cities: Capital--Tirana (600,000, 2005 est.). Others--Durres (200,000, 2005 est.), Shkoder (81,000, 2005 est.), Vlore (72,000, 2005 est.).
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.

People
Population (2007 est.): 3,600,523.
Growth rate (2007 est.): 0.529%.
Ethnic groups (2004 est., Government of Albania): Albanian 98.6%, Greeks 1.17%, others 0.23% (Vlachs, Roma, Serbs, Montenegrins, Macedonians, Balkan Egyptians, and Bulgarians).
Religions: Muslim (Sunni and Bektashi) 70%, Albanian Orthodox 20%, and Roman Catholic 10%.
Official language: Albanian.
Health (2007 est.): Life expectancy--males 74.95 years; females 80.53 years. Infant mortality rate--20.02 deaths per 1,000 live births.

Government
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, High Court, multiple district and appeals courts.
Suffrage: Universal at age 18.
Main political parties: Democratic Party of Albania (PD); Albanian Socialist Party (PS); Socialist Movement for Integration (LSI); Albanian Republican Party (PR); Demo-Christian Party (PDK); Union for Human Rights Party (PBDNJ); New Democracy Party (PDR); Social Democratic Party (PSD); Social Democracy Party (PDS).

Economy
Real GDP growth (2006): 5%.
Inflation rate (2005): 2.4%.
Unemployment rate (2006): 13.8%.
Natural resources: Oil, gas, coal, iron, copper and chrome ores.

GEOGRAPHY
Albania shares a border with Greece to the south/southeast, Macedonia to the east, Serbia (including Kosovo) to the northeast, and Montenegro to the northwest. Western Albania lies along the Adriatic and Ionian Sea coastlines. Albania's primary seaport is Durres, which handles 90% of its maritime cargo.

PEOPLE AND HISTORY
Over 90% of Albania's people are ethnic Albanian, and Albanian is the official language. Religions include Muslim (Sunni and Bektashi), Albanian Orthodox, and Roman Catholic.

Scholars believe the Albanian people are descended from a non-Slavic, non-Turkic group of tribes known as Illyrians, who arrived in the Balkans around 2000 BC. After falling under Roman authority in 165 BC, Albania was controlled nearly continuously by a succession of foreign powers until the mid-20th century, with only brief periods of self-rule.

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

The Ottoman Empire ruled Albania from 1385-1912. During this time, much of the population converted to the Islamic faith, and Albanians also emigrated to Italy, Greece, Egypt and Turkey. Although its control was briefly disrupted during the 1443-78 revolt, led by Albania's national hero, Gjergj Kastrioti Skenderbeu, the Ottomans eventually reasserted their dominance.

The League of Prizren (1878) promoted the idea of an Albanian nation-state and established the modern Albanian alphabet, updating a language that survived the hundreds of years of Ottoman rule despite being outlawed. By the early 20th century, the weakened Ottoman Empire was no longer able to suppress Albanian nationalism. Following the conclusion of the First Balkan War, Albanians issued the Vlore Proclamation of November 28, 1912, declaring independence and the Great Powers established Albania's borders in 1913. Albania's 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 among its neighbors.

During the Second World War, Albania was occupied first by Italy (1939-43) and then by Germany (1943-44). After the war, Communist Party leader Enver Hoxha, through a combination of ruthlessness and strategic alliances, managed to preserve Albania's territorial integrity during the next 40 years, but exacted a terrible price from the population, which was subjected to purges, shortages, repression of civil and political rights, a total ban on religious observance, and increased isolation. Albania adhered to a strict Stalinist philosophy, eventually withdrawing from the Warsaw Pact in 1968 and alienating its final remaining ally, China, in 1978.

Following Hoxha's death in 1985 and the subsequent fall of Communism in 1991, Albanian society struggled to overcome its historical isolation and underdevelopment. During the initial transition period, the Albanian Government sought closer ties with the West in order to improve economic conditions and introduced basic democratic reforms, including a multi-party system.

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 stalled in the mid-1990s, due to political gridlock. At the same time, unscrupulous investment companies defrauded investors all over Albania using pyramid schemes. In early 1997, several of these pyramid schemes collapsed, leaving thousands of people bankrupt, disillusioned, and angry. Armed revolts broke out across the country, leading to the near-total collapse of government authority. During this time, Albania's already inadequate and antiquated infrastructure suffered tremendous damage, as people looted public works for building materials. Weapons depots all over the country were raided. The anarchy of early 1997 alarmed the world and prompted intensive international mediation.

A UN Multinational Protection Force restored order, and an interim national reconciliation government oversaw the general elections of June 1997, which returned the Socialists and their allies to power at the national level. President Berisha resigned, and the Socialists elected Rexhep Meidani as President of the Republic.

During the transitional period of 1997-2002, a series of short-lived Socialist-led governments succeeded one another as Albania's fragile democratic structures were strengthened. Additional political parties formed, media outlets expanded, non-governmental organizations and business associations developed. In 1998, Albanians ratified a new constitution via popular referendum, guaranteeing the rule of law and the protection of fundamental human rights and religious freedom. Fatos Nano, Chairman of the Socialist Party, emerged as Prime Minister in July 2002.

On July 24, 2002, Alfred Moisiu was sworn in as President of the Republic. A nonpartisan figure, he was elected as a consensus candidate of the ruling and opposition parties. The peaceful transfer of power from President Meidani to President Moisiu was the result of an agreement between the parties to engage each other within established parliamentary structures. This "truce" ushered in a new period of political stability in Albania, making possible significant progress in democratic and economic reforms, rule of law initiatives, and the development of Albania's relations with its neighbors and the U.S.

The "truce" between party leaders began to fray in summer 2003 and progress on economic and political reforms suffered noticeably due to political infighting. The municipal elections of 2003 and national elections of 2005 were an improvement over past years, adding to the consolidation of democracy despite the continued presence of administrative errors and inaccuracies in voter lists.

In 2005, the Democratic Party and its allies returned to power, pledging to fight crime and corruption, decrease the size and scope of government, and promote economic growth. Their leader, Sali Berisha, was sworn in as Prime Minister on September 11, 2005.

Since the election, Prime Minister Berisha's government has made the fight against corruption and organized crime its first priority and has begun administrative and legal reforms toward that end. This brought repeated clashes with the opposition, which condemned the government's approach as unconstitutional and an attempt to undermine independent institutions. Both sides remain combative over a range of political and substantive issues.

Another politically contentious process was the pre-electoral period prior to the 2007 local elections. Although the February 18, 2007 local elections were generally peaceful and democratic, over-politicized debate during the preceding months resulted in procedural and administrative problems during the conduct of the elections. A major positive step forward was the performance of the police force.

The fragility of the Albanian electoral system was tested again during the parliamentary by-election in zone 26 (Shijak) on March 11, 2007. The left-wing opposition parties withdrew their commissioners from the polling stations and the counting center, in spite of prior concessions from the Central Elections Commission (CEC) to the opposition's demands. Opposition commissioners left and took with them one of the seals that mark the ballots. By midday, the opposition candidate also announced his withdrawal from the parliamentary race. However, the right of citizens to vote prevailed and the process continued thanks to the technical arrangements of the CEC. The only visible sign of violence was the wounding of a Democratic Party commissioner, who was fired upon by a militant.

Both elections were an indication of lack of political will to cooperate and of the imminent need for a comprehensive electoral reform of the present Albanian electoral system.

On July 20, 2007 President Bamir Topi was elected within Parliament after six members of the opposition coalition broke ranks to vote for his candidacy. Out of 90 deputies present at the session, 85 voted for Topi, while Neritan Ceka, head of the opposition Democratic Alliance party, won five votes. Topi, 50, a former agriculture minister, now succeeds President Alfred Moisiu for a five-year mandate.

GOVERNMENT AND POLITICAL CONDITIONS
The unicameral People's Assembly (Kuvendi Popullor) 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. The Speaker of Parliament (Jozefina Topalli) has two deputies, who along with eight permanent parliamentary commissions assist in the process of legislating 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 the right to one re-election. Although the position is largely ceremonial, the Constitution gives the President authority to appoint and dismiss some high-ranking civil servants in the executive and judicial branches, and this authority can have political implications. The President is also commander in chief of the armed forces, and chairs the National Security Commission. The current President's term expires on July 23, 2012.

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, decreed by the President, and approved by a parliamentary vote.

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, which is responsible for appointing and dismissing other judges. The High Court of Justice 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 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--Bamir Topi
Prime Minister--Sali Berisha
Deputy Prime Minister--Gazmend Oketa
Minister of Foreign Affairs--Lulzim Basha

ECONOMY
Albania remains one of the poorest countries in Europe. According to the Bank of Albania, per capita income was U.S. $2,883 in 2006. The official unemployment rate is 13.8%, and 18.5% of the population lives below the poverty line according to the World Bank's 2005 Poverty Assessment. Almost 60% of all workers are employed in the agricultural sector, although the construction and service industries have been expanding recently, the latter boosted significantly by ethnic Albanian tourists from throughout the Balkans. The GDP is comprised of agriculture (approximately 24%), industry (approximately 13%), service sector (approximately 39%), transport and communication (12%), construction (11%), and remittances from Albanian workers abroad--mostly in Greece and Italy (approximately 12.8%).

Albania was the last of the central and eastern European countries to embark upon democratic and free market reforms. Further, Albania started from a comparatively disadvantaged position, due to Hoxha's catastrophic economic policies. Transition from a centrally planned economy to a market-orientated system has been almost as difficult for Albania as the country's communist period.

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, and Albania's currency, the lek, stabilized. The speed and vigor of private entrepreneurial response to Albania's opening and liberalizing was better than expected. Beginning in 1995, however, progress stalled. The collapse of the infamous pyramid schemes of the 1990s and the instability that followed were a tremendous setback, from which Albania's economy continues to recover.

In recent years the Albanian economy has improved, although infrastructure development and major reforms in areas such as tax collection, property laws, and for improving the business climate in general are proceeding slowly. Between 2003-2006, Albania experienced an average 5.5% annual growth in GDP. Fiscal and monetary discipline has kept inflation relatively low, averaging roughly 2.5% per year between 2004-2006. Albania's public debt reached 57.5% of GDP in 2006, and the growing trade deficit was estimated at 25% of GDP in 2006. Economic reform has also been hampered by Albania's very large informal economy, which the International Monetary Fund (IMF) estimates equals 50% of GDP.

Albania's trade imbalance is severe. In 2006, Albanian trade had U.S. $3.1 billion in imports, and U.S. $790 million in exports. Albania has concluded Free Trade Agreements (FTAs) with Macedonia, Croatia, UNMIK (Kosovo), Bulgaria, Romania, Bosnia, and Moldova. In April 2006, these bilateral agreements were replaced by a multiregional agreement that entered into force in May 2007 and that is based on the Central European Free Trade Agreement (CEFTA) model. However, combined trade with all these countries constitutes a small percentage of Albania's trade, while trade with EU member states (mainly Greece and Italy) accounts for nearly 68%. U.S. two-way trade with Albania is very low. In 2006, U.S. exports to Albania totaled $46.6 million. U.S. imports, during the same time period, totaled $3.44 million, making the U.S. the 17th overall trade partner of Albania. However, there are some discrepancies between U.S. and Albanian trade figures. Major U.S. investment to date has been limited to large-scale infrastructure contracts with the government; Lockheed Martin and Bechtel are principal U.S. participants. The Albanian Government signed a FTA with the EU as part of its Stabilization and Association Agreement negotiations. The interim agreement entered into force in December 2006, and it foresees a duty-free regime for almost 90% of agricultural and industrial products. On the fiscal side it will also significantly reduce revenue collection.

Albania is trying to attract foreign investment and promote domestic investment, but significant impediments exist. The Albanian Government faces the daunting task of rationalizing and uniformly applying business laws, improving transparency in business procedures, restructuring the tax systems (including tax collection), reducing corruption in the bureaucracy, and resolving property ownership disputes.

Business growth is further hampered by Albania's inadequate energy and transportation infrastructure. The capital, Tirana, and the main port of Durres, generally receive electricity most of the day, but constant power outages plague every other major city, small town, and rural village. Although recent steps have been taken to improve the transportation infrastructure, Albania has a limited railway system and just one international airport. Because of the mountainous terrain and poor road condition, overland goods transport is arduous and costly.

MILITARY AFFAIRS
Since the fall of communism in Albania in 1991, the country has played a constructive role in resolving several of the inter-ethnic conflicts in south central Europe, promoting peaceful dispute resolution and discouraging ethnic Albanian extremists. Albania sheltered many thousands of Kosovar refugees during the 1999 conflict, and now provides logistical assistance for Kosovo Force (KFOR) troops. Albania is part of the international Stabilization Force (SFOR) serving in Bosnia, and Albanian peacekeepers are part of the International Security Assistance Force in Afghanistan and the international stabilization force in Iraq. Albania has been a steadfast supporter of U.S. policy in Iraq, and was one of only four nations to contribute troops to the combat phase of Operation Enduring Freedom.

Albania continues to work with the international community to restructure its armed forces and strengthen democratic structures pursuant to its NATO Membership Action Plan. NATO members continue to encourage Albania to address military reforms that will bring it closer to membership. Since 1999, Albania has spent approximately $108 million annually on military expenditures, roughly 1.35% of its GDP. According to Government of Albania projections, military expenditure will reach 2% of GDP in 2008. With bilateral and multilateral assistance, the Ministry of Defense is transitioning to a smaller, voluntary, professional military, and reducing the vast amounts of excess weaponry and ammunition that litter the country and pose a significant public hazard and proliferation risk. The Albanian Government and the international community are working together on a project that will make Albania a mine-free country by 2010. Most high- and medium-priority mine clearance has been completed in the mined areas of northeast Albania, a legacy of the 1999 Kosovo crisis.

Albania and the U.S. enjoy a military partnership and are signatories to treaties including the 2003 Prevention of Proliferation of Weapons of Mass Destruction and the Promotion of Defense and Military Relations and the 2004 Supplementary Agreement to the Partnership for Peace Status of Forces Agreement, which defines the status of American military troops in Albania and further enables military cooperation. In May 2003, Albania, Croatia, Macedonia, and the U.S. created the Adriatic Charter, modeled on the Baltic Charter, as a mechanism for promoting regional cooperation to advance each country's NATO candidacy. In spite of strong EU objections, Albania also signed in May 2003 a bilateral agreement with the United States on non-surrender of persons, based on Article 98 of the statute of International Criminal Court.

In 2004 President Bush authorized the use of the Nunn-Lugar Cooperative Threat Reduction program funds for projects in Albania, marking the first time such funds are used outside the former Soviet Union. With this funding the United States is assisting the Government of Albania with the destruction of a stockpile of chemical agents left over from the communist regime. Under this program, Albania became the first nation in the world to complete destruction of declared chemical weapons holdings under the Chemical Weapons Convention in July 2007.

FOREIGN RELATIONS
Albania is currently pursuing a path of greater Euro-Atlantic integration. Its primary long-term goals are to gain NATO and EU membership and to promote closer bilateral ties with its neighbors and with the U.S. Albania is a member of a number of international organizations, as well as multiple regional organizations and initiatives, including the Organization for Security and Cooperation in Europe (OSCE), the UN, the Stability Pact, the Adriatic Charter, and the World Trade Organization (WTO). In June 2006, Albania and the EU signed a Stabilization and Association Agreement, the first step to EU membership, which will focus on implementing essential rule of law reforms and curbing corruption and organized crime.

Albania maintains generally good relations with its neighbors. It re-established diplomatic relations with the Federal Republic of Yugoslavia following the ousting of Slobodan Milosevic in 2000, and maintains excellent relations with the Republic of Montenegro, which gained its independence after the dissolution of the Serbia and Montenegro union in 2006. Although the final status of Kosovo remains a key issue in Albanian-Serbian relations, both nations are committed to achieving a peaceful resolution. Albanian, Macedonian, and Italian law enforcement agencies are cooperating with increasing efficiency to crack down on the trafficking of arms, drugs, contraband, and human beings across their borders. Albania has also arrested and prosecuted several ethnic-Albanian extremists on charges of inciting interethnic hatred in Macedonia and Kosovo. Tensions occasionally arise with Greece over the treatment of the Greek minority in Albania or the Albanian community in Greece, but overall relations are good, and Greece maintains the public image of being a strong proponent of Albania's eventual integration into the EU and NATO.

U.S.-ALBANIAN RELATIONS
Albania enjoys friendly and cooperative bilateral relations with the U.S. Pro-U.S. sentiment is widespread among the population. Even while the U.S., which had closed its mission to Albania in 1946, was being vilified by communist propaganda during the Hoxha regime, ordinary Albanians remembered that Woodrow Wilson had protected Albanian independence in 1919. Albanians credit the NATO bombing of Serbia in 1999 with saving thousands of Kosovar-Albanian lives, and they greatly appreciate the U.S. Government's commitment to resolving the status of Kosovo.

In 2003, Albania and the U.S. signed and ratified a number of agreements, including a treaty on the Prevention of Proliferation of Weapons of Mass Destruction and the Promotion of Defense and Military Relations; the Adriatic Charter; and an Agreement regarding the non-surrender of persons to the International Criminal Court. The U.S. strongly supports Albania's EU and NATO membership goals. Working towards NATO membership, the U.S. and Albania signed a Supplementary Agreement to the Partnership for Peace Status of Forces Agreement, an important step in strengthening bilateral cooperation and enhancing security, peace, and stability in the region.

Since FY 1991, the U.S. has provided Albania with more than $550 million in assistance, not counting U.S. Department of Agriculture (USDA) food aid. The aid has served to facilitate Albania's transition from the most isolated and repressive communist state in Europe to a modern democracy with a market-oriented economy, and to support long-term development. In 2006, the U.S. gave over $24 million to Albania under the Support for East European Democracy (SEED) Act program. Albania was among the first countries selected to participate in the Threshold Program under the Millennium Challenge Account, winning a grant of $13.8 million. In September 2006, Albania began implementation of the program, which targets two critical stumbling blocks to development--corruption and rule of law.

Despite daunting problems at home, Albania has wholeheartedly supported the U.S. in the global war on terrorism by freezing terrorist assets, shutting down non-governmental organizations (NGOs) with possible links to terrorist financing, expelling extremists, and providing military and diplomatic support for the U.S.-led actions in Afghanistan and Iraq. Albania has played a moderating role in the region and has fully supported UN mediation efforts in Kosovo.

Principal U.S. Embassy Officials
Ambassador--John L. Withers II
Deputy Chief of Mission--Stephen A. Cristina
Political/Economic Section Chief--Paula Thiede
Political Officers--Dena Brownlow, Victor Myev, Chris Olson
Economic/Commercial Officer--Robert Newsome
Consular Officer--Abigail Aronson
USAID Director--Edward Landau
Public Affairs Officer--Leigh Rieder, Acting
Defense Attach»--Cmdr. Brian Moore
Regional Security Officer--Patrick Leonard
Management Officer--C. Wakefield Martin

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



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Further Electronic Information
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