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COUNTRY PROFILES


PROFILE

Country Profile

Area: 28,748 sq km (10,822 sq miles)
Population: 2,831,741 (2011 census preliminary results)
Capital city: Tirana (pop: 763,634 (2011 census preliminary results) )
People: Albanian 95%, Greeks 3% and others 2% (Vlachs, Roma (Gypsy), Serb, Macedonians, Bulgarian Balkans Egyptians, (1989 est, ethnic information from 2011 census not yet available).
Languages: Albanian, Greek, Vlach, Romani, Slavic dialects.
Religion: Sunni Muslim (70%), Albanian Orthodox (20%), Roman Catholic (10%)
Currency: Lek
Major political parties: Socialist Party, Democratic Party, Social Democratic Party, Republican Party, Socialist Movement for Integration, Demo-Christian Party.
Government: Parliamentary Democracy
Head of State: President Dr Bamir Topi (2007 – 2012)
Prime Minister: Dr Sali Berisha (Democratic Party)
Foreign Minister: Edmond Haxhinasto (Socialist Movement for Integration)
Membership of international organisations: United Nations, NATO (since 2009) South East Europe Cooperation Process, Organisation for Co-operation and Security in Europe (OSCE), Council of Europe (COE), World Trade Organisation (WTO)

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ECONOMY

Basic economic facts

GDP: US$23.86 bn (2010 est)
GDP per head: US$ 8,000(2010 est.)
Annual growth: 1% (2011 est.)
Inflation: 3% (2011 est.)
Major industries: Cement, Oil, Chromium, nickel, copper, hydroelectric power
Major trading partners: Italy, Greece, Germany, Bulgaria, Turkey, Macedonia
Exchange rate: 165.29 Lek ALL per Pound Sterling (xe.com February 2012)
Albania is one of the poorest countries in Europe. Since 1991, the economy has struggled to recover from the fall of Europe’s harshest communist regime, the impact of the move to a market economy, and the 1997 collapse of pyramid investment schemes. However, Albania’s economy has improved substantially over recent years – albeit from a very low base, (with average annual growth rates of 6% over the 2004-8 period) and was only one of two European countries to experience positive growth in 2009.

Although the current government have made the fight against high levels of organised crime and corruption a priority, limited success has been seen in both. Related lack of progress in the rule of law reform agenda continue to present difficulties for the economy.

Privatisation is ongoing, but has been completed in small and medium sized enterprises. The service (58% 2006 est.) and agricultural sectors (23%) drive growth. Only around 10% of Albania's GDP is generated by exports. Of those exports, around 85% go to the EU. Overseas remittances play an important role, contributing about US$800 million in revenue to the Albanian economy.

Albania is rich in mineral resources, with chrome, ferrochrome, iron, nickel and copper present in considerable quantities. There are also oil and gas reserves. Mineral extraction offers good prospects but requires sizeable foreign investment.

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HISTORY

Historical background

Albania came under Ottoman rule in the 15th century. This ended in 1912 during the first Balkan War, when the greater part of Albania was overrun by the Serbian and Greek armies during their successful campaign against the Turks. Later that year Albania declared independence. Independence was recognised by the Great Powers, including Great Britain, a year later. Albania retained its independence at the end of World War I and became a member of the League of Nations.

In the mid-1920s Ahmed Zog, a chieftain from the Gheg people of northern Albania, took control of the country. Despite his early alliance with Yugoslavia, King Zog increasingly relied on Italy for economic support, in return for which Albania provided Italy with industrial and agricultural raw materials.

In 1939, as war was brewing in Europe, Zog's relationship with Italy soured and Mussolini ordered an invasion. Albania was annexed, and spent the majority of the war under Italian and later German control. However, as their grip on Albania loosened towards the end of the war, increasing swathes of the country fell to Albanian partisans. With support from Tito's Yugoslav Communist Party, Enver Hoxha and his communist supporters entered the liberation struggle, defeated their rivals and gained effective control of the country.

Immediately after World War II Albania allied itself closely with Tito's Yugoslavia. When Yugoslavia fell out of favour with the Soviet Union in 1948, Hoxha turned to the Soviets for protection and help in purging pro-Yugoslav rivals, consolidating his grip on power and breaking ties with Yugoslavia. There followed a period of economic development and industrial production, made possible by considerable support from the Soviets. This era came to an end in 1961 as relations between Albania and the Soviet Union became strained following improved relations between the Khruschev regime and the Yugoslavs. Hoxha, taking advantage of worsening Sino-Soviet relations succeeded in building an alliance with China, securing continued economic support for Albania which lasted until 1978 when Mao's death prompted a change in Chinese policies. From this point until his death in 1985, Hoxha pursued an isolationist policy for Albania, keeping international commitments to a minimum, and stressing the need for self-reliance and self-sufficiency.

Albania after Hoxha

After Hoxha's death his chosen successor, Ramiz Alia, gradually opened up the country both diplomatically and economically. Against the backdrop of the events in Eastern Europe in the late 1980s he was forced to increase the rate of reform and in 1990, following student demonstrations, the formation of alternative political parties was allowed for the first time. The Democratic Party (DP) was the first to emerge and was quickly followed by several other parties. Significant progress towards democratisation was made, leading to multi-party elections in March 1991. The Communists managed to hold on to power but a third of the parliamentary seats went to the DP. Demonstrations continued, and in June the Communists were forced to include the DP in a coalition government. The following March, new elections were held in which the DP, led by Dr Sali Berisha, won an overwhelming victory, signalling the final collapse of communism.

In the years that followed, Albania enjoyed a period of economic growth in which democratic changes were introduced, civic institutions were created and laws on human and minority rights were passed. However, by the mid-90s, the DP, led by Sali Berisha started to adopt increasingly non-democratic and even authoritarian policies. In the 1996 parliamentary elections the DP won two thirds of the seats but, according to international observers, there were serious irregularities in the vote. The opposition boycotted parliament and took to the streets to demonstrate. These demonstrations were brutally broken up.

Pyramid schemes crisis

In January 1997, anti-government demonstrations and anarchy erupted in the south of Albania following the collapse of a number of pyramid financial schemes. By February, the government had lost control over large parts of the country: arms depots were looted, prisons were opened and over 1,500 people lost their lives. A government of national reconciliation was formed in March, led by Bashkim Fino, and an Italian-led UN peacekeeping force was deployed to restore order and to oversee security during the June 1997 parliamentary elections. These resulted in a resounding victory for the Socialist Party (SP) led by Fatos Nano, who became Prime Minister. There was still widespread social tension and the government found it extremely difficult to regain control of the country. Berisha organised continual street protests and his party boycotted parliament. The arrest of six DP members and the assassination of the legendary DP leader Azem Hajdari raised the stakes, the events culminating in violence in Tirana and an alleged attempt to overthrow the government by force. Nano fled to Macedonia, later returning to Albania to resign.

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INTERNATIONAL RELATIONS

Albania relations with UK

The British Embassy in Tirana works with international and local partners to implement projects that facilitate Foreign and Commonwealth Office (FCO) objectives and strategic priorities. The following funds are available:

The Strategic Programme Fund (SPF) - previously known as Global Opportunities Fund (GOF) is the FCO's most important Programme Budget, and is divided into strands which reflect the UK's Department Strategic Objectives (DSOs). The purpose of SPF is to promote action on global issues in areas of strategic importance to the UK.

SPF "Reuniting Europe" – to extend the success of enlargement by supporting countries through the EU integration process, particularly in the fields of improved governance and economic growth. This is one of the SPF strands under which Albania qualifies for funding as a priority country.

Relations with Neighbours

Albania has good relations with all her neighbours.

In March/April 1999, around 480,000 Kosovar refugees entered Albania during the Kosovo crisis. Albania was a staunch supporter of NATO military action and around 9,000 troops were deployed in Albania before crossing into Kosovo. Albania supports the international community's policy towards Kosovo. It has, however, also made consistent efforts to strengthen relations with Serbia.

Albania has consistently supported the international community's position on the Balkans, including in Kosovo. The Albanian government took a decisive stance in the 2001 crisis in Macedonia by strongly condemning the actions of ethnic Albanian rebels, whilst emphasising the need for all communities in Macedonia to enjoy equal rights.

Relations with EU

Albania has actively pursued closer relations with the EU. EU membership is the key element of Albania's foreign policy. Albania signed a Stabilisation and Association Agreement with the EU on 12 June 2006, and formally applied for EU membership in April 2009. During the first quarter of 2010, the Albanian government completed the European Commission’s (EC’s) questionnaire for prospective Member States, which was submitted to Brussels on 15 April 2010 and referred to the EC for an opinion (avis). The avis, published in November 2010, did not give Albania candidate status, and set 12 “key priorities” for further reform in Albania. The Annual Progress Report of October 2011 again refused to give Albania Candidate Status, and referred to lack of progress on the key priorities.

EU Assistance

PAMECA III - Police Assistance Mission of the European Community to Albania

PAMECA III will run from 2008-2012 and will build upon the work of previous EU funded policing projects, in order to meet the assessed needs of the Albanian State Police as the key beneficiary and will also generate improvements for secondary beneficiaries (Ministry of the Interior, Ministry of Justice, General Prosecutors Office etc).

Instrument for Pre-Accession Assistance (IPA)

The Instrument for Pre-Accession Assistance (IPA) is the Community's financial instrument for the pre-accession process for the period 2007-2013. Assistance is provided on the basis of the European Partnerships.

Its main aim is to support institution-building and the rule of law, human rights, including the fundamental freedoms, minority rights, gender equality and non-discrimination, both administrative and economic reforms, economic and social development, reconciliation and reconstruction, and regional and cross-border cooperation.

NATO

Albania has been a member of NATO since April 2009. It continues to contribute to international military operations, including in Afghanistan, and in recent times, has also contributed troops to operations in Afghanistan, Bosnia and Herzegovina and Iraq.

Visits

Inward

-- Prosecutor General Ina Rama visited London at the invitation of the CPS 28 Feb - 3 March 2011

-- President Topi met the PM and FCO Ministers, as well as addressing the Oxford Union 3/4 November 2010.

-- Then Minister of Justice Bujar Nishani visited London on 1 October 2010 and met MoJ counterparts.

-- OSCE funded parliamentary visit to observe 2010 UK election

-- Albanian MPs Arta Dade, Viktor Gumi, Ditmir Bushati, Mesila Doda, Gent Strazimiri and Ermonela Felaj visited London as guests of the Inter-Parliamentary Union, 16-17 March 2010

Outward

-- The Director of Public Prosecutions, Keir Starmer QC, visited Tirana on 30-31 January 2012, and met the President, Prime Minister and Prosecutor General.

-- David Lidington MP, Minister for Europe visited Tirana 8-9 June 2011 and met the President, Prime Minister, Foreign Minister and Leader of the Opposition.

-- Lord McNally, Minister of State for Justice visited Tirana on 24 – 26 March 2011, met the President, Prime Minister, Minister of Justice, Foreign Minister, and Leader of the Opposition.

-- The Lord Speaker, Baroness Hayman visited Albania 19 – 22 September 2010 at the invitation of the Albanian Speaker. She met MPs and senior officials and addressed the Albanian Parliament

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GEOGRAPHY

Albania lies on the eastern Adriatic coastline, bordered by Montenegro to the north, Serbia/Kosovo to the north-east, Macedonia to the east and Greece to the south and south-east. Two thirds of the interior is mountainous, while the main population centres lie on the coastal plain stretching from Shkodra in the north to Vlora in the south. The plains enjoy a Mediterranean climate in contrast to continental climate of the Balkan interior.

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TRADE AND INVESTMENT

UK development assistance

Since 1991, the EU has provided the bulk of foreign aid to Albania. The Department for International Development's (DfID) withdrew from Albania in 2009, as it was re-classified as a middle-income country. Details of ongoing work in Albania can be viewed on the DFID website (http://www.dfid.gov.uk/countries/europe/albania.asp) .

Trade and investment with the UK

UK import and export figures for Albania (mainly specialised industrial machinery, medicinal and pharmaceutical products, power generating machinery and equipment) totalled £22m in 2010. Business opportunities for foreign companies arise from the large untied inflow of funding from the International Financial Institutions such as the World Bank, IBRD, the UN Agencies and EBRD.

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POLITICS

Following the 1997 crisis, the new Socialist Party Prime Minister, Pandeli Majko, brought some political and economic stability to Albania. Reforms continued throughout 1998: a constitutional referendum was held and a new constitution adopted; there was increasing respect for human rights; a law was passed on freedom of the press and there were moves towards de-centralisation. During the 1999 Kosovo crisis, Albania remained stable and played a positive role opening up its borders to take in half a million refugees. It was praised by the international community for its constructive role and its generosity during the conflict.

In the 2005 general election, former President Sali Berisha returned to power as Prime Minister, representing the Democratic Party (DP). Since then, Albania has been actively pursuing the goal of EU membership. International observers criticised the 2005 elections for significant irregularities and, during the DP’s first term, changes were made in an attempt to address these.

The elections on 28 June 2009, were considered by the OSCE monitors to be a marked improvement on previous elections, but still far from perfect. Sali Berisha was returned to office with a slim majority achieved with the support of Ilir Meta’s Socialist Movement for Integration (4 MPs), a breakaway from the main socialist party. The opposition Socialist Party, whilst accepting the result of the election, called for investigations into irregularities, including the opening of the ballot boxes. The government refused to accept this last stipulation, and so the Opposition boycotted Parliament following the elections. The International Community pushed for both sides to find a compromise, warning that a continued impasse would affect Albania’s EU ambitions. The Opposition finally returned unconditionally to Parliament in September 2011.

After nearly two years of political crisis following disputed national elections (above), local elections were held on 8 May 2011. The race for Mayor of Tirana, between incumbent leader of the Socialist Party, Edi Rama, and the former Interior Minister, Lulzim Basha, turned local politics into a national contest. Election Day itself and the initial count went relatively smoothly. However, the counting process in Tirana was disputed and the Opposition laid several appeals with the Electoral College alleging that the Government had changed the rules in the middle of the process and that the subsequent result was inaccurate. The official result was not announced until 25th June 2011.

Constitution

Albania is a parliamentary democracy. The Albanian Constitution was adopted by referendum on 22 November 1998 and came into effect shortly afterwards. The Constitution sets out the basis for an executive consisting of the President and Council of Ministers, a parliamentary assembly, and a judiciary including the Constitutional Court and High Court.

The President is elected for a 5-year term, formerly by a three-fifths majority of Members of Parliament but, since constitutional changes in 2008, if consensus is not reached by the third round, a simple majority in Parliament is sufficient, removing the need to find a consensus candidate. No president may serve more than 2 terms in office. The current incumbent is President Bamir Topi who took over from President Alfred Moisiu in July 2007. The President is the constitutional Head of State but, in practice, has limited powers.

The Council of Ministers performs the main executive functions of government and includes the Prime Minister, the Deputy Prime Minister and line ministers. The Prime Minister is appointed by the President but must be approved by Parliament, and is usually the leader of the largest party in the governing coalition. The current Prime Minister is Sali Berisha

The unicameral Parliamentary Assembly consists of 140 Members of Parliament, or 'deputies'. The Assembly is elected for a four-year term, by party-list proportional representation. The current governing coalition is led by the Democratic Party (DP), and the Opposition is led by the Socialist Party (SP).

Albania passed constitutional changes in April 2008 to create a new electoral system. The previous arrangement elected 100 constituency based MPs on a simple majority system and 40 MPs nationally on a proportional open list system. Now, replicating the Spanish system, there is a closed list proportional representation on a regional basis. This system was agreed by the two main parties, the Democratic Party and the Socialist Party and was used for the general elections on 28 June 2009.

Political parties

Listed below are the main political parties in Albania grouped by the coalition to which they currently belong - Government or Opposition.

Government

-- Democratic Party (DP) - ruling party

Social Movement for Integration (SMI)

-- Republican Party (RP)

Party for Justice and Integration

Since its inception in 1990, Sali Berisha's Democratic Party has been fiercely anti-communist. It won an overwhelming victory in the 1992 elections and remained in power until 1997, initiating democratic and economic reforms. The party won the 2005 election, gaining 56 seats. It was re-elected in 2009 with 68 seats and formed a majority with the four seats of Ilir Meta’s SMI, and 2 seats from smaller parties.

Opposition:

-- Socialist Party (SP)

Human Rights Union Party (HRUP)

The Socialist Party emerged in 1991 as the successor party to the communist Albanian Workers Party, initially sharing power with the DP but went into opposition between 1991 and 1997. Following the 1997 parliamentary elections, the SP returned to power and governed until 2005. The party has been divided between the old-guard factions of the former communists and the reformist social-democratic members who have little connection with the party's communist heritage. Some of this latter group split from the SP in 2004 and formed the Social Movement for Integration (SMI) under former Prime Minister Ilir Meta, who caused controversy in 2009 by joining in coalition with the DP, and giving them the majority they needed to form a government.

Recent political developments

The most recent general elections were held on 28 June 2009. After that however, the opposition Socialist Party and their allies boycotted Parliament for over two years, calling for an investigation into election irregularities, the opening of the ballot boxes or for the Prime Minister to step down. The government refused to accept the opposition’s demands; the resulting stalemate affected other bodies, such as the judiciary, as well as the wider reform programme. Opposition MPs have now returned unconditionally to the Assembly in September 2011.

On 20 July 2007, the Albanian Parliament elected Bamir Topi to be the fifth President of the Republic. Topi was the official candidate of the Democratic Party (DP) and a senior Member of Parliament. Following a tense process, which at times did not look certain to produce a result, Topi eventually secured 85 votes – just one more than the minimum needed for the three-fifths majority required. Having resigned from Parliament and the DP, as required by the Albanian Constitution, Topi was sworn in as President on 24 July taking over from the previous incumbent, President Alfred Moisiu.

Ammunition explosion at Gerdec

On 15 March 2008, there was an explosion at a munitions storage facility in Gerdec, 18 km outside Tirana. The explosion killed 26 people, including some children and caused widespread damage to surrounding homes.

The President of Albania, Bamir Topi, called for a thorough investigation to be carried out, as reports surfaced after the event that children were being employed to work at the facility and that old ammunition from the 1960s was being cleaned, repackaged and sold on. Allegations surfaced that the Defence Minister at the time, Fatmir Mediu, was aware of the work that was being carried out there. The investigation is still ongoing, but Mediu resigned on 17 March 2008 as a result of the allegations against him. He has now returned to the Cabinet as Minister for the Environment (September 2009), an appointment which allowed the Supreme Court to uphold his immunity and drop the case against him over the Gerdec incident. The incident continues to cause immense interest in the Albanian press as the court case against those allegedly held responsible unfolds. Almost four years after the explosion, the court case continues with regular postponements. No convictions have yet been brought.

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Last Updated: February 2012

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