ECONOMY

Albania is one of Europe’s poorest countries and continues to face severe difficulties adjusting to the new Europe after decades of Stalinist isolation. More recently, conditions were worsened by regional political instability and the collapse of ’pyramid’ investment schemes in 1997. Albania is blessed with appreciable natural resources – it is one of the world’s largest producers of chromium and boasts reserves of copper, nickel, pyrites and coal. There are also oil deposits, both on and offshore. The agricultural sector, which accounts for 40 per cent of GDP and underwent some upheaval following de-collectivization, has now settled down with all but a few farming enterprises in the private sector. New components of the economy, such as tourism, which were mostly set up with foreign investment, suffered badly in the wake of the 1997 upheaval – a great deal of Albania’s hard-won economic progress was destroyed during that period. In the last five years, much of the damage has been restored but the black economy remains a huge influence over Albania, especially in view of the 40 per cent unemployment rate. Nonetheless, Albania has since received steady support from major foreign donors and it was admitted to the World Trade Organization in July 2000 – as much a valuable symbol of international recognition as a potential boost to the economy. The government hopes to join the EU in around 2010, although most observers consider this highly optimistic.