Focus Areas

Liberalisation and privatisation

The Stabilisation and Association Agreement signed with the European Union in June 2006, has been ratified by all member states and consequently came into force in April 2009. Albania has not been recommended  for visa-free access to the Schengen area.

Business environment and competition

The government has continued to improve the business climate. Following the establishment of a national business registration centre, the number of newly registered businesses in 2008 increased and licence and permits processes were made more efficient. Still companies continue to report practices of unregistered firms operating in the informal economy as one of the most serious obstacles affecting their operations. Further amendments to the bankruptcy law were introduced.

Limited progress has been made towards the establishment of secure property rights, and weak law enforcement and high levels of corruption remain significant impediments to business development.

Infrastructure

Progress has been made in the power sector by upgrading generation capacities and expanding market structures following the completion of the sector’s unbundling. Power supply has become more reliable and is noe also exported to Greece. By mid-2009 there had been a further increase in private sector participation in power generation. Market rules have been approved to provide the necessary framework for the opening and functioning of the wholesale and retail market for electricity. In the transport sector, significant progress was made in rebuilding road networks although the sector requires further investment.

Financial sector

The banking sector developed strongly in recent years until the onset of the global financial crisis. Following the privatisation of the government’s stake in the United Bank of Albania, the banking sector is now fully privatised.

The global financial crisis is affecting the sector, although to a lesser extent than in other countries of the region. Lending conditions have become more restricted, in particular for micro, small and medium-sized enterprises (MSMEs).

Businesses report access to finance as the single most important obstacle affecting their operations. The Bank of Albania strengthened banking supervision and further developed its credit registry, which is vital for risk management.