Albania Special: Albania open for business
Updated: 2012-01-09 08:00
Widespread investment is transforming the resource-rich Balkan country into an energy hub
Having achieved strong economic growth in recent years on the back of a services and construction boom, Albania celebrates its 100th anniversary as an independent country with immense motivation to fulfill its extraordinary potential.
With foreign direct investment (FDI) having tripled between 2006 and 2010, the government, led by Prime Minister Sali Berisha, has worked hard to procure a competitive investment environment, dropping corporation tax from 25 percent to 10 percent and personal income tax from 23 percent to 10 percent. Social security contributions have fallen from 32 percent to 15 percent for entrepreneurs.
Formerly one of the countries with the lowest information communication technology (ICT) penetration rates in the world, at just 4.8 percent in 2006, Albania has increased this to 50 percent in 2011, and it is still one of the government's biggest priorities.
"The next two years will be decisive," said the prime minister. "We are trying to provide super-fast broadband Internet in the country. Albania has a very high penetration of mobiles, higher than the European average. We have just issued the second 3G license and are preparing the framework for 4G.
"In 2009, we collected $1.7 billion in revenues. This has been a huge advantage and allowed us to undertake some very ambitious projects. Soon Albania will have the newest and the most impressive road network in the region, with every community having access to a national road within 15-25 minutes. Time is precious, and this way, it will take every citizen 60 percent less time to reach Tirana, our capital."
Albania's excellent water resources have earned it the nickname "Small Norway of the Balkans."
"We look forward to building 443 hydropower stations and have signed with private sector contracts for works to start in 2020, among them some of the largest projects in Europe," the prime minister said.
"Energy and mining are our greatest potentials. We are one of the richest countries in terms of minerals - we have chromite, nickel and copper - and new data has confirmed the presence of gold.
"We have been producing oil for 19 years and currently have around 850,000 tons.
"We have a constant dialogue with China, one of our most important trading partners, about economic investment and cooperation."
Minister of Economy, Trade and Energy Nasip Nao is pleased to see the government's investment reforms bearing fruit.
"The only way we will become more competitive is to involve the private sector," he said.
"We have a very favorable legal framework that protects the investor with maximum guarantees of transparency and openness to promote fair competition. We also have one of the lowest and simplest taxation regimes in the region.
"These days, a company can register in less than one hour. We have created a one-stop shop for registering and licensing as well, and we guarantee investments over $10 million.
"We also have a young and qualified workforce; this is not just fundamental for attracting FDI, but also good for business in general to encourage further development and growth.
"We have just approved a new law for the mineral sector that will give it more impetus and bring more strategic investors. More than 96 percent of the energy we produce comes from hydropower resources. We are using only 35 percent of our potential, but have awarded close to 100 concessions for the construction of more plants which will have a total estimated capacity of around 1,400 megawatts.
"We are also pursuing privatization reforms to increase efficiency. We're in the process of privatizing more than 1,200 assets, mainly factories that are no longer in use, and will revitalize these with private investment and more diversified activities. and evaluating the assets of Albpetrol, our national oil company."
Meanwhile, Minister of Public Works and Transportation Sokol Olldashi points to the vast opportunities in infrastructure.
"Since 2009, we have spent around 9 percent of our gross domestic product investing in roads and will finish this within three years," he said. There is a great chance for Chinese construction companies to take part in this process through electronic public procedures.
"Although we will build the roads with public money, we will outsource the operations and maintenance. Three years from now, we will concentrate on the railways," he said.
InFocus provided the story