24 Investment Guide for Southeast Europe 2004 Albania I Economic overview 1 1 General economic indicators 1997 2 294 690 2 10 3 25 8 42 1 14 9 64 0 30 62 5 1998 3 058 911 6 12 7 26 1 8 7 17 9 76 0 39 3 2 10 Deposits interest rate 27 8 16 5 9 1 7 7 7 8 9 3 11 Lending rate 43 0 25 0 25 8 23 7 11 9 16 0 12 Gross external debt stock debt USD mln 383 5 491 7 618 0 614 0 688 9 983 0 1 2 3 4 5 6 7 8 9 Indicators GDP USD mln GDP per capita USD Real GDP growth rate Industrial production growth rate Annual inflation rate Annual unemployment rate Average monthly gross salary USD Minimal salary USD Current account balance USD mln 13 Foreign exchange reserves USD mln 14 Exchange rate of ALL for 1 USD end of year 1999 3 801 1 122 0 8 9 30 0 1 0 18 3 87 5 42 43 7 2000 3 722 1 094 4 7 7 0 9 4 2 16 8 104 6 42 68 0 2001 4 307 1 328 0 6 5 6 5 3 1 14 4 125 6 55 27 3 2002 4 695 1 521 0 4 7 2 0 2 1 15 8 143 9 63 55 7 275 306 384 481 608 839 103 7 149 8 140 1 135 3 143 7 133 7 Source National Bank of Albania National Institute of Statistics INSTAT Ministry of Economy 1 2 Foreign trade 1 2 1 Foreign trade regime and major regulations Albania is a member of the WTO and therefore is committed to trade liberalisation A 1999 Decision of the Council of Ministers provides for an open export import regime No export taxes fees or other barriers are applicable to exports Imports on the other hand are subject to VAT and customs duties some particular commodities such as fuel alcoholic beverages and tobacco are subject to excise duty VAT Act No 7928 27 04 1995 Customs Code and Law on Excise Duties in the Republic of Albania No 8437 28 12 1998 Moreover being a member of the World Trade Organisation Albania applies international standard rules conditions and norms Furthermore Albanian exports to the EU enjoy the benefits and reduction awarded through the asymmetric regime 1 2 2 Customs regime export and import quota and license system tariffs The regulatory framework includes the Customs Code and other by laws deriving from it The General Department of Customs is the central authority responsible for the management organisation and control of customs activity According to the Nomenclature of Goods and Tariffs a tar iff of 2 10 or 15 is imposed on imported goods In this case the tariff is calculated on the basis of cost plus insurance and freight CIF value There is no quota or other restrictions applicable to imports However products affecting life health or environment are subject to import permissions Licensing is automatic in case no reply is received in a ten day period 1 2 3 Exports and imports Trade volume 1996 1997 1998 1999 2000 USD mln 2001 2002 Exports 210 5 141 3 206 5 275 0 259 9 303 9 330 2 Imports 908 6 619 7 794 6 902 7 1 064 7 1 326 9 1 487 3 Source National Bank of Albania INSTAT 1 2 4 Major trade partners The major trade partners in 2002 were Italy Greece Turkey Germany Yugoslavia United Kingdom France and USA Main export partners in 2002 Italy 71 3 Greece 13 1 Germany 5 5 Yugoslavia 3 1 Macedonia 1 5 Main import partners in 2002 Italy 36 2 Greece 28 0 Turkey 5 5 Germany 5 5 Bulgaria 2 4 Investment Guide for Southeast Europe 2004 Albania 1 2 5 Structure of foreign trade by regions 1 2 6 Structure of foreign trade by commodities Source National Bank of Albania Source National Bank of Albania Source National Bank of Albania Source National Bank of Albania 25 26 Investment Guide for Southeast Europe 2004 Albania 1 2 7 Major bilateral and multilateral trade agreements Trade and economic cooperation agreements have been signed with Italy Turkey Croatia Czech Republic Macedonia France Uruguay EFTA etc Bilateral investment protection and promotion agreements have been concluded with the following countries Greece Germany Italy USA Turkey Switzerland China Austria Croatia Poland Tunisia Egypt Romania Bulgaria the Netherlands United Kingdom Czech Republic Malaysia France Denmark Sweden Russia Israel Hungary Macedonia Finland Slovenia Portugal Belgium Luxemburg Ukraine Regional free trade agreements with Macedonia Croatia Bosnia and Herzegovina Yugoslavia Romania Bulgaria and Kosovo Albania is a member of the World Trade Organisation and therefore is a signatory to the GATT and other regulations of the WTO Albania has initiated negotiations for signing a Stabilisation and Association Agreement with the European Union 1 2 8 Duty free zones Free Zones Act Law No 8636 6 July 2000 forms the legal framework providing for free zones and related issues It offers exemption from VAT and customs duties to selected investors that operate in these areas The Free Zones Act provides for the establishment of free zones near ports airports and at the crossroads of international transport The Council of Ministers determines the areas and boundaries of free zones as well as economic activities that will be carried out there on a case by case basis The National Entity of Free Zones is the authority responsible for administration and licensing of investors willing to operate in the free zones The National Free Zones entity is working to determine potential free zones to be proposed to the Council of Ministers The Albanian government is open to requests and proposals for identification of free zones and industrial parks 1 3 Privatisation Some of the major companies included in the privatisation list are 1 Savings Bank of Albania the largest second tier bank in Albania 2 INSIG a state owned insurance company 3 Albtelekom Albania s fixed telephone operator 4 Electric Power Corporation KESH the state owned company of electricity production distribution and transmission 5 Armo oil distribution business a company partially owned by the state 6 Servcom oil service company 7 Albturist a state owned company intending to sell two of its most important assets Hotel Tirana partially owned and Hotel Dajti 1 4 Foreign investment The FDI stock for the period 1992 2002 has reached USD 1 1 billion Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 FDI USD mln 53 70 90 47 5 45 41 143 207 150 Source Foreign Investment Promotion Agency of Albania FDI inflow to Albania was low until 2000 when it reached USD 143 million about 3 times higher than in 1999 In 2001 FDI inflow reached USD 207 million This progress was mainly a result of the successful privatizations of AMC Albanian Mobile Communication Vodafone and Albkrom Chromium Albanian Industry Albcopper Cooper Albanian Industry taken by concession by the Italian company DARFO 1 4 1 Foreign
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