Economic Growth and Trade February 2010

The article below indicates how USAID will be helping companies grow and develop with the country of Albania.  This program is one of many helpful developing missions and is a wonderful asset to companies like MI.

Even since this article was written in February of this year, there have been improvements in the sectors mentioned below.  The great thing about having organizations like USAID involved in Albanian development is that data collected can be analyzed and studied to determine how programs are truly affecting the industry and country.  Websites like EuroStat contain trade and growth statistics but during the mid 1990s and before, the data is not necessarily reliable due to government transitions; hence, long term trends are not technically sound assumptions.  Now that an organization like USAID, in addition to many others, is collecting and analyzing data, accurate and statistically sound recommendations and forecasts can be made about markets like the agricultural sector, specificially with essential oils.

Photo Credit: USAID/Albania Sixty percent of Albania’s labor force works in the agriculture sector, and the sector accounts for 23 percent of Albania’s GDP. USAID is helping Albanian farmers and agribusinesses increase productivity and competitiveness.

Promoting Economic Growth and Prosperity

Before the effects of the global economic and financial crisis intensified in the last quarter of 2008, Albania had enjoyed an average annual GDP growth rate of 6.0%, thanks to continued macroeconomic stability and strong migrant remittances. The GDP per capita increased by 15.5%, from $3,429 in 2007 to $3,963 in 2008. However, the global crisis caused an economic downturn in early 2009, reducing Albania’s GDP growth rate to about 0.7%.The economy is expected to start improving in the latter part of 2009. Still, Albania remains one of the poorest countries in Europe and its per capita income is among the lowest in the Balkan region. High unemployment, low foreign direct investment (FDI), and a widening trade deficit are all causes for concern.

Micro, small and medium-sized enterprises (MSMEs) are the driving force for Albania’s economic growth and job creation. They account for 99.5% of private enterprises and about 75% of total employment in non-agricultural sectors.  However, the development of MSMEs has been hindered by their weak competitive capacity, their limited access to commercial credit and the unfavorable business environment caused by unfair competition, and inconsistent application of fiscal laws and regulations. In addition, poor infrastructure (energy, communication, and transportation), disputable property ownership, and weak rule of law discourage domestic and foreign investments. Despite some improvement in its ranking, Albania still trails most other countries in the region in the World Economic Forum global competitiveness index for 2009.

PROGRAM OVERVIEW
USAID’s Economic Growth program promotes sustained, broad-based economic growth. It aims to address the constraints to private enterprise development, decrease trade deficit, increase FDI, create employment, and reduce poverty. USAID will achieve the program objective through strengthening the competitive capacity of private enterprises; increasing access of MSMEs to credit; and fostering a policy environment that enhances business development, trade and private investment.
PROGRAM FOCUS

• Improving trade and investment capacity;
• Maintaining stability and soundness of the financial sector through improved supervision, risk management and regulatory environment;
• Strengthening regulatory capacity for the energy sector and supporting the privatization of Albanian Power Corporation’s distribution function;
• Increasing agricultural sector productivity and competitiveness;
• Improving private sector competitiveness through productivity improvement and workforce development.

Link to the original article

Gjithe te mirat!
"All the best!"

MI