Little Albania grows towards the mainstream

Wed Sep 24, 2008 8:23pm EDT
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By Adam Tanner and Benet Koleka

TIRANA (Reuters) - In times of economic turmoil in many countries, Albania, once the most isolated and desperately poor nation in Europe, is showing robust growth and attracting attention from foreign investors.

A modern airport opened in 2007 and in the capital Tirana, Bang & Olufsen sells expensive audio and video products to prosperous Albanians, albeit a few blocks from the main squares where pavement tiles are still cracked.

Economists including the International Monetary Fund expect GDP growth of at least six percent this year, which would be among the highest in eastern Europe, if the country can avoid the chronic power shortages that have hampered it in the past.

In June, the former Stalinist Balkan country of 3.3 million moved up to a "middle income" country from low income in World Bank classifications, receiving an invitation this year to join NATO. It expects to apply for EU membership next year.

A World Bank study this month rated Albania as best in the Balkans and among the world's top 10 countries for easing business regulations.

"Three years ago, although there has been growth and macroeconomic stability, still the country was really not at all preferred by foreign investors," Prime Minister Sali Berisha told Reuters in an interview earlier this month.

In his post since September 2005, he says he has fought corruption, lowered taxes, reduced the size of government and introduced a series of business-friendly laws.

Despite "a tremendous lowering of taxes and tariffs," Berisha said his government had in three years generated more revenue than the previous one did in six.   Continued...