Honourable guests,

Ladies and gentlemen,

Let me thank you for joining us today in this forum. I’m delighted to see that a lot have responded positively to our invitation.

I consider the forum a great opportunity to present the possibilities and advantages of investing in my country, Albania.

Before presenting the case for Albania as an excellent investment opportunity, allow me first, to say a few words about the current global economic context. The world economy is not performing well. Even though there is some recent good news from US and Britain, Japan is still struggling and China’s growth has slowed the most since 2009. And the Eurozone economies are close to another recession.

Low economic growth, high risk business environment, low inflation and unsatisfactory financial balance sheets, are only some of the symptoms of a global economy in dire need of new reforms.

Furthermore, the security challenges in Ukraine, Syria, ISIL, have only helped to aggravate an already fragile and volatile economic situation with the Balkans being affected

Albania has made incredible progress since establishing a market economy two decades ago. A clear indication of this progress was the fact that in 2008 Albania was graduated from the International Development Association (IDA) to the International Bank for Reconstruction and Development (IBRD).

Poverty was reduced significantly and structural reforms were introduced to the labour market.
The progress in economic terms was accompanied by important political milestones for Albania: a NATO member in 2009 and an EU candidate country this June. They are a clear proof that Albania is a democratic country with a favourable business climate for foreign investments.

But as the global financial crisis unfold itself, accompanied by the eurozone crises, Albania had to and needs to adapt itself in order to maintain the momentum to attract investments. In order to do this we need to have clear goals.

Our goals are focused:
1.    on the improvement of the economic performance in order to achieve sustainable and long-term growth,
2.    in facilitating the support to businesses in accessing finance,
3.    in the fight against corruption and informalities in the private and public sector,
4.    in improving of the fiscal law in line with business climate needs in order to have an essential and durable improvement of the business climate in our country.

Addressing these objectives is the milestone which will pave the way for future developments in the Albanian economy.

Next, let me introduce you to some facts concerning concrete measures which were undertaken to achieve these goals.

The Albanian government, with the support of international financial institutions, undertook a series of reforms aiming at preventing the economic slowdown and developing a new economic model, reforming key sectors of the economy, establishing a new approach for state-enterprise relations in support of investments that generate new job opportunities and are fully compliant with European standards.

The new economic model that we are implementing is stable and long-term. This model relies no longer on traditional resources, remittances and construction sector, but upon the increase of import and export , as well as upon attracting investments in processing industry, tourism, agriculture, services and information technology. It offers legal certainty and guarantees for a quick but sustainable profit.

Thanks to this model, the Albanian economy is performing well, fiscal indicators are positive especially because of the fight against corruption, fiscal evasion and informalities.

Statistics show that, in the last trimester, the Albanian economy has experienced growth in every sector, finally putting an end to the negative performance of economic indicators. Even the IMF refers to realistic chances of the Albanian economy reaching a growth rate of 2.2%-2.5% at the end of the year.

The EC Progress Report for 2014, clearly shows that Albania was able to maintain stability in the macroeconomic level by relying upon economic policies which were consensually preserved. A clear sign of this progress is the increase of the average income by 11% (in annual terms) during the first trimester of 2014, as a result of an efficient collection of the VAT. The general deficit, during the first seven months of 2014 was 38% lower than that of the previous year, and it accounted for 2.2% of the GDP.

The Annual Global Competitiveness Report for 2013-2014, which shows the stage of economic development, describes Albania as an efficient economy, very comparable to developed countries in some sectors (sometimes surpassing them, such as the case of primary and higher education, healthcare, or labor market training.)

Regarding the improvement of the Albanian economy structure, the government is undertaking comprehensive reforms to increase the productivity, to enlarge markets and to encourage international competitiveness.

Currently, we are working to restore and revitalize those potential sectors of the economy which

produce sustainable economic growth and employment, such as: agriculture, manufacture, tourism, trade, mining, oil, energy etc. These potential sectors, which directly contribute to economic growth, but also attract foreign direct investments, are currently placed into focus and analysed in order to understand the real problems, so that we can properly address and support them with direct policy packages and measures.

Sectorial reforms have been implemented in the processing industry and agriculture sector and the improvements are visible. Within 9 months, exports have increased by 26% compared to the same period last year.

The package on the textile, clothing and footwear (TCF) industry implemented in April of 2014, is contributing in favour of employment, in favour of added value, and above all, in favour of exports. Up to the end of September, there were 4750 new job openings. We are currently working on a supporting package for the agroindustry and we hope to see results by next year.

The investors will face a whole new situation, more favorable and less bureaucratic, marked by transparency and speed in carrying out fiscal procedures. Automatic VAT reimbursement, that unfortunately has been one of the biggest problems in the past, is already active. This means that not only VAT reimbursement will not take 60 days, but it will be done in a very transparent way, without any kind of problem, compared with previous problems.

Foreign investors who want to start a business in Albania, will always find support of the government who has designed and approved a clear legal framework that will serve as the impetus for the development of these investments, starting from the tax system, social contributions for employees, etc.

The government is also working in several directions to further improve the business climate. With the support of the World Bank, EBRD and other multilateral partners, we are not only addressing specific indicators and improving our performance in international terms, but also providing feasible solutions to the real challenges in the private sector.

According to the Doing Business Report of the World Bank published recently, Albania has improved in Doing Business 2015 ranking by 40 points as well as in The Distance to the Frontier (DTF) ranking by 6 points.

Indicators such as starting a business, dealing with construction permits, registering property, paying taxes etc., have greatly improved. The report confirms once more the Albanian Government keen to facilitate and regulate the business regulatory environment to attract foreign investment.

We have a new approach and stronger interaction in the relations between the business community and the Government. With the help of EBRD, we have established an Economic and an Investment Council.

The National Economic Council, managed by the Business Community, works closely with the Prime Minister’s Office, the Minister of Economic Development and representatives of financial institutions. In this council, business representatives have an opportunity to directly report corruption, to convey their problems, to work towards a solution and be part of the drafting of legislation relevant to their sectors.

The Investment Council introduces investors to their well-deserved place as long-term shareholders of the economic welfare of the country.

Furthermore, our focus remains the increase in exports. Albania has a favourable geographical position as optimal trade hub. It has a liberalised trade regime, and it is a member of WTO and CEFTA. Most of the exports are based on natural resources and cost-effective labour force.
Albania’s foreign trade  is characterised by a steady increase in trade flows from year to year.

Attracting sustainable and qualitative foreign direct investment is a priority for Albania, especially long-term investments that bring a sustainable development to the country.

In order to encourage investors and entrepreneurs we are fully committed to establish a regulating system which facilitates the well-functioning of the market and protects public interest. Financial intermediation, mining and manufacturing are still the main activities to attract FDI in our country.

A great deal of projects which cannot be covered by the state budget will be included in a new instrument, the “public private partnership” or concession. Albanian government is working on the Concessions Law, in order to make it more flexible. It is also reviewing the list of services to be given by concession or PPP.

The Western Balkans Conference which was held in Berlin, on August 2014, under the supervision of Germany and other EU countries, paved the way to a long process which will allow to the Western Balkans the opportunity to become a true region in economic terms.

This pre-accession process envisages projects with a regional economic impact that define a vision of where we would like to see our region in the next 5 to 10 years and will help improve the lives of our citizens and connect physically the Balkans with the EU.

This year’s Enlargement Package consolidates economic governance as an important pillar of the accession process through a process of evaluation that will result in more targeted policy guidance for each country. Moreover, IPA II increases focus on priorities for EU accession in the areas of competitiveness and growth. IPA II also introduces increased budget support and prioritisation of projects.

Moreover, since the crisis, limited fiscal space has been largely utilized to stabilize the economy and little is left for launching new projects, in particular those of regional/EU importance.
In order to counter these tendencies, in a Working Paper that Albania had circulated to the participants of the conference is outlined the need to facilitate and restructure the economic integration process of the region through the launch of several large scale initiatives of joint EU- Western Balkans interest.

The following regional projects are now being discussed:

•    Regional infrastructure projects such as the Blue Highway, and regional Railway networks,
•    Energy infrastructure and energy security: with key strategic projects such as TAP and IAP,
•    Support for SMEs, human capital financing and vocational training,
•    Regional tourism projects.

Through these regional projects, the foreign investors should have the opportunity to invest into projects with a regional impact and to reach a market of 26 million of consumers.
In this regard, the Albanian Government is fully prepared to take the necessary internal governance decisions to boost our courses towards the EU.

I take this opportunity to invite you all to come in Albania and witness the changes and transformation we are currently making.

You will find an economic environment that provides legal guarantees, transparency and predictability, a competitive environment, appropriate and convenient to invest in. You will also find a very serious partner, which is the Albanian government.

Thank you very much for your attention!