U.S. Department of State
Background Notes: Albania, March 1999

Released by the Bureau of European Affairs
U.S. Department of State

Official Name: Republic of Albania

Geography

People

Government

Economy

PEOPLE AND HISTORY

The name Albania is derived from an ancient Illyrian tribe, the Albanoi, forbears of the modern Albanians. The Albanian name for their country is Shqiperia.

Prior to the 20th century, Albania was subject to foreign domination except for a brief period (1443-1478) of revolt from Ottoman rule. Albania declared its independence during the first Balkan War in 1912 and remained independent after the World War I largely through the intercession of U.S. President Woodrow Wilson at the Paris peace conference.

In 1939, Italy under Mussolini annexed Albania. Following Italy's 1943 surrender to Allied Powers during World War II, German troops occupied the country. Partisan bands, including the communist-led National Liberation Front (NLF), gained control in November 1944 following the German withdrawal. Since Yugoslav communists were instrumental in creating the Albanian communist Party of Labor in November 1941, the NLF regime, led by Enver Hoxha, became a virtual satellite of Yugoslavia until the Tito-Stalin split in 1948. Subsequently, Albania's hard-line brand of communism led to growing difficulties with the Soviet Union under Krushchev, coming to a head in 1961 when the Soviet leaders openly denounced Albania at a party congress. The two states broke diplomatic relations later that year. However, Albania continued nominal membership in the Warsaw Pact until the 1968 invasion of Czechoslovakia.

In 1945, an informal U.S. mission was sent to Albania to study the possibility of establishing relations with the NLF regime. However, the regime refused to recognize the validity of prewar treaties and increasingly harassed the U.S. mission until it was withdrawn in November 1946. The U.S. maintained no contact with the Albanian Government between 1946 and 1990.

During the 1960s, China emerged as Albania's staunch ally and primary source of economic and military assistance. However, the close relationship faltered during the 1970s when China decided to introduce some market reforms and seek a rapprochement with the U.S. After years of rocky relations, the open split came in 1978 when the Chinese Government ended its aid program and terminated all trade. Hoxha, still communist dictator, opted to pursue an isolationist course. The result was financial ruin for Albania.

By 1990, changes elsewhere in the communist bloc began to influence thinking in Albania. The government began to seek closer ties with the West in order to improve the economic conditions in the country. The People's Assembly approved an interim basic law in April 1991. Short- lived governments introduced initial democratic reforms throughout 1991. In 1992, the victorious Democratic Party government under President Sali Berisha began a more deliberate program of market economic and democratic reform. Progress stalled in 1995, however, resulting in declining public confidence in government institutions and an economic crisis spurred on by the proliferation and collapse of several pyramid financial schemes. The implosion of authority in early 1997 alarmed the world and prompted intense international mediation and pressure. Early elections held in June 1997 led to the victory of a Socialist-led coalition of parties, which remains in power today.

GOVERNMENT AND POLITICAL CONDITIONS

Albania's 1976 socialist constitution was declared invalid in April 1991, and an interim basic law was adopted. The country remains without a permanent constitution; a draft constitution was rejected in a November 1994 referendum.

Principal Government Officials

President and Cabinet

The Head of State in Albania is the President of the Republic. The President is elected to a 5-year term by the People's Assembly by secret ballot, requiring a two-thirds majority of the votes of all deputies. The next election is expected in 2002.

The President has the power to guarantee observation of the Constitution and all laws, act as Commander-in-Chief of the armed forces; exercise the duties of the People's Assembly when the Assembly is not in session, and appoint the Chairman of the Council of Ministers (Prime Minister).

Executive power rests with the Council of Ministers (cabinet). The Chairman of the Council (Prime Minister) is appointed by the President, ministers are nominated by the President on the basis of the Prime Minister's recommendation. The People's Assembly must give final approval of the composition of the Council. The Council is responsible for carrying out both foreign and domestic policies. It directs and controls the activities of the ministries and other state organs.

The Council consists of 17 ministers and nine state secretaries. The Socialist Party occupies the bulk of the cabinet positions, though the Democratic Alliance, the Social Democratic Party, and the Agrarian Party each head one ministry.

Legislature

The Kuvendi Popullor, or People's Assembly, is the law-making body of the Albanian Government. There are 155 deputies in the Assembly, of which 115 are directly elected by an absolute majority of the voters and 40 are chosen by their parties on the basis of proportional representation. The President of the Assembly (or Speaker) has two deputies and chairs the Assembly. There are 15 permanent commissions, or committees. Parliamentary elections are held at least every 4 years.

The parliament that emerged from elections in June 1997 was led by the Socialist Party, which took 101 of the 155 seats. The Democratic Party won 27 seats. The Social Democrats won eight seats (including the Speaker's), and the Unity for Human Rights party won four. Among the remaining seats, the Democratic Alliance, Republican, and Legality and Unity of the Right parties won two each; Balli Kombetar, the Agrarian, Christian Democrat, and National Unity Party won one each.

The Assembly has the power to decide the direction of domestic and foreign policy; approve or amend the Constitution; declare war on another state; ratify or annul international treaties; elect the President of the Republic, the Supreme Court, the Attorney General and his or her deputies; and control the activity of state radio and television, state news agency and other official information media.

Judicial System

The court system consists of a Constitutional Court, the Court of Cassation, appeals courts, and district courts. The Constitutional Court is comprised of nine members appointed by the People's Assembly for maximum 9-year terms. The Constitutional Court interprets the Constitution, determines the constitutionality of laws, and resolves disagreements between local and federal authorities. The remaining
courts are each divided into three jurisdictions: criminal, civil, and military. The Court of Cassation is the highest court of appeal and consists of 11 members appointed by the People's Assembly and serving 7-year terms. The President of the Republic chairs the High Council of Justice (HCJ) charged with appointing and dismissing other judges. The HCJ was expanded in late 1997 to comprise 13 members from among the various branches of government.

A college of three judges renders Albanian court verdicts; there is no jury trial, though the college is sometimes referred to in the Albanian press as the "jury."

Administrative Divisions

Albania is divided into 12 prefectures. Prefects are appointed by the Council of Ministers. Each prefecture comprises several districts (Rreths), of which there are 36. Each district has its own local administration and governor. District governors are elected by the District Council, whose members are selected from party lists made public to voters before local elections, on the basis of proportional representation. City mayors are directly elected by voters, while city councils are chosen by proportional representation.

Albania maintains an embassy in the United States at 2100 S Street NW, Washington, DC 20008 (telephone: 202-223-4942; fax: 202-628-7342).

ECONOMY

The collapse of communism in Albania came later and was more chaotic than in other eastern European countries and was marked by a mass exodus of refugees to Italy and Greece in 1991 and 1992. Attempts at reform began in earnest in early 1992 after real GDP fell by more than 50% from its peak in 1989.

The democratically elected government that assumed office in April 1992 launched an ambitious economic reform program to halt economic deterioration and put the country on the path toward a market economy. Key elements included price and exchange system liberalization, fiscal consolidation, monetary restraint, and a firm income policy. These were complemented by a comprehensive package of structural reforms including privatization, enterprise, and financial sector reform, and creation of the legal framework for a market economy and private sector activity. Most prices were liberalized and are now at or near international levels. Most agriculture, state housing, and small industry were privatized. Progress continued in the privatization of transport, services, and small and medium-sized enterprises. In 1995, the government began privatizing large state enterprises.

Results of Albania's efforts were initially encouraging. Led by the agricultural sector, real GDP grew by an estimated 11% in 1993, 8% in 1994, and more than 8% in 1995, with most of this growth in the private sector. Annual inflation dropped from 250% in 1991 to single-digit numbers. The Albanian currency, the lek, stabilized. Albania became less dependent on food aid. The speed and vigor of private entrepreneurial response to Albania's opening and liberalizing was better than expected. Beginning in 1995, however, progress stalled, with negligible GDP growth in 1996 and a 9% contraction in 1997. Inflation approached 20% in 1996 and 50% in 1997. The lek initially lost up to half of its value during the 1997 crisis, before rebounding to its January 1998 level of 143 to the dollar.

Albania is currently undergoing an intensive macroeconomic restructuring regime with the IMF and World Bank. The need for reform is profound, encompassing all sectors of the economy. However, reforms are constrained by limited administrative capacity and low-income levels, which make the population particularly vulnerable to unemployment, price fluctuation, and other variables that negatively affect income. Albania is still dependent on foreign aid and remittances from expatriates abroad. Large scale investment from outside is still hampered by poor infrastructure, lack of a fully functional banking system, untested or incompletely developed investment, tax, and contract laws, and an enduring mentality that discourages bureaucratic initiative.

FOREIGN RELATIONS

Albanian foreign policy has concentrated on maintaining good relations with its Balkan neighbors, gaining access to European-Atlantic security institutions, and securing close ties with the United States. The crisis of 1997 spurred an intensive period of international involvement in Albania, led by the Organization for Security and Cooperation in Europe (OSCE). Italy hosted a series of international conferences and led a multinational force of about 7,000 troops to help stabilize the country and facilitate OSCE election monitoring. The United States has worked closely with European partners and various multilateral fora to ensure that international efforts are coordinated.

The Government of Albania is very concerned with developments in the ethnic Albanian province of Kosovo in neighboring Serbia, particularly in the post-Dayton agreement period. While maintaining a responsible and non-provocative position, the Albanian Government has made it clear that the status and treatment of the Albanian population in Kosovo is a principal national concern. Bilateral relations with Greece have improved dramatically since 1994. In 1996, the two countries signed a Treaty of Peace and Friendship and discussed the issues of the status of Albanian refugees in Greece and education in the mother tongue for the ethnic Greek minority in southern Albania. Tirana's relations with Macedonia remain friendly, despite occasional incidents involving ethnic Albanians there. Tirana has repeatedly encouraged the Albanian minority's continued participation in the government of F.Y.R.O.M.

Foreign Aid

Through FY 1998, the U.S. committed approximately $300 million to Albania's economic and political transformation and to address humanitarian needs. This figure comprises about 10% of all bilateral and multilateral assistance offered since 1991. Italy ranks first in bilateral assistance and Germany third. The EU has given about $800 million since 1991 and pledged $175 million in 1996-1999.

In FY 1999, the U.S. will provide $30 million through the Support for East European Democracy (SEED) Act, up from $27 million the previous year. The U.S. also will provide an agricultural commodities grant of $10 million. The $30 million Albanian-American Enterprise Fund (AAEF), launched in 1994, is actively making debt and equity investments in local businesses. AAEF is designed to harness private sector efforts to assist in the economic transformation. U.S. assistance priorities include promotion of agricultural development and a market economy, advancement of democratic institutions (including police training), and improvements in quality of life. The SEED funding request for Albania for FY 2000 is $25 million.

U.S.- ALBANIAN RELATIONS

The U.S. and Albania had no diplomatic relations between 1946 and 1991. Following the Albanian Government's lifting in March 1991 of restrictions on religious and political activity and on travel, the U.S. reestablished diplomatic relations with Albania. The U.S. Embassy in Tirana reopened October 1, 1991. Since 1991, the U.S. has maintained close relations with a series of Albanian Governments. The U.S. Government has provided more than $250 million in technical and humanitarian assistance to support Albania's political and economic development.

Principal U.S. Embassy Officials

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides Travel Warnings and Consular Information Sheets. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Consular Information Sheets exist for all countries and include information on immigration practices, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the country. Public Announcements are issued as a means to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas which pose significant risks to the security of American travelers. Free copies of this information are available by calling the Bureau of Consular Affairs at 202-647-5225 or via the fax-on-demand system: 202-647-3000. Travel Warnings and Consular Information Sheets also are available on the Consular Affairs Internet home page: http://travel.state.gov and the Consular Affairs Bulletin Board (CABB). To access CABB, dial the modem number: 301-946- 4400 (it will accommodate up to 33,600 bps), set terminal communications program to N-8-1(no parity, 8 bits, 1 stop bit); and terminal emulation to VT100. The login is travel and the password is info. (Note: Lower case is required). The CABB also carries international security information from the Overseas Security Advisory Council and Department's Bureau of Diplomatic Security. Consular Affairs Trips for Travelers publication series, which contain information on obtaining passports and planning a safe trip abroad, can be purchased from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954; telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647- 5225. For after-hours emergencies, Sundays and holidays, call 202-647- 4000.

Passport Services information can be obtained by calling the 24-hour, 7-day a week automated system ($.35 per minute) or live operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1- 900-225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648).

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled Health Information for International Travel (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a country's embassy and/or consulates in the U.S. (for this country, see "Principal Government Officials" listing in this publication).

U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register at the U.S. embassy upon arrival in a country (see "Principal U.S. Embassy Officials" listing in this publication). This may help family members contact you in case of an emergency.

Further Electronic Information

Department of State Foreign Affairs Network. Available on the Internet, DOSFAN provides timely, global access to official U.S. foreign policy information. Updated daily, DOSFAN includes Background Notes; Dispatch, the official magazine of U.S. foreign policy; daily press briefings; Country Commercial Guides; directories of key officers of foreign service posts; etc. DOSFAN's World Wide Web site is at http://www.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual basis by the U.S. Department of State, USFAC archives information on the Department of State Foreign Affairs Network, and includes an array of official foreign policy information from 1990 to the present. Contact the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S. Department of Commerce, the NTDB contains a wealth of trade-related information. It is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more information.

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