- published: 29 Oct 2014
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The economy of Albania has undergone a transition from its communist past into an open-market economy in the early 1990s. Although the country is rich in natural resources, the economy is mainly bolstered by agriculture, food processing, lumber, oil, cement, chemicals, mining, basic metals, hydropower, tourism, textile industry, migrant remittances, and the informal 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. The country attempted to transition to autarchy, but this eventually failed. Attempts at reform began in earnest in early 1992 after real GDP fell by more than 50% from its peak in 1989. Albania currently suffers from high organised crime and corruption rates.
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 agriculture, state housing, and small industry were privatized. This trend continued with the privatization of transport, services, and small and medium-sized enterprises. In 1995, the government began privatizing large state enterprises. After reaching a low point in the early 1990s, the economy slowly expanded again, reaching its 1989 level by the end of the decade.
Albania (i/ælˈbeɪniə/ al-BAY-nee-ə, Albanian: Shqipëri/Shqipëria; Gheg Albanian: Shqipnia), officially known as the Republic of Albania (Albanian: Republika e Shqipërisë pronounced Albanian pronunciation: [ɾɛpuˈblika ɛ ʃcipəˈɾiːs]), is a country in Southern Europe. It is bordered by Montenegro to the northwest, Kosovo to the northeast, the Republic of Macedonia to the east and Greece to the south and southeast. It has a coast on the Adriatic Sea to the west, and on the Ionian Sea to the southwest. It is less than 72 km (45 mi) from Italy, across the Strait of Otranto which links the Adriatic Sea to the Ionian Sea.
Albania is a member of the UN, NATO, the Organization for Security and Co-operation in Europe, Council of Europe, World Trade Organisation, Organisation of Islamic Cooperation and one of the founding members of the Union for the Mediterranean. Albania has been a potential candidate for accession to the European Union since January 2003, and it formally applied for EU membership on 28 April 2009.