Albania

Jessie Lu headshot

Jessie Lu

Former Research Assistant

Jessie Lu started at the Center for International Development’s Growth Lab as a Research Assistant in August 2019. Prior to joining the Growth Lab, she...

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Stock, D. & Zuccolo, B., 2019. Research Note: "One Village One Product" Programs, Growth Lab at Harvard's Center for International Development.Abstract
The One Village, One Product (OVOP) movement started 40 years ago in a rural Japanese prefecture, with the aim of helping small villages and towns develop by focusing on their local culture and resources. Since then the principles of the OVOP movement have spread to other countries, including Thailand, Malawi, and beyond. The varying levels of success across these different versions of OVOP suggest some lessons on how to best organize rural development programs that could be useful as the Albanian government embarks on its flagship 100+ Villages project.
Tim O'Brien

Tim O'Brien

Senior Manager, Applied Research

Tim O’Brien joined CID in 2015 and has worked on both Growth Lab and Building State Capability projects.

He has led growth diagnostic research...

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Center for International Development
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Ellis J. Juan

Ellis J. Juan

Economic Development Specialist

On January 1st, 2017, Ellis J. Juan retired from the IDB under the Bank’s retirement program. He now acts as an Independent External Advisor on...

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David Kennedy head shot

David W. Kennedy

Manley O. Hudson Professor of Law, Harvard Law School
Director, Institute for Global Law and Policy, Harvard Law School

The Case for the Albanian Investment Corporation

To support the growth strategy of Albania, to improve employment rates and the general well-being of its society, the Government of Albania (GOA) has been working since fall 2017 to develop a mechanism that could ensure timely preparation of needed investment projects and their financing under adequate conditions.

After a thorough due diligence process during 2018, and careful evaluation of different...

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Agritourism in Albania: Trends, Constraints, and Recommendations

Wine Tasting in Cobo Winery, Albania Albania is currently enjoying strong growth in both its agriculture and tourism sectors, but there is significant space for the acceleration of growth and job creation in both areas.

CID intern and Harvard Kennedy School student, Neetisha Besra, spent several months exploring recent developments in Albania at the intersection of these two sectors: agritourism. This exploration included working across numerous departments that are aiming to support the agritourism industry in Albania, traveling across the country to assess a range of emerging business cases, and traveling to both Italy and Greece to benchmark emerging trends in Albania against the development of mature agritourism industries in these two countries.... Read more about Agritourism in Albania: Trends, Constraints, and Recommendations

Besra, N., 2018. Agritourism in Albania: Trends, Constraints, and Recommendations, Growth Lab at Harvard's Center for International Development.Abstract

In Albania, the average specific expenditure by foreign tourists (non-residents) was 13.3% of GDP during 2013-2017, which clocked a 30% growth within the four-year duration. The number of foreign citizen arrivals in the first half of 2018 has seen an increase by 9.1%, as compared to the same period in 2017. "Holiday" is the second most popular purpose of their visit reported after "Others." Tourism being the largest industry since 1990, with Europe representing 42%3 of its total share, there remain huge economic dividends to reap for the emerging tourism industry in Albania. Moreover, this sector can generate non-farm employment in the agriculture sector. The challenge then is it to understand what is driving tourism growth in Albania, and what binds Albania’s tourism opportunities from growing faster.

The UN World Tourism Organisation (UNWTO) defines sustainable tourism as an enterprise that achieves a balance between the environmental, economic and socio-cultural aspects of tourism development for long-term benefits to recipient communities. The Government of Albania, led by Prime Minister Edi Rama, has identified Agritourism as a particularly inclusive and sustainable tourism opportunity and prioritized its development as a rural economic diversification tool within the country’s new "100+ villages Programme." Consistent with this program, the Ministry of Tourism and Environment (MoTE) has started certifying Agritourism businesses, while Ministry of Agriculture and Rural Development (MoARD) through the Albanian Rural Development Agency (ARDA) is in the process of funding Agritourism projects. It is essential to understand the emerging patterns within the sector to strategize appropriately supportive policies.

The Movements of citizens in Albania (INSTAT) report for June 2018 indicates a decrease by 13.3% in the number of foreign citizens’ arrivals as compared to June 2017. There is (month-by-month) erratic traffic of tourists and hence undefined tourism season for the country. The Government of Albania faces a dearth of tourism specific information, like in attractions visited most by tourists, or mapping of identified agritourism farms to make better policy judgements required for seasonal tourism preparedness.

Guven, D. & Miagkyi, M., 2016. Albania's Credit Market, Growth Lab at Harvard's Center for International Development.Abstract

Credit market activity in Albania has been sluggish in recent years in spite of low and declining interest rates. The economy lost its growth momentum after 2009. Investment and lending activity slowed down substantially despite low interest rates, relative macroeconomic resilience, and available capacity in the private sector to take on more debt. This study analyzes the supply (lenders’) and demand (borrowers’) sides of the market.

The reason behind the credit market failure is a supply-demand mismatch. Poor financial intermediation is the main problem on the supply side. Despite excess liquidity in the financial sector, banks are excessively risk-averse, bank practices and products are unsophisticated, and non-bank financial market is underdeveloped. Excessive risk aversion translates into tight credit standards, credit rationing and credit crunch for some economic sectors, in particular those dominated by SMEs. On the demand side, firms overall have a low appetite to expand, limited capacity to create bankable and financially viable projects, and are also constrained by infrastructural gaps and economic uncertainty. The mismatch results from the fragmentation of the credit market, with reliable borrowers from traditional sectors having easy access to finance, and other segments being almost fully deprived of credit.

Government and donor-led policies to mitigate the problem have had little success. Albania enjoys access to a number of domestic and external funding schemes primarily focused on alleviating funding constraints for credit-deprived sectors, but these programs have been ineffective. Further study is needed to understand the reasons behind the limited success of these programs.

A National Development Bank (NDB) could address some of the observed credit market challenges. While an NDB’s ability to directly resolve demand-side constraints would be limited, an NDB could effectively tackle supply-side constraints in the credit market as well as provide surveillance and collect information from the private sector, leverage technical assistance, and develop tailored financial products. Establishing an NDB should be considered carefully, taking into account functional, governance, funding, staffing and other risk factors.

Nedelkoska, L. & Khaw, N., 2015. The Albanian Community in the United States: Statistical Profiling of the Albanian-Americans, Growth Lab at Harvard's Center for International Development.Abstract

When the Albanian Communist regime fell in 1991-92, many Albanians saw their future outside the borders of Albania. At that time in history, no one anticipated the scale of migration that would take place in the subsequent two decades. Today, one third of Albania’s 1991 population lives abroad. Most of these migrants live and work in neighboring Greece and Italy. The third most popular destination is however the United States. Besides this new wave of migrants, the US has an old Albanian diaspora–the offspring of migrants who came to the US between the First and the Second World War. This is what mainly gives rise to the second generation Albanian-Americans.

To the best of our knowledge, there is currently no systematic documentation of the socio-demographic and economic characteristics of the Albanian community in the US. To bridge this gap, we use data from the American Community Survey 2012 and analyze these characteristics. The profiling could be of interest for anyone who focuses on the Albanians abroad – the Government’s Programs dealing with diaspora and migration issues, researchers interested in migration questions, the Albanian Community Organizations in the US or the diaspora members themselves.

We find that the first and the second generation Albanian-Americans have distinctive features. The first generation (those who arrived after the fall of Communism) is more educated than the non-Albanian Americans with comparable demographics. This is particularly true of Albanian women. The education of the second generation resembles more closely the US population with comparable demographic characteristics.

Despite the qualification advantage, first generation Albanian-Americans earn much less than non-Albanian Americans with comparable socio-demographic characteristics. We find that this is not associated with being Albanian per se but with being an immigrant more generally. The migrant-native gap narrows down with time spent in the US.

An important channel through which the current gap is maintained is qualification mismatch. We observe that first generation Albanian-Americans are over-represented in occupations requiring little skills and under-represented in occupations requiring medium and high skills, in direct contrast to them being more educated than non-Albanians.

When it comes to the earnings of second generation Albanian-Americans, the situation is more nuanced. The low skilled Albanian-Americans earn significantly more, and the highly skilled Albanian-Americans earn significantly less than the non-Albanian Americans with comparable socio-demographic characteristics. We currently do not have a straightforward explanation for this pattern.

The Albanian population in the US is highly concentrated in a few states: New York, Michigan and Massachusetts account for almost 60% of all Albanian Americans. The community in Massachusetts is the best educated; best employed and has the highest earnings among the three, but is also the oldest one in terms of demographics.

However, due to its sheer size (over 60,000 Albanian-Americans), New York is the host of most Albanians with BA degree (about 10,000). New York also hosts the largest number of high earning Albanians (about 1,800 earn at least $100,000 a year).

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