Ardian Fullani: Medium and long-term development priorities in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Joint Press Conference with the Ministry of Finance and the International Monetary Fund Mission, Tirana, 27 September 2013. *  *  *  Dear Minister of Finance, Dear Mr. Ilahi, Dear media representatives, The past two weeks have seen very intensive discussions on the current situation of the Albanian economy, the state of public finances, the developments in the financial system, as well as on the country’s development perspective and management of economic policies, which should support Albania’s sustainable and long-term growth. As the Governor of the Bank of Albania, I am pleased to see convergence on a common and real diagnosis of the current situation, and also on many viewpoints about medium-term and long-term development priorities. I would like to share with the media several opinions of the central bank on these issues. Two days ago, at its monthly meeting on monetary policy, the Bank of Albania analysed the latest information on current and expected performance of the economy. I made public the conclusions of this analysis at a press conference following the meeting. However, I will telegraphically re-present our main conclusions to put our suggestions for the future into the proper context. The Albanian economy is suffering from cyclical weaknesses, which appear in the form of a weak aggregate demand and are reflected in low and below-potential growth of the economy.
We deem that there is room for other agreements with international financial institutions specialised in providing funds and assistance. Establishing collective public protection releases the financial system and businesses from setting up individual protection. Besides, it may be transformed into a necessary source of funds for the Albanian economy. •  Improving the business climate further and observing the contract enforcement. The business climate is a rather complex issue, but I would highlight two issues here. First, the payment of deferred budget liabilities as a priority. In spite of the financial cost, it is an important step for easing the debt burden in the economy and signalling the political willingness to guarantee contract enforcement. •  Second, the improvement of by-laws that regulate the collateral enforcement and write-off of bad debt from banks’ balance sheets. The definitive solution to this problem would signal to the banking system that Albania is a country where lending is safe. All these steps would stimulate the economic activity and restore economic equilibrium. However, the Albanian economy is also suffering from structural weaknesses, which restrict the growth rate. I would not like to examine this aspect in detail but I think it's reasonable to reiterate my message that Albania should speed up structural reform. It should be anchored to the EU convergence process and aim at adopting its best models and rules. Through public investment and economic incentives, it should aim at a more effective and competitive economic structure, capable of generating a rapid and sustainable growth.