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The Process of Alleviating Poverty in Albania

Poverty in Albania
After the fall of its communist government in 1991, significant political, social and economic challenges confronted Albania. Albania is a country that lies on the Mediterranean Sea and borders Greece. The fall of the Communist Party left the country with high levels of extreme poverty that it needed to address quickly. As the government has transitioned to a constitutional republic and the centrally-planned economy has shifted to an open-market structure, it has also implemented considerable economic plans and reforms. These reforms partially alleviated the severity of the poverty much of the population faced before 1992, but poverty in Albania continued to be a challenge as the country moved forward.

Understanding Poverty in Albania

  • Privatization and a new legal framework were some of the key reforms the government implemented in 1992 that helped to increase the Gross Domestic Product (GDP) and strengthen the economy. The privatization of agriculture, which employs 40% of the population, particularly helped alleviate poverty in the rural areas where it is most prevalent. The new legal framework lowered poverty in urban areas by encouraging the private sector activity necessary for an open-market economy.
  • Consistent low-income levels and low administrative capacity are limitations to the success of economic reforms in Albania. The low-income population is particularly susceptible to price fluctuations and unemployment. For this reason, inflation in 1996 and 1997 caused a downturn in the economic growth the country had experienced earlier.
  • Fluctuations in the global economy impact the level of poverty. Remittances – money that Albanians working mostly in Greece and Italy sent back to the country – are a significant component of economic growth. After the 2008 financial crisis, remittances decreased from 15% of the GDP to 5.8% by 2015. Simultaneously, the poverty level in Albania increased from 35.8% in 2008 to 38% in 2017. This definition is the percentage of the population living on less than $5.50 per day, the poverty threshold for upper-middle-income countries. The World Bank classifies Albania as an upper-middle-income country.
  • Low-skill occupations, including agriculture, require lower levels of education and offer little job security yet employ the majority of the working population living in poverty. Those workers then have limited skills relevant to other types of higher-income labor and have constrained potential for social mobility.

Efforts to Alleviate Poverty in Albania

  • Recent growth in labor-intensive sectors has increased the number of potentially higher-income jobs available to Albanians and raised the GDP. Available jobs in textiles, tourism, trade and administrative services have been on the rise since 2013 and contribute to greater economic stability. Tourism, for instance, is one of the fastest-growing industries in Albania. In 2019, the number of foreign visitors increased by 8.1% in comparison to 2018.
  • International investments and donations have grown in recent years. The government has attracted international interest by taking the initiative to encourage economic growth by improving roads and rail networks and introducing plans for economic and legislative reform. These reforms primarily focus on strengthening tax collection and increasing public wages and pensions. They have been successful thus far and the World Bank estimates that the poverty rate has lowered to 37% as of April 2020.
  • Public debt remains high and a potentially significant barrier to the constant growth necessary to sustain Albania’s economy and keep the poverty level steadily decreasing. Although the debt requires a strong fiscal policy response by the government to avoid economic shocks, it has shown a promising 3% decline rate from 2015 to 2018.

Albania’s Partnership with International Organizations

Although not yet a member, Albania received EU candidacy status in June 2014 and officially adopted the Sustainable Development Goals (SDGs) in 2015. Furthermore, Albania’s government released its National Strategy for Development and (European) Integration 2015-2020 in 2016. It also partnered with the U.N. in Albania to release the Programme of Cooperation for Sustainable Development 2017-2021, a comprehensive plan for sustainable development and alleviation of poverty.

The U.N.’s work in alleviating poverty in Albania and its partnership with Albania’s government has proven to be successful as it has helped achieve sustainable economic development through various reforms. The poverty rate in Albania has shown steady signs of decrease since its peak in 2014. The international community is also supporting the government’s steps to combat poverty in Albania. After a devastating earthquake in November 2019 hindered ongoing efforts for infrastructure improvement and other reforms, Albania’s government received €1 billion in assistance from several international donors during a conference in February 2020.

The U.N. in Albania is just one of the organizations working to fight poverty in Albania through collaboration with the government and other civil society and private sector organizations. Among its goals are Albania’s integration into the EU and the achievement of the U.N.’s Sustainable Development Goals (SDGs), which should stabilize the country’s economy and ultimately lower the poverty rate.

Looking to the Future

The onset of COVID-19 could strain the government’s resources and ability to continue with these reforms to alleviate poverty in the immediate future. However, the U.N.’s work in Albania, support from international donors and stronger commitments from the government to lower the poverty rate point to an optimistic future of long-term development. This should subsequently lead to economic growth and a steady decrease in the rate of poverty.

– Isabel Serrano
Photo: Flickr

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Drugs and Poverty in Albania: What it Means for Europe


On December 1, 2016, the BBC reported that Albania’s clandestine drug industry may be producing almost half of the nation’s total GDP on a yearly basis. The recent aspiration of the Albanian government to become admitted into the European Union, though, has successfully and drastically accelerated efforts to crack down on the mafias, corruption and poverty in Albania which allow these occurrences to take place.

But first, the events beg the question: how has the situation gotten so bad? Albania has been stable in recent decades, although not on a large enough scale. For instance, while the capital of Tirana had seen significant growth in services and order, most of the rest of the country was neglected. Poor and impoverished citizens in the rural regions were left to fend for themselves – and found a better life through the growth of illegal drugs. These are just a few examples of the effects of poverty in Albania backed by research.

In response to this, Prime Minister Edi Rama showed eagerness in establishing prosperous policies and projects. For instance, the government of Albania is attempting to curb issues mentioned heretofore by providing financial services to rural areas, establishing consumer protection and promoting tourism throughout the nation. Also, police salaries have risen between 10 and 17 percent to steer away bribery.

Of course, more turbulent methods are also being pursued — Rama has promised to deal with the more aggressive concerns by expanding currently existing assets. With the help of the Italian government, and significantly more senior officers, keeping track of and attacking these illicit organizations has become easier. For instance, Rama oversaw the besiege of Lazarat in 2014, a village in southern Albania, where civilians ineffectively utilized military-grade weaponry against police.

At this rate, the flow of certain drugs throughout Europe should significantly decrease since Albania is one of the root causes of this spread. Today, Albania has opened up more government jobs to citizens while it also works to rebuild and refurnish once-neglected regions. Programs to promote rehabilitation are also a must to not only help in reducing poverty in Albania, but to also further the nation as a whole. As a result of these efforts, Rama hopes Albania will be accepted into the EU in the early 2020s.

– Kristopher Nasse

Photo: Flickr

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Why is Albania Poor?

Poverty in AlbaniaAlbania, located on the Mediterranean Sea across from southern Italy, is one of the poorest countries in Europe. Why is Albania poor, though? It is important to discuss not only the causes of poverty in Albania, but also the standards for poverty in Albania.

After World War II, Albania became a communist state under Stalin’s regime, but was not part of the Soviet Union. In 1989, communist rule in Europe collapsed and in 1990, independent political parties in Albania formed. By 1992, the Democratic Party won elections, officially ending communist rule in Albania after 47 years.

Why is Albania poor? The country’s transition from a communist regime to a free market in a democratic republic has disrupted economic growth and has caused high levels of poverty. Most of the poverty in Albania is considered deep, whereby incomes are below minimally acceptable standards, people struggle to meet basic needs such as food, clothing and heating. Albanians face poor public services and inaccessible social services. Many citizens who do not face poverty in terms of income still are threatened by it.

The standards for poverty in rural and urban areas, however, are different based on circumstances. According to estimates from the World Bank as of 2013, 25-30 percent of Albanians in rural areas live in poverty, while about 15 percent of Albanians living in urban areas live in poverty. These statistics are relative to the conditions of the rest of Albania’s rural and urban populations.

The majority of rural families live in the mountains and the uplands. The main determinants of rural poverty are farm size, livestock holding and off-farm income. About 25 percent of the rural population lives on a farm that is too small to provide a sufficient level of subsistence.

Urban poverty has different characteristics than rural poverty. Urban poverty in Albania is concerned with the education level and the employment status of the head of the household, the number of children in a household and the number of dependent generations in a household (if there are grandparents or grandchildren). As more Albanians migrate out of rural areas into urban areas, poverty starts to become concentrated in more rural, mountainous areas.

Albania has made recent strides in poverty reduction. The country’s main production resources — agriculture and construction — have been privatized. The reduction of state involvement is especially important in agriculture, which is now mostly privately owned. Additionally, the liberalization of prices, trade and foreign exchange has helped the economy grow. The World Bank classified Albania as an upper middle-income country as of 2010. The percent of Albanians below the poverty line has decreased dramatically, from 25.4 percent of citizens in 2002 to 14.3 percent in 2012.

In 2009, Albania applied to join the European Union and was confirmed as a candidate in 2014. Albania is not expected to join the EU until 2020, however, as the EU has urged Albania to tackle corruption and organized crime, especially relating to trafficking of humans and drugs.

Though Albania has historically ranked as the poorest country in Europe, poverty in Albania is slowly starting to decrease. Albania’s transition from a post-Cold War economy into a viable EU candidate proves that this country has the potential to transition out of extreme poverty, and may no longer need to provide an answer to the question, “Why is Albania poor?”

– Christiana Lano

Photo: Flickr