U.S. Department of State
Background Notes: Albania, September 1996
Released by the Bureau of European and Canadian Affairs

Official Name: Republic of Albania

PROFILE

Geography

Area: 28,750 sq km, slightly larger than Maryland.
Cities: Capital -- Tirana (est. pop 312,220); Durres (100,405), Elbasan 
(87,711), Shkoder (82,097), Vlore (71,089).
Terrain: Mostly mountains and hills; small plains along coast.
Climate: Mild temperate; cool, cloudy, wet winters; hot, clear, dry 
summers; interior colder.

People

Nationality: Albanian(s).
Population: 3,413,904 (1995 est.).
Population Growth Rate: 1.16% (1995 est.).
Ethnic groups: Albanian 95%; Greek 3-4%; other 1-2%.
Religions: Muslim 70%; Orthodox 20%; Catholic 10%.
Languages: Albanian (Tosk is the official dialect), Greek.
Education: Years compulsory -- 9; Attendance -- 96.6% in urban areas, 
41.1% in rural areas; Literacy -- 72%.
Health: Infant mortality rate -- 28.1 deaths/1000; Life expectancy: male 
-- 70, female -- 77.
Workforce: 1.5 million, total. Agriculture 60%; Industry and 
Commerce 40% (1987).

Government

Type: Parliamentary democracy.
Constitution: An interim basic law was approved by the People's 
Assembly on April 29, 1991; a draft constitution was rejected by 
popular referendum in the fall of 1994 and a new draft is pending.
Independence: November 28, 1912 (from the Ottoman Empire).
Branches: Executive -- President (chief of state), Prime Minister (head 
of government), Council of Ministers (cabinet); Legislative -- 
unicameral People's Assembly (parliament); Judicial -- Constitutional 
Court, Court of Cassation, Appeals Courts, and District Courts.
Subdivisions: 36 Rreths (districts).
Political parties: Democratic Party (PD); Socialist Party (PS, formerly 
Albanian Workers Party); Republican Party (PR); Unity for Human 
Rights Party (PBDNJ, Greek minority party); Social Democratic Party 
(PSD); Democratic Alliance Party (PAD); Balli Kombetar (BK, 
National Front); National Unity Party (PUK); Social Democratic Union 
Party (PBSD); Christian Democratic Party (PCD); Democratic Party of 
the Right (PDD); Agrarian Party (PA); Ecology Party (EP); over 20 
other parties registered.
Suffrage: Universal and compulsory at age 18.

Economy

GDP: $2.35 billion (1995 est.).
GDP growth rate: 11% (1995 est.).
Income per capita: $660 (1995 est.).
Inflation rate: 1996 -- 17-20%; 1995 -- 6%; 1992 -- 225%.
Natural resources: Oil, gas, coal, chromium, copper, iron, nickel.
Agriculture (55% of GDP): Wheat, corn, potatoes, sugar beets, cotton, 
tobacco.
Industry (16% of GDP): Textiles, timber, construction materials, fuels, 
semi-processed minerals.
Trade: Exports (1995) -- $205 million. Major markets: Italy, the 
Former Yugoslav Republic of Macedonia, Germany, Greece, Czech 
Republic, Slovakia, Poland, Romania, Bulgaria, Hungary. Imports 
(1995) -- $679 million. Major suppliers -- Italy, the Former Yugoslav 
Republic of Macedonia, Germany, Czech Republic, Slovakia, 
Romania, Poland, Hungary, Bulgaria, Greece.
Exchange rate (Jan 1995): 110 lek (L) per US $1.

U.S.- ALBANIAN RELATIONS

The Government of Albania made tremendous progress in overcoming 
years of Stalinist totalitarianism, economic ruin and isolation. In 1992 
and 1993, under the programs of President Sali Berisha and the 
Democratic Party, Albania sought to establish the rule of law and 
institutionalize respect for human rights and fundamental freedoms in 
nearly every corner of society. Western observers have called for 
continued progress, especially in the areas of the judiciary and the 
free 
press, and the focus of U.S. policy toward Albania has been to 
encourage this reform and democratization.

For 45 years, Albania was one of the most closed and tightly controlled 
countries of the world, a one-party state ruled by a Marxist-Leninist 
dictatorship. During 1990, restrictions on travel abroad were 
liberalized, the ban on religious practice was amended, and multiparty 
elections were scheduled. In 1991, the Albanian government freed its 
political prisoners and made progress toward greater respect for human 
rights. Newly formed opposition parties won approximately one-third 
of the seats in the People's Assembly in the 1991 legislative elections. 
Following these reforms, the U.S. reestablished diplomatic relations 
with Albania in March 1991, and the U.S. Embassy in Tirana opened 
on October 1, 1991.

Since 1991, the U.S. Government has provided over $200 million to 
support Albania's political and economic transition. Assistance 
program initially consisted primarily of humanitarian assistance (food 
aid and medicine) and emergency supplies (fertilizer and school 
textbooks), but now focuses more broadly on transforming economic 
and political conditions.

Although relations with Albania remain good, they have cooled since 
May 1996, when international monitors observed serious irregularities 
in Albanian parliamentary elections, including intimidation, 
manipulation, and ballot fraud. Concern over the flawed elections has 
resulted in a thorough review of assistance projects in Albania, 
including military and assistance programs.

Principal U.S. Embassy Officials

Ambassador - Marisa R. Lino
Deputy Chief of Mission - Robert F. Cekuta
Political Officer - Lynn Gurian
Economic/Commercial Officer - Frank Yacenda
Consular Officer - Susan Lively
Administrative Officer - Ellen Sullivan
Public Affairs Officer - Charles Walsh

========================================
Historical Highlights

The name Albania is derived from an ancient Illyrian tribe, the 
Albanoi, from which many Albanians are thought to be descended. The 
Albanian name for their country is Shqiperia. Historically, Albania has 
been a nation subject to foreign domination except for a brief period of 
independence from the Turks 1443-1478. After the upheaval of World 
War I, Albania was re-established as an independent state largely 
through the efforts of U.S. President Woodrow Wilson at the Paris 
peace conference, and remained independent until Italy invaded the 
country in 1939.

After Italy's surrender in 1943, German troops occupied the country 
and were challenged by the communist-dominated National Liberation 
Front (NLF), which gained control in November 1944. Yugoslav 
communists were instrumental in establishing the Albanian communist 
party in November 1941, and the NLF regime became a virtual satellite 
of Yugoslavia until the Tito-Stalin split in 1948. Albania's hard-line 
brand of communism led to growing difficulties with the Soviet Union 
under Krushchev and came to a head in 1961 when the Soviet leaders 
openly denounced Albania at a party congress. The two 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, so it was withdrawn in 
November 1946. The U.S. had 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. But the close 
relationship faltered during the 1970s when China decided to 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. Enver Hoxha, leader of the Albanian 
Communist Party, decided to pursue an independent, 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. An 
interim basic law was approved by the People's Assembly in April 
1991, and the country is now working to draft a new constitution 
outlining the structure of its new democratic government.
========================================

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 had 
fallen by over 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 have been privatized. Progress has continued in the 
privatization of transport, services, and small and medium enterprises. 
In 1995, the government began privatizing large state enterprises.

Results of Albania's efforts have been encouraging. Led by the 
agricultural sector, real GDP grew by an estimated 11% in 1993, 8% in 
1994, and over 8% in 1995. Most of this growth occurred in the private 
sector. Annual inflation dropped from 250% in 1991 to single digits, 
although this may rise again due to continued deficit spending. The lek 
stabilized. Albania is no longer dependent on food aid. Farmers' small 
plots are being intensively cultivated, there are large numbers of new 
shops in the cities, and rural-to-urban migration is underway. The 
speed and vigor of private entrepreneurial response to Albania's 
opening and liberalizing was better than expected.

Relations with Albania's foreign commercial creditors are improving 
following a mid-1995 debt reduction agreement in which Albania, with 
World Bank assistance, wrote off its ruinous short-term commercial 
debt. Debt reduction should improve Albania's access to international 
commercial lending and increase its attractiveness to foreign investors.

The need for further 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 employment loss, price increase, 
and other actions which negatively affect income. Albania is still 
dependent on foreign aid and expatriate remittances from abroad. 
Large scale investment from outside is still hampered by poor 
infrastructure, lack of a fully functional banking system, untested or 
incompletely developed investment and tax laws, and an enduring 
mentality that discourages bureaucratic initiative.

The government has followed an expansionary fiscal policy resulting in 
an unsustainable budget deficit. Unemployment remains high, 
particularly in the cities and the northern districts, where there has 
been 
little economic activity except smuggling.

GOVERNMENT AND POLITICAL CONDITIONS

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

Principal Government Officials

President - Dr. Sali Berisha
Prime Minister - Aleksander Meksi
Foreign Minister - Tritan Shehu
Ambassador to the United States - Lublin Dilja
Ambassador to the United Nations - Pellumb Kula

President and Cabinet

The Head of State in Albania is the President of the Republic. He is 
elected to a five-year term by the People's Assembly using secret 
ballot, requiring a two-thirds majority of the votes of all deputies. 
The 
next election is expected in spring of 1997.

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;
--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 
Chairman's recommendation. The composition of the Council must 
finally be approved by the People's Assembly. 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 cabinet consists of sixteen ministers and nine state secretaries. 
The 
Social Democratic Union Party heads one ministry, and the Republican 
and Christian Democratic Parties hold state secretariats.

Legislature

The Kuvendi Popullor, or People's Assembly, is the law-making body 
of the Albanian government. There are 140 deputies in the Assembly, 
of which 115 are directly elected by an absolute majority of the voters 
and 25 are chosen by their parties on the basis of proportional 
representation. The Assembly has fifteen permanent commissions, or 
committees. Parliamentary elections are held every four years.

The parliament which emerged from flawed elections in May 1996 was 
led by the Democratic Party, which occupied 122 of the 140 seats. The 
Socialist Party won ten seats, but only one renegade party member 
occupied his. The ethnic-Greek-dominated Unity for Human Rights 
Party won three seats, and the right-wing Republican Party and Balli 
Kombetar hold the remaining five.

The Assembly has the power to:

--decide the direction of domestic and foreign policy;
--approve or amending 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;
--control the activity of state radio and television, state news agency 
and other official information media.

Judicial System

The judicial system is administered by the Ministry of Justice, which 
supervises the organization and functioning of the courts. Reforms in 
1990 re-established the Ministry of Justice (the Minister being 
empowered to overturn court rulings), and guaranteed defendants the 
right to an attorney. Further reforms were undertaken following 
international criticism of the unconstitutional removal of the President 
of the Court of Cassation (supreme criminal court) in 1995.

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; five elected by the People's Assembly, 
four appointed by the President. The Constitutional Court interprets the 
Constitution, determines the constitutionality of laws, and resolves 
disagreements between local and federal authorities.

Albanian court verdicts are rendered by a college of three judges; 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.

Military

Albania's defense forces consist of 72,500 persons in uniform (60,000 
army; 10,000 air force; 2,500 navy); the defense expenditure for 1995 
was estimated at 5,100 million lek. The paramilitary forces numbered 
13,500 (including an internal security force of 5,000 and a people's 
militia of 3,500). There is universal male conscription under which 
men serve for 12 months. Military ranks were approved by the People's 
Assembly and re-introduced in 1992.

Albanian Embassy

U.S. address - Suite 1000, 1511 K Street N.W., Washington, DC 
20005; Telephone: 202-223-4942; fax: 202-628-7342

FOREIGN RELATIONS

Albanian foreign policy has focused on maintaining good relations 
with its Balkan neighbors, gaining access to European security 
institutions, and securing close ties with the United States. 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 GOA has made it clear that the status 
and treatment of the Albanian population in Kosovo is a principal 
national concern. Governmental and public support for Kosovar leader 
Rugova and his Democratic League of Kosova (LDK) remains strong.

Bilateral relations with Greece 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 
mother-tongue education for the ethnic Greek minority in southern 
Albania. The situation of the Greek minority in southern Albania is 
calm. Albanians have done a great deal to assure the minority's rights, 
but more could be done, particularly in the area of education.

Tirana's relations with the Former Yugoslav Republic of Macedonia 
(FYROM) remain friendly, despite occasional incidents involving 
ethnic Albanians in the FYROM. A principal point of contention is 
Skopje's opposition to an Albanian-language "university" in the 
Macedonian town of Tetovo. Tirana remains convinced that a stable 
FYROM is essential to stability in the Balkans and has repeatedly 
encouraged the Albanian minority's continued participation in the 
government of FYROM. The GOA has been supportive of the presence 
of U.S. troops in the UNPREDEP contingent stationed near the 
FYROM's border with Serbia.

Foreign Aid

Through FY 1996 the U.S. has committed approximately $219 million 
to Albania's economic and political transformation and to address 
humanitarian needs. This figure comprises about ten percent of all 
bilateral and multilateral assistance offered since 1991. Italy ranks 
first in bilateral assistance ($421 million) and Germany third ($117 million). 
The EU has given about $664 million since 1991 and pledged $175 
million during 1996-1999 under the PHARE program.

In FY 1996, the U.S. provided $21 million through the Support for 
East European Democracy (SEED) Act, down from $27 million the 
previous year. The $30 million Albanian-American Enterprise Fund 
(AAEF), launched in 1994, began making loans to 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, and improvements in quality of life. U.S. 
programs no longer include humanitarian assistance.
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