Subscribe to our newsletter

Fostering Regional Cooperation

Over the course of nine years, Albania increased the value of its trade with Western Balkan countries fivefold, thus demonstrating how much it values regional cooperation in practical terms

Albania has been following and maintaining a standard when it comes to regional cooperation, as a country that’s always among the first to adopt and implement legislation aimed at reducing border barriers and tariffs, but also eliminating red tape or excessive procedures, in order for the customs clearance process to run smoothly. With 49 acts implemented, CEFTA statistics confirm that Albania has the made the biggest legislative changes.

Through initiatives like the Berlin Process and Open Balkan zone, our country has implemented a series of reforms, such as reducing waiting times at borders, recognising the exchange of phytosanitary certificates, harmonising professional qualifications and providing for the free movement of workers. The Balkan Barometer clearly shows that exporters from Albania, Kosovo and North Macedonia have found it easier to export to CEFTA 2006 than to the EU. Albanian exporters find this region more compelling because they are geographically closer and the costs are lower than exporting to the European Union. Moreover, the structure of exports, which are composed entirely of raw materials and agricultural products, ensures that they can easily enter the Serbian market, for example, which still relies on heavy industry.

The most important figure showing the importance of regional cooperation for Albania is the trade balance with CEFTA countries. We started with a huge foreign trade deficit in 2013, but nine years later, in 2022, Albania had created a surplus and increased the value of its exports fivefold. From exports worth 188 million euros, we last year exported goods worth 686 million euros to CEFTA countries and imported goods worth around 609 million euros, generating a surplus of 77 million euro.

Twenty per cent of Albanian exports went to CEFTA countries in 2022, while that total was only 11% back in 2013. The greatest increases in trade have been recorded with Kosovo and Serbia. CEFTA figures show that, from 2013, goods imported to Albania from Serbia increased from a value of 108 million euros to 270 million euros. Over the course of nine years, our trade only reduced with Bosnia-Herzegovina, while it increased with all of the other five countries with large margins, ranging from 50–76%.

The Balkan Barometer clearly shows that exporters from Albania, Kosovo and North Macedonia have found it easier to export to CEFTA 2006 than to the EU

Albania provides a major contribution to regional cooperation with initiatives like the “One Stop Shop” and the Balkans Trade and Transport Facilitation project. This project was initially launched in 2010, with the help of the World Bank, and is now being renewed by the Albanian government, under the scope of the socalled 2.0 proposal. In this phase, Albania hopes to create more efficient Green Corridors and to further digitalise its customs clearance services. The mutual recognition of Authorised Economic Operators is also a big step in this direction. Businesses are certified by Albanian institutions and offered a dedicated customs clearance service.

Meanwhile, the “One Stop Shop” concept has been implemented with Kosovo, Montenegro and North Macedonia. Its main aim is for there to only be one stop at the border. This initiative has shown that it can cut waiting times for haulage vehicles, and also the costs for businesses, by half. That figure was confirmed by the Balkan Barometer and the business climate survey that it conducted in 2022. According to the associated report, Albania also appears to have the quickest customs clearance process for imports among the countries of the region, with nearly half of non-exporters completing it in as little as two days.

Albanian enterprises are also encouraging and benefitting from another regional initiative: the movement of citizens around the region with the use of only personal ID cards. Respondents from Albania and Kosovo are the most enthusiastic supporters of the plan, with 88% and 76% support respectively, according to Regional Cooperation Council. Businesspeople from Albania are also the top supporters of initiatives to hire people from other Western Balkan economies, particularly Kosovo and North Macedonia, apparently owing to the lack of a language barrier. Albanian businesses also led the region in terms of innovation in 2022, with 40% of all products in the country developed for the first time.

When it comes to the regional performance strategy and the comparative advantages of the market, agriculture is the sector in which Albania remains highly competitive in the regional context. The latest World Bank data show that agricultural products account for 66% of Albanian exports to the EU, representing the highest percentage in the region. New investments are also being made to establish capacities to process products and thereby create higher added value for the economy.

Another sector where Albania plans to create a competitive advantage is the energy sector. The country’s parliament has approved the construction of a hydropower plant with a power generating capacity of 1GWH, which is one of the biggest projects in the region. We are also anticipating major oil discoveries by company Shell in the Shpirag oil field.

Albania provides a major contribution to regional cooperation with initiatives like the “One Stop Shop” and the Balkans Trade and Transport Facilitation project

Albania is also leading the region in terms of tourism and we expect to reach a record number of 10 million tourists for this year. According to Eurostat, Albania also become the top country in Europe and the third worldwide when it comes to the biggest increases in tourist numbers. Albania has doubled the size of its capital city’s airport, where two of Europe’s biggest low-cost carriers, Ryanair and WizzAir, are now competing and making our country even easier to reach. Works are also nearing completion on another airport in the suburbs of Vlora, a coastal city in the south of the country.

With a view to its strategic location, Albania has launched major infrastructure projects aimed at transforming the Port of Durrës and turning it into the main gateway of the Western Balkans to the Adriatic Sea and the markets of the EU. Projects include a railway from Tirana to the Montenegrin border and another one connecting Durrës and the Kosovo capital of Pristina, as well as a highway linking Tirana and Skopje. These will be connected directly to the “Dry Port” in Durrës, a facility that’s been created next to the port and where regional countries will be able to clear goods without having to subsequently stop for control at the border check-point.

Real estate is another sector where Albania is projecting massive growth. Albania received FDI of 1.2 billion euros in 2022, the highest in the region, with 60% of that total relating to the real estate sector.

Albania also has one of the youngest and best-educated workforces in the region, contributing to its skilled labour pool and innovation, as well as competitiveness in various sectors.

Digitalising public services

The most prevalent word in Albania over the last five years has been “digitalisation”, and more specifically as it relates to public services. Efforts aimed at improving the business environment, simplifying regulations and streamlining administrative processes have been implemented in order to attract foreign direct investment and encourage entrepreneurship. The government has embarked on a journey of putting everything online and has presented an ambitious plan to become completely digital by 2030.

Must Read

INA Fuels Green Transition with €98 Million Renewables Investment

Croatian oil company INA is steering a green course with a €98 million plunge into renewable energy projects, marking a significant pivot from its...

Milica Uraz, CEO, Steel Impex

Transform Waste into a Valuable Resource