Reflections for the consequences and opportunities post COVID-19 Pandemic
In my opinion, it should be noted that Covid’s drama is a two-time world crisis:
Firstly, a sanitary crisis with major health consequences
Secondly, an economic crisis with severe consequences for the economy and poverty in a large part of the population. The second part of the crisis can kill even more people than the pandemic virus.
We are living in a period where big changes will take place, perhaps the greatest changes of modern times. The crisis has catastrophic consequences, but it will also bring radical changes to the economic model, providing opportunities for industry players in Europe and indirectly in Albania.
I would like to bring up the reindustrialization movement in Europe, which is often emphasized at the moment. The Covid-19 brought to light a major weakness in France and Europe:
Lack of local production for basic products such as masks or gloves, and even the basic molecule for paracetamol that is no longer produced and must be imported from China. This deindustrialization originated in the 1980s, with the onset of globalization that intensified in the 1990s and the creation of the post-industrial economic model in Europe.Read More
“We have ambitious plans for our investment and we see the Albanian government as one of the closest partners to develop our strategy and business”
FIAA: Mr. Sun, this is your first year in Albania and also the first for the Geo-Jade Corporation. Who is GEO-JADE in China and where is your role consisting in the Acquisition of Bankers Petroleum in Albania?
Mr. Xingyun Sun: “Geo-jade Petroleum Corporation” is a company from China which has been expanding its investments remarkably in the last years. It was founded in August 1984 and is one of the first pilot enterprises in Hainan Province to launch public offering of stocks. Geo-jade Petroleum Corporation is foraying into Oil & Gas industry, throughout overseas acquisitions of oil and gas assets. The Company has conducted a strategic transition, which has strengthened the company’s capacity for sustainable development.
Currently in Kazakhstan the company holds 100% equity in both Maten oil company and Kozhan company, which are oil producing operators. Since the establishment, the company has always operated fully in compliance with business laws, as well as honestly and trustworthy. Geo-Jade Petroleum has won the best practice in the Belt & Road award on “2014 China cross-border investment Golden Whistle Award” , the economic cooperation achievement award issued by “Silk Road Fund for Peace” , and has also been awarded the “2016 top 100 enterprises in Hainan Province award” issued by “Federation of Hainan enterprises”.
As regarding to the investment in Balkan region, Bankers Petroleum is one of the most important Chinese investment and its now under the property of Geo-Jade Petroleum. We are very proud of our presence here with Bankers which is the largest taxpayer that represents 5% of Albanian’s GDP. Bankers has invested US$ 2 Billion in Albania, while more will be done by using modern technology and develop further the major asset of the country.Read More
“Important changes in the current business environment would be necessary to make Albania achieve in the near future double digits growth! “
FIAA: What are the core services that Deloitte Albania offers?
Mr. Caslli: Deloitte Albania offers a suite of exceptional quality services in Assurance & Audit, Tax, Legal, Financial Advisory and Consulting. Numerous private companies, non for profit organizations and public institutions rely on the opinions and judgements of Deloitte Albania auditors. Businesses from any industry can count on us to provide them with the most basic operational services such as bookkeeping and payroll; as well as less routine services such as advisory on M&A, valuation, debt and equity financing, restructuring, liquidation. Our tax and legal experts are leaders in ensuring compliance to and optimization of all applicable legislative and fiscal requirements, be they local or international. Another core service that Deloitte Albania offers is consulting in various areas – human capital, technology, strategy and operations.In a few words any business in Albania needs business advice to be able to offer top services.Read More
“Shell wants to assist building a thriving energy industry in partnership with the Albanian Government”
FIAA: What is your role and background?
Mr. D’Souza: Earlier this year, I was delighted to be appointed as the Country Chairman and Commercial Manager for Shell’s activities in Albania. I have previously lived and worked in numerous countries around the world including in Africa, Asia and Australia across nearly all of Shell’s business’s: Upstream, Integrated Gas, and Downstream.
What are your impressions of Albania?
I was thrilled at what a beautiful and pleasant country Albania is to live in. The country has incredible natural beauty that will undoubtedly make Albania a tourist haven. But perhaps the most notable thing is the positive transformation we see in Tirana itself – improving infrastructure and a thriving atmosphere. From a Shell perspective, we are also committed to the development of this beautiful country.
What is Shell’s upstream project in Albania?
Shell is currently appraising an oil and gas prospect called Shpirag near the city of Berat. We operate under a contract with the Albanian government. As a part of that Shell puts significant amounts of dollars upfront to fund the exploration and development – with significant risk to Shell as it is exploration after all. In the chance that we are successful, the benefit is then significantly shared with the Albanian Government.Read More
“As a small economy, although quite strategically located, stability remains crucial at all aspects, but more specifically as relates to laws and institutions”
FIAA: What is your impression of the current business investment climate in Albania?Read More
“An independent, functioning and reliable justice system is a basic element required for all!”
FIAA: During the first four years of the operation phase of the Ashta Hydro Power Plant, what have been the most significant challenges that you have had to overcome?
Mr. Dietmar Reiner: We have invested more than 200 Million EURO until end of 2012 to build a state of the art Hydro Power Plant. VERBUND and its partner EVN were the first large–scale private investors entering the Albanian Energy Sector. Due to the difficult situation in 2008, the time when the concession agreement has been signed, it was agreed with the government to enter into a long-term power offtake agreement. This agreement entered into force in April 2013, until June 2016 KESH was the off-taker, but then it was transferred to OSHEE. In the last four years there were a lot of challenges in the Albanian energy sector, especially in the downstream business, with the difficult situation in the distribution system and the supply to endcustomers. These difficulties also influenced our business; we were mainly suffering from payment delays which created for some periods huge arrears mainly to our lenders. Due to the background of our shareholders as large public utilities in the energy sector in Austria, the understanding of the situation and our belief in the success of the necessary reform in the energy sector, we and also our shareholders and lenders kept calm and focused during this time.Read More
“It is important that state institutions play a greater role in creating a business environment able to retain current investments and attract new ones”
FIAA: What is the IFC’s current long term finance investment strategy in Albania?
IFC was established in 1956 as part of the World Bank Group to support private sector investment in emerging markets to create jobs and raise standards of living. IFC’s financial products enable companies to manage risk and broaden their access to foreign and domestic capital markets. Our financial products consist of fixed and variable rate loans extended to the private sector, which finance both early-stage companies and expansion projects. IFC also makes loans to intermediary banks, leasing companies, and other financial institutions for on-lending. In addition to lending, IFC engages in equity investments that provide developmental support and the long-term growth capital the private sector needs. IFC invests directly in companies’ equity and also through private-equity funds.Read More
“Albania needs greater trust in law and order”
FIAA: During your time here in Albania, have you seen any change in the operating environment for foreign businesses in the country?
Mr. Larsen: Yes – several laws which have been passed, for example. I think the law on strategic investment is beneficial for investors that want to do business here in Albania. It gives businesses a one-stop window in terms of interaction with the government, and so on. We already have that kind of one-stop window in the energy ministry and in the project implementation unit which has been established in the Ministry of Energy, and I believe that the law on strategic investment should help all businesses.
The fact is that Albania is in a period of active reform and we are hopeful of seeing changes in the energy sector as a result. The whole energy sector is undergoing reform and the new energy law passed last year makes commitments to changes in the institutions, for example, liberalization of the market for power trading. We were originally expecting these things to be in place by now, but they will come. The government is committed to reform and it will make it happen. I think it will take some more years still before we have a fully functional power market here in Albania.Read More
“Justice Reform will contribute to creating a more predictable and transparent business environment in Albania”
Mrs. Vlahutin: Despite its dominant role in the economy, business is held back by significant shortcomings in the regulatory environment and the rule of law. To Business Operating in Albania, the challenges remain mainly related to judicial system, property rights enforcement, contract enforcement, fight against corruption and informality.
Whereas, Albania has great potential to develop in terms of its geographical position, natural resources, and relatively cheap labor force, it still has to improve labor skills, to improve trade logistics, reduce the regulatory burden to businesses and ensure law enforcement in order to increase its competitiveness and attract foreign investors.Read More