During the last weeks, FIAA has been following with serious concern the situation created by the lock down and measures imposed to prevent further spread of the Covid-19 throughout Albania.
FIAA is aware that the business is living in critical moments and from many contacts with most of its members, FIAA has understood that this emergency situation has caused an unprecedented impact on their daily business. Business community is very concerned not only due to the current situation, but most of all from the uncertainty of the future. The main issue being faced now is how to deal with work force and related costs, and also with payments to be made to the state budget and to third party suppliers. This is even of a bigger concern for those businesses that are completely locked down, therefore, FIAA has continuously asked for the Government’s attention and requested their intervention.
After continuous communication with the Government of Albania, on April 14th, FIAA was represented by its Chairman in the Investment Council and had the opportunity to contribute with proposals for addressing this situation directly to Minister Denaj and other participants from International Organizations and Business.
FIAA’s proposals in the Investment Council Meeting
- FIAA thinks that a gradual startup of the economy is the best possible “medicine”for all businesses affected by the lock down, and the restart of the economy will help all sectors as it will give oxygen to all our lungs, and bring the revenues back which we are lacking at this very moment. The restart of the economy needs to take into consideration the public health since any sudden increase of the number of infections would trigger the reintroduction of stringent measures.
In the meantime GoA has announced a number of support measures, the latest ones on April 13th, 2020.
- Since March, many sectors are heavily hit, many businesses are completely locked down and in a very tense liquidity situation. A large portion of the staff of these businesses are left virtually without work, although they remain employed by their companies as most businesses presume that the lock down will only take some months.
However, in many cases the liquidity situation does not allow to pay full salaries any more, as no employer knows how long this situation will continue. FIAA’s concern is for the financial situations of the many employees affected.
FIAA proposes to GoA to consider introducing a short work support scheme like in many EU countries. Such scheme would mean paying to the employees for a period of three months 30% of their salaries and the social security associated with such 30%. This would limit the damage for the employees and help to preserve a minimum purchase power.
Specific Sector comments represented by the Foreign Investors Association:
- The Textile Sector is helped by a rapid switch to the production of masks. FIAA thanks Minister Ahmetaj for addressing this to the EU and for establishing any potential contact.
- The Oil Production Industry is in greatest difficulty due to a complete crash of demand resulting in a severe liquidity situation.
- An accelerated VAT Reimbursement would help all businesses in Albania, but in particular those which are closed completely. In addition, FIAA thinks that other measures may be considered.
- So far, Tax Prepayments are based on the profit of the previous year. This creates a problem, even if tax payments have been postponed as was announced on April 13th. For the vast majority 2019 has been a great year, but in 2020 revenues are heavily reduced since middle of March. To make prepayments based on pre-year profits is a heavy burden. Help on this will be appreciated. In addition, the volume of sovereign guarantee offered by GoA so far may be too tight to cover the demand for loan guarantees.
- Air Transport is currently completely shut down except for cargo traffic, but air transport is also hugely important for getting the economy going again, since not only airlines and airport depend on an open sky, but also the hotel and tourism sector need the air travel to survive. Without the air passengers the situation will continue to be depressed for tourism. Obviously, the reopening of air transport has to be done with the greatest precautions to avoid the re-import of the virus which we are fighting so well in Albania. And it requires not only the willingness of GoA to reopen the skies, but also of the Governments of all other partner countries, in particular the European Union have to agree to open the sky. It is worth working internationally on the reopening of the skies. The moment Mother Tereza Airport will reopen for scheduled passenger flights will be a great moment for the whole Albanian economy, the decisive signal that we have made it through the crisis.
- Finally, a suggestion how Tourism, Hotel Sector, Airlines and Airport can be greatly helped: If GoA would consider suspending for a period of one and a half years, until October 2021, the Border Crossing Tax of 10 EUR per departing passenger this will take a big financial burden away and greatly help the recovery not only of this sector but set an important signal for the whole economy.