“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.
And of course we have the justice reform, which is something they are working on, which is very good for the country. I think in general the current government has quite some reforms on its agenda to strengthen law and order; the government is trying to be more prudent on law and order and on social security and healthcare for people – which for sure is good for the country.
At the same time, I think small businesses might be suffering because of the crackdown on law and order. But in the long term, we have to believe in strengthening institutions and law and order. Enforcing the law will actually help improve the businesses environment in Albania. These things need to be in place for Albania to grow even more in the coming years.
What are your growth expectations for the coming 1—2 years in Albania and what are the upside and downside risks to those expectations?
I think there was quite some growth in Albania some years back, which has slowed down for a number of reasons, including lower economic growth in Europe overall. There is a good opportunity for Albania to drive solid growth by developing its tourism industry, as well as other sectors; it’s a beautiful country that has a lot to offer, and there are a lot of modernization opportunities all over. It needs to develop its infrastructure to make it happen, though, and it needs money to get the infrastructure in place. When a country starting from a low base of GDP gets its institutions and acts together, there is in general a good opportunity to achieve strong GDP growth. I am looking forward to see that happen here in Albania.
What are some of the improvements you would like to see in Albania to attract foreign investors?
I think you need to see trust in institutions, trust in law and order, predictability that the government will implement things on time, and really setting out to implement the reforms they are planning in the legal system and the energy sector. If the process can be accelerated that would be really good for Albania and would certainly encourage investments in our sector.