[abe-forum] privatization

[Edi Bice]

              *** Albanian Business and Economics Forum ***


Dear Etta:

> We all know what the benefits Liberalization and Open Economy. IIn the case
> of Albania though I think we have un unprecedent case where we are
> importing all the vegetables and fruits from Macedonia as well as light
> industry products from Bulgaria while our farmers can't get to the Albanian
> Markets for lack of infrastructure.

I don't think that enacting protectionist laws will improve the
infrastructure. While infrastructure is crucial, that is not what is
holding the farmers back right now. I believe it is the low productivity,
small lot size, lack of business skills and organization. It's been a few
years now, but I remember clearly that there were enough transportation
facilities which due to lack of skills were underutilized. I used to go to
school in Tirana from Pogradec, and I remember how the taxi drivers fought
for passengers. I have worked with a Dutch organization that started a
semi-cooperative in the mountainous villages of Pogradec. Once there was
some kind of management in place, it was so much easier to get the seeds,
and other needed things, and then eventually bring the produce to the
market.

> So we have this situation: The government does not give credit to farmers

I understand how much this affects their ability to grow, but on the other
side it is a much needed period for both sides. The state banks need to
restructure before they squander any more of the people's money in bad
loans, and the small businesses need to understand how precious those
loans are. Albania needs more business owners who build their businesses
through their frugality. It's a valuable lesson from the 'Asian Tigers'
crisis. 

> As a consequence qe import all and evey food. I think this is unacceptable.
> And just to remind you countries as U.S and France have heavy protectionist
> laws for agriculture.

That is simply due to the strong lobbying from the farmers. It doesn't
mean that it is the right thing.

> We all know the theories that a country should produce what he is most
> efficient in and import the rest. What happens if a country is not
> efficient in producing anything? And if we do not produce anything how are
> these people suppose to live?

As I mentioned above Albanians do not lack the ability to become efficient
in what they do. There are many obstacles to overcome but protectionism
will do more harm especially in the long term. Look at how entrenched
protectionism is in America and how hard it is for the current
administration to do away with it (NAFTA etc.)

> I did read that news from the BA regarding the credits. It is simply not
> true. Just the usual propaganda. Since the last year of the DP ruling all
> the credits are frozen and as far as I know only foreign foundations like
> FEFAD and FSHZH and some others give credits 9but not the banks unless you
> are sb with STRONG links)

I have also read about the applications without accompanying business
plans and other basic neccessities. Maybe some of these businesses
shouldn't be financed. It takes two. Banks should learn to be less rigid
(can't apply Western standards in Albania yet), but business owners should
take bankruptcy and default more seriously, consider carefully how they
will pay the loan back and prove it to the banks. I have also read that
the banks grant loans mostly to businesses that pay back quickly --
basically trade transactions -- which supports their riskiness concern.

Anyways, I wrote the last part rather hastily, so no real 'thought
processes' were at work. I could be completely wrong about all this, which
is the best thing about this discussion: learn.

It's been very interesting. I wish I had more time.

regards,
edi