The Eastern European Economy in Context: Communism and the Transition

By David Turnock | Go to book overview
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6

NATIONAL PROFILES

Balkan countries

ALBANIA

Albania's communist government resisted reform and cast the country into a dangerous state of international isolation after the departure of Soviet and Chinese technicians in 1960 and 1978 respectively (Sandstrom and Sjoberg 1991). Fiercely nationalistic and fearful of foreign domination, Albanians found it hard to reconcile their political instincts with the economic reality of continuing external dependence (Biberaj 1990). With the highest rate of population growth in Europe, Albania had to struggle just to stop the very low living standards falling even further behind the average for Europe. Drought during the late 1980s (through a succession of dry winters) reduced agricultural output and also eroded the effectiveness of hydropower projects, while export performance stagnated: at the time trade was transacted mainly with near neighbours (Bulgaria, Italy, Romania and FRY) along with France, Germany and Poland, exchanging minerals, electricity and agricultural produce for raw materials and capital goods. Until May 1990 the country's constitution officially forbade any sort of foreign investment and even credits were ruled out. However, after Hoxha's death in 1985 the country began to move slowly away from the constitutional position of 1976 and money was borrowed to finance foreign trade deficits, although servicing became a problem with the stagnation of the late 1980s (Hall 1994).


Momentum for revolution

With no sign of economic reform and a lack of external assistance, the outlook for the 1990s was depressing. The plan for 1990 'showed little sign of having been prepared by people with a knowledge of real economies' (Milivojevic 1991, p.7). The fall of N. Ceausescu in Romania sent a shock wave through Albania and activated the country's alienated young people who obtained information through Greek and Italian television broadcasts. There was unrest in Shkoder continuing into the New Year, and other towns (such as Durres, Tirana and Vlore) became involved. The government used

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