Albania's Transition to Capitalism

By Emadi, Hafizullah | Contemporary Review, May 1999 | Go to article overview

Albania's Transition to Capitalism


Emadi, Hafizullah, Contemporary Review


The persecution and flight of the 'ethnic Albanians' in Kosovo and the consequent NATO attack on Serbia at the end of March have once again drawn the world's attention to the Balkans. The small country of Albania is crucial to any settlement of the Balkan question, especially since hundreds of thousands of 'ethnic Albanians' have fled there and have been received with such great generosity by the poorest country in Europe. A recent article in Contemporary Review (March 1999) dealt with some aspects of Albania's problems. To understand present-day Albania it is necessary to explore its immediate socio-economic past.

Socialist development thought in the last few decades was influenced by the articulation of endogenous forces as the prime factor in socio-economic transformation. Proponents of this thought underestimated the prowess of international capital in integrating peripheral and semi-peripheral social formations into the fabric of the capitalist world economy. Political changes in the Soviet Union in the late 1950s gradually but certainly transformed socialism into bureaucratic state capitalism, which patterned the socioeconomic strategies of its East European bloc on its model of development. Since then, state capitalism has failed to achieve parity with Western economies. This necessitated profound changes in the entire structure of the command economy and rigid social and political structures. Soviet leader Mikhail Gorbachev initiated Perestroika and Glasnost in order to restructure the Soviet economy. The reforms not only contributed to the disintegration of the Soviet Union but also inspired political and economic changes in Eastern Europe. The last bastion of Marxist regime fell from grace in Albania in 1992.

Albania was the most backward country in Europe before World War II. It was occupied by the Italians and then by the Germans during the war. The Communist Party of Albania, later known as the Party of Labour of Albania (PLA), founded in 1941, mobilized and organized peasants, workers and the nationalist forces, and led a successful partisan war. Liberating the country in 1944, the PLA ruled Albania until 1992. The Communist state nationalized basic means of production in order (a) to eliminate the power base of feudal and capitalist social forces, (b) to consolidate the domination of the blue-collar workers, and (c) to lay the foundation for a socialist society. In 1970 the state declared that it had succeeded in completing the electrification of entire villages and by the end of the 1980s Albania was processing domestically most of its minerals and producing its own machinery and industrial equipment and tractors. Economic development and industrialization also brought about an improvement in the living standards of the people.

Before the Second World War the state of the health services in Albania was very poor. There were ten hospitals and public health centres throughout the country, with only one doctor for 8,527 patients. After the war health systems were improved and new hospitals and public health centres were built. In 1978 the number of hospitals and public health centres reached 763 and the number of patients per doctor was reduced to 687 persons. The state provided health insurance and medicine and other hospital related services free and exempted Albanians from paying any kind of taxes.

Prior to World War II Albania's population was estimated to be one million. It rose to 3,273,131 by 1990 and life expectancy from 38 years before World War II to 72 years for male and 78 years for females. Despite this modest progress, infant mortality still remained relatively high. Modernization and industrial development required labourers to raise their technological and managerial skills. To achieve this the state provided free education to Albanians. The educational gap between men and women narrowed to the extent that by 1984 girls made up 45.3 per cent of primary and 42. …

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