VZCZCXRO0163
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTI #0028/01 0111807
ZNR UUUUU ZZH
R 111807Z JAN 08
FM AMEMBASSY TIRANA
TO RUEHC/SECSTATE WASHDC 6544
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 TIRANA 000028 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR EUR/SCE 
 
E.O. 12958: N/A 
TAGS: ECON PGOV PREL AL
SUBJECT: THIS WEEK IN ALBANIA, JANUARY 4-10, 2008 
 
¶1.  (U) The following is a weekly report prepared by Embassy 
Tirana's local staff to provide political and economic context and 
insight into developments in Albania.  These updates will supplement 
post's DAR reports and reporting cables. 
 
---------------------- 
POLITICAL DEVELOPMENTS 
---------------------- 
 
¶2. (U) The Endgame: Working Together For NATO: Opposition leader and 
Socialist Party (SP) Chairman Edi Rama launched a striking 
initiative this week to enhance the country's efforts on NATO 
integration.  The Socialist Party presented a draft resolution that 
recognizes the importance of the April NATO Summit in Bucharest and 
offers maximum support and cooperation to the ruling majority to 
carry out necessary reforms. Recognizing the challenges Albania 
faces, the SP has apparently changed its strategy from boycott to 
cooperation.  The strong public confirmation of opposition support 
is an important step toward achieving these reforms before April. 
 
¶3.  (SBU) Parliamentary Speaker Jozefina Topalli publicly welcomed 
the announcement, and the two sides sat down almost immediately for 
a closed-door meeting, discussing concrete plans to expedite 
judicial and electoral reform, NATO Allies' top priorities.  We hope 
this will be the continuation of a series of small steps taken since 
last summer to create a new political climate, one that puts the 
national interest above partisan politics and gets down to the hard 
work of governing. 
 
--------------------------------------------- ----- 
"Great things are done by a series of small things brought 
together." - Vincent Van Gogh 
--------------------------------------------- ----- 
 
¶4.  (U) The Albanian Armed Forces - Leaner and Meaner: The Ministry 
of Defense has waged an active campaign to rid the country of 
massive stockpiles of weapons and ammunition ahead of the NATO 
enlargement summit in April 2007.  It recently retired over 1,000 
tanks and 7,000 artillery pieces, and withdrew from service a large 
arsenal of communist-era, Russian-made Mig planes. In July 2007, 
with funding from the Nunn-Lugar program, Albania was the world's 
first country to completely destroy its chemical weapons cache. 
Thanks to an increase in the defense budget, now reaching 2.07% of 
GDP, the Albanian Ministry of Defense is moving to purchase new 
weaponry that meets NATO standards. 
 
¶5.  (U) During the Cold War, Albania was one of the most heavily 
militarized countries in Europe with a communist regime that closely 
followed the Maoist model.  In a population about half the size of 
Baltimore's, Albania had over 100,000 people in uniform when 
communism collapsed in 1990.  Due to extensive military cooperation 
with the former Soviet Union and subsequently with communist China, 
Albania, a country roughly the size of Maryland, built a military 
arsenal that included over 1100 Chinese-made tanks, 152 planes, and 
a naval force of four Russian-made submarines.  The 
security-obsessed communist government also built over 700,000 
bunkers and tunnels to defend the country from attack.  Today, we 
see a military committed to lean modernization and the development 
of niche capabilities. 
 
--------------------- 
ECONOMIC DEVELOPMENTS 
--------------------- 
¶6.  (U) More Transparency, More Credit: The Bank of Albania opened a 
new credit bureau last week which will track consumers' credit 
histories.  Consumer loans have a short history in Albania, but as 
they have become more commonplace the need to track and manage 
credit histories has become more acute.  Governor Fullani said the 
main goal of the credit registry will be to encourage sound credit 
transactions by providing more complete information on consumer 
credit for all 18 banks in the system.  Commercial banks are now 
responsible for uploading credit information to the registry; in 
return, they have access to the database.  Individuals will also be 
able to access their credit history. 
¶7.  (U) The banking sector has come a long way since 1997 when the 
collapse of pyramid schemes led to massive turmoil.  Its most rapid 
development has occurred during the last four years with the 
introduction of large European banks, Austrian Raiffeisen Bank, 
Italian San Paolo Imi and Intesa, and French Societe Generale and 
Credit Agricole.  Public confidence in the sector has improved with 
performance - deposits have reached US $7 billion, 60% of the GDP. 
Loans have experienced the most spectacular growth, increases of 70% 
in 2005, 55% in 2006, and 50% in 2007, boosting the loan to GDP 
ratio to 24%.  Despite concerns over the stability of this rapid 
growth, these developments have boosted the role of the banking 
sector in economic development. 
 
----------------------------- 
THIS WEEK IN ALBANIAN CULTURE 
---------------------------- 
 
TIRANA 00000028  002 OF 002 
 
 
 
¶8. (U) There's a New Dean in Town: Albania's public universities 
held general elections this week to choose the schools' Deans and 
other leaders, as well as student representatives.  Some elections 
had been delayed over a year as the Ministry of Education and 
universities worked out new regulations for elections, rules that 
the schools charged involved too much government interference in the 
university structure, particularly regarding new criteria for who 
may run for office. 
 
¶9. (U) In some faculties, elections for Dean and Head of Department 
were unfortunately held with only one candidate, and it was only 
academia's older generation that qualified to run, dominating the 
ballots.  The current generational gap, a quirk of the fall of 
communism, leaves a lack of professors between 30 and 50 years old, 
and a distinctly different point of view from each side of the 
divide, particularly on issues of teaching methods, testing styles, 
and more generally regarding a communist mindset vs. a stronger 
western influence. 
 
-------------- 
THE FINAL WORD 
-------------- 
 
¶10. (U) No Means Yes - And How Much Did That Cost?: Savvy travelers 
understand that one should always grasp a few important cultural 
mores before arriving in a foreign country.  However, with a general 
dearth of information on Albania and a sparse selection of travel 
guides, the few American and Western European tourists here don't do 
a lot of homework.  They might be surprised then, when a shopkeeper 
shakes his head "no" is response to a request for a bottled water or 
Coca Cola (which might be in full view).  Most Albanians shake their 
head left to right to indicate "Yes" and forward and backward to 
indicate "No."  Confusion abounds for the uninitiated.  Another 
curiosity includes the "old Lek - new Lek" issue.  Albania devalued 
its currency around 1969 by 100%.  However, to this day, shopkeepers 
and waiters born long after this date bring a bill for $100 for 
lunch or $10 for two loaves of bread.  Those in the know see right 
away that they aren't being cheated - just charged in "old Leke." 
 
CRISTINA