VZCZCXRO1456
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTI #0066/01 0251657
ZNR UUUUU ZZH
R 251657Z JAN 08
FM AMEMBASSY TIRANA
TO RUEHC/SECSTATE WASHDC 6596
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHTV/AMEMBASSY TEL AVIV 0040
RUEHJM/AMCONSUL JERUSALEM 0014

UNCLAS SECTION 01 OF 02 TIRANA 000066 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/SCE 
 
E.O. 12958: N/A 
TAGS: ECON PGOV PREL AL
 
SUBJECT: THIS WEEK IN ALBANIA, JANUARY 18 - 25, 2008 
 
REF: TIRANA 10 
 
¶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) One With the People: Opposition leader Edi Rama continued 
his "Dialogue with Albania" by talking to locals in an area that has 
traditionally isolated itself with its renegade policies, Lazarat. 
This small village is infamous for the illegal cultivation and 
export of cannabis - in spite of intermittent government efforts to 
crack down on this livelihood.  It has been used over the last 
decade as a political football by both left and right wing 
governments, though neither has managed to reign it in.  Rama tried 
a populist appeal this week to attempt to bring the village into the 
Socialist Party fold.  With careful rhetoric he avoided mentioning 
"growing weed" and concentrated on "growing together," emphasizing 
that "Young people should become the example for politicians, for a 
new politics completely different from the deafening and blinding 
one - completely different from the politics that does not provide 
jobs or schooling, leaving us without a future.  It must be 
different from the politics that is devastating the Albanian village 
and rendering the Albanian city an unlivable place." 
 
--------------------------------------------- ------ 
"As long as we are persistent in our pursuit of our deepest destiny, 
we will continue to grow. We cannot choose the day or time when we 
will fully bloom. It happens in its own time."  Denis Waitley 
--------------------------------------------- ------ 
 
--------------------- 
ECONOMIC DEVELOPMENTS 
--------------------- 
¶4.  (U) Time for tanglible results: "Every cloud has a silver 
lining" is proving somewhat true in the case of Albania's 2006-2007 
energy crises.  This winter's energy shortage became the driving 
force in accelerating reforms to promote investments in this sector. 
 The Prime Minister reviewed a record number of investment proposals 
for energy generation in 2007 and several previously derailed 
projects finally seem to be back on track.  Options vary from hydro 
and thermal power plants to renewable energy generation and long 
term strategies such as nuclear power.  The PM announced that in the 
not-too-distant future Albania will be an energy exporter rather 
than importer in the region, a goal which could be bolstered by the 
recent GOA nod to create the largest on-shore wind farm in Europe, 
with a total generating capacity of 500 MW.  A second undersea power 
cable has also been approved, a 400kV cable stretching across the 
Otranto channel under the Adriatic Sea, to allow electricity 
transmission between Albania and Italy. 
 
¶5.  (U) This focus on energy infrastructure is welcome news to 
common citizens who have become increasingly jaded by every new 
claim to solve the problem, only to be left the next winter - and 
sometimes summer too - without their basic needs being met.  In 
almost two decades the problem has remained unaddressed, without the 
construction of a single energy generation source and no 
comprehensive update to the crumbling infrastructure.  Albanians 
today are eager for tangible results. 
 
¶6.  (U) Albanian Micro Finance in Forbes Top 50: Forbes Magazine 
named BESA 43rd in its World's Top 50 Microfinance Institutions. 
The list includes just seven institutions from Europe, clustered in 
the Western Balkans.  Institutions were ranked according to the 
scale, efficiency, risk and return equally weighted for  overall 
ranking. 
 
¶7.  (U) BESA was the micro finance "pioneer," begun as a Soros 
Foundation urban micro credit project in 1994.  (Today there are six 
micro finance lenders in the country.)  BESA's assistance reigns 
where traditional banks do not, mainly in the agricultural sector, 
but also in support of women-owned businesses.  The average loan 
does not exceed US$4,000 and 55% of the loans are less than US$ 
3,000.  Through the end of 2007 BESA had granted 37,000 loans with a 
cumulative disbursement of US$194 million, creating thousands of new 
jobs since its inception. 
 
¶8.  (U) Heritage Foundation Index of Economic Freedom: The 2008 
Index gives Albanian a 63.3 point rating, moving up from the 66th 
place in 2007 to the 56th.  Albania's economic freedom ranks above 
the world average, but when it comes to freedom from corruption and 
adequate property rights Albania's score is among the lowest in the 
region.  PM Berisha won the 2005 general elections on a pledge of 
zero-tolerance against corruption, and has recently reiterated that 
 
TIRANA 00000066  002 OF 002 
 
 
the fight against the corruption and the informal economy will 
continue to be one his top priorities in 2008. 
 
¶9.  (U) Despite the government's efforts to tackle corruption and 
secure property rights, progress has been slow, with unsatisfactory 
results.  The GoA embarked on a number of fiscal and legislative 
reforms in 2007, including a flat tax to simplify tax administration 
and broaden the base of companies ready to join the formal sector 
from the informal.  Other measures have been more controversial, 
such as a minimal reference salary for calculating personal income 
tax, social and health contributions, a reference price for goods, 
and set profit margins for selected industries. The business 
community charges that these efforts undermine the free market 
economy and defy its core principles and have protested loudly over 
these changes. 
 
--------------------- 
DIPLOMACY AND CULTURE 
--------------------- 
 
¶10.  (U) The Right Person at the Right Time: Although it has a small 
population, Albania's pool of young talented nationals who began 
their careers as communism fell is growing in number and experience. 
 Tonin Gjuraj is one, Albania's current Ambassador to Israel.  A 
skilled diplomat, he is a sociologist by profession with a doctorate 
from Tirana University and M.A. in Society and Politics from the 
Central European University. 
 
¶11.  (U) Gjuraj has recently presented to Israelis the case for 
Kosovar independence, explaining that Kosovars want to establish an 
independent state, not a Muslim nation-state, as some regional 
journalists and opinion makers perceive.  In an article entitled 
"Kosovo Deserves Independence," published in the Jerusalem Post, he 
writes that "It is a fundamental mistake to equate religion with 
ethnicity."  (A misperception that is not limited to Albanians 
inside Kosovo's borders, see reftel: "Why Albania is Not a Muslim 
Nation").  He argues that "Kosovo Albanians are more European than 
any other neighboring country in the Balkans" and their independence 
has nothing to do with Islam.  Commenting on the article from his 
residence in Paris, the iconic (sometimes ironic) novelist Ismail 
Kadare stated: "It is rare in Albanian diplomacy that the right 
Ambassador happens to be at the right place."  Such appointments 
should multiply as the next generation wizens and matures. 
 
 
WITHERS