Albanian economic paradox

In the last decade, this growth has had an average of 5.5% to 6% per year, seemingly the highest in the region. But did the Albanians increase their wealth with the same pace as the Balkan neighbors? IMF data show how much the Albanians have grown their revenues since 2000, based on the buying power.

Despite the highest economic growth in the region, the Albanian citizens grow their wealth slower than their neighbors, except Bosnia, which is plunged in ethnic conflicts and prolonged political destabilization. According to the IMF, some of our neighbors have increased the wellbeing of their citizens by 2 or 3 times more than Albania, despite their lower economic growth. Experts say that the economic growth doesn’t tell the whole truth, and this paradox can be explained in several ways.

First, the low level of initial revenues – Albania came out of the communist regime as the poorest country in the region, with annual revenues not bigger than 800 USD per capita.

Secondly, the wellbeing of the Albanian citizens is held down by the price increase rates, which are the biggest in the region.

The third reason is related with the population growth pace. A group of professors from the Economic Faculty made a study and found that Albania is 6% behind. According to them, for the Albanians to grow their wealth more than the neighbors, they need to have an economic growth of at least more than 7%.

20 years after Albania came out as the poorest post-communist state, the IMF says that the country will still hold this place at least for another decade.

Crisis blocks wealth growth

The last decade has been the best one for under development countries. The revenues increased with the fastest pace in history. China and India had the wealth of their citizens doubled every five years, due to the economic boom.

Some Balkan countries doubled their wealth for 8 to 15 years. Albania needed 12 years to double the revenues from 3900 to 7800 USD per capita. But this rate was before the crisis.

Now that the economic growth has slowed down, the citizens’ wealth will grow much slower in the entire world. According to experts, there are a few economies left in the world that could double their revenues for at least the next decade. China and India are two of them, expected to double their revenues in 7 or 9 years. Albania, which currently has an economic growth twice lower than before the crisis, will need 20 other years for the citizens to have their revenues doubled, at almost the same level as developed countries.

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