The Harvard University professor, Ricardo Hausmann, speaks about Albania’s progress on the prestigious newspaper “Project Syndicate”.
Venezuela’s former Minister of Economic Planning has been working closely with Albania as an adviser for reforms in the fiscal system, energy, industrial policies etc.
“Five years ago, Albania faced a truly ominous situation. With Greece and Italy reeling from the euro crisis, remittances and capital inflows were falling and the economy suffered a severe slowdown. The fiscal deficit ballooned to over 7% of GDP, financed to a large extent by arrears, as access to external financial markets had collapsed and domestic interest rates were sky high. Fast-forward to the present: the economy is growing at a robust 4.2% rate, led by double-digit export growth in agriculture, mining, manufacturing, energy, tourism, and business services”, the Hausmann writes.
According to Hausmann, the secret for this turn were the difficult reforms that the government undertook in cooperation with the international monetary fund, in order to keep public finances under control, but also for encouraging exports and the energy sector.
“To be able to grow in the midst of fiscal consolidation, something else has to pull the economy forward, typically exports. And exports are growing in Albania – where I have been leading a Harvard Center for International Development research effort since 2013 – not because of good luck, but thanks to a relentless effort to remove bottlenecks and seize opportunities”, says the Harvard professor, who adds that these innovative policies were seen in the local governments as well.
According to Hausmann, Mayor Erion Veliaj has increased Tirana’s municipality profits three-fold, making it one of the prettiest cities in the region.
Hausmann says that Albania seemed hopeless for most of its history, but now it has turned into a ray of hope for others as well.
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