Politics scares foreign investors away
18/06/2011 08:00
Opposition protesters break metal barriers in front of Tirana municipality, physically clash with officers who throw tear gas 30/04 21:24
In the eyes of foreign investors, Albania is turning into an unsafe
country for starting or continuing a business activity. Media reports
more and more news about political stalemates with few chances of
resolution, while the business notes that the growing potential is
declining. Patrick Pascal, head of Foreign Investors Association
declared that the country is suffering an economic slowdown. Since the
end of 2010 and until today there have been many crisis and failing
enterprises.
“Food and services businesses are seeing less profit, and this affects their investment plans”, says Pascal, according to “Shqip” newspaper.
The head of the association lists some of private sectors that are being affected by the political crisis, except construction, mining and oil industries. According to him, the problems in this country cannot be solved only by the business, especially when the emigrants are not contributing as they used to.
“If the political situation remains unclear, with incidents like January 21st, it is clear that foreign investors prefer to postpone their arrival or even cancel it”, says Patrick Pascal.
He adds that the foreign business has supported Albania for many years, but the situation today is different.
“All that the business community wants, is to have a calm political climate, in order to enable enterprises to develop normally, by favoring employment and exports, pushing the long term development of the country further”, says the head of Foreign Investors Association.
For Pascal, the problems will be more difficult in the future, if the politics does not end the conflict now.
Bank of Albania reports a decrease of foreign investments, referring to its data for the first trimester 2011. According to the numbers that Bank of Albania published lately, the foreign investments decreased from two to three times, compared to the same period of one year before. More specifically, the net inflow of foreign capital that entered the Albanian economy through investments was 57 million EUR for the first trimester 2011, three times less compared to the 154 million EUR that entered in the first trimester 2010.
Bank of Albania states that in the first trimester there was seen an unusual phenomenon with the flux of foreign capitals. Foreign companies have returned back home the money that was transferred in Albania for investments.
“In the period January-March 2011, 173 million EUR entered Albania as foreign investments, but more than 115 million EUR were turned back home”, Bank of Albania notes.
These data show that the money of the investors have been transferred back, outside of Albania, exactly in February, after January 21st events. The foreign companies that operate in Albania returned to the origin source almost 94 million EUR.
A big part of these funds that were sent out of the country were not only the profits of foreign businesses, but investment portfolios planned to be used in Albania, which never happened.
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