Address of Prime Minister Edi Rama to the Foreign Investors Association in Albania:

I had a speech prepared, but I will put it aside and focus on these 10 points that you have chosen to assess. And at first sight, these points tell a lot. I will start with a little story that the Minister of Economy told me today. He met yesterday with the Secretary General of the Greek Ministry of Economy. The Greek colleague was full of energy, he was very happy and very optimistic, and was telling that they had managed to save the Greek economy, and had a lot of energy because they had envisaged a 3% growth and in fact, the growth was less than -1 %.

Then, he asked our minister and he replied that we are not very satisfied. We feel motivated, but not for the same reasons. We foresee + 3%, but we have reached + 2.7%. So, the economy depends heavily on which angle you see and of course, if optimism heals, optimism is also the one who kills.

I am not very happy to see that the director of one of the most successful banks is moving in fact with liquidity and is here before you, saying that things are good and are on track, but … There should be no “but”, and if I saw this list, I would say in a few words that I am more than pleased to see these assessments, and perhaps this is the first time in my political life that I do not need to contest the polls. I think that the Europeanization of the VAT system and the speeding up of VAT refund by 50% is a high figure and a pretty big accomplishment.

This morning I saw a fantastic investment near Tirana, in a complex for the production of steel that transforms raw materials into several different types of steel products for the industry. They are moving quickly, and it was very clear that if they have been working in Albania for 10 nearly years, the last two years have been actually the most successful and rewarding for them. This is thanks to the VAT system and speeding up the VAT refund.

On the one hand, the abolition of VAT on imported machinery, and the direct reimbursement of VAT on the other hand. So, if someone looks at improvement, or makes a comparison with other countries with a better performance, such as Germany and possibly Italy, this of course has to be improved. If I do not forget that just two and a half years ago, VAT reimbursement was for all investors and businessmen the opportunity to be part of Dante’s hell as a teller, then we believe that we are in a right place.

While in terms of the liberalization and opening of the energy market, I’m not too sure if the data of this chart are accurate, but at the same time I will not oppose it, but will highlight that our government has paved the way to the liberalization of the energy market.

Our plan is to work, to move forward with a roadmap, and our goal is to have a fully liberalized energy market by 2018. As you know, we succeeded in changing many things in the energy sector. I know that if you were to give a mark on payments for energy consumption, it would be the highest.

In addition, in terms of the business community in this market, I would say that many things have changed for the better, and at the same time the public interest has been increasingly protected than it was before. There is no more a fierce competition on the basis of hundreds of concessions, which were transformed into transactions of illegal market. There are no more arrears in this sector at the expense of business, because 93 million dollars have been paid for the sold electricity, on the basis of those contracts that were not paid before.

Looking at the system of reference prices in taxes and customs, I know that we have still much to do, but we are working hard with our Italian friends, and our hope is that we will be finally able to have a solution for the data exchange. The lack of data exchange with the countries of origin for imported goods has been creating a heavy burden, and is giving more room for evasion. This is why reference prices do still exist. If we have a good deal, then I believe that we will succeed. At least, all the goods coming from the EU could pass with the reference prices, and then we’ll see how we deal with goods coming from China or elsewhere, where things are more complicated.

If we move on to the next point, which is a revision to the medium-term fiscal package in relation to mid-2014, I think that’s where we have a sound basis to move forward in a more efficient manner.

Another aspect relates to the prohibition of unfair subsidies, and to the discipline in charging public services. I believe this is right, and we have made progress in this field. However, we must continue the work, and actually we are very committed to stop all subsidies that are unfair to competition and to the efficiency of the system. At the same time, in terms of the payment discipline, there has been a lot of improvement, although there still remains a lot to be done.

In terms of focus on fiscal stability and macro-economic balance, I think that the grade should have been higher, although for me, for the Minister of Economy, the Minister of Transport and for many others, it is a painful issue, and the only happy person here is the Minister of Finance, but we know that this is the price we have to pay to have a serious economy and a serious functional state.

Another aspect relates to the implementation of good governance practices and European standards in the administration. Your figure is generous. I know that we need to improve further in this regard. In this regard, I would even say that we must fight with history, culture, mentality and with many years of total ignorance. I mean that no one has tried to invest seriously in improving the capacities of human capital.

We have started to do this in a systematic way. Our tax inspectors are cursing me, and I’m sure not just me, because they are required to be trained systematically, make tests and have their knowledge certified as appropriate to perform their work. However, we still have a lot of work to do. Thank you for your assessment.

To be honest, thanks to the online publishing of the progress of concessions, the new level of transparency is unclear to me, because you know we live in a country where concessions are being fought as if they were the devil, just as people fought religious beliefs once upon a time, when people were not allowed to attend churches and mosques which were blown up with dynamite. Thank God, time shave changed. I have to say that we are confident that what we should do in this regard is to continue strengthening partnerships with the private sector.

Our country has not increased the debt, and we do not want to raise taxes. Then, how else will we ensure the best investments for the improvement of services, if we don’t do this through public-private partnerships? I am convinced that these partnerships are well thought, well studied, and will result to be precise, in addition to being the right thing for the public interest. In this regard, I would like to emphasize that the partnership we are preparing to improve the VAT system will be very good for all of you, and will improve the issue of unfair competition.

Here [in the chart] a major focus has been given to competitiveness and investment promotion, and this is not good. But at the same time I must say that it has not been easy, and you know this very well. It is still not easy to convince foreign investors to take the risk and come to Albania, because the history of transition, even the most remote one, was not a good thing, and the image we have plays its role. However, we are increasingly encouraged by the good signs that we see and are reaching at the end of some projects, and we are confident that this year we will see the finalization of some very important contracts in terms of oil, tourism and other areas as well.

Finally, section 10 deals with the Competitiveness Council for Investors. The figure here is very high, because this is your council and you give yourself the highest grade, being selfish as you should be, and trying through this figure to tell us how much you have achieved in comparison with the government, and how fast you are moving compared with the government.

I would like to see the reality of lending to investors for projects. This would make me give you a mark 100%, if you did this. But we are still negotiating with banks, they are sleeping on liquidity and are finding every reason to not lend as much as they can and as much as they should. This is not helping, and I’m sure that if you want to find the best alibi, you do no need to ask the lawyer to find it, but rather a banker, because when they want to do something, they do it even if they are in the most violent conflict, not to mention that in this country we are very far from violent conflicts.

To conclude, I did not understand what Silvio (Pedruzzi, FIA’s president) meant with “to join”. Then he stressed the need to be united with the government, and if it has to do with being part of this joined government, I want to assure you that you should not worry, because it is a wedding which works at best. Which means, in this regard, you need to feel secure. Sometimes, a passionate love can blow up marriages, sometimes convenience makes marriages more lasting, even more than married people could imagine. So everything is fine. I do not know what my speech was about, and I apologize to those who have spent so much time to write it and make it a bold one here in front of you, but I think that it was worthier to look at these ten topics proposed by you.

Thank you all for listening patiently, and I hope as always that I wasn’t boring.

Thank you!

 

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Prime Minister Edi Rama attended on Wednesday evening the meeting of the Foreign Investors Association in Albania.

“All of us are feeling the positive effects of the reforms embarked in 2015 “, President of the association Silvio Pedruzzi said in his presentation.

In addition to the Prime Minister, this meeting was attended by Minister of Economy, Ahmetaj and Minister of Transports Edmond Haxhinasto.