Presentation is loading. Please wait.

Presentation is loading. Please wait.

Albania’s Troubled Economy Justin Wise Geography 308 (Russia and Eastern Europe) Professor Zoltan Grossman University of Wisconsin-Eau.

Similar presentations


Presentation on theme: "Albania’s Troubled Economy Justin Wise Geography 308 (Russia and Eastern Europe) Professor Zoltan Grossman University of Wisconsin-Eau."— Presentation transcript:

1 Albania’s Troubled Economy Justin Wise Geography 308 (Russia and Eastern Europe) Professor Zoltan Grossman University of Wisconsin-Eau Claire Spring 2005

2 Where in the World is Albania?

3 Influences on Albania’s Economy Geography Geography Coastal boundary Coastal boundary Mountainous region Mountainous region History History War War Transition from Communist government Transition from Communist government Foreign assistance Foreign assistance Pyramid Schemes Pyramid Schemes m/ipka/A html

4 Geography of Albania Similar in size to the state of Maryland Similar in size to the state of Maryland Coast is along the Adriatic Sea Coast is along the Adriatic Sea Two major regions: Two major regions: Mountainous Mountainous Coastal lowlands Coastal lowlands

5

6 Mountainous Region 70% of the landmass is mountainous highlands Highlands located in the North, East, and South SAZH2.JPG

7 Mountainous Land Use & Industry Land Use Land Use Mining Mining Timber Timber Livestock Livestock Industry Industry Machining Machining Cement production Cement production Textile Textile Metal goods Metal goods economy.jpg

8 Coastal Region Densely populated Densely populated Contains a majority of the country’s agricultural lands Contains a majority of the country’s agricultural lands vlora8.jpg

9 Coastal Land Use & Industry Land Use Agriculture Wheat, Grapes, Dairy, etc. Pasture land Industry Petroleum refineries Chemicals Textiles Food Processing

10 History of Albania Long history of involvement in war Long history of involvement in war Isolation from rest of world in Enver Hoxha (communist) dictatorship Isolation from rest of world in Enver Hoxha (communist) dictatorship Dramatic shifts in government systems Dramatic shifts in government systems Large amounts of foreign aid in recent years Large amounts of foreign aid in recent years Corrupted Pyramid business practices Corrupted Pyramid business practices

11 Long history of involvement in war Occupied during both World Wars Occupied during both World Wars WWI WWI Italy, Serbia, Greece, & France Italy, Serbia, Greece, & France WWII WWII Germany & later Soviet Union Germany & later Soviet Union Pro-Nazi “Greater Albania” included Kosovo and western Macedonia Pro-Nazi “Greater Albania” included Kosovo and western Macedonia Kosovo Conflict Kosovo Conflict Large numbers of Kosovar- Albanian refugees Large numbers of Kosovar- Albanian refugees &w=330&sz=19&tbnid=8ThwmEGLh68J: &tbnh=86&tbnw=114&start=17&prev=/i mages%3Fq%3Dalbanian%2Bwar%26hl%3 Den%26lr%3D%26sa%3DG

12 Isolation from the rest of the world Enver Hoxha Enver Hoxha Albania’s 1 st communist chief of state Albania’s 1 st communist chief of state Ruled for 40 years Ruled for 40 years Albania became the most tightly controlled country in Europe Albania became the most tightly controlled country in Europe Restricted trade Restricted trade Limited communication with the rest of Europe Limited communication with the rest of Europe

13 Shifts in governmental systems Early 1900s-1948 – Socialist Early 1900s-1948 – Socialist – Communist – Communist Soviet Communism Soviet Communism Enver Hoxha dictatorship Enver Hoxha dictatorship Chinese Communism Chinese Communism – Reformed Socialist – Reformed Socialist 1992-Present – Emerging Democracy 1992-Present – Emerging Democracy

14 Large amounts of Foreign Aid Italy, under Mussolini, provides aid when he gained Albania ( ) Italy, under Mussolini, provides aid when he gained Albania ( ) Communist partisan leader Enver Hoxha takes over Communist partisan leader Enver Hoxha takes over Albania joins Soviet-allied Council for Mutual Economic Assistance “Comecon” (1949) Albania joins Soviet-allied Council for Mutual Economic Assistance “Comecon” (1949) Hoxha signed agreement between Soviet Union and Albania for economic assistance (1951) Hoxha signed agreement between Soviet Union and Albania for economic assistance (1951)

15 Foreign Aid Continued… Large amounts of economic aid from Soviet Union, Eastern European countries, and China begin pouring into Albania (1959) Large amounts of economic aid from Soviet Union, Eastern European countries, and China begin pouring into Albania (1959) Albania sides with China, Soviet economic support to Albania stops, and Chinese aid is increased (1960) Albania sides with China, Soviet economic support to Albania stops, and Chinese aid is increased (1960) China terminates all economic aid to Albania (1978), and it becomes the poorest country in Europe China terminates all economic aid to Albania (1978), and it becomes the poorest country in Europe

16 The Pyramids of Albania! Albanians personal savings soared Equaling ~15% of the nation’s GDP (1995) Investors saw opportunity Introduction of the pyramid scheme…

17 How the Pyramid System Works High interest rates High interest rates Promise of 30%-50% return Promise of 30%-50% return Earliest depositors gain most return Earliest depositors gain most return Everyone investing benefits Everyone investing benefits Or do they… Or do they…

18 Pyramids Gone Awry All but few operated honestly All but few operated honestly Systems corrupted by swindlers and pseudo- businesses Systems corrupted by swindlers and pseudo- businesses Many Albanians fooled Many Albanians fooled

19 Effects of the Pyramid Schemes 50% of Albania’s GDP lost to the schemes 50% of Albania’s GDP lost to the schemes $1.2 billion $1.2 billion ½ of nation’s money gone (only eight years ago!) ½ of nation’s money gone (only eight years ago!) Albanian government blamed by the people Albanian government blamed by the people Trust in the government broken Trust in the government broken Judiciary and bureaucracy remain weak Judiciary and bureaucracy remain weak

20 Effects continued… Massive rioting broke out Massive rioting broke out Foreign minister Tritan Shehu attacked and injured after trying to calm the rioters Foreign minister Tritan Shehu attacked and injured after trying to calm the rioters Police stations, town halls, court houses set on fire Police stations, town halls, court houses set on fire US forces currently in Albania helped to control crowds US forces currently in Albania helped to control crowds

21 Current Economic Status Poorest country in Europe Poorest country in Europe Lowest European standard of living Lowest European standard of living Relatively high unemployment rate Relatively high unemployment rate 15.8% (closer estimates near 30%) 15.8% (closer estimates near 30%) Organized crime flourishes in chaotic circumstances Organized crime flourishes in chaotic circumstances Remains a developing country, even though it’s in Europe Remains a developing country, even though it’s in Europe EU Membership? Not a chance! EU Membership? Not a chance! X/jube.jpg

22 Currency & Exchange Rate Leke or Lek Current Exchange Rate per US Dollar

23 Future Albanian Economy Striving for a more open- market economy Striving for a more open- market economy New chief of state Alfred Moisiu (elected July 2002) New chief of state Alfred Moisiu (elected July 2002) Restored public order Restored public order Increased economic activity and trade Increased economic activity and trade Remittances of workers abroad help to supplement the GDP Remittances of workers abroad help to supplement the GDP images/alb17.jpg

24 References


Download ppt "Albania’s Troubled Economy Justin Wise Geography 308 (Russia and Eastern Europe) Professor Zoltan Grossman University of Wisconsin-Eau."

Similar presentations


Ads by Google