Why the Socialist Government of Albania Is Not a Success Story
by Eden Kollçinaku
Albania is a small country in the south-east of Europe, with a large coastline in the Mediterranean Sea. But the country has a big problem, hidden inside politics. For five years now, the Socialist Party government has caused Albanians to flee the country and find better living standards in Europe — especially Germany — and America. Bad policies have destabilized the economy of the country.
Albanians have suffered for fifty years under a Communist regime; now, 28 years after the system fell, people are suffering the policies of the Socialist government with Prime Minister Edi Rama as their leader. His policies are a mix of all kind of interventionist ideas, as he has been trying to grab as much as power as possible. In recent years, rule of law issues have arisen, too, as Socialists implemented a justice system which has left Albania without a functioning Constitutional Court.
Another problem is the misuse of public funds and how the Albanian taxpayers’ money has been used. Only in 2018, public-private partnerships caused taxpayers to pay 70 million euros. The new fiscal policy for 2019 would take another 100 million euros from taxpayers’ money to be used for public-private partnerships. This has caused a lot of problems for the economy, as this policy has — artificially — created big oligarchs and monopolies. Right now, there is no economic liberalism in Albania, as Prime Minister Rama is favoring only the oligarchs.
Their policy of implementing a progressive tax — which repealed the flat tax used before — has caused thousands of businesses to go bankrupt and all of this, thanks to fiscal policies passed by the Socialist majority in the Albanian Parliament. This reform has created a big crisis for the economy, as the unemployment rate has risen steadily.
These problems need to be fixed. The policies pursued by the current government only hurt Albanians, who are at their poorest since the Communist era. To get back on the right track, the progressive tax system needs to be replaced with a low flat tax, thus spurring growth and creating a better climate to do business and work.
The usage of public-private partnerships needs to be addressed, too. At the moment, it is possible to say that the country is being controlled by merely five or six people who have profited from the government, since funds are funneled to them.
Economic freedom and truly private solutions would be an antidote to the crises plaguing Albania today. The Socialist government doesn’t understand this.
Eden Kollçinaku is an undergraduate student at University of New York Tirana, majoring in Computer Science. He wants to promote his libertarian views to large audience by founding a non-profit organization in order to contribute to economic education.
The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.
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