Prior to the 20th century, Albania was subject to foreign domination except for a brief period (1443-78) of revolt from Ottoman rule. Albania declared its independence during the first Balkan War in 1912 and remained independent after the World War I largely through the intercession of U.S. President Woodrow Wilson at the Paris Peace Conference.
In 1939, Italy under Mussolini annexed Albania. Following Italy's 1943 surrender to Allied Powers during World War II, German troops occupied the country. Partisan bands, including the communist-led National Liberation Front (NLF), gained control in November 1944 following the German withdrawal. Since Yugoslav communists were instrumental in creating the Albanian Communist Party of Labor in November 1941, the NLF regime, led by Enver Hoxha, became a virtual satellite of Yugoslavia until the Tito-Stalin split in 1948. Subsequently, Albania's hardline brand of communism led to growing difficulties with the Soviet Union under Krushchev, coming to a head in 1961 when the Soviet leaders openly denounced Albania at a party congress. The two states broke diplomatic relations later that year; however, Albania continued nominal membership in the Warsaw Pact until the 1968 invasion of Czechoslovakia.
In 1945, an informal U.S. mission was sent to Albania to study the possibility of establishing relations with the NLF regime. However, the regime refused to recognize the validity of prewar treaties and increasingly harassed the U.S. mission until it was withdrawn in November 1946. The U.S. maintained no contact with the Albanian Government between 1946 and 1990.
During the 1960s, China emerged as Albania's staunch ally and primary source of economic and military assistance. However, the close relationship faltered during the 1970s when China decided to introduce some market reforms and seek a rapprochement with the U.S. After years of rocky relations, the open split came in 1978 when the Chinese Government ended its aid program and terminated all trade. Hoxha, still communist dictator, opted to pursue an isolationist course. The result was financial ruin for Albania.
By 1990, changes elsewhere in the communist bloc began to influence thinking in Albania. The government began to seek closer ties with the West in order to improve the economic conditions in the country. The People's Assembly approved an interim basic law in April 1991. Short-lived governments introduced initial democratic reforms throughout 1991. In 1992, the victorious Democratic Party government under President Sali Berisha began a more deliberate program of market economic and democratic reform. Progress stalled in 1995, however, resulting in declining public confidence in government institutions and an economic crisis spurred on by the proliferation and collapse of several pyramid financial schemes. The implosion of authority in early 1997 alarmed the world and prompted intense international mediation and pressure. Early elections held in June 1997 led to the victory of a socialist-led coalition of parties, which remains in power today.
President -- Rexhep Meidani
Prime Minister -- Pandeli Majko
Foreign Minister -- Paskal Milo
Ambassador to the United States -- Petrit Bushati
Ambassador to the United Nations -- Agim Nesho
President and Cabinet
The head of state in Albania is the President of the Republic. The President is elected to a 5-year term by the People's Assembly by secret ballot, requiring a two-thirds majority of the votes of all deputies. The next election is expected in 2002.
The President has the power to guarantee observation of the constitution and all laws, act as commander in chief of the armed forces, exercise the duties of the People's Assembly when the Assembly is not in session, and appoint the Chairman of the Council of Ministers (Prime Minister).
Executive power rests with the Council of Ministers (cabinet). The Chairman of the Council (Prime Minister) is appointed by the President; ministers are nominated by the President on the basis of the Prime Minister's recommendation. The People's Assembly must give final approval of the composition of the Council. The Council is responsible for carrying out both foreign and domestic policies. It directs and controls the activities of the
ministries and other state organs.
The Council consists of 17 ministers and nine state secretaries. The Socialist Party occupies the bulk of the cabinet positions; the Democratic Alliance, the Social Democratic Party, and the Agrarian Party each head one ministry.
Albania maintains an embassy in the United States at 2100 S Street NW, Washington, DC 20008 (telephone: 202-223-4942; fax: 202-628-7342).
The democratically elected government that assumed office in April 1992 launched an ambitious economic reform program to halt economic deterioration and put the country on the path toward a market economy. Key elements included price and exchange system liberalization, fiscal consolidation, monetary restraint, and a firm income policy. These were complemented by a comprehensive package of structural reforms including privatization, enterprise, and financial sector reform, and creation of the legal framework for a market economy and private sector activity. Most prices were liberalized and are now at or near international levels. Most agriculture, state housing, and small industry were privatized. Progress continued in the privatization of transport, services, and small and medium-sized enterprises. In 1995, the government began privatizing large state enterprises.
Results of Albania's efforts were initially encouraging. Led by the agricultural sector, real GDP grew by an estimated 11% in 1993, 8% in 1994, and more than 8% in 1995, with most of this growth in the private sector. Annual inflation dropped from 250% in 1991 to single-digit numbers. The Albanian currency, the lek, stabilized. Albania became less dependent on food aid. The speed and vigor of private entrepreneurial response to Albania's opening and liberalizing was better than expected. Beginning in 1995, however, progress stalled, with negligible GDP growth in 1996 and a 9% contraction in 1997. Inflation approached 20% in 1996 and 50% in 1997. The lek initially lost up to half of its value during the 1997 crisis, before rebounding to its January 1998 level of 143 to the dollar.
Albania is currently undergoing an intensive macroeconomic restructuring regime with the IMF and World Bank. The need for reform is profound, encompassing all sectors of the economy. However, reforms are constrained by limited administrative capacity and low-income levels, which make the population particularly vulnerable to unemployment, price fluctuation, and other variables that negatively affect income. Albania is still dependent on foreign aid and remittances from expatriates abroad. Largescale investment from outside is still hampered by poor infrastructure; lack of a fully functional banking system; untested or incompletely developed investment, tax, and contract laws; and an enduring mentality that discourages bureaucratic initiative.
The Government of Albania is very concerned with developments in the ethnic Albanian province of Kosovo in neighboring Serbia, particularly in the post-Dayton agreement period. While maintaining a responsible and nonprovocative position, the Albanian Government has made it clear that the status and treatment of the Albanian population in Kosovo is a principal national concern. Bilateral relations with Greece have improved dramatically since 1994. In 1996, the two countries signed a Treaty of Peace and Friendship and discussed the issues of the status of Albanian refugees in Greece and education in the mother tongue for the ethnic Greek minority in southern Albania. Tirana's relations with F.Y.R.O.M. remain friendly, despite occasional incidents involving ethnic Albanians there. Tirana has repeatedly encouraged the Albanian minority's continued participation in the Government of F.Y.R.O.M.
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