Ahmetaj: Albania Will Continue Its Work and Relation with the IMF
Albanian Daily News
Published October 12, 2016

The Minister of Finance of
Albania, Arben Ahmetaj, who is currently on a visit to Washington to talk with
the International Monetary Fund (IMF), said in an interview for the Voice of
America that the economic developments of Albania are the focus of his talks.
He said that part of these talks is the possibility of increasing salaries and
pensions, but no decision has been taken about how much this increase will be.
Mr. Ahmetaj also talked about future relations with the IMF, foreign
investments, and issues of ownership with ARMO oil company.

In his interview, Minister
Ahmetaj said that the Albanian economy is growing steadily.

"The main focus of the
talks has to do with the economic developments of Albania, in a three-year
retrospective, so from the moment when the program started, because now we are
reaching the end of the program with the IMF. The program will end in February
of 2017. This program has been dubbed as a 'star performer', so one of the best
in the region, because of direct statistical and structural reasons. The
Albanian economy has grown by 3.4 percent, at a time when this growth was under
1 percent three years ago. And all the data and figures show that the Albanian
economy has left the crisis behind and has entered a consolidated path and
cycle of long-term growth. At the same time, all the macro-fiscal data which
have to do with the budget show only fiscal consolidation, economic growth, and
reduction of public debt," Ahmetaj said.

The Minister of Finance
was asked about the increase of pensions and salaries.

"All I have to say is that
if the IMF discusses the reduction of salaries with other countries, but with Albania,
it is debating the increase of salaries and how much this increase will be.
This has nothing to do with the elections. It has to do with the success of
reforms. It's the right moment to mention that set of reforms that the Rama
Government has carried out in three years; starting from the macro-fiscal
reform, so the control of debt, the reduction of debt, and the reduction of
deficit. For the first time this year, there will be a positive primary balance
sheet. In simple terms, the government is not creating debt through its
operations. The energy reform is one of the most successful, even though it was
a difficult one. There should be a reform in pensions because they have not
been touched for 25 years. And above all, it's the judicial reform. So it's
very important to tell the Albanian citizens that the reforms were worth the
sacrifice, because there is economic growth and increase of incomes as well,
and clearly, there is a possibility to increase salaries and pensions as well,"
Ahmetaj said.

When asked if his proposal
for the increase of salaries and pensions was accepted, but the Minister did
not give a straight-forward answer.

"In principle, the
possibility of the increase of salaries and pensions is there, because of the
collection of incomes, the success of reforms, and economic development. We are
still debating the situation with the IMF and how much space we will have
within the budget to increase salaries and pensions. And certainly, this is a
political decision and will of the Prime Minister and the ruling majority as to
how much this increase will be," Ahmetaj said.

The Minister was asked
about the end of the agreement with the IMF next year and if there is another
agreement in sight.

"It's true that the
agreement will end. This was considered as one of the most successful programs
of the IMF and Albania has left the economic crisis behind. It has created a
new model of the economy based on production, exports, and consumption as well,
and it is focused on attracting foreign investments. Foreign investments in
2015 reached a record of the last 25 years and compared to many countries of
the region, Albania is above Macedonia, Montenegro nominally, and above many
other countries, including Kosovo. And I believe that the current agreement
will end successfully in February. It's too soon to think about what kind of
agreement we shall have next year with the IMF, but one thing is certain: We
will continue our work and relation with the IMF, maybe through Article 4,
through an agreement of policies," Ahmetaj said.

When told that the foreign
investments fell during the first half of 2016, Minister Ahmetaj denied it.

"I have the investment
figures in front of me. During the second quarter of 2016 Albania had its
champion quarter, Euro261 million. So there is an increase in attracting
foreign investments and I believe that this year will be even better than 2015.
There are more foreign investments in the energy sector, in hydro-carbons, in
the hydro one, in the oil industry, in oil research and development. There are
investments in agriculture, tourism, services. This is not insignificant. The
figure is high and it's one of the direct reasons of development. Many reforms
are being carried out in doing business, to make Albania into a simple country
to invest in. The interest is great. Concretization is great as well. The last
index of enterprises shows a considerable increase of the number of foreign
enterprises in the country, which is a very significant and direct statistic.
However, despite attracting about Euro900 million last year, we are not
satisfied. Albania needs more and we have greater ambitions. Certainly, after
the judicial reform and others, I am sure that the number of foreign
investments and investors in Albania will increase," Ahmetaj said.

Minister Ahmetaj was asked
about the new owners of ARMO oil company: "There's talk that they are American
investors, but no details have been given. Meantime, it's said that great
amounts of money are needed to make this company successful."

In his response, Minister
Ahmetaj blamed the previous government for the failure of this company.

"There are two viewpoints
from which to see the ARMO issue. First, ARMO is a spectacular failure of the
previous government in privatization and management. And since it was left in
that ruined condition, let's say that the refinery has its technological cycle,
which could make the damage in technology, refinery, and assets final.
Meantime, the privatized company has inherited and created new debts with the
banks, in taxes and with the suppliers. So there is a private company which has
created three kinds of debts. There comes a time when all creditors, in the
concrete case banks which had assets as collateral, hat the right based on the
law to exchange this collateral, or to keep this collateral based on the
contract of the loan. And banks, in order not to damage themselves, have
entered into a private transaction. So this is a purifying private transaction
between the banks and companies. And this is a renting relation. It's not a
sale or buy relation. There are some concrete American companies which need to
invest. And as far as I know, the work has started. 1200 workers are in a list
to start working. Over 250 workers have started working already. They have been
workers in the refinery for several years. ARMO has not been dissolved. It's an
economic unit or entity which needs to be treated by legislation, including the
long-term restructuring of loans, or bankruptcy. This depends on the juridical
instruments or the institutional instruments which will be used. But we have a
joint effort of the banks which have that asset as a collateral and of the
various companies interested to revitalize that part of the asset," Ahmetaj
said. (Daily Koha Jone, October 11, 2016)

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