They have arrived in Albania once again. Although their official 3 year agreement with the Albanian authorities has ended, experts of the International Monetary Fund are here. As of yesterday, they have started an agenda which will last several days and this agenda will be filled with meetings and discussions with Albanian experts. The scope of all this is to monitor not only the performance of macro-economic indicators, but also the recommendations that the important international financial institution, IMF, has left to the Albanian authorities while the official deal was still in place. In the end of these talks, IMF experts and Albanian officials are expected to come to concrete results and perhaps, issue a joint statement. But, what is not yet known is whether the two sides will sign a new joint deal or not. Meanwhile, let us recall that before the 25 June 2017 parliamentary elections, senior officials of the Albanian government have announced that this fall, there will be a fresh cooperation agreement with the International Monetary Fund. Meanwhile, there are rumors saying that there will not be an actual agreement, but the establishment of a new relation with this institution, where the IMF doesn’t assume a dictating role for the policies that the Albanian government will apply for the economy, but a mere advisory role. If this is the case, then the new agreement that the two sides will sign may be similar to the ones that the International Monetary Fund is applying with developed countries, including the US and other world countries with sustainable economies.
This is a new contractual phase with the IMF and it applies when a country has economic stability. Meanwhile, if this new relation is established between IMF and Albanian government, austere measures can no longer be justified by saying that “IMF told us so”, as it’s been the case so far.
DILEMMA
What will we see in the next four years between the Albanian side and IMF? A new relationship based on the advisory role or will the IMF continue to “impose” reforms and different measures in the domestic economy?
Agenda, IMF mission is interested on the economy
The new IMF mission, which has launched yesterday a tour of meetings with the highest Albanian state officials, is expected to end on 3 October. The agenda includes meetings with the minister of Finance, Arben Ahmetaj and the Governor of the Bank of Albania, Gent Sejko. These meetings are expected to focus on the progress reached with structural and tax reforms, policy agendas for the next four years, etc. Meanwhile, there will also be discussions on topics which relate to debt. At the same time, IMF experts will also discuss with the Albanian side issues that relate to next year’s budget and the plan of the management of public finances for the period 2018-2021, without forgetting the “hot” topic of public debt and arrears accumulated by institutions over the years and their payment. Another topic of discussions will relate to nonperforming loans and the process of restructuring these loans.
New action against informality, IMF backed the first phase
Starting from 1 October 2017, a new government action against informality in the economy will start in Albania. This was announced by the new minister of Finance and Economy, Arben Ahmetaj. According to him, the battle against informality will be accompanied by another important reform, which has to do with offering easier services to individuals and businesses, but at the same time, regulate the market, aiming to reduce bureaucracy, time and costs for the public.
“The Prime Minister has considered the second term of the government in office as the term of anti-informality. Each day that goes by, we will see zero tolerance against evasion”, the minister said.
Meanwhile, let us recall that when it launched the first action against informality, Rama 1 government which was in office from 2013 until 2017, justified it with the fact that it was backed by the International Monetary Fund.
HISTORY
A 26 year old history of cooperation, which besides considerable monetary amounts of aid, has also provided Albania with a high level of credibility among the highest financial world authorities. This was said by the Bank of Albania during a special analysis on the relations of the country with the International Monetary Fund. Dating back to 15 October 1991, they initially started with the scope of implementing a strategy for economic development, ensuring a smooth transition from a planned economy to a market economy. On the other hand, the Bank of Albania also mentions the fact that the first agreement that Albania has signed with the IMF was the 12 month agreement signed on 26 August 1992 amounting to 20 million SDR (32 million USD).
