In this year\'s World Bank Doing Business Report, Albania ranked second among countries which undertook reforms during 2007-2008 to make doing business easier. Several of the reforms noted in the report were produced through Albania\'s MCC Threshold Program administered by USAID.

Albania Second Top Reformer Globally for Doing Business

Tirana, Albania—Doing business in Albania is easier, faster, and cheaper, thanks to reforms undertaken by Albania, and supported by USAID, to overhaul the country’s business registration, tax, and procurement systems.

Albania received international acclaim in last month’s release of the annual World Bank Doing Business report for 2009. The report ranked Albania second among countries which undertook reforms during 2007-2008 to make doing business easier.  Albania’s overall rank on the ease of doing business index climbed to 86 from 135 (out of 191 economies), putting it on par with other countries in the region.

Behind Albania’s success lie the achievements of the Millennium Challenge Corporation (MCC) Albania Threshold Country Program.  This two-year, $13.85 million program administered by USAID, aimed to help Albania reduce corruption in tax administration, public procurement, and business registration.

Two years ago, Albania’s business registration process was costly and time consuming, requiring 42 days and a court decision. That system has been replaced with a simplified one-day procedure that leaves few bribery opportunities and can be done in one place, the Tirana-based National Registration Center or any of its 10 branch offices located in cities throughout Albania. After only one year of operation, this new system has registered over 18,000 new businesses, all of which are simultaneously tax-registered, reducing informality while expanding the tax base.

Other MCC Program supported reforms noted by the Doing Business Report include e-filing of corporate taxes for large businesses, which has severed the exploitative personal relationship between officials and taxpayers. On average, more than 61,000 tax forms are now downloaded per month, and over 2,100 monthly declarations are now e-filed. These numbers keep rising. The reforms have also set the stage for a modern tax administration reform oriented to greater efficiency and better service.

Albania’s public procurement system is also easier, faster and less prone to corruption as a result of the MCC program. The e-procurement system developed by the MCC program became standard Government procedure in March 2008 and has since generated 70 competitive awards worth more than $29 million, 6% of total procurement value and 2% of the total number of awards. The Procurement Advocate, an independent procurement oversight agency supported by the MCC project, is now fully engaged in overseeing the procurement process and handling bidder complaints. 

A chord tying these reforms together is e-governance. A new institution equipped and trained by the project, the National Agency for an Information Society (NAIS) now hosts the e-governance systems and ensures they are secure, maintained and upgraded. In her recent visit to Albania, USAID Administrator Henrietta Fore inaugurated the Agency and officially handed over the new e-governance system to the Albanian Government.

In her remarks, Fore emphasized the importance of adopting and sustaining an integrated e-government system as a means for Albania to progress towards meeting EU standards in the areas of the MCC program.

At the "Doing Business: Five Years of Reform" Event this September, Fore praised Albania’s strong showing and the effective partnership between USAID and MCC. 

This sentiment was echoed by Albania’s Prime Minister as well. “I want to thank USAID and the Millennium Challenge Corporation for funding these important reform projects and providing us valuable help for their implementation. E-taxes, e-business, and e-procurement have made Albania’s development path easier.”

Albania has set its sights even higher for improving the business environment. A new $16.4 million MCC Stage II Threshold Proposal to reduce corruption and strengthen the rule of law in Albania will begin in January 2009. The program will be administered by USAID and will focus on streamlining business licensing, supporting further tax administration reforms, cleaning up a corrupt building permit process, and establishing Albania’s first administrative courts to adjudicate commercial disputes.