Remarks on Trade and Competitiveness

Remarks of USAID Mission Director, Roberta Mahoney
at the ACIT's 2009 Conference on Foreign Trade
April 27, 2009

Minister Ruli, Ladies and Gentlemen,

It is a pleasure for me to participate at this roundtable on Albania’s economy.

On behalf of USAID, I am pleased to reconfirm the United States Government’s commitment to assisting Albania achieve sustained, broad-based economic growth and full integration into the Euro-Atlantic community.

After years of economic contraction, Albania has over the last few years recorded positive growth and moved rapidly from the command to a market economy. The country has restored and maintained macroeconomic stability and furthered institutional reforms. Private sector share of GDP continues to increase.

Albania has also made steady progress in trade liberalization within the framework of the World Trade Organization, bilateral free Trade Agreements with several neighboring countries, the Central European Free Trade Agreement and the Stabilization and Association Agreement with the European Union.

Yet despite such impressive achievements, Albania is still facing many problems which include addressing the relative low per capita income levels and high unemployment, as well as low direct foreign investment.

As you will see in a presentation that will follow, Albania’s trade deficit has continued to grow at an alarming rate.  The impact of the current global financial crisis has reduced remittances coming into Albania, compounding the widening trade deficit. Despite a significant growth of exports, Albania’s trade deficit increased to over 3 billion U.S. dollars in 2008.

This deficit underlines the urgent need to improve the competitiveness of Albanian products in domestic and foreign markets. 

Albanian enterprises have to increase not only their productivity but also the quality of their products. Protectionism is not going to help Albania reduce the trade deficit and sustain economic growth because it will foster inefficiency, poor product quality and unresponsiveness to market demand.

More importantly, successful economic competition in an open, global market requires much more than increased productivity and quality. 

It requires visionary leadership, consistent political will and persistent efforts in both public and private sectors to adopt more effective and appropriate development strategies.

These steps are necessary to creating the enabling conditions to enhance competitive advantages and improve trade and investment.

I would like to commend the Government of Albania for its proactive efforts to improve the trade and investment environment through tariff liberalization, fiscal reforms, and removal of administrative barriers.

The Albanian government plays the most important role in creating a suitable environment for trade and investment. 

With the assistance of the Millennium Challenge Account Threshold Program, the Government has established the National Registration Center around the country where the registration of a business can be completed in less than one day.

This reform, coupled with making tax filing and public procurement fully electronic are making the process more efficient and transparent and reducing the opportunities for corruption.

USAID’s other programs also contribute to improving the trade and investment enabling environment and strengthening the trade capacity of Albania’s private enterprises.

As an independent NGO, the Albanian Center for Competitiveness and International Trade, will carry on the USAID effort to provide technical support to the public and private sectors in addressing issues concerning trade policy, WTO, and Free Trade Agreements.

ACIT offers reliable and up-to-date trade information, not only the Albanian government and private sector, but also the international donor community and businesses.

Today, perhaps more than any other time, discussions on trade policies that promote openness and competition are needed to safeguard against protectionist policies.

Albania may seem to be better positioned against such global pressures. But as the recently published Global Competitiveness Report indicates, Albania’s resilience is due to its low level of integration into the global economy.

USAID programs help strengthen the capacity of Albanian small and medium enterprises to improve their productivity and competitiveness, while seeking to increase export sales, trade, incomes, and jobs.

These enterprises have benefited from our technical assistance to effectively respond to trade and investment opportunities through improving technical and managerial capacity, undertaking technological innovations and accessing needed financial resources.

I hope that this roundtable will further Albania’s efforts to become a capable and competitive participant in the global market.

Finally, I would like to commend the Albanian Center for Competitiveness and International Trade for undertaking this initiative.