A Critical Analysis of the Strategic Sector Privatization in Albania

Abstract

The privatization of the strategic sector has been the core of the privatization process in Albania. This strategy started in 1998 for the first time and is still in force for the remaining enterprises of the strategic sector. The changes of political and economic system in the early 90’s in Albania required a broader reform of the entire legal system by creating a functioning market based in the rules of free market and competition and the privatization of state enterprises. The economic system of planned economy, which was established in Albania with the centralized control of economy through five-year plans for 45 years and state ownership (private property was abolished in Albania since the Constitution of 1976) as well as the binding of the enterprise to the priorities of the PPSH or to the fulfillment of the plan, led to the reduction of economic output, the rationing of consumer goods and, ultimately, after the political change to the transformation into a market economy (Åslund, 2013). Privatization and especially the strategic sector privatization was one of the main pillars of free market economy in Albania. My central contention in this paper is to analyse the strategic sector privatization in the perspective of EU standards. In this point of view this process in Albania can only be meaningfully thought through, and I suggest implemented, within the context of the European market (Gärtner 1996), but on the other hand the way this transformation had to be mastered was not clearly defined.

DOI: 10.5901/ajis.2014.v3n4p319