An analysis of the Albanian economy in the past, current, and future demonstrates how an economic structure fluctuates with the type of government present at the time. Albania, a newly found member of the European Union, is a midst its battle to stabilize its vigorous economy that has had trouble since before the 1940’s. An explanation of this instability can be found looking through Albania’s history, government structure, currency and exchange rates, imports and exports including natural wealth, national education, unemployment rates, and the country’s overall integration on a global scale.
The fall of communism in Albania began in 1985 when Dictator Enver Hoxha died. Before his death, he ruled Albania with communist and socialistic policies which led to a steadily decreasing economy. After Hoxha’s death, Ramiz Alia succeeded the dictatorship and continued with the same policies, but began to lighten the stronghold with allowances on the economy to let it begin to self-sustain (Eastern Europe 15). With the communist government letting go of some of its grip, the society of Albania began to rebel against the government, demanding more democratic policies and less communism. In 1991, communist rule fell and new policies began to be created focusing more on democratic ideals with a socialistic influence. Alia became the president during this time but was voted out of office in 1992 (Fund 1). Since then, Albania’s economy has varied extremely but is slowly improving.
To comprehend the variations in the more recent economy fluctuation, reviewing currency alterations and balancing of foreign and domestic currencies can provide understanding. Since the establishment of the democratic government, the country began borrowing from other countries to allow for reform. Albania’s currency, the Lek, was in discussion of being formally changed to the euro. Much of Albania’s economic reform is from borrowing from countries whose currency is in euros. Although the proposal to change did not follow, the value of the Lek has not seen much change in value since 2008 in comparison to the euro. Being the least-integrated economy, Albania’s Lek has not seen much change when compared to the international down-turn in economy. During the international financial crisis in 2008, the Lek’s value varied from 121.7:1 to 140:1 in comparison to the euro respectively (Economist Intelligence 2). Although the Lek’s value has not varied as much as predictions may prove, it also revels the isolation of Albania. The depression of Europe between 2007 and 2009 was so substantial that suicides saw a rise of 5% in 2008 (Financial Crisis 1). Albania’s seclusion has very few constructive values, but if it were not for the seclusion, Albania would have been brought down to the crashed economy and forced to rebuild once again. This stability, caused by seclusion, is crucial for the continuation of the reconstruction of the Albanian economy during the European depression of 2008.