Both Macedonia and Albania are small transitional economies. Both countries have had a long, difficult, expensive and conflictive transition. Both countries continue to have huge migration flows. However, Albanians flow is higher than Macedonians flow: over 30% versus 25%.
Albania seems to have economically performed better than Macedonia. Macedonia’s average economic growth rate during 2009-2015 was 1.8%; meanwhile Albania’s was Albania 2.4%. However, Macedonia has had a more sustainable economic growth during the last years. Meanwhile, Albania’s growth has been unstable: decreased from 2009-2013 and is rapidly increasing after 2013.
Both countries have high unemployment rates. However, Macedonia’s unemployment rate is twice greater than Albania’s: over 30% versus 17%. The same happens to youth unemployment: Macedonia’s level is above 50%, meanwhile Albania’s around 30%.Poverty is decreasing in both countries, but actually the level of poverty in Macedonia doubles Albania’s poverty: over 30% versus 14%.
Albania is also doing better in FDI, which averaged 156.50 EUR millions during 2004 -2016, versus 31.11 EUR millions of Macedonia during the same period.
Both countries have to strengthen economic and trade relations. Albania is neither among top export destinations, nor among top import origins of Macedonia. Trade and markets will be able to better connect the two economies, societies and people. They will help both countries to depart from the inertia of traditional romantic attitudes.
Generally, Albania has lacked the synergy between migration and development. This was partly the responsibility of the governments, which have failed to mobilize migration financial, human and social capitals; and partly the responsibility of Diaspora. Albanian old and new Diaspora has not demonstrated an economic and market approach towards their home country. Romanticism, nostalgia and emotions have dominated over realism, rationality and economic thinking. However, as far as the new Diaspora is concerned, I have to make an explanation. Migration studies show that for the first 15 years of their stay in host countries migrants are a fiscal and financial burden to their welfare system. Migrants are able to generate capitals and think and operate strategically as potential investors at the end of their second decade in the host countries. To become a true investor it takes almost a generation. Therefore, I believe that the second generation of Albanian new Diaspora will be able to influence economic development of their home country.
Lessons learnt are a lot, but I would like to mention only a few of them. The good news from Albania is that the Government is shifting from patriotic thinking on Diaspora towards promoting and benefitting from market power of Albanian communities abroad. However, government needs to think and manage strategically, and consider Diaspora a real, not only a potential factor of country’s development. We have to consider also the fact that diaspora engagement in a country’s development does not require huge infrastructural investment. In addition, the partnership between Albania and its Diaspora requires a spirit of openness and trust to develop and produce success. And finally, the country can and must make better use of Diaspora’s soft and smart power.
As I have mentioned, Albania is performing very well in producing a remarkable economic growth during the last three years: 1.1% in 2013, 2% in 2014, 2.6% in 2015, and expected to reach 3.2% in 2016. Among the factors of this economic success, I would like to mention: improvement of business environment, increase of foreign investments, successful performance of strategic sectors, and finally the visible reduction of informality in the economy and labor market. Both indicators in 2013 were at the level of 40% and are rapidly decreased during the last three years.
Markets and trade are promoters of political realism. Economic cooperation, trade relations and market competition will produce the “ideology of success”, which will be replacing the “ideology of conflict” and the “ideology of failure”.