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MASTER'S THESIS - SuSanA

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3 Background information Albania<br />

The Human Development Index of Albania is at 0.739, what brings Albania in the world ranking on place 70.<br />

Adult literacy counts 95.9 %, what is very close to the German literacy rate of 98.0 %. Average life<br />

expectation is 76.9 years, what is as well very close to German life expectancy with 80.4 years (HDI 2011).<br />

3.1.4 Economy<br />

Nowadays, Albania is moving from the model of the closed and centrally planned market towards a modern<br />

market-open economy with macroeconomic growth and low and stable inflation. It has to be considered<br />

that the GDP, that counted $24.99 billion in 2011, increased also a lot due to the Albanian residents in<br />

Greece and Italy (as comparison GDP of Germany: 3.085 trillion US$ (CIA 2012,b)). At the country<br />

comparison of the GDP, Albania reaches only place 160 of the world.<br />

Considering the Albanian economy, the composition by sector is the following (CIA 2012,a):<br />

• Agriculture: 20.2 %<br />

• Industry: 19.5 %<br />

• Services: 60.3 % (2011 est.)<br />

The agricultural sector accounts for almost half of the employment but only one fifth of the GDP due to old<br />

and inappropriate or missing technical equipment and general inefficiency. Electricity shortages and the<br />

electricity cut-offs that come along as well as a bad infrastructure contribute to “Albania’s poor business<br />

environment”. Unemployment lies around 13.4 % (2011 est.), but can be estimated even to be more than<br />

30 % due to „preponderance of near-subsistence farming“ (CIA 2012,a).<br />

Albania is trying to catch up with the Western standards very fast, the country changed a lot in the past few<br />

years. But still, the country is the poorest one in Europe. (BMZ 2011) states that the “economic<br />

development is still being constrained by a lack of legal certainty, poor infrastructure, unresolved ownership<br />

issues and organised crime“. The volume of German development cooperation for Albania counted<br />

108.2 million €/year in 2011 (BMZ 2011). “German development cooperation activities in Albania are<br />

particularly concerned with drinking water supply, sanitation and waste management, energy and<br />

sustainable economic development. These activities are designed to contribute towards poverty reduction<br />

as defined in Albania’s National Strategy for Development and Integration 2007-13 (NSDI) and help Albania<br />

towards its goal of rapprochement to the EU.“ (BMZ 2011)<br />

3.1.5 Environment<br />

According to the United Nations (UN 2012), Albania “is rich in biological diversity and natural resources” but<br />

suffers problems due to “overexploitation and poor management”. Pressing issues are the rapid growth,<br />

poor solid waste management, the air quality, deforestation and land degradation. The area under<br />

protection is stated to be not sufficient (8.3 % in 2005) to protect the biological diversity (UN 2012).<br />

Efforts of international institutions have been done and still are going on in the field of use of renewable<br />

energy resources, drinking water supply, wastewater treatment, biodiversity, climate change, land<br />

degradation and sustainable tourism as well as to strengthen legal institutions and human capacity.<br />

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