Shkodra free zone

Ferid R. Hoti 

The Basic Strategy of the Development 

in the region of Shkodra, Albania 

Published by 

( electronic edition by Arben Çokaj, www.shkoder.net ) 

1

Ferid R. Hoti 

Deputy of the People's Assembly (Zone no. 8) 

SHKODRA 

FREE ZONE 

The most adequate 

option for the economic 

development of Shkodra 

region, giving the actual 

conditions 

Shtëpia Botuese “CAMAJ – PIPA” 

Shkodër, 1999 

2

Translated by: Artan KARINI 

of the USAID Public Administration 

Project in Albania 

November 1997. 

Reviewer: Artan Rroji 

Design: Gjergj Spathari 

Computer: Albana Gjyrezi 

Photos: S. Osmani & M. Borici 

(‘Marubi’ Archive, Shkodër) 

First Edition, 1997 

© Copyright: Ferid R. Hoti 

3

FERID R. HOTI 

Ferid R. Hoti was born in 

Shkoder on 11.21.1943 to an old 

civic family, renowned for the 

preservation of their heritage ties 

with their kinsfolk in Hot (Malësi e 

Madhe). 

Graduated from the 

Department of Medicine in 1967. 

For 28 years, committed to heal his 

patients, he served as a surgeon adhering to the principle: “Medicine 

does not serve the physician, but the patients”. 

For the first time in the Shkoder hospital, he applied the 

technique of narcotic tubes, designed and built the Intensive Care 

Unit and the guinea-pig surgical theatre (the first of this kind in 

Albania). 

He owns the patent on two surgical operation techniques on 

stomach and bladder. 

At the first democratic election, 1992, he was elected member 

of the Municipal Council. 

In 1993, he completed a 6 months specialization course in 

France. 

For a period of 4 years, he served as the Albanian ambassador 

to Malaysia, Indonesia, Brunei, Thailand and Vietnam. 

During his diplomatic mission, he was distinguished for a 

successful assimilation of economic policies, the accomplishment of 

several important investments in Tirana and the opening of the 

Albanian Center for the attraction of business from the South-East 

Asia and also the commercial agencies in Pinangut - Malaysia, 

Xhakarta - Indonesia, Perth - the centre of Western Australia. In 

1997 he was elected member of the Albanian Parliament and 

member of the Commission of Inter Parliamentary Union (IPU). 

4

TOWARDS THE LOSS 

OF THE ECONOMIC 

AUTONOMY OF 

SHKODER CITY 

The citizens of Shkoder have 

expected concrete plans for the 

economic development of their area. 

In order to interpret the TIRANA 

present demands and the inevitable 

reactions of tomorrow imposed by the deep poverty this material 

follows with a brief account of the historical experience, which over 

the past hundred years, determined the economic ill fate for the 

inhabitants of this area (marked during the last elections campaign as 

Zone No. 8). In reality, this zone comprises a triangular area 

bordered by the rivers of Buna, Drini, Kiri and by the Lake of 

Shkodra. In this area lies the Rozafat castle, the river jetty and 

ancient cites of the city. 

Citizens of Shkodra in a passenger boat 

passing from one side of the city to the other - 1908 

5

Actually, Zone No. 8 represents the City of Shkoder that is 

identified as an inland port on ancient Greek-Roman navigation maps 

and those of modern navy schools. Situated on the North - West 

Albania, bordering with the Montenegrin Republic, the City has been 

estimated as a confluent point of quite a number of commercial 

routes linking Central Europe with the Mediterranean basin, between 

the East and the West. Because of the navigable river Buna and the 

Lake in common with Montenegro, ships from the Dalmatian shore, 

Italy, North Africa, Aegean Isles, Turkey and several North Atlantic 

countries used to moor at the Shkoder river port, thus turning it into a 

key commercial point for all the West Balkans. 

Until the proclamation of the Independence, the City of 

Shkoder was known as the “moral and political capital” of Albania 

and had a population of 50 000 inhabitants, at a time when Tirana 

had some 3000, Korce 6000, Vlore 5000, Janina 2800 and Belgrade 

15 000, inhabitants. It is evident though, that in spite of the perennial 

tide of foreign invasions, the citizens of Shkoder succeeded, very 

soon, to take into their hands the economic self-administration of the 

city, to provide it with all the functional-administrative structures 

that belong to a real metropolis. This metropolis, as one resting upon 

its own foundations dating back from the 4 Century B. C., was 

identified as the oldest of all Balkan cities and most of those 

European ones. 

During the rule of Balshaj, in 14 th century, the city developed 

trade relations with the Dalmatian cities. After the agreement signed 

on April 14, 1396, between Gjergj II of Balshaj and Venice, Shkodra 

was placed under the rule of Sinjoris and for 84 years (1396-1479), 

its trade was oriented towards the Republic of San Marco. After the 

Turks took over Shkodra in 1479, the City became an important 

military centre. In 1502, at the request of Shkodra’s powerful traders, 

in order to continue the economic self-governing, on Sultan's decree, 

Shkoder was granted the status of “a city open to trade” 

6

(a status similar to that of today’s free zone). The merchants of 

Shkoder had such a powerful activity at that time, that during 18 th 

and 19 th centuries there were 130 representations of commerce in 

Venice, and Shkodra’s Chamber of Commerce was represented by 

Mrs. Terezina Muzhani. Referring to the report dated on April 8, 

1736, the Head of Shkodra’s Chamber of Commerce was substituted. 

Sulejman Beg Gradani was elected as the chairman and Hasan Beg 

Kopliku as the vice chairman, a fact proving that this Chamber 

functioned times ago, being so one of the oldest in the region. 

During the rule of the Bushati’s Dynasty (1779-1832), 

Shkodra experienced a trade boom. Besides its market, the Bejisten, 

built during the period 1801-1807 by the Albanian vizier Ibrahim 

Pasha Bushati, ranked second after that of Instanbul. 

The market of Shkodra 

During this period, the activity of the Shkodra’s merchants 

was concentrated mainly in Trieste where a number of merchants 

7

settled, such as Pjeter Dodmasej. The shipment through the river of 

Buna mostly provided supplies for the joint market, which at that 

time was known as the “axle” between Vienna, Trieste, Shkodra, 

Thessaloniki and Instanbul. Shkodra’s contribution to this market 

was constant and influential up until the revolt that embraced our city 

in 1839 against the new systems of taxes, liabilities, etc. 

Furthermore, the use of the Sues Canal in the year 1869 and the 

Mitrovice-Thessaloniki railway gave Shkoder two successive hits. 

Similar to what happened in all the other seaports of the region, 

under the absorbing effect of the Sues Canal, the flux of goods 

passing through Shkodra’s port was further reduced because the port 

lacked connections with the freight railway network of the Balkan 

countries. 

Two years ago (1872) merchants of Shkodra, headed by Filip 

Parruca, raised the necessary capital to pay the designers and start 

building the whole railway Shengjin-Shkoder-Prizren-Ferizaj, but 

this undertaking was interrupted leaving the city isolated for ever 

from the railway network of Balkan and Europe. The operation of the 

faster and safer railway freight through all the Balkan and European 

countries, except Shkodra, challenged considerably the classical 

routes towards Shkodra market. The trade took other directions 

towards Mitrovice, Prishtine, Ferizaj, Thessaloniki. The use of Sues 

Canal increased the value and the importance of Thessaloniki port. 

Under the new circumstances (determined by the separation from the 

railway network) the economic authority of Shkodra metropolis 

began to fade and city’s elite began to focus their attention on the 

fluvial route of Buna River. The activity was so powerful that out of 

the custom duties imposed on the imported colonial goods, in 1895 

they managed to raise the necessary financial capital to engage a 

group of Austrian and French engineers to carry out the necessary 

studies and design projects to clean the river mouth, dredge and 

8

deepen the river-bed and deviate the flow of Kiri river into the lake 

and that of Drini river into the sea. This was to ensure the all-time 

navigation over the whole of its length and to facilitate the navigation 

of medium size vessels. 

Only through the utilization of the navigating route of Buna 

River, the city hoped to keep a stable economic development. 

Unfortunately, the project was never carried out. 

Workers cleaning the river of Buna 

The isolation of Shkodra from the European Trans Balkan 

railway network was not a matter of accident, but a result of the 

direct intervention of those states interested to disregard this 

metropolis administered by the Turks. Referring to the observations 

of Carl Marx, presented in the article published in the New York 

Times in 1853, the region of Shkoder was a neuralgic point of the 

Mediterranean, vital for the Russian, Austrian, Italian, and Turkish 

imperialism. The development of the city reflected their interests. 

Only by following this reasoning we can explain the reason of the 

9

establishment of the several councils (starting from 1718), 

Diplomatic Missions of the five big powers (France, Britain, Russia, 

Italy, Austria) and two regional states (Montenegro and Greece), 

branches of the Turkish, Italian, Austrian banks, the bank of Albania 

(reportedly it is the first one in the country and was established by 

Shkodra businessmen on February 4, 1863) and also the market wellknown 

all over the area. According to several western analysts, the 

intensive flux of commercial exchanges at the City Market and the 

activity of the above mentioned banks were the key factors 

attributable to Shkoder’s authority in the Balkans’ stock exchange. 

Since the early Middle Ages, especially in the 18-19 th 

centuries, the Market operated under the discipline of juridical 

principles, and because it was glutted with both domestic and 

imported goods, it was rigorously divided into separate wards 

amounting to 3500 rich stores and over 2400 big warehouses. In the 

second half of the 18 th century, Shkodra, with its domestic and 

foreign trade, continued to play the role of a national centre for all 

kinds of goods, coming from all parts of Albania and partly from 

Bosnia, Macedonia and Thessaloniki. Unfortunately, over the past 

100 years, the City did lose the economic autonomy it enjoyed in the 

past centuries. 

WHY DID THE ECONOMIC DECLINE OF SHKODRA START 

AFTER THE PROCLAMATION OF THE INDIPENDENCE OF 

ALBANIA? 

Referring to the historical events, we will interpret the causes 

of the economic devastation of our City over the 20 th century as 

follows: 

1912: At a time when Shkoder found itself besieged by the 

Serb-Montenegrin troops, in south Albania the national 

independence ceremony was held. Lonesome, after six months 

10

of resistance, in April the city tolerated the moving in of the 

Montenegrins who left within three weeks. The losses were extensive 

including the ruin of the market (Bejisten, etc.) 

1912, the city is surrounded. Following the directions of Commander 

Hasan Riza Pasha, Turkish and Shkodra volunteer soldiers defend the city 

Ugo Oieti (Italian journalist that followed the surrounding of Shkodra in 1912) 

in front of the Italian Diplomatic Mission 

11

1913: On the 14 th of May the city was handed over (for two 

years) to the international military committee headed by General 

Burney (the same tactics with that of E.U. followed lastly, in 1997, 

through “Alba mission”). As stated by William U. Howard, the 

States Secretary for the aids fond to the Balkans, during this period 

the major part of 124 villages ruined by Serbian army, without being 

provoked by the Albanians, was from Shkoder region. 

In London, the political borders were imposed. Shkodra got 

impoverished and was separated from the Kosova and Metohi 

markets. Further on, with the decisions of Berlin Congress, 

Shkodra’s market was separated even from those of Tivari, Ulqini, 

Plava, Hoti, Gruda, etc. 

General Burney, The Commander of the 

international army committee, 1913 

12

Detachment of international forces in Shkoder for the 

establishment of 1913’s political borders 

Commanders of army forces from the rural areas to help the chief-center of 

Shkodra, during the discussions about political borders held in 1913 

13

Soldiers of the international forces and leaders of the city and village war units 

defending Shkodra after the Declaration of the Political Borders in 1913 

1914: The First World War had just started. Foreign armies 

were in Shkodra; most of the shipping fleet was damaged. 

Turkish warship, 1914, at anchor in the port of Shkodra 

14

Italian warship in Shkoder, 1914 

1915: A seven months invasion from the Montenegrin army 

was imposed. There was an extreme famine in the city. In order to 

face the grave situation the “caring commission for providing corn to 

the people” was set up. 

15

Famine in Shkoder. In the picture: A lunch for the poor 

held by the international forces, 1915 

1916: In January the Montenegrin troops left. The city was 

then administered by the Austro-Hungarians (for two years). 

Important public projects started in the city, such as the covering up 

of all opened rain-water and sewer canals and also the building of the 

modem wharf of Shkodra port. 

It is the first time that the Albanian language is used as the 

official language in all administration offices. The medical ambulant 

and hospital service and the general hygienic control were improved 

to perfection. Attention was paid to the building of the infrastructure, 

internationalization of Buna port (joining it to the land roads leading 

to Lezha, Podgorica, Ulqini), the railway unification of all the most 

important urban centres, administered by them, was achieved. 

The building of the Shengjin-Shkoder and Prizren-Ferizaj 

railways according to a project pending since 1872 was decreed. 

Quite different from our today's neglecting attitude, the Austro- 

Hungarian Empire esteemed so much this project that in order to 

16

implement it the general command decided to bring in Shkodra 60 

thousands workers (prisoners of war). Even this time this 

undertaking was interrupted because in 1918 the empire capitulated. 

During this period the activities of two Viennese banks, 

“Pester Ung Bank” of Budapest and “Wiens Banc Werein” of Vienna 

went so far as to gulp in all the savings of the citizens promising 

them very high interests (a speculative “get-rich-quickly” game, 

which bears a thrilling resemblance to the pyramid schemes of the 

recent years). According to the payment order issued by the Wiener- 

Bank-Werein on October 5, 1918, this bank alone had appropriated 

26, 330, 447 crowns and 40 helera (silver coins). 

During this period, the Italian military navy submerged the 

five biggest vessels left of the Shkodra fleet, among which was the 

1000 tons ship “Gloria”. Its owner, Selim Shurdha, on his ship was 

known in the Mediterranean basin as the winner of the Alexandria- 

Trieste race with participants from Spain, Italy, Greece, etc. 

General Trollmann, Commander of the Austrian forces in Shkoder, 1916 

17

The railway transportation during the period of Austro-Hungarian Empire included 

Shkodra, too. (The picture shows railways in one of the market streets, 1917) 

1918: The First World War was over and the Austrians left 

Shkodra. For the two coming years the city is administered by 

common European Powers (Allies). In the two following years the 

Allies took over, the administration of the city. 

1920: The battle of Kopliku took place (18 km away from 

Shkoder) causing the city financial losses of two millions silver 

crowns (not mentioning the material damages). 

Destroyed houses. A warrior of Shkodra on watch (War of Koplik, 1920) 

18

The war of Koplik - 1920. A group of Albanian Soldiers in between 

the fighting’s, captured by the camera of Marubi Photo 

The mission term of French garrison, to keep order in the city, 

expired. Following the shrewd advises of Marta Doda or Marta of 

Preng Pasha (the wife of the outstanding surgeon Sadetin), the 

consigning of the city from the commander Barti de Fortou to the 

Minister of Interiors, Ahmed Zogu, was achieved. For the first time 

Shkodra came under the administration of a government sprung from 

Lushnja Congress and officially lost its authority of the political 

capital, preserving that of the moral, cultural and economic capital. 

On the left, Marta (of Preng Pasha), the wife of Doctor Sadetin. After 10 years of 

prison she lived her last years in deep poverty, “forgotten” by everyone and 

separated from her husband and daughter Frida (on the right), who was also 

imprisoned for 30 years - the three of them were un put under absurd accusations 

invented by the public prosecutors of the Communist Regime. 

19

Doc. Sadetin, the nephew of the Turkish governor in Syria and 

Lebanon, who founded the first Albanian hospital (in Shkodra) 

and the Red Cross. He died isolated by the Communist Regime 

in the villages of Lushnja. 

20

The Commander of French Garrison, Barti de Fartou, on the day of the 

departure from his residence, after handing the City of Shkoder over to 

Ahmet Beg Zogolli in 1920 

1924: The city was involved in the events of the revolution 

lead by F. S. Noli. The Prefecture building was set on fire where the 

daring gendarmerie commander, the captain Ferid Frasheri, was 

killed. 

Willing to achieve the economic development and political 

stability within the pruned Albania of the 1913 borders, Nolists 

attempted to establish a liberal republic with a capitalist market 

economy. The projects failed leaving behind large basic needs, 

poverty and distress. Some representatives of international trust 

companies and monopolies, interested in investing in mineral 

resources, left. 

1925-1939: The capitalist development process was restored; 

there was an increase in the investments in infrastructure, education 

and in tobacco, cement, consumption, alcoholic drinks and textile 

industry. The public order was fully restored, juridical powers 

succeeded in becoming independent, the school was separated from 

the religion and political stability prevailed. 

21

Successful financial policies helped to strengthen and stabilize the 

Albanian currency. 

The domestic airport of Shkodra started to function, the 

exploitation of Buna port was improved, the domestic and foreign 

trade was intensified and the codified border traffic with Montenegro 

was released. 

His Majesty, the first King of the Albanians, Ahmet Zogu 

22

During the Kingdom period, the rule of law was guaranteed by the gendarmerie, 

famous in Europe. In the picture: The Princesses accompanied by General 

Aranitasi, etc., during a visit in the Drini Quarters in the center of Shkodra 

(in front of the Prefecture Building), 1928 

Passenger’s airplane (3 motors), flying Rome-Shkoder, 

in the Airport of Shkoder, 1939 

23

1939-1944: Special strategic interest was paid to the 

infrastructure. The airport and port of Shkodra were fully efficient. 

Trade relations with Kosovo and Italy were restored. The allies 

managed to submerge 16 sailing crafts, the owners being from 

Ulqini, but residents in Shkodra for generations. 

1944-1992: The massive fluvial transportation came to an 

end. In 1945 the State sequestrated 35 sailing crafts left (the owners 

being from Shkodra but of Ulqini origin) out of which only one, 

Saint Nicola, belonged to an owner from Saranda. 

The total isolation of Albania from Europe and the World 

from 1944 to 1992, the extremely centralized economy, the 

severance of capitalistic relations, the stalemate of the free market, 

the prohibition of any kind of trade, the expropriations and 

sequestration of the personal property, and the theft of private 

capital, finally ruined the economy of the City. Although Shkoder 

was until recently estimated as the second largest city in terms of the 

population, statistic data prove that in all aspects there were but very 

few investments (compared to those in other cities) made in the 

recent years. 

1992-1998: Even after the democratic system in Albania was 

decreed, the city, for a number of reasons, was lagging behind in 

terms of the economic development. In the course of accomplishing 

the post-communist transition in Albania, the economists, graduates 

of the University of Tirana, assumed the position of economic reform 

leaders not having the proper knowledge or data on the most 

appropriate comparative techniques to be used in Albania. The 

reformers of our times, because of unknown matters and dealing with 

unexpected subjective identifications, embarked on this mission 

without mastering the appropriate concepts or guidelines. As the 

worst and systematically damaged city in the past, the postcommunist 

transition repeated, in Shkoder, a tempest that 

24

considerably shook, also, the original social relations, which had 

been firmly crystallized over the past centuries. Being unable to 

properly understand the relationship between cultural and economic 

traditions, the transition reform leaders paid more attention to the 

naïve political requests rather than to the economic ones causing the 

deformation of the fundamental process - the free market 

performance. These “leaders”, who were educated and trained within 

limited democratic environments, often proved to have revolutionary 

tendencies in their activities, pushing everything to extremes. Such is 

the case of the unsolicited installation using the so-called "shock" 

therapy. The drastic fall in productivity, consumption, the increase in 

the inflation and the quasi-total unemployment, did outrageously 

polarize our society. The poor masses (the largest group of the new 

classification of the society) provoked by factors of the political 

hatred started very quickly to unleash their spite on the newlyenriched 

people (by speculation or fair means). 

The amateur courage of these reformers was not enough to 

completely change what was required. None of them made use of the 

analytical guidelines and descriptions that are necessary to 

accomplish the radical systematic interventions on the traditions of 

the past. However, it shouldn't be forgotten that the activity of the 

democratic system was, in reality, a pledge of the inheritance from 

the past years. The lack of the natural cultivation of the civil aid 

patriotic feelings, the imposition of “fear” upon the whole society 

(1944-1992), the flaws in the solution to the issue of the inherited 

property rights, the inability of the reform leaders to understand the 

successfully affirmed concepts and models to accomplish the 

changes, were all negative factors that delayed the elimination of the 

our communist inheritances. These factors had similar, restraining 

effects on the accomplishment of two basic objectives: the promotion 

of the market economy and creation of a political system evermore 

democratic. The lack of the historical experience to accomplish 

25

and implement a universal political platform, either of long- or shortterm, 

in order to carry out the desired changes, led to the tendency to 

imitate those countries already running market economies. Under 

these circumstances, a serious contradiction erupted between the 

political aim of the democracy and the economic aim of the free 

market. As heirs of the communist consequences and ex-members of 

the old economic state system, super centralized and overloaded with 

an illogical, mixed, unreliable and not competitive industrial sector, 

none had the competence to clearly interpret the financial 

involvements, understand the essence of the market competitiveness 

and determine the best approaches to revitalize the demolished 

economy of our City. 

The privatization process which was neither quick nor slow, 

neither partial nor complete but, of course, not totally fair added 

destabilizing effects to the turmoil in the city and the surrounding 

rural areas. In the period from 1992 to this day, the high-ranking staff 

of the purposely set up departments, in order to carry out the 

economic privatization process, found it sufficient to implement a 

simplified model suitable to a free market sample that did not 

properly assess the social costs and political disorders. Without a 

necessary legal structure, a true multiparty system and consistent 

parliamentary procedures, not only did the true democracy and 

market economy fail to be built but also no business ethics were 

established. 

The diminution of the role of the state and its incapability to 

select and affect those policies, which progressively develop the 

social and physical infrastructure that the free market cannot fulfill, 

created the delicate interdependence of the democracy with a weak 

administrative state. The lack of long-term investments, the quasitotal 

unemployment and the total destruction of the state structures 

due to the freezing and collapse of the economy caused by the 

activities of the pyramid schemes, led the electoral Zone 8 to new 

elections, too. 

26

HOW SHOULD WE CONCEIVE THE ECONOMIC 

DEVELOPMENT? 

The final solution to the political problem, pro the victory of 

the democracy gives this zone the right to seek a safe path to the 

economic development. Under the current difficult circumstances, 

the people of this area are interested in implementing those economic 

policies that would guarantee the prosperity of Shkoder which, until 

today, has keen neglected by all. The mixed staff in charge of this 

very important task should have the full know-how of the reality 

inherited from the communist society and should possess the proper 

skills to choose and implement those economic policies that would 

be able to ensure a proper strategic economic process for the back 

warded region of Shkodra. 

From the standpoint of some foreign economic experts and 

especially from some scholars of the Curtin University of 

Technology (Perth, Western Australia), the economic development 

plan of Shkoder city should focus on the immediate improvement of 

the economic welfare, without which no social harmony can be 

achieved. GDP per capita is the most important indicator of the 

economic development but it cannot be considered so reliable if it 

does not retain its positive values for a relatively long period. The 

economic growth of our region should be accepted as such only if 

there is a growth in the GDP. Shkodra’s economic development 

cannot be designed without including the factors of production, the 

improvement of the resource allocate ion and the rise in productivity 

of the factors of production. Everyone should know, particularly all 

the developers of the economic programs, that human capital is one 

of the fundamental resources for the economic growth and 

determines the value of the profit-making potential embodied to the 

individual. The human capital includes in itself: the respective talent 

(which is native), job ethics, working skills and capabilities. 

27

In an industrialized country, the “average worker” is more 

productive than his counterpart in a less developed country, such as 

the region of Shkoder. This happens, not only, because he or she 

possesses more physical capital but also because he or she has better 

job ethics and more working experience. The attainment of these 

important objectives is closely related to three important driving 

factors: education, industrialization and urban planning that started in 

these countries as early as the 18 th centuries and continued until the 

20 th century. Unlike the other countries of our continent, the new 

century finds Albania not properly affected by these powerful 

currents of development. The quick abolition of illiteracy in the 

second half of the 20 th century, the superficial education offered to 

communities, the neglect of all the actual teaching processes, the non 

- coordination of the teaching programs with those of modem 

European schools, etc, could also be seen as the results of the failure 

to carry out an effective industrialization of the country. The real 

development of industry implies the variety of those processes that 

create the economic need for an indispensable education. 

Nowadays, at time when electronics is being applied to all 

working environments, sophisticated equipment is being supplied to 

all the branches of economy, industry, army and road systems, the 

Albanian average worker does not have the kind of knowledge to 

keep step with his Balkan counterparts, let alone the European ones. 

The lack of the instructions to handle the industrial and military 

equipment, observed after the post-cold war exodus until the arrival 

of the military force “Alba” (1997), has convinced everyone of the 

reason why the Albanian workers and University graduates put on a 

common worker's - or soldier's uniform when they are in Europe or 

elsewhere. The Albanian “sui generis” education corresponds to the 

one of those categories of people who do not even know how to 

operate the buttons of an elevator and who, in the today’s western 

28

world, are referred to as the “bearers” of the modem illiteracy. In 

addition to the deficiencies caused by the ineffective education and 

industrialization, the present-day Albanian society has started to feel 

the harsh effects of the spontaneous and irregular urban planning. In 

conditions of serious overall economic poverty, the rural population, 

who is currently divorcing from the traditional life and rushing to 

urban areas, is seeking out solutions to the abnormal life they are 

living. Politically misled, most of them susceptible towards 

ambiguous party callings, at a moment when the religion is not 

playing its full role and in the splits of its inability various premature 

politicians are penetrating, the mixed population of our cities, not 

thinking hard enough and rushed by the indescribable hatred, is 

looking for anything, primarily food - meaning employment. In these 

days, when there is no production activity and the primitive industry 

has come to an end, Shkoder’s “abundant” labour market is keenly 

waiting to be educated and qualified. (Therefore, the government 

should also program the training of the human capital and that is 

carried out by official education (schools and courses) and extracurricular 

activities and the experience acquired in working 

activities. Education is one of the slowest factors of growth, but at 

the same time, it is the most important economic growth factor. 

The area of Shkoder, economically underdeveloped, finds it 

very hard to accumulate the production factors as well as the human 

and physical capital. The problem is the fact that the income levels 

are so low, that after the necessary expenses to cover for the minimal 

vital needs, there is very little income left to “purchase” as much 

education and physical capital. In today's Shkoder, economically 

ruined, the decision of whether the children and the youth should go 

to school or work is very hard, both for the families with very low 

incomes and for the government holding very limited financial 

29

esources. Thus, it might be concluded that it is impossible for the 

region to abruptly rise from a low-income levels to high ones. The 

economic growth, like the gradual accumulation of the factors of 

production, requires time. This process should influence the official 

economic strategists to distance themselves from the technical 

classical thinking and to try to shorten this time-period, by applying 

modern techniques that can attract investments. 

WHERE SHOULD THE STRATEGIC PROCESS FOR THE 

ECONOMIC DEVELOPMENT START? 

The efforts of our city to face the growing population and the 

economic requirements urged us to have a look at the clear traces of 

our city's economic self-administration in centuries, in order to 

clarify to some extend the reasons of the continuous economic 

decline after the Proclamation of Independence, and to take the 

courage to show how unprepared will, the new century, find us (the 

education being inefficient, the industry being destroyed and the 

urbanization being incomplete). It is about time that we do our best 

to set the priorities and take the proper decisions for the future. It 

should be taken into account that in our country the free-market is 

recently introduced. The economic process is taking its rise from a 

private, not consolidated sector with the help of incapable and 

unmotivated authorities from the local and central government. 

The mixed staff, charged with this very important mission, should 

detect all the possibilities of exploiting the resources efficiently in 

order to be able to face the great challenging factors expected to be 

introduced in the coming century. 

Certainly, we should consider the positive experience of our 

predecessors. We should also consider what has been 

30

plundered, the kinds of values we have been denied, the point we 

should start from, the primary goals we should set, our vision for the 

future, who should we accept as partners, the way to detach radically 

from this backwardness. 

The restoration of Shkodra port should be one of the 

main goals. 

Because of the illogical isolation of Albania due to the 

communist regime, Shkodra was deprived from the status of the 

intra-territorial port. It would be absurd not plan again the complete 

restoration of this port highly evaluated even from the modem naval 

academies. It has been proved that the birth of the city and the 

imposing building of Rorafat Citadel were because of the inland port 

of Buna. The port-city of Shkodra is one of the oldest cities in 

Europe and, as noted above, is documented in the ancient Greek and 

Roman pre-historic maps. Owing to the navigable Buna River and 

Shkodra Lake (the biggest in the Balkans), this vital mouth, for 24 

consecutive centuries, I was open and fed from navigating units 

coming from the Mediterranean countries, the Black Sea, some 

Atlantic Ocean regions. For the first time in 1944 (the establishment 

of the communist system in Albania), paradoxically for political 

motives, this port was closed causing in the region the worst general 

famine that followed since then up to present times. 

The metropolis of Shkodra, as quoted by Heredotus, managed to 

become the most flourishing centre of the 20 most developed centres 

of South Illyria. The economic growth of Shkodra can not be 

explained without mentioning its connection with the sea (the world) 

through Buna River. 

In 1502, after Shkodra was proclaimed “a city open to trade”, 

as a result of the fluvial route of Buna, the market of Shkodra turned 

to be a centre for the supply of goods in the major part of the 

countries surrounding the Adriatic Sea. 

The city’s free-market, rich in various manufactured articles 

(of 80 artisan groups), agricultural and animal products of Shkodra 

region and other foreign goods processed or not processed by 

Shkodra traders, gave energy to the economic development and 

31

increased the financial revenues that the Turkish administration was 

not obliged to provide for the city. Being self-administrators of the 

economy, with a centuries long experience, unlike what we witness 

today, Shkodra’s businessmen were interested to keep fully efficient 

structures of the city administration, excellent port services, trade 

courts, post services, agencies and chambers of commerce, foreign 

and national banks, schools, multi-religious institutions, etc. 

At the present conditions of territorial, railway, fluvial and 

airline isolation because of lack of infrastructure development, we 

should insist more than ever to realize the 1895 project to transform 

Buna in a fluvial route along all its length. The Government has no 

reason to object this undertaking at a time when urgent measures 

should be taken to bring the river under control, because in the recent 

years and especially after the hydro- technical works over Drini 

River, the river-bed of Buna has undergone substantial changes. 

The Drini water that actually flows into Buna River is now 

clearer and freer of solid underneath materials, which means it 

possesses the proper considerable eroding power. No one has 

ascertained all these enormous changes. The most typical phenomena 

are clearly reflected in the riverbanks that continuously fall-down. 

The amplitude of water oscillations is about 6 meters at the vertical 

axis. This is clearly observed in the village of Dajç and Obot. 

The research studies show that each year the river corrodes 

1215 hectares of fertile agricultural ground. The continuous and 

highly intensified erosions in the villages of Dajç and Obot are 

seriously putting at risk the protective embankments and the 

inhabited centres. The corroded banks in many places have 

approached the embankments up to 10-15 meters. 

32

The transversal dikes, built up for this purpose, are ell out of 

use. In face of such a threatening situation for the population and 

agriculture, especially the local and central government should bear 

the proper responsibility and take immediate measures to protect the 

river-banks from the daily erosion in the inhabited areas. 

I he economic development of Shkodra region would be deeply 

incomplete in case we will not consider the projects, cit' the 

specialized EU departments and those of some well-known European 

and Asian companies etc, to deviate the outflow of Drini river into 

the sea and Kiri river into the hike. In the pilot project of EU “the 

navigable Buna”, recently handed over to the Municipality of 

Shkodra, the river is highly evaluated as a “transversal route” 

connecting the Adriatic corridor with segments of no. 5 and no. 10 

corridor transgressing the ring of the port-city of Shkoder. 

By recalling our memory, we hope to enlighten the minds of 

the E.D.B. (Economic Development Boards) so that they will not 

forget the fact that only after 1948 did our city loses its role as an 

internal port and with it almost everything. 

It is enough to remind that only during the last two years two 

foreign companies have presented their requests for the revitalization 

of the fluvial route of Buna (25-30 years concessions). Referring to 

their projects, the revitalization of the port and the continuous 

renewal of navigation along the whole length of Buna River require a 

financial capital of 5 million U.S.A dollars, an amount less than the 

value of the damages caused by the river floods which swallow up 

each year 12-15 hectares of land. 

Shkodra has had its fleet 

The experienced fleet of Shkodra, as described by Tuciditi and Tit 

Livi (B.C.), had 120 ships and in the new epoch, Peter Rosa 

33

(the Venice consul) reported it to have 300 units and 5000 sailors in 

the period 1707- 1809 and at the beginning of 19 th century it had 400 

ships. 

Sailing vessels in the port of Shkoder 

The failure to be connected, in 1872, to the trans-Balkans 

railway network and the inefficient and partial use of the fluvial route 

because of the failure of 1895 project, left Shkodra out of the modern 

railway transportation and to the mercy of natural fluvial 

transportation. 

In such unfavourable conditions, like never before, during the 

19 th century up to the end of the first half of the 20 th century, the 

quay of Ulqini, Tivari and Shengjin were put in the service of 

Shkodra port. The activation of all navigation equipments reinforced 

further the maritime trade domination in all Albanian regions 

inherited from the 18 th century and strengthened its traffic control 

that embraced even the quay of Vlora. 

The intensification of the river-to-sea transportation increased 

Shkodra’s relations with the friendly markets, providing, in this way, 

sufficient revenues. But in this time, Shkodra had already started to 

decline and was suffering, more than ever, from the isolation -caused 

by the lack of infrastructure. 

34

Inspired by Sir Stanford Raffles (who, in 1819, after 

declaring Singapore a “free port”, transformed the backward island, 

with a territory 647,5 square km, into one the most developed centres 

of the Southeast Asian region) the outstanding diplomat Mr. Spencer, 

the missionary of Foreign Office for the Balkans in Shkoder, during 

Second half of 19 th century reported to London “…steam- ships of 

hundreds of tons cargo sail in the Buna River and the lake towards 

Shkodra city. Therefore, if Shkodra is declared a free port and joins 

the Trans Serbia-Danube road, will become very important in the 

region.” 

Right at this moment the sailing boats of Shkodra and Ulqini 

were on competition with the Austrian steam-ships that were sailing 

on Buna River since the beginning of 19 th century. Shkodra’s 

reaction in fact was not delayed. The supremacy of the Austrians 

represented mainly by the steam-ships of Lloyd Company started to 

feel the competing effect of the city owner’s steam-ships. In 

competition with Lloyd Company, Jak Muzhani managed to buy the 

yacht of the Bianchi Family (very luxurious and modern for that 

time). 

The port-city of Shkoder, 1917 

35

“Scutari” steamship of Muzhani family 

Peasants from the regions watered by Buna River waiting in front 

of the Customs Building. The picture shows boat no. 33 full of soldiers, a 

fact showing that the transport with these simple means of navigation, 

too, was under the control of the administration of the port-city of Shkoder 

36

Montenegrin steamship in the port of Shkoder 

Austrian steamship in the port of Shkoder 

37

Steamship of the mercantile-fleet of Shkoder 

“Antivari” steamship of Shkoder fleet 

38

Steamship of Shkoder in the river 

of Buna 

This yacht together with the Scutari, Vilajet and Fantasy steamers, 

the last one bought from the widow of Arciduche Maximilian (who 

was killed in Mexico in 1867) made up the Muzhani family fleet. 

Like all the other steamers belonging to Shkodra, the fleet of 

Muzhani family sailed holding the Turkish flag. In their interests, the 

city’s fleet transported passengers, goods, various materials and 

performed postal services, sailing northern areas like the ports of 

Shkodra, Obot, Shengjin, Venice, Trieste and the southern routes to 

Vlora, Preveza, Alexandria particularly to Malt-Bengazi. 

It is worth mentioning that at that time the journeys were 

organised in a fixed time-table. In Shkodra one could find a trans- 

Mediterranean basin passenger ship. It would be sufficient to realize 

that the journey from Shkodra to Trieste lusted 48 hours. 

The reason for mentioning the above facts is not draw in 

details Shkodra’s fl eet and its navigable units but to 

give 

39

credible arguments and show, first of all, that this city has existed 

because of its port status and its closure was a big mistake, one of the 

most aggravating factors to drive the social-economic backwardness 

in last 50 years. 

Even on the present conditions of fluvial transportation 

(without any investment in the river), the coming of an ordinary 

passenger ferry in Shkodra would be very possible. 

It would be enough to hear the ferry siren today and 

tomorrow it would be justifiable to open a consulate and other 

foreign representative offices, as well as, all the administrative 

structures that are actually missing in the port-city of Shkodra. 

We should develop the infrastructure we don’t have 

The start of the democratic process in 1992 implied the real 

unification of Shkoder with Europe and the world through 

a concrete infrastructure. 

Years 

passed and, unfortunately, no infrastructure was 

build. Instead, priority was given to subjective linkages (adheresions, 

associations with international organisations and counterparts, 

exchanges of envoys of all kinds) that the experience has proved that 

they cannot 

resist for long. It is about time not to waste any more of 

it trying to establish new “friendships”, but it the time to embark on 

the most important undertaking - the construction of the 

infrastructure at home and beyond the state borders towards Europe 

and further more. In 1858, the Austrian Consul in Albania wrote to 

Vienna that in the near future the Thessaloniki harbour would 

eclipse 

Shkoder’s market because it was connected with land roads that 

were in better condition than those of Shkodra port-city. Without 

the infrastructure in place, we cannot dodge the image of a small, 

poor and isolated country. Appropriate departments of both 

central 

and local 

government should accept projects that fulfil our needs 

40

and 

those of the regional countries. It would be absurd if our foreign 

policy inclination would be to “sacrifice” our vital interests for the 

sake of the politically engineered business and fraudulent diplomatic 

agreements. It would be an unforgivable mistake to neglect of the 

corridor Durres-Istanbuland 

and its angular extension across the 

Republic of Greece, which, because of the geopolitics imposition 

has 

often suffered from the land isolation from the surrounding countries. 

According to the declaration of the present Italian Prime 

Minister 

Prodi, this project represents a sure prospective to the development 

not only of Albania but also of the back warded South Italy. 

Detfer, a regional analyst, has insisted that the West-East 

trajectory of the telephone cable coming now from the Apennine 

Peninsula, as well as, the West-East course of the railway segment 

that links Albania, through Montenegro, to the centre of Europe, 

should 

be considered as the guide for n mere, far-reaching and 

meaningful 

policy to construct the infrastructure we lack. The 

coming of the telephone cable from Italy, the tendency of Austria 

and other Central European countries to get access to the sea through 

Shengjin, the decision of the European Union to revive the Durres- 

Istanbul highway - the energetic artery, as well as, the predisposition 

of certain European companies to accomplish the “navigable Bune” 

project, prove that in the East coastline of the Adriatic sea (Balkans), 

only the Albanian ports are situated in the shortest passage of this sea 

to the Western coastline (the Apennine Peninsula). Using the same 

reasoning as those of the old Romans, the new Europeans and today's 

government officials, we need to understand that the revitalization of 

the river-route of Buna to Adriatic (44 km long), the connection of 

the Shkoder inland pori with the future modern railway “Trans 

Montenegro-Europe” (that will be reconstructed almost according to 

the trajectory of the Shengjin-Ferizaj project of 1872), and the 

41

construction of the Durres-Istanbul highway, provide to Central 

European countries a shorter access to the sea and shorten in 

maximum the land area that is confined within the “water siphon” 

from Durres to Istanbul (the regions watered by the Adriatic and 

Black Sea). It is a fact that the construction of the sea ports along the 

Albanian coast and of Shkodra’s inland port has historically 

determined the direction of the Balkan roads. It is known that all the 

main strategic commercial roads converged in our ground ending up 

in the Albanian seaports to load and unload the goods coming from 

the East or West. Especially from 1992 onwards, the Western and 

Asian economic 

analysts have continuously advised that the key 

strategy for the economic recovery of Albania, especially of the 

artificially back warded north, should start from the rehabilitation of 

the roads according to the most up-to-date standards of the modern 

transportation. (... Unfortunately, today, some of government 

officials are trying to deform the East-West corridor of Egnatia into a 

village lane, 7-8 m wide). Albania had and still has many requests for 

concessions, BOOT, 25-30 years bid invitations to construct the 

above-mentioned inter-country roads, as well as, intra-country roads 

such as the highway and railway of Malesi e Gjakoves-Konispol (the 

railway with its serrate extensions reaches the deepest territories like 

Kelmendi, Dukagjini, etc.), the international airport in Koplik- 

Postopoje and Bushat (according to the Italian project of 1939), five 

domestic airports and the immediate construction of the Shkodra- 

Podgorice highway and railway. 

According to the best-known business analysts, the Balkans 

peninsula has a big investment potential that was not realised due to 

certain conflicts or the fear of war. The accomplishment of the 

above-mentioned investments in infrastructure is a strong driving 

factor to turn Albania into an economically powerful country, with 

a 

strong trade performance, and political stability. 

42

In this way, Albania would be able to contribute to the neutralization 

of the risks threatening the equilibrium between the Balkan 

countries, without which there is no reason for the foreign 

businessmen to invest in Albania. To accomplish the extension and 

modernization of our seaports, there is clear information it the central 

government reasons, like in the past when Albania was isolated 

from 

the world, in concordance with their local services. After the opening 

of Albania in 1992 a new development strategy was expected for the 

seaports of the Northern part of Albania, since they met all the 

geographical conditions to become “international” ports (such as 

Durres, Shengjin and Shkodra). It is now the time to insist on the 

accomplishment of the unification of our ports with the European 

highways and railways and, then, deal with the investments that meet 

the needs of the local tourism industry and travel agencies. In order 

to make more profits most of the coastal countries have created 

many 

facilities and services in their ports, the reduction or removal of taxes 

in order to attract the clientele of the non-coastal neighbouring 

countries. Therefore, besides the coverage of the Northern area, 

Shkoder and Shengjin should develop to such a point so that they are 

ready to serve the needs of Montenegro, Serbia, Bosnie-Hercegovina, 

and other Central European countries. Whereas Durres would cover 

Macedonia, Bulgaria and the entire labyrinth of the Asian route 

network ending in Istanbul. Only in this way, the forgotten North 

Albania, and the chief-town of Shkoder, will regain the lost 

economic authority. Of all the above-mentioned 

countries, it is 

estimated 

that 55-75% of the goods flows will occur through our 

seaports. 

I t should be borne in mind that the government could invest 

in relatively unproductive projects, or likewise, could pursue a policy 

that would encourage unproductive private investments. 

43

By analyzing, let’s say, the ‘principles’ of the planning of 

state funds and strategies for the seaports development, the 

government decision to allocate development funds to Saranda 

rather 

than to Shengjin seaport, or better to Vlore and nothing to Shengjin 

and Shkodra seaports, is considered wrong. We base this judgment 

on the archived expert opinions in these fields and, also, on the 

recent data of Muchel company (a French company assigned by the 

World Bank to accomplish the master-plan for the development of 

the Albanian ports), showing that all the Southern seaports (the port 

of Vlore is classified in the second category) due to their mountain 

ranges surrounding them, are considered as isolated from the Eastern 

part of Albania and Balkans. 

This rationale is enough to understand their distinction from 

the Northern seaports, in this case from the ports of Shengjin and 

Shkoder (free of any geographical obstacle), which seating next to 

the only railway leaving Albania towards Montenegro-Europe, meet 

all the conditions to become international ports and have all the 

chances to turn into unloading centres and confluent points for all 

the 

roads of Northern Albania, East Balkan countries, as well as those of 

Central Europe that do not have access to the sea. Talking about 

seaports and based upon the experience of the countries with 

advanced port services, it would be much more effective if the 

development investment were carried out in the Shengjin seaport 

rather than that of Saranda. 

It is not by chance that in 1939 the preparatory works to 

extend the Shengjin port to the lagoon of “Knalla”, at its entrance, 

started. Because 

of its natural location, Knalla region is very suitable 

for the port extension. Besides the water depth which permits 

shipments of heavy tonnage, the vast land space which exists in the 

Knalla lagoon also permits the building of enormous stores 

and the 

installation of loading and unloading equipments (cranes, etc.). 

Referring to the Italian project, Shengjin has all the potentials to 

become a port times bigger than that of Durres and one of the biggest 

44

of Adriatic corridor. 

The unification of the inland port of Shkodra and the seaport 

of Shengjin with the railway and highway network of Montenegro, as 

well as the connection of the seaport of Durres with Istanbul through 

corridor No.8, are expected with great interest also from the North 

Italian maritime transportation companies. The transportation of 

goods between the countries of Central Europe and Asia through the 

ports of the Albanian upper half (Shkodra, Shengjin, Durres) is of 

great advantage, especially, for Trieste, Venice and Ancona, since it 

is done via the shortest trans-Balkanics routes, implying also lesser 

expenses. As noted above, we may deduce that the government 

would be less interested in undertaking or promoting investments in 

the seaports designed for limited regional services, as it happened in 

the period of the closed and super-centralized socialist economy, 

rather than in those which perform a wide variety of services not 

only in their areas, but also as far as the heart of Europe. 

While waiting for the construction of the inner land 

infrastructure, communicating with corridors No. 5 and No. 10 and 

the neighbouring countries (respecting the most advanced and up-to 

date standards), in order to gain its vitality, our city should 

immediately make use of the railway transportation - still fully intact, 

the lake transportation using a tow-boat and other navigating units 

suitable for this purpose, and also all kinds of hydroplane 

transportation by making use of the lake surface. (Some companies 

have offered such services). 

What shall we include in the strategic process of the economic 

development? 

Conscious of the inadequate and defective instructions in 

schools of economics in Tirana and the lack of experience in the 

the 

45

market economy game, 

the staff in charge of this mission is obliged 

to co-operate 

with their compatriots overseas (the Diaspora in 

Europe, USA, Australia, New Zealand, Asia) and also with qualified 

partners of the western hemisphere residing in Albania. We must pay 

very much attention to the recognition of their status, their operating 

limits, the co-operation rules, the concrete indicators of the outcome 

of their undertakings in Shkodra. The co-operation with foreign 

experts means also profound studies focused on the future, aims for 

the realisation of concrete projects compiled in compliance with the 

natural sources and resources. 

Planning should be as objective as possible because only in 

this way it can encourage the intervention of the management groups 

in the daily realisation of the strategy chosen to face the 

unpredictable changes and respond to unexpected situations. Owning 

the 1/10 of territory and almost this much of the Albanian 

population, the region of Shkodra holds the first place for the electric 

energy production, water resources, industrial and geological 

reserves of cooper and poly-metals, useful non-metal minerals, and 

the second place in the wood industry. 

Of special importance is the enormous and ‘proteinic’ 

mine 

of the lake and Buna river, and the very rich market with a youngage 

labour force (considerably qualified for classic and modem 

manufactured production). 

The planning of the economic development should be done 

based on a rational model where 

the concretising, successive 

thinking 

and action should combine in harmony. 

There can’t be any exploitation of forests without their 

revitalisation. 

Until 1950, Albania was evaluated as being one of the five richest 

European countries in forests. During the 19501985 period, the 

socialist government sponsored the auto destructive policy of 

46

deforestation (to create new agricultural lands). The state enterprises 

established for this purpose, in the region of Shkodra alone, have 

destroyed each year a 30 hectares area of various timber forests that 

existed since ancient times. 

Actually, the forests in the region of Shkodra cover an area of 

54,410 hectares or 35.8% of the whole Shkodra territory. Regarding 

the way these forests were administered, 31,560 hectares or 58% of 

the entire forested surface and 3,456,000 m 

of the total volume are medium 

forests; 

eties of 

ps 

ll around Europe for its 

diversi 

e 

smetic industries (complete studies and 

invento 

s 

in goals of 

Shkodra’s economic development strategic process. It is necessary to 

naturally 

vive the forests using seeds, grafting and 

terventions with modem artificial techniques. 

3 or 75% of the total 

volume are tall forests; 13,400 hectares or 25% of the forested 

surface and 718,000 m 3 or 15% 

and 9,450 hectares or 17% of the total surface and 376,000 

m 3 or 10% of the total volume are low forests. 

In the forests of Shkodra region, there are 54 vari 

woods, not mentioning the rare exemplars. It is enough to say that 

300 hectares of land are occupied with chestnut-trees. 

In the coastal part of our region (zone of Velipoja) there are 

328 hectares of natural and cultivated forests and 5 watery swam 

having a surface of 302 hectares. All these 630 hectares make up 

Velipoja’s hunting resort well-known a 

ty of flora, fauna, domestic and migratory birds, etc. 

The forests in the region of Shkodra have a great and divers 

potential of medical, tannic and ethereal-oil plants wanted by the 

pharmaceutical, medical, co 

ries of these plants exist). 

The revitalisation of our forests should be considered a 

the most important engagement and one of the ma 

fulfil all the conditions and provide the necessary means to 

or imposingly re 

in 

47

o 

are realising here what is legally 

prohibi 

y 

0 m 3 

In order to end the further destruction of forests we should 

stop their exploitation from foreign companies, forced by the law t 

quit their productive activities at home, which in the name of 

“philanthropic” investments 

ted in their countries. The Albanian lawmakers cannot keep 

silent and not change the technical regulations and legal structures by 

which out of the 3 456 000 m 

as been destined to 

industr 

and 

specula 

. 

profess 

d in 

e with our forests and breathe 

through 

city 

3 volume of tall forests, 2 346 000 m 3 

have been destined to fulfil the requirements of the wood industr 

and 1 110 000 m3 destined to satisfy the heating needs (burning 

wood); out of the 718 000 m 3 volume of medium forests, 220 00 

have been selected for industrial use and 498 000 m 3 for burning 

wood; all the low forests volume (376 000 m 3 ) h 

ial use and burning wood. 

It is the time for us to think about the revitalisation of the 

forests and not their exploitation. It is an unreasonable 

tive (giving way to abuses) principle to allocate to the 

industry only the timbers of more than 10 cm diameter. 

The exploitation of forests should cease for a period of at 

least 25 years and their cutting should be limited at the maximum 

The cutting of the woods should always be observed by the 

ionals and according to the natural changes and physiological 

requirement of the timber resources that are preliminarily specifie 

the official protocols as unavoidable and necessary. 

Only in this way we can liv 

their filter. 

Fifty years ago they have been present even inside the 

while today they have moved away but still not so much, 20- 41 km 

far. 

We should learn from the successful experience 

of the foreigners. 

It would be of great interest to base the identification of Shkodra's 

48

development 

strategies on the most successful economic policies, 

proved as such in their prior implementations in several countries of 

the world. The abandoning of the agricultural economy policies 

and 

the adoption of the industrial economy policies, lead to the economic 

growth experienced by the industrialised countries. One of the 

essential factors of the positive changes in the economies of these 

countries, was the initial super growth in agricultural productivity. At 

the same time, there was a very quick growth in the contemporary 

manufactural production. The fact that both these factors have 

encouraged the modem development of these countries, implies that 

industrialisation is the key to development. As a conclusion, the first 

thing to do, in the original region of Shkodra, is to target the growth 

in agricultural production and, simultaneously, 

to allocate the 

financial resources for the industrialisation of the region. We should 

be cautious that the industries to emerge would have the necessary 

development level to produce at low costs, since “small industries” 

are unable to do so. 

Taking into consideration the agreements of the ‘80s, the 

major part of the countries agreed to reduce the barriers of trade 

in 

order to be able to participate in the world market. Our economists, 

too, should support the liberalisation of imports by reducing the 

tariffs and quotas and promoting exports (if necessary, 

through 

currency 

devaluations by means of direct measures, etc...). 

Our economic 

strategy that could serve the Shkoder City is 

the outward-oriented 

development strategy. According to this 

strategy, the relations with the export markets have a positive 

influence 

on the domestic producers, thus improving the quality of 

their goods. The export of the domestic products versus foreign 

imports is accompanied with the drive or incentive to improve the 

quality 

of the goods and increase their sales. The best example of the 

49

effects of this incentive, experienced in the adopting outwardoriented 

development strategies, is clearly shown in the success of 

the newly industrialised economies, NIE (Newly Industrialised 

Economies), of East Asia. They include the so-called “Four Tigers”, 

i.e.: Korea, Taiwan, Hong Kong and Singapore, as well as Malaysia, 

Thailand and Indonesia, which are right behind corner. The last three 

have started to grow tremendously, but leading them all is Japan. 

Mainly due to the increase of the manufactural exports, 

during the last two decades, not only did the economies of these 

countries experience rapid growths but, until recently, they escaped 

the current world-wide economic crisis and, what matters most, 

resolved the unemployment problem. 

At the beginning, having as a primary aim the protection, of 

the small producers, these states did generally refuse the free entry of 

imports. Unlike the forecasted projections of our economy planners, 

it was only after some 

time, when improvements in the domestic 

products 

were witnessed, that the NIE economic leaders, with a 

sound reasoning, 

changed tactics by allowing the free entry of 

imports. Their objective was premeditated; the free entry of imports 

exposed the interests of the domestic producers to the game and 

lessons of the free market competition. 

It is obvious that in each of these cases, the adoption of the 

outward-oriented growth strategies, alone, is not enough. The 

success es of the “Tigers” economies are also closely related to their 

very high interest rate savings (up to 40%), utilised also to finance 

the official education (schools, courses), as mentioned earlier. 

Usually, the “Tigers” have shown to be conservative in their fiscal 

policies and have approved a small government budget compared to 

the GDP. 

50

How 

should the government role on the economic 

development be evaluated? 

For many centuries the population of our region has lived 

making use of the land, water, and forests and, during the last 

decades, exploiting useful minerals. 

The way these resources are processed, exploited and used, 

determines the level of the economy, the security, the health and the 

prosperity 

of our region. 

The deep backwardness we have inherited in all fields, 

essentially, has its origin in the extremely centralised leadership of 

the economy (from the capital city). It is the time to insist on the 

decentralisation of the governing, according 

to the Carte of 

Strasbourg. 

Nevertheless, the initiatives to prepare the strategic 

process of the economic development for the back warded region of 

Shkodra should respect the tendency of the central government to 

avoid decisions that feed or lead to social-economic crises, and 

support all the efforts to shorten as fast as possible the transition 

period and face the changes that the 21 (the 

don as soon as possible 

the tota 

t we base the economic development process on a strategy 

where besides the permanent resources (being the sun, light and 

water), an important place should be given also to the exploitation of 

resources that nature grants only once (the minerals). 

st century holds in itself 

unsuitable position in an environment of trade liberalization and 

economic globalisation). 

No doubts, our interest is to aban 

l backwardness and develop the economy on strong 

foundations. 

In a country of 3.4 million of people, our city has all the 

possibilities to solve the inherited problems. Famous European 

analysts are not only optimistic but are also confident that Shkodra 

and its surroundings with a population of 224,557 inhabitants can 

accomplish the needed modernisation within a 3-4 years period. It is 

enough tha 

51

Brian Shinner (USA) is right when he says “The great 

empires reached their universal prosperity 

when they were able to 

excavate 

and exploit at low costs the mineral resources and vanished 

together 

with the destruction of these resources”. 

The universal development of the most industrialised 

countries in the world (G 7) is mainly achieved through the 

exploitation 

of flammable minerals (petrol, gas, coal, mud of coal 

bitumen, radioactive elements, metal and non-metal minerals. Since 

many kinds of metals have 

been destroyed and those that remain are 

deep-down the earth requiring big expenses to excavate and process 

them (fuel to melt expensive pigments used to stop the corroding 

activity), during the last 2-3 decades it is witnessed the tendency to 

substitute metals with non-metal minerals. It is becoming more 

evident in the technical-scientific literature that the indicator of a 

country industrialisation level is being based on the increasing 

inclusion of non-metals and avoidance of metals. According to the 

research data, it is shown that out of 70 non-metal minerals 

discovered in the entire Albania, 40 of them can be found in the 

region of Shkodra - Lezha. This other gift of God should be highly 

valued by the local authorities of our region because these non-metal 

minerals, considering their 

excavation volume and value (in dollars, 

etc.), are ranking second after the fuels leaving the metal minerals 

in 

the third place. 

The simplest 

European citizen is well informed that the 

primary responsibility of local government is the economic 

development. In the hard economic conditions, this government first 

should supervise and reduce to the tolerable limits its administration 

expenses and the parasite staff, interrupt the needless activities such 

as ceremonies, celebrations, trips abroad. 

The leaders of the local government should consider the 

interests of those from which they were elected and espeally of 

52

those u nemployed. They should do their best to keep the prices of the 

main articles under control, not to allow the daily suffering of the 

poor and ruination, in general, of the educational and medical service 

level. 

The development of Shkodra region should be based on 

the 

most appropriate bilateral and multilateral economic interdependence 

inside and outside the country. We should analyse the successes and 

achievements of others to see if they are applicable to our economy. 

We should not isolate ourselves from the progresses of the others; it 

is time to throw down the “Chinese wall” of ideological, political, 

racial, religious, etc. hatred. The new leadership of the oldest city in 

the Balkans and one of the oldest in Europe has suffered from the 

isolation period and should not forget at any time the lesson: “to stay 

alone means to experience backwardness”. Considering the fact that 

the hydro-energy reserves of Shkodra region are enough to satisfy 

the demands of some regional countries for electric energy and the 

deficit (40%) of the neighbouring Republic of Montenegro, even 

we 

can profit from their advanced level of industry and technology 

without damaging the planned production and as a small region, we 

should not spend money to reconstruct and install different types of 

technologies. 

The completion of the industrial chain we wish to achieve 

should not submit 

itself to the rule of turns. No investment should be 

refused under the pretext that, in our economic development plans, 

it 

is foreseen sometime in the first decade of the coming century. 

In 

order to solve the unemployment problem, the local government 

should welcome investments, especially those that tend to implement 

long term and important projects. The requirements of the economic 

development hold responsible the leaders of 

the local government if 

they accept transplantation of used or out-dated technology, coming 

from E.U or more distant countries, instead of modern technologies. 

53

Taking into account the gist of what has been introduced so 

far, we should to turn the eyes on the role of the government and its 

functions regarding the economic development methods. As to this, 

there are 

contradicting opinions, but in general, there are two 

ultimate 

points of view: 

• First, the Government might decide to perform a leadership 

role in the economic process. 

• Second, the Government might decide to keep aloof from the 

economic issues. 

The East Asian newly industrialised countries have a long 

experience in this field. First, it is worth mentioning the complete 

“laissez- faire” approach, as applied in Hong Kong. Second, the other 

extreme consists of the government's general intervention into the 

running of the economy, as applied in South Korea until the '80s. 

The experts’ views have converged on the point that the 

government should play its part in running the economic activities, 

by developing a solid legal macro-economic environment leading to 

the economic progress. Unfortunately, the governments of many 

“developing countries” 

are full of parasitic and very incompetent 

personnel, 

sometimes so corrupt, that they are not able to perform the 

right interventions. 

Hence, a question arises: Is it possible for the poor country 

economies like Shkodra’s economy, to reach the level of the 

industrialised economies? According to the opinions of most 

economists graduated from the Tirana University, this is hard to be 

achieved, but we are convinced that we have all the possibilities to be 

successful in this aspect. Shkodra has all the necessary grounds to 

accomplish its goals all it needs is to strictly adopt the Japanese 

method. 

54

In what 

kinds of investments are the foreigners 

interested? 

Referring to the files of the cross-sectional studies concerning 

the investing potentials in the region of Shkodra, the foreigners have 

paid attention to the following: 

Construction of hydropower - stations 

The region of Shkodra ranks first as far as the hydro- 

energetic 

reserves are concerned and has drawn the attention of the 

forei gn companies to exploit them. Up to now, they have offered to 

build one hydropower-station located the fountainhead of Buna river 

(according to Mehdi Frasheri’s ideas in 1940), three on Shala river 

(Dulcagjin) and one on the deviated Drini river (Bushat). In the 

following table we will present the main data. 

No H.P.S Power (kW, MW) Production(kW/hr, MW/hr) Building Cost 

1 Buna 10.000 kW/hr 50 million kW/hr 15 million USD 

2 Dukagjin 2.000 kW/hr 11.000 million kW/hr 2 million USD 

3 = 9.000 kW/hr 48.000 million kW/hr 11 million USD 

4 = 9.000 kW/hr 49.000 million kW/hr 12 million USD 

5 Bushat 2 x 40 MW 350 million kW/hr 160 million USD 

Out of all the hydro-energetic centres (HEC) that of Buna 

is 

to be constructed for the first time in our country since it will be 

elevated on a field river. We should pay special attention to the 

ecological issues concerning the content of the water and its 

movements from the lake to the sea and vice-versa. 

In order to defend the fauna the construction of an 

appropriate passage (according to the Scandinavian countries’ 

practice) is indispensable. The production of electric energy 

55

in the HPS number 2,3,4 is achieved using PELTON standard 

turbines while in those of Bursa and Bushati using BULB standard 

turbines. 

The construction of the small HPSs, within the Alps areas 

(that hold great potentials for the industry of tourism) and close to 

the Montenegrin regions in need of electric energy, is of great 

interest 

to the investors. This is due to the amount of the produced 

electric current and the guaranteed market as well as the low costs 

resulting 

from the minimal losses in the transmission. 

Excluding Bushati HPS it is possible to produce, only from 

the small HPSs (1,2,3,4), a 30 MW power that can approximately 

provide 160 million kW/hr in a year, which means (1000 kW = 30 

USD) 4.8 million USD an amount that equals the annual budget 

allocated by the Government to the District of Shkodra. 

- Marina Harbour for Yachts and Cruise boats. 

(Restoration of the inland port of Shkodra) 

- The “ Navigable Buna” Project (essentially similar to that of 

18 95) inte nds to implemen t the all time (seaso ns around) 

transition 

across the fluv ial highway of the fifth category (105x 12x3 

m) units. 

- The construction of tourist ports and small wharve s along the 

la ke and riverbanks. - The cons truction of roads on both banks of the Buna 

River and 

the eastern bank of the lake (the roads on the western bank of the 

lake exist). 

The transformation of Shkodra into an intermediate tourist 

centre 

The favourable geographical position, the intertwined blue Adriatic 

and green and white alpine tourist routes, confined by the transparent 

waters of three rivers and the lake, and the great popularity as 

an 

56

inland port city has drawn the attention of the world’s most well 

known comparatives as far as the tourist industry is concerned. 

Considering 

the unpleasant experience and many past mistakes of the 

western tourist centres, the main aim of the investors is already 

known to us. 

They intend to build in Shkodra a modem tourism industry, 

being qualitative, cultural, environmental and able to satisfy the 

tastes of the clients coming from all around the world and fulfil the 

demands of all the generations. 

In their projects, a special attention is paid to the development 

of tourism in harmony with the protection of the environment and the 

natural watery life, fauna and flora. 

It is paid a special attention to the requirements for a mine 

infrastructure and the perfection of tourism industry services 

(roads, 

water piping, electricity supply, telecommunication because together 

with the enormous attract we potential of the environmental 

resources, they create a lot of recreation facilities 

providing to the 

region 

of Shkodra new gifts. These gifts are to be included in the 

itineraries of the tourist tour “mosaics” planned in the Mediterranean 

basin, in the form of navigation to a satisfactory destination in all 

aspects. 

- Placing 

Rozafa citadel and five fortresses of the nearby small cities 

under the exploitation of tourism business. 

The fate of Rozafa citadel is safe because it is well protected 

and 

as such will be given priority in the project of the Adriatic 

Venetian castles. 

The city of Venice, Emilia-Romania 

region, Puglia and the 

Greek 

cities of the Aegean Sea have taken upon themselves the 

renovation of the vestiges located all over the Mediterranean basin in 

order to reshow the observers, tourists etc., the complex imposing 

architecture of the Venetian castles. 

57

- Financial district (15 office buildings, 6 branches of 

international banks). 

- 

- Reconstruction of the street network, the circle main street 

of 

the city (with two lanes). 

- Electricity distribution following modern standards. 

- Private airport (for small to medium size aeroplanes). 

- Private airport for big size aeroplanes (Koplik - Postopoje). 

- 

Four 5 stars hotels. 

- Four 4 stars hotels. 

- Shopping moll (60 duty-free retail stores, restaurants, 

cinemas). 

- Private hospital. 

- Residential area on the Tepe hills: 180 private villas. 

- Residential Towers (condominiums) . 

Investments in the Adriatic coast 

We are talking about the impressive beach of Velipoja that is situated 

15 km of straight line far from Shkodra. The white, clear and not 

exploited sand, the obvious width of the beach, the 15 km length and 

its bordering with natural and cultivated forests (as mentioned above) 

has drawn the attention of some companies 

of the European and 

Asian of tourism industry. 

58

- Three 5 stars hotels. 

- Six 4 stars hotels. 

- International 

golf course. 

- Residential area: 50 private villas. 

- Private airport (for small size 

aeroplanes). 

- Two-lane straight roads connecting Shkoder and Velipoja. 

Investments 

in the mountainous region 

- The reconstruction of Shkoder-Razem, Shkoder-Theth and 

Hot-Vermosh roads according the highest standards. 

- The opening of a mountainous tunnel in Kelmendi (11 km) to 

shorten the Hot-Vermosh 

road about 35 km and make 

possible the all-year-round transition (this road in winter gets 

blocked). The opening 

of the mountainous tunnel of 

Kelmendi will contribute also to the reduction of 100 km in 

the communication network among the Albanian communes 

and the cities 

of the neighbouring Republic of Montenegro. 

- The construction of mountainous railways leading to 

Kelmendi and Dukagjin. 

- The construction of roads leading to the centre of “Bjeshkët e 

Namuna”, Lepush, estimated as the centres holding the 

rarest 

beauties of the Northern Alps. (According to the British 

traveller, E. Durham, the Alps of the Northern 

Albania are the 

most attractive of the region). 

- The establishment in the Alps of centres for all kinds of 

winter and summer sports. The projects foreseeing the 

construction of the necessary structures and complexes to 

practice these sports safely and easily have already been 

archived. Five of the projects are foreseen in the mountainous 

region of Kelmendi (the most important in Vermosh acid 

Lepush), one in Theth of Dukagjin and two in Razma. We are 

talking about sliding 

tracks, diving-boards, mountain 

climbing, delta-planes, summer beaches in the Cemi and 

59

Shala banks, canoeing (in these same rivers), exploring caves 

(more than 50), touristic 

hunting, walking through the Alps. 

- The construction of 

five touristic villages inside the Alps to 

meet with the flux of the tourists 

all around the seasons. Five 

3 stars hotels, 20 villas, a hospital offering 

emergency 

services, 5 platforms for helicopter landing and internal 

cable-car transportation. 

- Investments in telecommunication, electricity supplying 

(from the above mentioned HPSs over 

Shala River) and 

central heating. 

- Converting the Kelmendi region into a developed agro-tourist 

centre. 

(Base d on factors such as the climate gifts, agricultural productivity, 

fruit-culture, stock-breeding, traditions of hygiene, inherited habits 

of 

hospitality 

and predisposition to help and serve the visitors and 

travellers, this region will achieve a strong economic development). 

Investments 

around the watery area of Shkoder 

Various investment requests, archived since 1994, along the bank 

of 

our half of the lake (36km) and the 

44 km of Buna banks: 

- 

- 

- 

- 

- 

- 

100 private villas 

eighteen 3 stars hotels, 

construction of tourist, industrial and artisan centres, souvenir 

shops, 

- construction of golf fields, hippodromes, fishing and bird 

hunting resorts, 

underwater sports, sailing, windsurfing, 

ferry and cruise travelling from Velipoja to Buna and the 

Lake. 

walking along the banks of twisting river beds, meaning 

60

wonderful 

panorama viewing; snow- mountain canoeing, rocky 

slop es , waterfalls, various forests, alpine flower fields, offering the 

tourists the possibility to paint and take pictures, to catch fish and in 

some places 

to exercise the tourist hunting. 

All the projects offered to step in or organise the internal 

navigation, to bring under control the water movements (with 

specific guides and forced crossings), as well as, the projects aiming 

to achieve the completion 

of Shkodra’s watery area with all the 

necessary elements to establish a modern tourism industry (all basic 

infrastructures: roads, bridges, lights, waste and water discharging, 

public transportation etc.) have been analysed and the conclusion is 

that none of them goes against the policy of protecting the natural 

environment of the lake and Buna river. 

- A yard for constructing fluvial and sea navigable units. 

- A highway joining Shkodra port with no. 5 and 

no. 10 

corridors. 

- An electric train connecting the port city of Shkodra and 

Podgorica. 

Exploitation of mineral resources 

Cooper: Different companies are waiting for the green light 

to invest in cooper excavation in Shkodra - Puke region where it is 

well known to exist 65% of the geological and industrial cooper 

reserves 

of Albania. 

We are talking about projects offering a very 

advanced 

technology for the exploitation of volcanogenic cooper (found in 

Puka), volcanogenic-sedimentary cooper (found in Shkodra and 

Puk e) . It is insisted to start exploiting the reserves discovered in Palaj 

- Karme (Shkodra), where 5-7% of all the Albanian cooper is found, 

61

half of which is rich in more than 2% cooper having the advantage 

of 

being sent for the melting process without the need of being 

enriched. 

The foreign investors are interested in 

Shkodra region 

because 

70% of the gold and silver combined with cooper and polymetals 

of all Albania, is found here. 

Exploitation of non-metal minerals 

Companies from some European and Asian countries ask 

invest in: 

The calcareous sources (Postribë) 

There are 36.7 billiard tons of such reserves that can be used 

for cement production and can be found close 

to clay and silicon 

deposit in Drisht (used for clinker production). The source is in 

optimal exploitation conditions, few meters ' away from Kiri river 

bed , 5 km away from the city and 2.5 km away from the railway. 

The industrial tests prove that, besides the cement, over 500 

brands of white cement (mixed with kaolin) and dehydrated 

limestone 

can be produced. 

The 

dolomite sources in Rasek 

Some companies of Eastern Europe have requested to start 

the exploitation of 4 million tons existing in Rasek. The intention is 

to produce bricks, dolomite panels and blocks to satisfy the needs of 

the refractory industry 

(castiron furnaces and cement kilns), to 

produce 

the mineral cotton (for hydro-isolations and as raw material 

for the textile industry) used as additional material for glass 

production. 

The Albitofire sources in Guri i Zi 

There are I million tons' of these reserves that serve the 

to 

62

industrial production of coloured glass, telephone isolators and, used 

with the calcareous kaolins, that of white cement, grey slabs and 

tubes, and antiacid betons, etc. 

A consortium from Southeast Asia is willing to realise its 

project for the exploitation of the reserves. 

Kaolin 

Sources 

In Dedaj-Vig-Korth Pule exist 75% of the total found 

reserves in Albania. 

A European company is much interested to start their full 

exploitation. It is known that these materials 

serve the preparation of 

the porcelain dough, the extraction of the aluminium hydroxide and, 

from their enrichment, they create filling concentrates for the paper, 

rubber and leather industry. 

Clay sources 

Italian, Dalmatian and Slovakian companies have presented 

projects to enable the exploitation of the delta clay basin Bushat 

Zefjanë. Their factories will produce bricks, tiles, tubes but also the 

paste 

of porcelain plates and hydro-sanitary equipment. 

Fluoride 

sources 

As a mineral of a rare and scarce grouping in the world 

market, the exploitation of fluorides is based on criteria that differ 

from those of the minerals in general. 

Fluoride reserves reach the 50 000 tons. 

During 

1990, in Brazhdë and Shosh of Dukagjin, 100 000 

tons of fluorides were discovered, an amount which justifies 

investments in this area. 

A Japanese consortium has presented the request 

for the 

exclusive exploitation of fluorides in Dukagjin, and such an 

63

investment will be followed by the deserved development of this 

zone with railways and cable-car transportation. 

The Japanese have carefully 

considered their investment 

because there are over 70 areas of use of fluorides and according to 

the geo-chemistry data comes out that in their 

mineral field, the 

presence 

of poly-metals and rare valuable minerals is certain. 

Decorative-stone 

sources 

In Mes, Rrapshstare and in the city of Shkodra, over the 

Tepe 

hills (close to Rozafa Castle), thousands of marbled calcareous 

stones with pleasant decorative features are found. 

Some Italian companies are highly interested to invest a lot in 

the source zones, while two Austrian companies and a Turkish one 

want to realise middle and small investments, exploiting firstly the 

Tepe reserves that possess a deeper marbling feature making them 

very 

pleasant (1 million tons). 

Industries 

Within the climate of a market economy and a real opening 

(conditioned by the construction of the infrastructure) the city-port 

of 

Shkodra, located on the separating border between Albania and the 

Republic of Montenegro, possesses all the geographical possibilities 

and 

advantages to became, as Mehdi Frasheri foresaw it, a first hand 

commercial transportation 

centre with a developed industry. In the 

conditions 

of trade liberalisation and economic globalisation, a 

special attention should be paid to the construction of those 

industries that can survive and get hurt as little as possible from the 

market competition. The escape of Shkodra 

region from the 

backwardness can not happen without the construction of a diverse 

light industry. 

64

Therefore, Shkodra will be able to satisfy the city demands 

not only, as a developed touristic centre but, as we 

mentioned above, 

also as a zone of commercial transit for other countries. 

In reality foreign investors from USA, Australia, France, 

Thailand, following the above mentioned visions, have presented 

their projects for the exploitation, as raw material, of the production 

of 

the enormous area of fertile land of Shkodra region within which 

it is witnessed the successful 

cultivation of 5000 hectares of wheat, 

4000 hectares 

of maize, 3500 hectares of tobacco, 1000 hectares of 

vineyards, 2000 hectares of vegetable glass-houses, 1200 hectares 

of 

rice, 300 - 400 hectares of onions. There are 54 410 hectares of 

forests growing healthily (300 hectares of chestnut trees alone) and 

there is a high potential of livestock-raising, bee-keeping, silk-worm 

raising, fish-farming, olive and sunflower growing, etc. 

- chocolate factories, 

- 8 milk processing factories (4 of average capacity and 4 of 

small 

capacity) 

- 4 alcoholic drink factories, 

- 2 water distilling factories, 

- 2 canneries (for fruits and vegetables), 

- 4 tobacco factories, 

- 2 sauce factories (average capacity), 

- 1 maize processing combine, 

- 1 leather processing factory, 

- I classic-shoe factory, 

- 1 sports-shoe factory, 

- 1 factory to process the complex products of the proteinic 

“mine” of Shkodra’s lake (the largest one in the Balkans). 

- 1 small 

capacity combine to process the aged timbers of our 

forests. 

65

HOW CAN WE OBTAIN THE INVESTMENTS WE DON'T 

HAVE? 

The program for the economic development of Shkodra 

should be based upon two basic investment sources: 

- Domestic savings 

- Letting in foreign savings through loans or aids. 

Since the domestic resources do not meet the conditions for the 

capital accumulation, then the attention of the economic 

programmers should not be primarily focused on a policy that 

encourages high savings. This is because the level of savings 

depends also on the operating efficiency of the savings institutions 

which in turn depend on the banking system. It is obvious 

that our 

banking 

institutions do not only offer suitable depository services but 

also they are not able to generate their usual profits. The weak 

foundations of the present day market economy and the fragile 

political stability continue 

to obstruct the accomplishment of the 

fisc al, monetary reforms and the integration 

with the western 

banking system. The Albanian bank s, no 

matter how they are 

denominated, do not enjoy the deserved independence 

and still 

cannot be released from government 

policies- the state budget. 

Taking in consideration the quasi-global unemployment 

rate and 

the lo w industrial production level, it is 

clear that we cannot even 

app ly the economic method of "obligated 

savings" which, in itself, is 

a very powerful way to restrict consumption and increase savings. 

This mechanism puts "aside" part 

of the output, thus increasing the 

capital accumulation. It was the same mechanism that collected huge 

savings in China, which explains the origin of the "dramatically " 

successful results of the Chinese economy over the past 20 years. 

If the market 

economy started to operate on sound economic 

66

grounds, an equivalent policy could be applied in our country 

through the 

budget. The economic planners should never forget 

that only when the government is capable to collect more taxes 

than it spends to purchase the material goods and deliver 

services, it is able to precisely plan the investments of the 

remaining resources in infrastructure, 

state- run enterprises or 

channel them to various companies through the development 

banks. 

Since it is clear to all that right now in Albania, foreign savings 

represent the sole condition for the capital accumulation, then 

Shkodra region should pay special attention to three ways of 

attracting foreign savings: 

- Obtaining the necessary direct investments from foreign 

companies investing for this purpose (for instance, Australian 

companies construct the infrastructure in Vietnam, whereas 

Japanese companies build factories in Indonesia). 

- Borrowing from the world capital market, via banking 

institutions such as World Bank, IMF, the European Bank 

of 

Investments (in recent years, one billion US$ have been 

allocated to Albania, but not a single cent reached Shkoder), 

etc. 

- Obtaining foreign aid from the industrialised countries (this 

would impose on Shkoder local government and the citizens a 

co-ordination of work for creating the necessary conditions 

for stability and fostering the idea that the aid will not "vanish 

into the air"). 

Certainly, the use of the foreign savings on Shkoder area (with 

very 

low levels of per capita income) is very important, since the 

67

insufficient income level does not allow us to set aside any surpluses 

for accumulation. 

The economic planers should fully understand that the 

people are already well- informed about the fact that the 

government has planned the economic development without 

declaring the amount of domestic and foreign savings, be they 

private or public, which in reality, determine the amount of the 

investments 

to be made in Albania, or in Shkoder, in particular. 

How efficient an investment in Shkoder can be depends on 

the judgement or the decision of the government. So far, the 

government has taken no steps 

towards the regionalism, the 

decentralisation 

and the autonomy of the local government. 

The em phasised needs for the above mentioned investments (US$ 

4.4 billion) 

and the incapability of the government to attain them, the 

distancing 

of the foreign investors and the daily deepening of the 

econom ic woe urge us to look around and learn something from the 

other countries 

experience. 

After the unification of Germany, in order to integrate the 16 

million population of the East, the Federal State allocated them each 

year, an amount of US$ 100 billion. By declaring this sum, allocated 

annually to the most well maintained ex-republic of the Eastern 

Camp, 

it is clear that for a population of 3.4 million in Albania, the 

most back 

warded ex-republic of this camp and actually the poorest 

in Euro pe, the needed annual capital should be of more than US$ 21 

billion. 

Considering the 

above comparison it is clear that this year's 

Albanian 

State budget of US$ I billion is insufficient. 

In c ase the Albanian annual budget would have been inspired by the 

financial sums that the unified Germany allocated to the 16 million 

eastern population for the integration, based only on the number 

68

of the inhabitants of Shkodra (224 557 people) the government 

should have allocated 

to us US$ 1.4 billion, while according to this 

year's 

real budget the government should have allocated to us at least 

US$ 64 million. 

Strangely enough, in the annual budget approved in the 

capital city for the region of Shkodra, not only were the numerical 

population data not taken to consideration but also the deep 

backwardness of Shkodra region was ignored. We say so because the 

planned expenses for this year are declared to be much lower, US$ 

5.7 million 

“The consequences of the historical fate, the spontaneous 

development during this century and especially the downfall of 

the 

highly centralised, socialist economy during the last 50 years should 

encourage the state leaders to attract, at high rhythm, the investments 

we actually need, aiming first at reducing the unemployment. 

According to the analysts and observers of the European 

financial institutions: the incompetence in managing the financial 

expenses, budget deficit, high fiscal evasion, corruption as a 

dominating phenomena, inflation, 

the growing effect of VAT, 

devaluation 

of Lek against foreign currencies, unfair competition 

(fiscal policies in favour of exports, imports and trade for a `small 

group of people'), are the fundamental factors that obstruct the 

economic advancement, generate poverty and deepen the socialeconomic 

crisis, especially in the region of Shkodra. 

Without the proper education, without industry, under the 

heavy weight of the spontaneous urbanisation paradoxically starting 

on the eve 

of 21st century, the citizens of Shkodra are surviving. By 

forgetting 

whose sons they are and abiding by the motto "all 

shopkeepers", the young and the old have occupied the city 

sidewalks simply to sell other people's goods. 

In these conditions the Government should accept the 

69

implementation of economic policy of the free zones which resolves 

the unemployment problem (guarantees the socioeconomic 

equilibrium), neutralises the anomalies and corruption, creates the 

conditions to establish 

business ethics, solves contradictions resulting 

from incomplete legal structures because it attracts all the necessary 

financial capital to invest in (brain) education, industry and to 

successfully complete the urbanisation of Shkodra port-city. 

In order to modestly contribute to the creation of a common 

doctrine relating to this status, we will briefly explain what the 

meaning of a free zone is: 

THE “FREE ZONE” 

There are many years that the discussion, on declaring free 

zones around Albania, is on the agenda. In 1991, the professional 

press of the economists, in accordance with the knowledge they 

presented, made public the idea of decreeing the whole Albania as 

a 

free zone. 

Having assimilated the archived data of the free zone of 

Shkodra offered from the Turks in 1502 and those of 19931997 

period, we were given the chance to have many direct contacts with 

some foreign countries and "free zone" areas in Eastern Asia. 

Impressed by the quick and strong economic development under 

this 

status we felt obliged to prepare the following materials. 

A free zone can be a country or a clearly defined area within 

the geographical borders of a country where all the goods, except 

those prohibited by law, can be brought in (to be kept safe and stored 

at the existing conditions or undergo a manufacturing or industrial 

production) and produced without paying any custom, excise, 

sale or 

service duties. 

The free zones, in case the law that applies to them exists (in 

Albania, law 8072, dated 15.02.1996), enjoy a relatively strong 

70

authority in the economic and judicial aspect to promote the 

attraction of new investments, enhance trade exchanges, provide 

export opportunities and activate the multiplying financial 

components of the Off Shore capitals (borrowed or obtained straight 

from the foreign market). The economic policy of the free zone has 

been accepted as successful from the experience of all the developed 

countries. Therefore, the accomplishment of our desired aims is 

totally dependent on the efficient implementation of the mechanics of 

this economic strategy. Free zones in these countries are approved 

by 

the Ministry of Finance. The 

Government specifies the area, sends 

the 

proposal to the minister who, after approving it, publishes the 

decision in the legal newspapers, 

etc. 

The aim of free zones creation is closely related with the 

interest of transforming back warded regions (of various widths) into 

developed centres of tourism, trade, industry, exports and finance. 

Giving the "free zone" status to the city of Shkodra shortly means 

free circulation 

of money and goods without any form of 

govern ment, direct taxation (duty-free and tax-free) and access to the 

area for the foreigners will be given without the need of visas. As 

a 

free trade and industrial zone all the goods produced in this area are 

designed for export. Such zones treated as "extra territories" and 

attract huge foreign investments. 

The advantages of the free zone 

- Delay of repayment and removal of tariffs. 

In this framework, we mean the imported goods stored within 

the free zone, before they are delivered to their destination and 

the removal of tariffs for the goods which will be exported later. 

This has encouraged 

the businessmen to build warehouses and 

huge store-units to store goods within these zones. Although the 

retail 

is prohibited in a free zone, the businessmen 

71

are interested since they can take advantage of the delay in paying 

the tariffs while the goods are stored in the zone. 

- Lower tariffs 

Bringing separate parts of various articles to the free zone, the 

producers or assemblers of the inverted tax goods (higher tariffs are 

levied on separate parts than on the whole item they are part of) are 

charged with lower tariffs as a result of the final cost that will result 

lower. 

- Avoiding restrictions of quotas 

Import quotas in the free zone are usually not applicable to the 

goods s tored within the zone. For instance, in Singapore, when an 

importer has shipped in more goods than permitted, he has all the 

facilities to store his merchandise in the free zone and is not obliged 

to follow the permissible norms of merchandising as in the case of 

normal trade regions (where there are no free zones). He is 

also 

allowed to use the extra quantity of goods (above the quota) to 

produce products that are below the permitted quotas or he can wait 

until the next term for the new quota. In Malaysia, another approach 

is applied, where quota products are transformed into quota-free 

ones. For instance, if a certain product 

is above the quota, the excess 

can 

be stored in a free zone where there are no laws on quotas. 

Automatically, no excess will be as above the quota. 

- Labelling the product in the country where it 

is produced 

The imported parts, which will be imported in the free zone and 

participate 

in the structural architecture of a product or machinery, 

etc., 

will lose their original value assuming the label of the zone 

72

where they are imported. Essentially, every completed product is 

identified as of all the products of that country. For 

example, in 

Singapore, computer producers 

bring into free zones parts imported 

from USA and Japan, and after the computers are produced, they 

retain the label “Made in Singapore”. 

Types of free zones: 

• Commercial free zone 

• Industrial free zones 

The activities allowed in commercial free zones are: the 

movement 

of goods from a free zone to a similar one (in their 

original or different packaging); storing, wholesale, advertising, 

distribution, packaging, fragmenting, repackaging, assembling, 

cleansing, manipulation, production, labelling, etc. 

The goal of the above- mentioned activities is trade promotion. 

- Regarding the industrial free zones, all the production 

activities, making a variety of articles or products destined for 

exports, are allowed. In the industrial free zone are allowed to enter 

goods that are to be used for the production of other goods. Here are 

allowed to exercise their activities only producers with export 

orientation and enterprises aiming to increase the productive sector. 

The aim of the creation of industrial free zones is 

the promotion 

of 

the productive sector development. For this reason there are even 

four categories of users that exercise their activities in the industrial 

free 

zones. 

- The operator: 

Enterprise established to operate exclusively within the 

73

geographical borders of an industrial free zone aiming the running 

the activities to encourage, manage and administer the zone. 

- The developer: 

It is the corporation or a branch of any foreign company, 

which 

is dedicated to the construction and development of the 

service infrastructure, within the geographical borders of one or more 

industrial 

free zones. 

- Industrial manufacturing user, 

It is a corporation or a branch of any foreign company set to 

operate exclusively within the geographical borders of an industrial 

free zone, to manufacture, assemble and transform industrial 

products to be sold overseas. 

- Industrial services user. 

It is a corporation or a branch of a foreign company set 

to 

operate exclusively within the geographical borders of an industrial 

free zone offering services primarily to foreign markets. 

The users of the industrial manufacturing and industrial 

services should sign a contract with the operator stating the terms 

and 

conditions of their agreement. 

The status of a free industrial zone benefits both foreign and 

local companies not only in terms of the savings relating to licences, 

payment delays, non-payment of tariffs, avoidance of the quota 

limits, but also in terms of lower production cost of the industrial 

products. 

A country that has free zones has a competitive advantage 

over other countries that produce the same products at higher costs. 

For the planners of an economy with a fixed orientation 

such 

as the case of our country, the removal of custom duties would be, at 

first sight, absurd. Looking at the experience of one of the newly 

of 

74

industrialised Southeast Asian countries, we follow with a 

commentary explanation. 

In one of the islands, occupying an area 1/3 that of the actual 

Albania, the central government 

decided to increase investments 

because it was a region with a back warded population and economy. 

After the establishment of the customs system by the state, the real 

value of the revenues from custom duties in the first year as 

prescribed by law added 

up to $ 200 million. 

In the following years, this amount decreased to $ 50 million, 

which related to the corruption “philosophy” 

in the customs. From 

the data collected, there was an estimated sum of $ 50 million stolen 

by customs officers, another sum of $ 50 million were “donated” to 

the high administration and another $ 50 million disappeared 

mysteriously. 

To 

avoid fiscal evasions, the government decided to increase 

the effectiveness and perfect the intelligent 

supervision. Nothing 

happen ed; on the contrary, the losses increased, since this time the 

government had to spend more to keep the new personnel. To rectify 

this uncontrollable situation, the government found it reasonable 

to 

announce the free zone all over the country. The results were very 

positive. Besides the quick realisation of the economic development 

through an extraordinary attraction 

of foreign investments, the 

govern ment, although it collected no revenues from the customs, did 

manage to make higher profits through the 15-30% tax on the returns 

of numerous enterprises (of manufacturing productions), factories, 

plants. These profits were made only after the application of this 

economic strategy (that of the free zone). It is estimated that only 

from the 

revenues coming from the income tax on investments, 

which reduce the unemployment in a country by 10%, the state 

generates 

55-60% higher revenues than those coming from customs. 

We gave this simple explanation, relying on Singapore's 

75

experience. By supporting the “customs paradise” policy combined 

with the motivated adoption 

of VAT, Singapore managed to 

eliminate 

not only the nourishing ground of corruption, but also to 

give a fatal stroke to the corruption habitat of the customs. 

WHY WE DEMAND FOR SHKODER TO BE PROCLAIMED 

A FREE ZONE? 

• The attraction of the necessary investments is made possible. 

• The bureaucracy, the corruption (having its strongest roots at 

the customs), the incompetence of the state administration, the high 

and not stable income-tax policy, the outdated banking system and 

the lack of order 

have all kept the foreign investors away. 

The 

experience of free zones in Europe, USA, Asia, Australia 

have proved that besides creating the conditions for attracting 

investments we need, they are extremely successful even when it 

comes to the transformation of the technology, professional 

management and, why not, the avoidance of contradictions with the 

incomplete local legislation. 

Under the status of the free zone, isolated within the watery 

“canal” as an extraterritorial area, Shkodra in fact will follow the 

idea of, as stated by the proverb well known by now, “one country 

two systems”, which means to the foreign investors that the paradise 

for investments in Albania is the port city of Shkodra. 

- The expansion of the Shkoder market 

Many economic observers think that the insufficient 

marketplace has been one factor for the limitation of the big 

76

investments. The proclamation of Shkoder as a free zone with all the 

export conveniences implies the removal of the limitations although 

the area of the internal Shkoder market is relatively small. Under the 

status of the free zone, investors are free to produce for the domestic 

market, 

the Albanian customs zone and the neighbouring and 

regional 

countries. Transportation can be easily arranged due to the 

favourable geographic position of the City and its access to the sea. 

Contrary to the pessimism 

of the economic analysts of Tirana, the 

phenomena 

of the satiation of the “small” market of Shkodra after 

the inflow of investments brought by the "free zone", is normal and 

not considered by the foreign investors as a restraining factor. 

On the contrary they are interested to increase as much as possible 

their activity in the commercial and industrial free zone of our city in 

order to supply, according to the plan, their markets in general 

(here 

and there in the world) and also the target markets of consumers 

interested or waiting the ordered products “Made in Shkodra”. 

As we said at the beginning, this policy, to the tradesmen of Shkodra, 

was known since the first half of the 19 arly 

th century. They regul 

supplied with their goods the common market known at that time as 

the axis of Vienna, Trieste, Shkodra, Thessaloniki and Istanbul. 

- The abatement of the social-economic crisis 

At a time when unemployment is the biggest wound of our 

society, the problems caused by the retarded and spontaneous 

phenomenon 

of the rushed urbanisation should be dealt with before 

they gain the full features of the social-economic 

crisis. The poverty 

of 

the unemployed “nurtures” the social conflict that will be certainly 

associated with serious acts of crime, thefts, smuggling, Mafia, 

etc. 

(based on the experience of American crisis of the 30's). 

77

Government officials should not forget that our people of 

today can't take up entrepreneurial initiatives and the political culture 

of the compromises, in order to change the thorns of misery into 

fruits of democracy. The overall development of Shkoder as a free 

zone would really contribute to the reduction of the complex 

problems caused by the spontaneous urbanisation with 

unemployment as its destabilising, fundamental factor which, under 

the status of a free zone, can be resolved. 

- Under the status of a free zone, Shkoder will become a very 

important export centre. 

Based upon the experience of the most distinguished free 

zones in the world in terms of the flux of trade exchanges in East 

Asia and West Pacific, we can convincingly indicate that Shkoder, 

as 

a free zone can serve even as an communicating bridge between the 

national economy and the foreign markets. The circulation of goods 

at convenient times, the reduction of the production costs, avoidance 

of the red-tape bureaucracy of the customs and the use of the 

transportation companies and agencies that will be trained to find 

suitable 

markets, are all factors supporting the exports growth giving 

to our city the authority of the most developed centre 

for exports in 

Albania. 

- The integration into the capital market 

The physiology of the free zone mechanism is reinforced by 

the activities of the Off- Shore banks which provide facilities to 

operate local market capitals, without losing, moving or risking them 

by protecting the interests of the Shkoder businessmen. 

78

- The customs 

paradise of a free zone prioritises the regional 

integration and augments both state and local revenues 

Under the status of a free zone, Shkoder and its region will 

develop the trade, increase the production activity and strengthen 

the 

economy contributing to keeping up with the living standards 

of the 

neighbouring countries, especially those that have begun to receive 

the fruits of this economic strategy. The free 

zone status will grant 

the 

city the proper economic prestige to embark on the regional 

integration and assimilate, as much as possible, the tangible effects 

of the economic globalisation. 

The forecasted economic prosperity of 

Shkoder, 

as a free zone encourages the ties with the Republic of 

Montenegro, which over the past 5 years, has progressed due to the 

initiative and understating of our two close countries. (It is the time 

that we revitalise the border agreements entered into in the 30's and 

institutionalise all the necessary ties to fill the elements of the 

integration, each time stronger, with this neighbour country). 

The free zone advantage from the creation of new jobs, by 

engaging the workforce and the intellectual potential, raises income 

levels. By employing 60% of the unemployed, the national revenues, 

provided by Shkoder City, would rise $ 5,7 million annually. Both 

the central and the local budget will also benefit from the taxes: on 

personal income 

of both nationals and foreign residents, rentals, 

supply 

of domestic materials and goods, delivery of various services; 

the transportation tax. 

- Solution 

to the employment issue in and outside the free zone 

Various commercial activities (inside and outside the free 

zone) and productive processes that go along with the 

79

advent of the “free zone” require the engagement of a certain number 

of employees. Out of the total number (20.000) registered 

unemployed 

in Shkodra during 1997, it is estimated that the 

employment 

of 11.000 (due to the opportunities provided by the 

“free zone”), would spare to the central government an annual 

amount of 508 million Lek from the fund of economic aid and social 

assistance. A financial value four times bigger than the amount of the 

total revenues collected from the Shkodra customs during 1997 (this 

argument proves again that under the status of the free zone the state 

does not have lose anything from the removal of customs taxes) 

It is worth mentioning that besides of solving the 

unemployment problem right inside the free zone, the extension of 

market out of it, into the Albanian customs zone, will necessarily be 

accompanied by the growth of purchasing power which generates the 

investing process even outside the free zone, which means indirect 

new jobs outside Shkodra. 

THE FREE 

ZONE OF SHKODRA NEEDS NO 

PREPARATORY EXPENSES 

Shkodra, as a border inland port-city in between the Republic 

of Albania and Republic of Montenegro, has all the favours to be 

declared a commercial and industrial free zone. 

Having no need to spend on building artificial borders, 

demanded by the regulators 

(enclosures using walls, wire or 

electronic 

fences), the city of Shkodra, in a natural way, is 

surrounded in all sides from the deep water “canal” of the three 

rivers 

(Buna, Drini and Kiri) and of the lake. This reminds us of the 

bordering 

of the "free zone" state of Singapore, etc. Under such 

geographical conditions, the entrance in and exit from the 

city will 

necessarily be done, as it is done today, through the crossing bridges 

80

of Buna, Drini and Kiri and, as soon as the port - city of Shkodra will 

be declared a free zone, the entrance and exit gates together 

with the 

customs edifices will be located in front of bridges (the same way 

they were located during the Albanian Kingdom period). 

Besides avoiding expenses on surrounding “fences”, the 

problem of building an infrastructure, communicating with European 

markets and beyond, will be also solved without the need to spend 

any financial capital. 

The water transportation across the Lake (13 meters deep), 

between Shkodra-free zone and the neighbour Republic of 

Montenegro, can start immediately. Considering the fact that 

the lake 

ports in Montenegro are connected with land and railway routes, 

Shkodra's products have all the possibilities to be delivered within a 

short time to all the European, and other markets. 

Some well-known Montenegrin companies have already 

offered to provide not only these services, but also passengers’ 

transportation. 

We are talking about putting into use ships, ferries, 

tow-boats and other special units for these kinds of transportation. 

During the 1992-1998 periods, 

the city inhabitants have not 

used 

so much the primitive centripetal Albanian routes. They 

managed 

to survive mainly due to the intensification of the land and 

water (across the Lake) centrifugal traffic towards Montenegro. 

Thanks to the in-between borders trade, in the last 

years, it was 

gradually 

achieved the defacto realisation of some integration 

components, officially started only during the reigning of King 

Zog I 

and interrupted in 1948 after the full closure of the communist 

Albania. 

Waiting for the construction of the infrastructure we actually 

lack, it would also be a mistake to refuse the offers for the 

hydroplane transportation on the lake made by some German 

companies, which consider the Shkodra lake as an 

81

enormous water runway (368 km 2 out of which 168 km 2 belong to 

Shkodra) and suitable to be used all year round (since the Taraboshi 

mountain protects it form winds). 

THE ECONOMIC DEVELOPMENT MUST BE SUPERVISED 

Special attention should be paid to the investments-GDP ratio 

(the total investments over the GDP). Official analysers of these 

indicat ors should be know by how much this ration should rise for a 

1 % rise in the economic growth (for example, if up to now our city 

reached a 4% economic growth, the economists should be able to 

determine by how much should the investments-GDP ratio change in 

order to have a 5% economic growth or 1% more than the previous 

rate). 

As a group, the Asian countries have followed development 

policies seen until lately as successful. In these countries the 

investments-GDP ratio has been 5% (US$5 billion investments over 

US$1 billion GDP). In order for the GDP growth to rise by 1%, the 

government 

in these countries had to increase the investments-GDP 

ratio by 5%. In the Latin American countries in order to reach the 

same rate of GDP growth, the investments-GDP ratio had to reach a 

10:1 ratio. This can be explained by the inefficiency of the economic 

policies followed by these countries and the distribution and 

allocation of resources. Unlike the Asian countries, the Latin 

American countries were obliged to spend much more in order to 

reach the same result, a 1% rise in GDP growth. 

The 

planners of the strategic process for the economic 

development 

of Shkodra should keep their authority even after the 

implementation of the forecasted and new coming projects. 

The primary objective of the daily relations with the 

82

most active businessmen of the free zone is to find the most suitable 

and satisfying strategic policies for the economic development, based 

on the real efficiency of investments 

relating to the distribution and 

allocation 

of resources. 

What can we learn from the Asian Newly Industrialised 

Economies? 

On my diplomatic mission in Southeast Asia (1993-997) I 

came into close contacts with the economic reality of this region and 

learned that the most developed part of Asia is located in the 

Southeast region. This region with an astonishing record of sustained 

growth, within less than two decades, has improved the living 

standards 

of more people, more rapidly, than at any other time or 

place in history. 

Southeast Asian economies are built on strong basic 

fundamentals, which are still in place even now that this region is 

trying to find the way out of its financial turmoil. These economies 

have been built following the Japanese model of high savings and 

cheap money directed to strategic industries, which helped Japan to 

catch up with the West very quickly. The economists points of view 

on these fundamentals differ but most of them agree with the view 

that, unlike the other Asian countries such as India, etc., the 

Southeast Asian economic development has been due to `openness' 

and outward orientation, and greater reliance placed on market 

forces. The hard work, management and worker efficiency, 

adoption 

of the world best-practice, promotion of research and development 

(R&D), entrepreneurship, high savings, productive investments, low 

taxation, flexible labour markets, family values, sound government 

policies, macroeconomic stability, active trade, and export 

policies 

helped the region to grow at 7 - 8% a year for more than a decade. 

Southeast Asia experienced an export-led economic growth. 

83

With a cheap and large labour force and high marginal 

productivity of product (low capital to labour - K/L - ratio), these 

economies exported their labour intensive products to Western 

mature economies making, in this way, huge profits due to the large 

disparities 

between unit costs and foreign prices of the products. 

These economies managed to improve their products quality 

standards by adopting 

and imitating rather than inventing new 

technological 

advances. More exports meant more profits, therefore, 

more income, 

which in turn led to higher savings and investments. 

Exporting into mature economies of the West provided the much 

needed hard currency for investing in capital accumulation, 

education, training, R&D. 

The knowledge I gained during my diplomatic mission in this 

region made me conclude 

that the port-city of Shkodra should aim at 

its fast economic development nearly detached from the general 

development plan of Albania (from which Shkodra benefits very 

little). Declaring my city a `commercial and industrial free zone' will 

create all the possibilities to attract investments, that employ the 

richness of the resources of Shkodra region, if we follow accurately 

the economic strategy that allowed the Southeast Asia region to 

experience such a high growth record and leave the rest of Asia far 

behind. 

84

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Hoti, R. Ferid 

Shkodra, Free Zone: Studies/Ferid R. Hoti, 

Translated by: A. Karini, 

Rev. A. Rroji, Shkoder: “Camaj-Pipa“, 1999. 

86 pages, 32 photos, 9x16.5 cm 

1. Studies over Albania (Shkodra) 

308.496.5 (1.21): 338.48 

Ferid R. Hoti, H 5 

Shkodra, zonë e lirë: studim. 

Formati: 61x86/16 

Botuar: shkurt, 1999. 

Shtëpia Botuese “Camaj-Pipa", Kiras, Kodra nr.43, 

Tel. 00355 224 38 22, Shkodër-Albania. 

Shtypur: Shtypshkronja "VOLAJ", Rruga: Filip Shiroka, 27 

Tel. 00355 224 44 80, Shkodër-Albania 

87

Shkodra free zone

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