Lack of Justice System and Political Games are Killing Business Climate in Albania

Tirana, Albania | Tirana Echo – The dysfunctional system of justice in Albania and the lack of proper political will to reform its highly corrupt structures is costing the poor Balkan country millions in foreign investments.

Experts calculate that apart from its citizens, the highest cost of a corrupt justice system is paid by business and investors, who are hesitant to invest more money in a country where unpredictability and corruption are endemic and common rules of the game.

According to weekly business Monitor, although Albania has immense natural resources and potentials for development, its GDP growth is still lagging at 2-3%.

Monitor calculates that there are several reasons why justice impacts investments.

Poor rule of law and its misuse prevents investors from coming to Albania in the first place. No serious investor has come into the country in the past few years, while major companies such as Canadian Banker Petroleum and German Tirana International Airport have been sold to Chinese firms.

A poor justice system has failed to sentence those who engage in bad debt making Albania the country with the highest level (20%) of bad debt in the region.

In addition, the mess created by the courts when handling the land property crucial issue has divided the country into an unmanageable chaotic territory where people often feel they have to take the law into their own hands, rather than solve a land conflict in the courts.

Lack of justice has favored parallel judicial structures similar to those mafia-like structures of Naples and Sicily with many businesses not paying taxes while fair competitiveness has been hit hard. Despite statements from the Government of major improvements in the financial sector, inequality and informality are still at very high levels of 35-60%.

The Albanian government, pushed by the European Union and the United States are under pressure to move forward with the reformation of its justice institutions.

However, since the Albanian Parliament voted its historic constitutional package to totally reform its corrupt justice system last July, the path to getting on with its implementation has been bouncy.

After several objections from the opposition on the impartiality of ‘foreign experts’ involved with drafting the reform, the latest obstacles come from a conflict between Minister of Justice Petrit Vasili and the European Commission on modalities of setting up the structures while the opposition has started a parliamentary boycott.

Vasili raised legal questions on the constitutional role of the International Monitoring Operation (IMO) which is a body of international monitors from the EU and US to keep an eye on the vetting process of justice reform. The issue is still to be solved between the Albanian authorities and the European Commission, as its legal mission EURALIUS recently dismissed its head due to translation problems with the constitutional drafts of the reform.

In addition, the opposition Democratic Party has entered a non-stop protest and parliamentary boycott, demanding Prime Minister Edi Rama’s resignation and the establishment of a technical government which would guarantee free and fair elections in June.

Foreign investors in Albania are entitled to judicial protection and have the right to submit disputes to an Albanian court. In addition, parties to a dispute may agree to arbitration as was the case with Czech energy giant ‘CEZ’. However, many foreign and Albanian companies complain about the sluggishness of the courts and the endemic corruption in the judiciary. The unspoken rule in Tirana is ‘if you don’t pay, you don’t get a verdict’.

As Albanians are massively wanting to leave the country , the EU is keen to keep them at home and together with the USA see a democratic and solid Albania, in a region where political turmoil may yet affect the Geo-strategic future of the entire South-East Europe.

The current political games and the opposition’s parliamentary boycott at a time when crucial ‘Vetting’ structures are expected to be voted in Parliament, only add to fears and uncertainties of foreign investors who may be looking at the region.