Nearly four decades after the death of Enver Hoxha, the leader who turned Albania into one of the most isolated countries in Europe, tourism has experienced a rapid surge in recent months, writes journalist Francisco de Zárate in an article published in the Spanish daily “El Pais”.

The number of foreign visitors in May was 2.5 times higher than the same month in 2019.

The small Balkan country has exceeded pre-pandemic figures since the fall of 2021, while major tourist destinations like France and Italy have yet to return to previous levels.

Albania offers affordable prices, crystal-clear waters, and exotic appeal.

These are the foundations of the digital marketing campaign that has attracted thousands of tourists this summer to a country with a population of 2.8 million, which has had to recruit more workers from India, Bangladesh, and Pakistan, among other countries, to meet the growing demand.

“Of the five hotels we stayed in, four opened last year, and one this year,” said Marcos Fernández from Madrid, Spain, who visited Albania in August.

“The whole country is under construction,” he added.

Albania recorded a 45% year-on-year increase in building permits in 2021, reflecting a growing trend that, according to government data, was led in 2022 by the hotel sector, which saw a 55% increase in business.

“At the forefront of the growth in tourism and construction since the 2019 earthquake, the construction boom is also due to remittances sent by a considerable diaspora of 1.2 million Albanians abroad, which accounts for more than 9% of the country’s GDP,” according to World Bank’s estimates.

In Albania, agriculture has traditionally been the main source of employment, but it has now become a foreign exchange generator.

Although family farming still dominates in a country that was self-sufficient in the 1980s, productivity has increased at the same rate as exports, with a 15.6% increase in foreign sales of crops such as wheat, corn, tomatoes, peppers, and citrus fruits, among others.

“Agricultural export data began to rise before the pandemic, in 2017 and 2018. Then it recovered in 2022 and has performed quite well in 2023,” said Meleq Hoxhaj, an independent researcher and co-author of a research paper on the link between globalization and unemployment in Albania.

“The job losses that could have come from the rapid mechanization of Albanian villages have been offset by the growth in exports,” he added.

Progress

“Albania was at the bottom of Europe and Central Asia in terms of poverty levels, and in 30 years, it has reached a high average income level, with almost all indicators moving in the right direction,” said Emanuel Salinas, World Bank representative in Tirana.

“Poverty has been continuously declining, and GDP has been growing rapidly,” he added.

You don’t need to go back to the 1990s to see progress.

“Between 2010 and 2019, per capita GDP grew at an average annual rate of 2.9%,” according to the World Bank.

In just seven years, poverty has shifted from 41.5% of the population (2016) to 23.9% (2023).

Eliminating this figure is not the only extraordinary challenge the country faces.

Albania now faces a problem that countries like Argentina or Venezuela could only dream of, namely, increasing pressure on the local currency resulting from the massive influx of foreign currency through foreign investment, remittances, tourism, and agricultural exports.

From 135 Albanian lek needed to buy one euro a decade ago, it had recently crossed the threshold of 120 Albanian lek per euro.

This barrier was broken again in July 2023 when the Albanian currency appreciated to 101 lek per euro.

“To alleviate this pressure, the Bank of Albania has withdrawn euros from the market, but this has not been enough. Although the strong appreciation of the lek has softened slightly, it remains a major burden for exporting companies, which have received some tax refunds from the government as an incentive,” Hoxhaj said.

The Albanian Government is aware that tax incentives and interventions in the currency serve only as a deterrent, and it has decided to develop digital export services and improve innovation and competition in the agriculture and tourism sectors.

While the strategy may not yield immediate results, one thing is clear: a revalued currency can be a challenge.

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