In Albania, similarly to other Balkan countries, politics influence the administration of justice and business, according to Kalo & Associates Executive Partner Aigest Milo.
"Generally speaking, in Albania, business-related activities slow down during the election period," Milo says. "This year’s general parliamentary elections, held in April, created some degree of uncertainty, lasting until the election results were published in May. However, the election atmosphere this year was atypical as, even during this period, there were some developments from the economic point of view." According to him, since the parliamentary majority was reconfirmed for a third mandate, there was a sense of continuity and, therefore, no drastic changes have occurred.
Milo notes that the ongoing judicial vetting process remains one of Albania’s major challenges. "Many judges have been dismissed from office, as they did not pass the vetting procedure," he explains. "Until very recently, Albania’s Supreme Court was in crisis, as only three seats out of 19 were filled. Similar developments have been witnessed in the Tirana Court of Appeal and lower courts, where a substantial majority of judicial seats remains vacant." According to him, this has resulted in delays in reviewing cases. "In fact, at this moment, around 35,000 cases are awaiting decisions in the Supreme Court. Excessively long proceedings have a significant impact on business. In particular, it has been considered a major obstacle for foreign investors, who are more sensitive to judicial delays and the malfunction of justice." Milo notes that various chambers of commerce representing foreign investors have raised objections to this issue.
In addition, Milo highlights that one of the major recent legislative reforms in Albania is related to the convergence of banking legislation towards the EU legal framework. "An interesting development has been the enactment of legislation regulating crypto assets. In Albania a comprehensive law was adopted, regulating different aspects of cryptocurrencies and crypto-assets, which will come into force next year. The law is a novelty not only for the region but globally, and it will have considerable implications for this sphere," he notes.
Milo points out that the economy has largely recovered and reached pre-pandemic levels. "We are witnessing many M&A and finance-related transactions, involving local banks and international financial institutions. Unfortunately, deals involving local and regional business entities account for the majority of these transactions, as the number of foreign investments remains rather low," he says.
Milo explains that the financial industry and manufacturing sectors remain very active, along with construction. "As a matter of fact, a major industry that has not been affected at all has been construction. To give a perspective, while last year, the overall economy shrank by 4%, the construction industry grew by almost 10%. The boom in construction can be witnessed not only in the capital but primarily in the southern touristic part of the country." In addition, Milo highlights that the government has been promoting major infrastructure projects, such as ports, airports, and highways. "While the majority of these projects are still in the preparation phase, we expect their implementation to start shortly as well," he says.
As for transactions, Milo mentions two major ongoing deals in the banking and extraction sectors – the sale of Alpha Bank’s subsidiary in Albania and the rumored sale of one of the biggest companies in the extraction sector. "Considering these developments, we hope that the growth trend in transactions continues not only in the following couple of months but for the next year as well," Milo concludes.