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The
privatization process in Albania started soon after adoption of the new
Constitution , and of the Law “On sanctioning and protection of private
property, free initiatives and privatization”, in 1991. Large-scale
privatization started in 1992. Guided by the IMF and the World Bank, the
new Government launched a privatization program, with the outcome being
that the economy was largely in private hands by 1996. A mass privatization
program, which gave each citizen vouchers to buy equity in public
enterprises, began in 1995, but had difficulties in implementation and was
interrupted during the unrest of 1997. In 1998, based on the “Strategic Sectors Privatization Strategy ”, the Government
took steps to accelerate the process of enterprise privatization and
restructuring. Since then, most of small and medium-sized enterprises have
been sold, leased, or liquidated. At the same time, the Government started
the privatization of the strategic
sectors, that included large state-owned industries.
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The
National Agency for Privatization was established in 1991 - the year when
legislation reinstating and protecting private property in Albania was
passed. The agency managed the technical aspects of the privatization work
program and is subordinated to the Council of Ministers. The Ministry of
Economy and Privatization, which incorporated the Enterprise Restructuring
Agency in July 1996, has been preparing factories for privatization. The
privatization process is realized in accordance with the Strategic Sectors
Privatization Strategy approved by the Parliament in April 1998 into
effect in September of that year. The privatization program is supported by
the IMF's Poverty
Reduction and Growth Facility (PRGF), the World Bank's Financial
Sector Institution Building Technical Assistance Project. Recently, the
objectives of the Government for completion of privatization process of
industrial enterprises, public services and financial institutions, have
been formulated as part of its GPRS/NSSED
(National Strategy for Social Economic Development), and have been
supported by the World Bank through the Poverty
Reduction Support Credit (PRSC) I and II as well as through the Financial Sector Adjustment Credit (FSAC), approved
in May 2002. The new Socialist Government that came into power in August
2002, assigned the responsibility for monitoring the privatization process to the Ministry of Economy, in close
coordination with the Ministry of Finance and the line ministries.
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The privatization process is still part of the economic reform
in Albania. The privatization of housing, transport and retail trade
enterprises has been largely completed. Since 1998, when the privatization
process accelerated, most of small and medium enterprises have been sold,
leased, or liquidated. Several large transactions took place in 2000 ; the
sale of 85 per cent of the mobile telephone network, Albanian Mobile Communication, a second GSM license was issued for
another operator, the Fushe-Kruja cement plant and the biggest privatization ever, the sale of the National
Commercial Bank, has also been completed (see details on Privatization
of Enterprise Sector). In the mining sector, the ferrochromium plant in
Elbasan and the chromium mines in Prrenjas and Pojska, were given for
concessional leasing to a foreign company. Following some delays
as regards some large scale privatizations ( i.e. the
privatization of Albtelekom, initially scheduled for 2002, has been delayed
because of lack of interest by foreign investors, partly reflecting a
further weakening of the international telecommunication sector; and the sale of Savings Bank was also
postponed for similar reasons), the
Government is now renewing its
efforts for further restructuring
of these companies and for conducting a more aggressive marketing campaign,
considering the recent developments
in the international markets. These efforts are being coordinated closely with the World Bank (IDA), IMF, as well as with the , IFC and EBRD
(as potential investors). In parallel with the implementation of the
strategic sectors privatization program , the Government under its NSSED is
also committed to take the necessary steps towards reducing the
administrative barriers to the foreign investment and private sector
development in the country
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- The
Government has announced its intention to complete the privatization
of the fixed-lines telecommunications company, Albtelekom, and the
largest state-owned bank, the Savings Bank, the principal remaining
entities to be privatized.
- In
relation to Albtelekom, the Government intends to set new deadlines
for its privatization, as well as improve the company's management and
strengthen coordination of the privatization process.
- The
state-owned insurance company INSIG is set for privatization.
- In
the oil sector, SERVCOM's strategic and non-strategic parts are to be
brought to the point of sale before the end of 2002. The aim is to
finalize the privatization of the refinery by end-2002.
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