ardian fullani : the development of, and challenges for, the albanian economy opinion of mr ardian fullani, governor of the bank of albania, published in the albanian daily newspapers “ panorama ” and “ albania daily news ”, 2 december 2013. * * * soon enough representatives of the international monetary fund ( imf ) will come to albania to judge on the performance of the albanian economy and its perspective. during their mission to tirana, fund representatives are expected to discuss the country ’ s economic outlook in the medium run, from the perspective of the imf vis - a - vis the perspective of the albanian authorities. given the latest economic developments in albania, the possibility of signing a new cooperation agreement between the imf and albanian authorities has been a persisting question in public debates. my approach to this issue has been to fully support negotiating a new agreement with the imf. i am certain our economy will only benefit from it, especially under the current circumstances, as the attitude of the imf towards developing economies has become more flexible. presently, the biggest challenge facing the albanian economy is recovering its activity, ensuring stable economic growth and employment. on the other hand, all the economies of central and southeast europe are also facing these challenges. the main objective remains enhancing competitiveness : in other words, creating and boosting production capacities to produce high - quality goods and services at lower costs compared to our competitors. currently, both our economy and the economies in the region are too small to generate sufficient domestic demand that would promote employment, and, for them, to cope with the competition from the asian economies is costly. at the same time, our economies are small against the economies of central europe ; they suffer from low productivity, implying that, in the current conditions, the production quality and quantity for unit of labour is lower than in our direct partners, both at regional and global levels. higher production and employment rates are the only alternatives that lead to creating values that would guarantee convergence with advanced european economies. in central european economies, this phenomenon happened at the end of 1990s thanks to capital investments from european and global markets. factors that supported these capital flows weakened at the outbreak of the global financial crisis and withdrew totally after the sovereign debt crisis. at present, the global markets have withdrawn from eastern europe economies and from other developing countries. in the absence of free capital from abroad, structural reforms in the labour, capital, and land markets and pension system remain the only possibilities to attract foreign capital and investments to

to stimulate on - going structural reforms and sustainable economic growth in the long run, unaffected by short - term problems. concluding, i am confident that the news for an agreement will be received positively by the domestic and foreign financial markets, and will also be interpreted as a guarantee that albania enjoys a sound economic and financial environment, with many opportunities for investment and profit. bis central bankers ’ speeches