economic and financial stability should be further enhanced, in order to increase our resilience to shocks and to decrease our financing costs. third, it is becoming increasingly clear that our financial systems have become over - reliant on banks. looking ahead, we should rely more on capital markets in order to finance 1 / 3 bis central bankers'speeches domestic growth. fourth, a common complaint frequently heard from potential foreign investors is the limited attractiveness of small and fragmented markets. while partly incorrect, we should do more to increase our trade and infrastructure integration. fifth, in competing for the same pool of international investors, countries in the region often attempt to raise their individual profile through offering tax break or other subsidies. this race to the bottom does not prove to be productive. resolving any of these issues requires foresight, strong institutions, determined policy action, and regional coordination. institutions and integration our region is actively involved in the eu integration process. this objective is the lighthouse for our institutional reform efforts and has produced notable benefits. the eu integration is aiding authorities in the region to anchor their institutional reforms and policies. on the other hand, the eu institutions provide oversight and lend credibility to the process. additionally, since individual countries are working towards common objectives, regional policy is better coordinated. however, i also believe countries in the region could do more to share their experiences and learn from each other. albania offers a positive example in terms of economic and financial stability. macedonia has done exceptionally well in terms of attracting high - value - added fdis. serbia is on the regional vanguard of financial market development. all of us should learn from our individual success stories ; all of us should avoid mistakes we have individually made in the past. our countries share more commonalities than differences : what works for one is more likely than not to work for others, and vice versa. furthermore, i believe we should look at regional integration as a goal in itself, rather than as an instrument to eu integration. joint eu integration would supersede certain regional integration frameworks, such as trade and factor mobility, but it would not supplant the need for further policy dialogue and common regional perspectives and solutions. let me now to briefly describe the role of institutions in structural reforms in albania. institutions and structural reforms in albania it is virtually impossible to do justice to the breadth and depth of reforms in albania over the limited allotted time. therefore, i will try to highlight only its main items. in order to improve our business environment,

ardian fullani : economic outlook and important developments in albania speech by mr ardian fullani, governor of the bank of albania, at the economist's conference – first business roundtable with the government of albania : identifying new business opportunities, tirana, 14 september 2006. * * * honorable chairman, distinguished participants, i am very pleased to be here today to share and discuss with you our views, future macroeconomic and financial market developments and outline our policy orientation. i was looking forward to converse to this forum. it is a great opportunity that such well known institution, focus their attention toward albania. i would like to thank the economist conferences and express my deepest and highest appreciation for this venture. i am confident that members of all communities, foreign and domestic, gathered here today will leave this forum with a clear image on the economic reality and business opportunities albania has to offer. assisted by geopolitical conditions and actual state of affairs, although small at a glance, albanian economy presents numerous financial and economic advantages and incentives. recently albanian economy has reached a commendable macroeconomic equilibrium, sustained by an economic growth of 5 - 6 percent, low inflation levels well contained within a 2 - 3 percent band, and continuously shrinking budget deficits. it is my pleasure to emphasize that the bank of albania and its policy has been rightfully credited and earned accolades by established foreign and domestic institutions for its notable role in such accomplishments. monetary policy has been designed and implemented in line with midterm country ’ s macroeconomic program : with specific focus on price and financial stability let me now briefly summarize what i believe are the latest most important developments, and outline our economic outlook. economic growth after the significant electricity shortages at the end of 2005, it appears that traditional growth promoting industries like services ( tourism ) and construction are growing at a stable pace, contributing at a sustainable economic growth. building upon these developments as well as other positive indicators, we expect the economy will grow at a solid rate of 5 - 5. 5 percent. the main challenge remains ensuring sustainability of these growth rates, even higher in the long run. i believe that respective albanian authorities have already identified the major priorities of these challenges which fully converge with bank of albania views. just to remind you i would briefly summaries some of these priorities. building new, preferably alternative, energy sources and improving the efficiency is top priority. in our view, sufficient and reliable energy supply remains a main concern to achieving economic growth. providing a