The President of the American Chamber of Commerce, Enio Jaço in an interview for the Telegraph has analyzed the impact of the crisis in Ukraine and recent developments in Albania.

Jaço draws attention to long-term crisis management measures.

He is skeptical about strong government intervention in price control, while stressing free market competitiveness as the main tool for lowering prices.

But also for a better concentration of resources and conditions for the sustainability of the economy and the attraction of investment.


Focusing on the potential major investments in Albania, Jaço announces that the Liquefied Gas project at the Vlora TPP takes on an added geostrategic dimension after the crisis in Ukraine.

"A possible Albanian contract with ExonMobil, one of the largest producers of natural gas in the world, would be one of the largest foreign direct American investments for Albania and would turn the country into a potential regional gas supplier in "The Western Balkans," said the president of AmCham.

Jaço also spoke about the protests against price increases that have involved Albania in the recent period.

He stressed that the protests reflect the fragile structure of the Albanian economy.

Journalist Klaudjo Jonuzaj talked to Mr. Jaço in Tirana.

Full interview:

Telegraph:

Mr. Jaço, Albania has been involved in mass protests over rising prices.

Concerns started with fuel prices but have now spread to all products.

The government has announced measures, but how do you see the whole situation?

Enio Jaço:

The rise in prices has come mainly from the conflict in Ukraine.

And this is inevitable - Albania is not isolated from developments in foreign markets.

A kind of sensitivity in this regard I think is necessary to cope with a situation that may even last.

But there is also an accumulated local concern here.

The price of fuel in Albania has always been high - many economists think it is higher than it should be.

In fact, Albania ranks among the highest countries in the world for the price of gasoline in relation to average income.

And people have come out in protest just when this price went up further, creating a new socio-economic pressure, perhaps unaffordable for a section of the population.

I think the situation is real and requires an address beyond the usual frameworks.

But on the other hand, we must understand the fragility of the fiscal system in Albania in the face of such crises - the efficiency that the system offers in relation to free market rules, price functioning, tax system, etc.

These factors in addition to the crisis in Ukraine are resulting in a strong pressure on business and growing socio-economic stress compared to other economies.

Telegrafi:

Has the shock of inflation in international markets brought consequences to the Albanian economy?

Do you think that the rapid rise in prices can be mitigated by certain state policies and how do you see the continuation of this situation towards business and consumers in the country?

Enio Jaço:

Inflation seems to continue in Albania because it is related to a number of factors, a large part outside Albania affected by the crisis in Ukraine.

However, rising prices can be mitigated by monetary policies that slow down the injection of money into the economy, but at the same time curb economic growth.

Businesses generally do not like this because it increases the cost of investing.

But I want to emphasize that the Lek is one of the most stable currencies in the region.

I think that the Central Bank of Albania in these 15-20 years has managed to manage the stability of the currency well and I have reason to believe that this will continue.

But this is not a normal situation, and in the following periods, there may be a need for increased attention to vulnerable segments of society.

Especially following the increase in the prices of the basic basket of products.

The increase in these prices may have a disproportionate impact on vulnerable strata and needs to be addressed in assistive terms that extend solutions in time.

Telegrafi:

And in these conditions, what measures do you think would protect the economy from facing rising prices?

Enio Jaço:

I think that in these cases, but also in general, taking quick measures "on the spot" does not help much.

It should be thought of in the long run.

We are generally skeptical about private sector price management by the government.

Global time and history has shown that the free and competitive market creates the best prices for the consumer.

The task of the government is to create the conditions for the ideal functioning of the market, but not the regulation of prices.

Regarding fuels, I think that taxes on fuels and the level of competition should be addressed.

Taxes can be addressed with temporary easing policies while competition needs to be significantly increased in order to overcome price pressures.

This would be the best service for customers in the long run.

On the other hand, every crisis brings a new moment.

The conflict in Ukraine can last and the diversification of markets is an opportunity, where new sectors can be developed such as technology industry, renewable energy sources, etc.

The possibilities are for the markets to alternate in new ways where Albania with some good plans can become a protagonist in some of these markets.

Telegraph:

This situation is obviously related to the business climate.

How do you see the business climate now that the crisis is accelerating other rates for businesses and investment?

Enio Jaço:

The moment created by the global crisis is also ideal for investment reform.

Albania is an attractive place for investment.

The reasons are known, include good climate, favorable geographical position, low labor costs, hospitable culture and high security as a NATO country.

But there are also two fundamental problems: there is a system of doing business which is backward, non-competitive and enables bureaucracy and corruption.

Second is the small market.

The second does not depend on us but can be addressed with creative strategies.

The first depends entirely on the political will for reform in the liberalization of the investment market.

This is the right time to focus on this reform because it would ease the pressure of inflation.

Telegraph:

How does it compare to countries in the region?

Is Albania attractive to foreign investors (American in particular) and how does it compete with countries in the region to attract investment.

Enio Jaço:

The lion's share of foreign investment in the region benefits Serbia and Northern Macedonia.

Both countries have superior legislation regarding the business climate compared to Albania.

But while Serbia offers a larger and more developed market, Northern Macedonia "wins" only with the business climate.

In this respect, Albania has a lot to do.

Developments that have changed in recent weeks now show an even greater urgency for Albania to move faster from the position it is currently ranked.

Telegrafi:

How important are the American investments in the projects of the Skavica hydropower plant and the Vlora TPP?

How do you see the progress of these projects and are you aware of other similar investments or in other areas of American companies in our country?

Enio Jaço:

Skavica is a project of the Albanian Government that will be implemented by Bechtel Corporation.

I think it is one of the largest projects in Energy, with a clear return on investment and that will significantly improve energy production in Albania.

The project is in its initial stages after signing the contract and is moving forward with the right steps.

In relation to the Vlora TPP, large American companies, ExonMobil and Excelerate are conducting a feasibility study, for the possible opening of the Liquefied Gas terminal in Vlora.

If it goes ahead, it would create an important, additional source of gas supply for the Western Balkans and Europe, further diversifying Europe's energy sources.

A possible Albanian contract with ExonMobil, one of the largest producers of natural gas in the world, would be one of the largest foreign direct American investments for Albania and would turn the country into a potential regional gas supplier in the Balkans. Western.

The Liquefied Gas project takes on an already geostrategic dimension after the crisis in Ukraine.

I think these developments are very important for the American presence through business and trade in Albania.

/ Telegraphy /