BREAKING NEWS

The new structure of the Reestablishment is revealed, here are the drastic changes that will take place from the vice presidents to the appointments of supporters who are in the position of members of the Presidency

The new structure of the Reestablishment is revealed, here are the drastic
x
BREAKING NEWS

Kreshnik Spahiu: I show you the orders that Rama and Zelensky received from NATO, the summit for Ukraine was not an advertisement for the prime minister, here is the American plan that is being woven in complete secrecy for Albania

Kreshnik Spahiu: I show you the orders that Rama and Zelensky received from
x
BREAKING NEWS

Daut Gumeni reveals the reason why Ilir Meta abandoned the Re-establishment protest and confesses the unsaid of February 20, 1991: Here are the tricks of Sali Berisha, the bust of Enver Hoxha was prepared by the dictatorship to overthrow him

Daut Gumeni reveals the reason why Ilir Meta abandoned the Re-establishment
x
BREAKING NEWS

SPAK interrogates Damian Gjiknur for 7 hours, in the scanner his assets, travels, houses and suspicions about hidden bank accounts in Malta, here are the affairs that could sink the deputy, from the abuses in the Tirana-Elbasan road project, to the fil...

SPAK interrogates Damian Gjiknur for 7 hours, in the scanner his assets,
x
BREAKING NEWS

Ilir Meta seals the "divorce" with Sali Berisha after isolation at home, "comes down" to the field and seeks to take the head of the opposition

Ilir Meta seals the "divorce" with Sali Berisha after isolation at
x
BREAKING NEWS

Here are the secret bargains between Rama, Berisha, Meta and Gazment Bardhi, their mafia codes to threaten each other, the connections with the oligarchs, the behind the scenes allegations of wiping the servers on "January 21" and the details of the bi...

Here are the secret bargains between Rama, Berisha, Meta and Gazment Bardhi,
x
BREAKING NEWS

Spartak Ngjela: Here is the 'Achilles' heel' in justice that can save Sali Berisha from 'house arrest' and the only case when his mandate as a deputy can be burned, why the former prime minister can give him peace if the file is investigated of 'Januar...

Spartak Ngjela: Here is the 'Achilles' heel' in justice that can
x
BREAKING NEWS

Idajet Beqiri: Here are all of Berisha's attempts to cover up the crime of January 21, 2011, the scheme to bill the murders to the opposition, the fabrication of close-up wounds and the reward that was given to the guards, we are ready to take to SPAK ...

Idajet Beqiri: Here are all of Berisha's attempts to cover up the crime of
x

Ekonomia

Construction and "uncreative destruction" of the Albanian economy

Construction and "uncreative destruction" of the Albanian economy

"Creative destruction" is a term that began to be used in 1942, when innovation and industrialization increased production and productivity, revolutionizing the economic structure but simultaneously destroying the old one.

Although it can result in immediate problems and job losses, creative destruction has been viewed positively, as it is a constructive driver of long-term economic growth and progress. Innovation is a key factor in economic progress, fueling creative destruction.

In fact, since that time, the world has gone through cycles of growth, decline, crises, but it has always moved forward driven by innovation, innovations, technology and above all, the evolution of human resources.

Today, the global economy is changing at an extraordinary speed, driven by technology and scientific advances, which are bringing about the need for new development models.

The contrast is obvious with the path that the Albanian economy has followed and is following. After the transition from a centralized to a market economy, for three decades, the main competitive advantage of the domestic economy has been the cheap cost of labor, which has encouraged sectors with low added value and minimum wages.

Now, this model is no longer working. Immigration has created a real bottleneck in the labor market.

All sectors report that they are struggling to find employees and are being forced to increase wages, for the most part without improving productivity, affecting the reduction of competitiveness in relation to their neighbors.

This process, being strained, is not accompanied by increased productivity, risking many bankruptcies. The industry is failing to invest in improving technology, losing the advantage of cheap labor costs, without creating another advantage. Albania lags behind in information technology, which is mainly being developed as a service for third parties.

Tourism is the most positive development that has happened to the economy in recent years, but again, as seen from the figures of 2023, it failed to bring added value to the economy. Besides having a seasonal impact, no effort is seen to be made to link other sectors, such as the food processing industry.

Moreover, this sector is quite fragile, both to unexpected developments and to a deterioration of the image, in the conditions of a not very functional infrastructure and a rapid increase in prices in the country that is marketed as one of the cheapest Europe.

Construction has been and continues to be an important engine of the country's progress. Eurostat data, which calculates the nominal construction costs as a percentage of the Gross Domestic Product (GDP), or what the economy produces in a year, in 2022, for Albania was 18.8% of GDP, from 11.3% that is the average of the European Union.

In contrast, investments in machinery and equipment, which are necessary for the progress of enterprises, as they positively affect productivity growth, are the lowest in Europe. And according to Eurostat, in 2022, spending on machinery and equipment was 4.1% of GDP in Albania, the second lowest in Europe.

In Serbia, this indicator is 8.9% of GDP, in Montenegro, 7.9%, in Bosnia and Herzegovina, 9.5%, in North Macedonia, 7.5%.

The need for a new economic model, oriented towards innovation, the use of competitive advantages, increased knowledge and added value, investment in human capital, has been discussed for years.

Practically, in recent years, the greatest orientation of investments is in construction, a temporary sector with no added value in the economy. Construction and real estate activities have been the largest contributors to economic growth in the past three years, often accounting for nearly 50% of it.

Both these sectors were driven by the boom in building permits that were issued in the capital after 2017 and peaked in 2022, falling for the first time in 2023.

That today's model has failed to increase well-being was proven by the latest IMF figure for poverty, which had risen to 25% in 2022, from 22% the previous year. Destruction is remaining non-creative due to the delay in innovation, but also the low level of knowledge - the result of non-creative destruction in education.

This is the most important point that will hold the development hostage, if there is no revolution so that some knowledgeable Albanians return, or some knowledgeable immigrants come!

Demographic developments, emigration and labor shortages are turning into a systemic problem of the economy, which requires an immediate solution.

Only a sustainable economic model, centered on human capital, innovation, the use of competitive advantages and the increase of added value could bring the economy back on track, before it is too late./Monitor