Capitalist Albania: The Rip Off and Revolt
Part 1: The Rip Off

Revolutionary Worker #902, April 13, 1997

Sali Berisha came to power as president of Albania in 1992. His policy was opening Albania wide to foreign capitalist investment--"integrating with Europe" it was called. He was committed to the final dismantling of old ownership systems left over from Albania's earlier socialist days: destroying centralized planning in the economy, ending the state ownership of industry, and dividing up the collectively owned land and agricultural enterprises.

Sali Berisha had the enthusiastic support of the U.S. and the big European powers. They backed his rise like they backed Yeltsin in Russia and similar figures throughout Eastern Europe.

Back then, in 1992, there was much talk of foreign investment, loans, new industries, new prosperity and Western-style electoral democracy. Albania's people were told that if they embraced western-style capitalism, they would soon have the lifestyles of Germans or Italians. Berisha's slogan for the election of March 1992 was "With me, we all win."

One essential truth was covered up: Capitalism is rooted in the private ownership of the social product. Under capitalism, the wealth of a few is always based on the labor and poverty of the many. Some countries may have relatively high standards of living, but that is because capitalism/imperialism, on a world scale, impoverishes and exploits billions of people who live in oppressed countries around the world.

The masses of Albanian people were offered a re-entry into the capitalist world market--but as the exploited, not as the beneficiaries of exploitation.

This reality hit hard and quick in Albania--as it has throughout Eastern Europe and the former Soviet Union. Berisha's rule has been increasingly brutal and fascistic. And then, in January 1997, the people of Albania woke up to suddenly discover that they had been robbed of almost every dime they had!

Since January, Albania's people have created a countrywide rebellion against the government. Large parts of the country have left the control of the central capitalist government in Tirana. The shockwaves of this revolt are being felt throughout the Balkan region--and the rest of Europe.

The Capitalist Thing To Do

From 1991 on, massive changes swept over Albanian society. Collective ownership was destroyed in Albanian villages. Land was broken up among families.

A few investments came in from foreign capitalists--mainly from Italy and Germany--attracted by the promise of low wages. U.S. and European companies announced that they had spent $100 million studying Albania's mineral wealth--and that they had discovered significant oil deposits. Meanwhile, U.S. Marines from the Sixth Fleet Expeditionary Force started training in Albania's mountains. Albania's government signed a military pact with Turkey's infamous fascist military, which is a member of the U.S.-led North Atlantic Treaty Organization (NATO).

A new private banking system was set up in Albania. And people were urged to put their money in investment funds.

These days, in the Western press, the Albanian financial institutions are described as "pyramid schemes" and "investment scams." But that is not how they were presented to the Albanian people. People were told that such investments were the way ordinary people ensured their own future in Western-style capitalist countries. With the dismantling of the old state-guaranteed social services, Albanian people could no longer count on having jobs, pensions, medical care or education. Instead, they were told, each person was now responsible for their own survival and prosperity. Saving money was not enough--there was great danger that sudden inflation might eat up savings overnight. So people were told to invest money with the country's new banking system. And they did.

Between 1992 and 1995, the Albanian parliament worked out a new structure of banking laws. On the advice of a team from the International Monetary Fund the final versions of these laws took out provisions that would have required new banks to insure the savings of depositors. The IMF experts apparently felt such government regulation would be a burden on Albania's newborn capitalist banking institutions.

A number of rival "investment funds" emerged in Albania that promised a heady rate of return. As they competed for investors, their promised rate of return started to rise: from 8 and 20 percent, to 80 and 100 percent a month. These associations were closely identified with the government. These funds were promoted as the new-style capitalist way to go.

Many small farmers were having trouble making a living on the small patches of land they had gotten from the breakup of collective farming. Many sold their land and invested the money. Meanwhile 500,000 Albanians had emigrated to Western Europe to get jobs. Many sent their hard currency earnings back to families in Albania. Much of that money too ended up in the "investment funds."

By September 1996, these funds had $1.2 billion invested in them--virtually all the savings of the people.

These funds were a way that Albania's emerging Western-style capitalist class was quickly accumulating pools of capital to buy up the most profitable sectors of the state-owned economy. Behind the scenes, everyone now knows, the capitalists were investing these funds in typical capitalist ways: They siphoned off profits for themselves and moved them out of the country. It is widely reported that the funds laundered money for Albanian and Italian drug smugglers. The largest fund, Vefa, poured money into the election campaign of Berisha's new Democratic Party. Vefa's owner, Vebia Laimucaj, became an Albanian representative to NATO. Another of these funds is said to finance the opposition Socialist Party.

Luxury cars, satellite dishes and high government connections became symbols of a new privatized capitalist class. These "entrepreneurs" created an Albanian stock market in 1996, and started buying up those parts of the economy they considered profitable.

A Total Wreck--
Thanks to Free Enterprise

In its socialist days, Albania's people had been relatively poor--but their lives had improved tremendously because of the revolution. Together they had built a modern industry out of the old feudal society while facing the constant hostility, military threats, and economic embargoes of surrounding capitalist countries. And they had been proud of their self-reliance and their socialist equality.

When the country was opened to the capitalist world market, Albania as a whole sank into economic collapse. As cheap foreign goods flooded in, many domestic Albanian factories closed.

Agriculture also stagnated. Formerly collective village granaries, day care centers, meeting halls and mills fell into disrepair--as the collective village organizations were broken up. Each farming family was now on its own, trying to make a living. A small handful was starting to get wealthy at the expense of the majority. The reactionary traditions of Albania's patriarchal clans got a new lease on life.

The promises of foreign investment and loans also faded. Albania, it was said, did not have the "infrastructure"--highways, railroads, electrical power--needed for profitable investments. A few Italian capitalists opened new factories in Albania and a few new Albanian businesses sprang up--routinely forcing the workers to labor extra long hours for as little as $20 a week.

Perhaps the biggest "growth industry" has been smuggling. Arms and oil pass through Albania going north into Yugoslavia, And drugs pass through Albania going west, across the Adriatic Sea, into Italy. Such operations reportedly involve elements of the Shik secret police, with close ties to the Italian Mafia. Mountainous farming regions have been introduced to cash crops like coca and marijuana.

Now about 400,000 people are officially listed as unemployed (in a country with about 1,500,000 adults). Less than 10 percent of the old industrial capacity is being used. Many working people have been forced to leave the cities and return to farm villages--and even there most people reportedly had a hard time avoiding starvation. The average per capita yearly income is $360.

One Italian capitalist recently said in a newspaper interview that Albanian people were now so poor that they had to live on a diet of bread and onions. And he bragged that this poverty made it easier for him to extract sexual favors from women working in his factory.

Living with such outrages, the masses of people became more and more disgusted over the last few years.

A Duly Elected Police State

At the same time, the promises of Western-style electoral "democracy" also turned sour. After winning office in 1992, Berisha used the crudest methods to steal the following elections. The various opposition parties were simply shut out, some of their leaders were jailed and many of their delegates refused to even sit in the parliament.

The police and secret police became more active. In one now-famous incident, police clubbed a rally of elderly pensioners protesting the naked fraud of last May's election. Journalists were arrested for criticizing the government in print. The TV and radio became tightly controlled.

Berisha created an elected police state--in many ways he was just copying the political arrangements the Western powers have nurtured in many countries throughout the world--including Chile, Peru, Guatemala, Turkey, Croatia, Russia, Rumania and so on. As late as March 6, the Washington Post still called Berisha "Our man in Tirana."

The Shameless Robbery of a Whole People

Last fall, major disaster struck the people. More and more investment funds stopped paying people the monthly interest payments they had been promised. Instead the funds went bankrupt. The shocked people were told that their money--their total savings--were simply gone for good. Over one million people--in a country of three million--had been ripped off. The Albanian people are not alone--similar investment funds have collapsed in nearby Macedonia, Bulgaria, Rumania, and Russia.

On the PBS Lehrer News Hour, one "expert" arrogantly claimed that this was the people's own fault: they should have known that it was impossible for ordinary people to reap such profits. Pointing out that the amount stolen from the people is equal to one year's gross national product of the whole country, this expert added that the Albanian people must accept that no government can repay it. And finally, he concluded, people must understand that nobody is guaranteed profit under capitalism--windfalls for some often come at the expense of others.

In Albania, the Finance Minister Riouan Bode remarked, "This is capitalism; companies can collapse."


In 1990, as the Soviet Union collapsed and Western-style capitalist restructuring took hold in Eastern Europe, the Committee of the Revolutionary Internationalist Movement put out a call to the peoples' of Eastern Europe: "If you want to know what Western democracy is really about, turn off Radio Free Europe and find the way to ask South Africa's blacks, or Palestinians in the Gaza strip, ask the Arab dustmen in Paris or Turks in Hamburg, ask England's coal miners or Chicago's ghetto inhabitants--get them to tell you about the `marvels' of Western democracy. Or you can just wait to find out for yourselves."

The people of Albania have found out.

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