POSTCARDS FROM ALBANIA: CARS AND TRUCKS AND THINGS THAT GO

UNCLAS TIRANA 000118

SIPDIS

SIPDIS

DEPT FOR EUR/SCE
DEPT OF JUSTICE FOR OPDAT, ICITAP

E.O. 12958: N/A
TAGS: ECON PGOV PREL KCRM AL

SUBJECT: POSTCARDS FROM ALBANIA: CARS AND TRUCKS AND THINGS THAT GO


1. (U) This cable is part of an occasional series entitled
"Postcards from Albania." These cables are prepared by our locally
engaged staff to provide analysis, opinions and commentary on
Albanian reality from an Albanian perspective. This cable was
contributed by a member of the Pol-Econ staff.


2. (U) SUMMARY: During communism, Albanians were deprived of
basic rights and freedoms, including private ownership of vehicles.
The few cars circulating prior to the 1990s (roughly 15,000) were
state-owned, while common Albanians used limited public
transportation and bicycles. Horse-and-cart was also a common means
of transportation in rural areas and sometimes part of the normal
scene even in Tirana, the capital. Seventeen years later, the
street scene has been completely altered from dead silent to noisy
and boisterous, with 300,000 cars, old and new, storming through
chaotic traffic every day. While the modernity and cleanliness of
vehicles has improved, the dominance of the informal market
continues to offer temptation to unscrupulous automobile purveyors.
END SUMMARY.


3. (U) Released from communist-era restrictions on private property
ownership, the first item on many families' wish lists was a car.
To own a car was a sign of freedom, wealth and prosperity. High
demand and initially weak purchasing power brought scores of
outdated, high-polluting models and a flourishing informal market of
second-hand European cars that operated beyond government control.
As the number of cars on the road rose dramatically, the existing
infrastructure of narrow and dilapidated roads could not keep pace.
Corruption in getting a driving license and low standards for
driving tests contributed to poor driving skills and high
fatalities, which persist to this day. Maintenance costs soared for
the average car owner, who faced frantic traffic and high accident
rates in addition to inadequate pavement. Furthermore, the outdated
imports contributed significantly to heavy pollution, particularly
in Tirana, contributing to its current status as one of the most
polluted capitals in Europe.


4. (U) The trend has somewhat reversed itself in recent years, with
newer models and more luxurious cars entering the market and
significant improvements in road infrastructure. The newer, more
expensive cars, incongruous in a developing country that rates near
the bottom of Europe's GDP ranking, are widely available on an
informal market which offers autos (usually imported legally but
often carrying suspicious backgrounds) at a quarter of the price of
authorized car dealers. Other factors also contribute: increased
purchasing power at the highest levels of society, high remittance
incomes for many in the middle, increased availability of consumer
loans, the banning of substandard fuels, government incentives to
promote the import of newer cars with environmentally friendly
technologies, as well as what Albanians call "easy money" - high
profits made overnight through illicit activities.


5. (U) Despite the growing presence of authorized car dealers,
representing nearly a dozen brand names from Mercedes to Hyundai,
their business is insignificant compared to that of the informal
market. In 2007, only 2,900 of 23,900 cars were sold by authorized
dealers. In addition to distorting market competition and causing
significant tax losses for the state, the situation has also created
the perfect terrain for a vigorous market of stolen cars from across
Europe. These cars are easily imported legally and resold in
Albania, the final ring in a long chain of organized traffic
initiating in Western Europe. One legend has western car owners
participating in the scheme for insurance payments. Until recently,
public officials commonly drove such stolen cars.


6. (U) COMMENT: The lucrative business in stolen cars contributed
to Albania's negative image abroad as an organized crime stronghold.
The early days after the fall of communism, as well as the time of
civil unrest of 1997, provided a fertile environment for lucrative,
flourishing organized crime markets, not only in autos, but also
trafficking and smuggling. Ineffective and corrupt law enforcement
contributed to the circumstances. In some areas, such as
trafficking and smuggling, there have been marked improvements since
these days (though much improvement remains necessary),as the
government responded to internal and international pressure.
However, the more domestically-oriented issue of autos has taken
longer to reach the tipping point, and greater changes are expected
in this area as well.
WITHERS