THIS WEEK IN ALBANIA, FEBRUARY 23-29, 2008

UNCLAS SECTION 01 OF 02 TIRANA 000161 SIPDIS SIPDIS SENSITIVE DEPT FOR EUR/SCE DEPT OF JUSTICE FOR OPDAT, ICITAP E.O. 12958: N/A TAGS: PGOV PREL PHUM KV AL SUBJECT: THIS WEEK IN ALBANIA, FEBRUARY 23-29, 2008 ¶1. (U) The following is a weekly report prepared by Embassy Tirana's local staff to provide political and economic context and insight into developments in Albania. -------------- POLITICAL DEVELOPMENTS -------------- ¶2. (U) The Honeymoon is Over: It was to be expected, but perhaps not so soon. Chairman of the Socialist Movement for Integration (LSI) Ilir Meta pulled out of the minority coalition led by Socialist Party (SP) Chairman Edi Rama in a public declaration this week. He quickly presented a request to officially register a new political movement, the left-wing Coalition for Integration, calling on other minority parties who are dissatisfied with Rama's leadership to join his new political umbrella. ¶3. (SBU) In response, Rama called for unity. However, he had recently refused several of Meta's requests for power sharing, producing a foe who turned immediately to courting Rama's rival, former SP Chairman Fatos Nano. Nano, who has maintained a low profile since being ousted as party chairman in 2005, still commands a broad base of political support in the SP, including the public support of several opposition Members of Parliament. (Note: Several of these MPs broke with the SP last summer to support Nano's nomination for president over Rama's objections). ¶4. (SBU) Meta's new coalition could find support from this disaffected group of MPs and others from smaller parties in the opposition coaliation, as disenchantment grows with Rama's leadership style and focus begins to turn to the 2009 national elections. However, it is too early to predict success for Meta. What is certain is that Meta's break complicates the current debate on electoral reform, which Prime Minister Berisha hope conclude by the end of % -------------- "From mQ QABQCQAQA @(C(@(G(Q Q(Ere was no honeymoon." aQb@QcQaQ@Qc0A0QQQ,Q(Q(Q -------------- -------------- !Q!Q!Q!Q!Q!Q!,!,!,Q,%,QQQ -------------- AQAAQAQ QAQAQCQAQBQCQQQ%, -------------- ¶5. (U) Bad Year, With Mixed Results: This week the Ahbanian Power Corporation (KESH) announced its 2007 annual performance results. Despite a difficult year, including a severe drought and prolonged power shortages, KESH managed to meet and even exceed targets set by international donors. Results for technical and non-technical losses (36.4%),as well as the collection rate (90%),marked their best performance in 10 years. This is an impressive feat for a company that paid almost $300 million last year for electricity imports when it couldn't meet domestic demand, a crisis which has plunged the company into dire financial straits just before the expected privatization of its distribution arm later this year. ¶6. (U) While most observers agree that KESH Director Gjergj Bojaxhi has done the best he can to manage a bad situation at KESH, Albanians remain frustrated by ongoing electricity problems. Supply remains a serious issue, with no solution likely in the short term. Efforts are underway to improve the situation, including diversification of power generation sources and the installation of an electricity meter in every household and business to improve collections. Recent increases in domestic electricity tariff prices will bring KESH closer to meeting its costs for expensive imports. Finally, the privatization of the KESH distribution arm within 2008 is expected to further improve management of the distribution sector, which represents more than 90% of the company's total losses (both technical and non-technical). In the end, only a solid commitment by the government to implement comprehensive reform will upgrade Albania's malfunctioning energy sector. ¶7. (U) Albania and the Olive Trees: It's unclear if Thomas Friedman, author of "The Lexus and the Olive Tree" knew about olives in Albania, though the country is mentioned several times in his famous bestseller. During the early 1990s, Albanians did their best to expunge their communist heritage, including demolishing almost 40 percent of the country's then supply of 5 million olive trees, a legacy of collectivist agriculture. ¶8. (U) Fifteen years later, the situation is far more optimistic. TIRANA 00000161 002 OF 002 New plantings are taking place, with 200,000 trees planted last year alone. Encouraged by a government program that subsidizes 50 percent of the cost of the seedling, Albania's olive trees have rebounded to total 4.5 million. Private investment in processing plants has increased production, while efforts by the Alimentary Oil Association have increased quality. Members of this association are actively looking for new markets, domestic and foreign, while prices for Albanian olive oil are on the rise in international markets. Though much remains to be done, the future of olive oil production in Albania is brighter now than in many years. -------------- EDUCATION AND CULTURE -------------- ¶9. (U) Skipping School or Dropping Out?: In the streets of the capital city, young children sell cigarettes, nuts, and other knick-knacks to strangers sipping coffee in the sunny outdoor cafes. These kids are forced or encouraged by their parents or guardians to cruise the streets during school hours instead of heeding the government's call for mandatory education. Their families are usually among the poorest in Albania, and the childrens' income helps put food on the table. The number of children on the streets has increased in recent years, while drop-out rates have officially remained the same. ¶10. (U) It's not always fun, or comfortable, to attend school in Albania. Particularly in the rural villages where basic infrastructure is inadequate and schools lack a reliable electricity supply, heating and cooling systems, teaching supplies, and qualified teachers. Without a national network of school buses, children may have to walk miles to reach the nearest school, only to be met with overcrowded and irregularly held classes. Without publicly supplied textbooks, the cost of books and supplies can be prohibitive for poor families. Lacking economic options, these families are most vulnerable to making the choice to send their young boys abroad or find them jobs that pay "better than schooling." These households are also generally the most traditional and least likely to enroll their daughters in school, keeping them at home to help with domestic work, or, particularly during the teen and pre-teen years, safe from the influence of young males. Children with disabilities have an even tougher time getting an education in this system, which is in acute need of resources and reform. WITHERS