THIS WEEK IN ALBANIA, JANUARY 4-10, 2008

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SUBJECT: THIS WEEK IN ALBANIA, JANUARY 4-10, 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. These updates will supplement
post's DAR reports and reporting cables.

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POLITICAL DEVELOPMENTS
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2. (U) The Endgame: Working Together For NATO: Opposition leader and
Socialist Party (SP) Chairman Edi Rama launched a striking
initiative this week to enhance the country's efforts on NATO
integration. The Socialist Party presented a draft resolution that
recognizes the importance of the April NATO Summit in Bucharest and
offers maximum support and cooperation to the ruling majority to
carry out necessary reforms. Recognizing the challenges Albania
faces, the SP has apparently changed its strategy from boycott to
cooperation. The strong public confirmation of opposition support
is an important step toward achieving these reforms before April.


3. (SBU) Parliamentary Speaker Jozefina Topalli publicly welcomed
the announcement, and the two sides sat down almost immediately for
a closed-door meeting, discussing concrete plans to expedite
judicial and electoral reform, NATO Allies' top priorities. We hope
this will be the continuation of a series of small steps taken since
last summer to create a new political climate, one that puts the
national interest above partisan politics and gets down to the hard
work of governing.

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"Great things are done by a series of small things brought
together." - Vincent Van Gogh
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4. (U) The Albanian Armed Forces - Leaner and Meaner: The Ministry
of Defense has waged an active campaign to rid the country of
massive stockpiles of weapons and ammunition ahead of the NATO
enlargement summit in April 2007. It recently retired over 1,000
tanks and 7,000 artillery pieces, and withdrew from service a large
arsenal of communist-era, Russian-made Mig planes. In July 2007,
with funding from the Nunn-Lugar program, Albania was the world's
first country to completely destroy its chemical weapons cache.
Thanks to an increase in the defense budget, now reaching 2.07% of
GDP, the Albanian Ministry of Defense is moving to purchase new
weaponry that meets NATO standards.


5. (U) During the Cold War, Albania was one of the most heavily
militarized countries in Europe with a communist regime that closely
followed the Maoist model. In a population about half the size of
Baltimore's, Albania had over 100,000 people in uniform when
communism collapsed in 1990. Due to extensive military cooperation
with the former Soviet Union and subsequently with communist China,
Albania, a country roughly the size of Maryland, built a military
arsenal that included over 1100 Chinese-made tanks, 152 planes, and
a naval force of four Russian-made submarines. The
security-obsessed communist government also built over 700,000
bunkers and tunnels to defend the country from attack. Today, we
see a military committed to lean modernization and the development
of niche capabilities.

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ECONOMIC DEVELOPMENTS
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6. (U) More Transparency, More Credit: The Bank of Albania opened a
new credit bureau last week which will track consumers' credit
histories. Consumer loans have a short history in Albania, but as
they have become more commonplace the need to track and manage
credit histories has become more acute. Governor Fullani said the
main goal of the credit registry will be to encourage sound credit
transactions by providing more complete information on consumer
credit for all 18 banks in the system. Commercial banks are now
responsible for uploading credit information to the registry; in
return, they have access to the database. Individuals will also be
able to access their credit history.

7. (U) The banking sector has come a long way since 1997 when the
collapse of pyramid schemes led to massive turmoil. Its most rapid
development has occurred during the last four years with the
introduction of large European banks, Austrian Raiffeisen Bank,
Italian San Paolo Imi and Intesa, and French Societe Generale and
Credit Agricole. Public confidence in the sector has improved with
performance - deposits have reached US $7 billion, 60% of the GDP.
Loans have experienced the most spectacular growth, increases of 70%
in 2005, 55% in 2006, and 50% in 2007, boosting the loan to GDP
ratio to 24%. Despite concerns over the stability of this rapid
growth, these developments have boosted the role of the banking
sector in economic development.

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THIS WEEK IN ALBANIAN CULTURE
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8. (U) There's a New Dean in Town: Albania's public universities
held general elections this week to choose the schools' Deans and
other leaders, as well as student representatives. Some elections
had been delayed over a year as the Ministry of Education and
universities worked out new regulations for elections, rules that
the schools charged involved too much government interference in the
university structure, particularly regarding new criteria for who
may run for office.


9. (U) In some faculties, elections for Dean and Head of Department
were unfortunately held with only one candidate, and it was only
academia's older generation that qualified to run, dominating the
ballots. The current generational gap, a quirk of the fall of
communism, leaves a lack of professors between 30 and 50 years old,
and a distinctly different point of view from each side of the
divide, particularly on issues of teaching methods, testing styles,
and more generally regarding a communist mindset vs. a stronger
western influence.

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THE FINAL WORD
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10. (U) No Means Yes - And How Much Did That Cost?: Savvy travelers
understand that one should always grasp a few important cultural
mores before arriving in a foreign country. However, with a general
dearth of information on Albania and a sparse selection of travel
guides, the few American and Western European tourists here don't do
a lot of homework. They might be surprised then, when a shopkeeper
shakes his head "no" is response to a request for a bottled water or
Coca Cola (which might be in full view). Most Albanians shake their
head left to right to indicate "Yes" and forward and backward to
indicate "No." Confusion abounds for the uninitiated. Another
curiosity includes the "old Lek - new Lek" issue. Albania devalued
its currency around 1969 by 100%. However, to this day, shopkeepers
and waiters born long after this date bring a bill for $100 for
lunch or $10 for two loaves of bread. Those in the know see right
away that they aren't being cheated - just charged in "old Leke."

CRISTINA