Embassy Tirana Weekly Report

UNCLAS SECTION 01 OF 02 TIRANA 000700

SIPDIS

STATE FOR EUR/SCE

E.O. 12958: N/A
TAGS: PGOV ENRG EFIN PREL PHUM PINR AL
SUBJECT: Embassy Tirana Weekly Report

TIRANA 00000700 001.2 OF 002



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.

Central Bank Taking More Active Role in Economy
-------------- --


2. Central Bank Governor Fullani recently increased his presence in
the public to unveil the Albanian central bank's (known as the Bank
of Albania) stance and its actions to mitigate the negative effects
of the global economic downturn on the Albanian economy. The
financial sector in Albania has been largely spared from the initial
devastating effects of the crisis. However, both consumer
confidence and economic activity have declined. Over the past year,
bank deposits have declined by approximately ten percent, and banks
have continued their conservative lending practices. Even though
both deposits and lending have seen recent upticks, the trend since
last year has been negative. This in turn has restricted banks'
performance and their role as economic activity promoter.

3. Following the departure of the IMF mission from Albania in
August, Fullani tried with some success to take over the IMF role as
the watchdog of the government's financial policies and its
implementation of the state budget. Fullani has repeatedly called on
the government to remain focused - especially during the current
developments - in maintaining country's macroeconomic stability as
one of the best achievements in Albania. More specifically, Fullani
has raised the attention paid to long-term fiscal indicators,
macroeconomic stability, and the GOA's expenditure approach and
their effect on the budget deficit.

4. The Albanian Central Bank has managed to play an important role
in tackling several problems and supporting and monitoring the
banking sector in order to prevent any serious threat. It has
maintained a stable interest rate as an important anti- inflationary
measure, despite political pressure on the Bank to reduce rates.
The Governor himself has defended the domestic currency, the Lek,
during a recent (and short-lived) sharp decline vs. the Euro,
underlining that the Lek has been, is and will remain a successful
currency for Albania, adding that it will serve Albania until it
eventually enters the European Union. Nobody can say with accuracy
when the current global economic crisis will be over. However, all
appearances are that the BOA is playing a constructive and
stabilizing role, and is helping to insulate as much as possible
Albania from its negative effects.
Minister of Economy, Trade and Energy, Dritan Prifti
-------------- --------------


5. Dritan Prifti was born on August 27, 1968 in Berat. He received
a Master's of Public Administration (MPA) from Harvard's Kennedy
School of Government in June 2000. He received a Master's of
Business Administration (MBA) from the University of New Mexico in
December 1995.


6. Mr. Prifti served as Minister of Energy during September 2001 -
February 2002. For a period of three months in 2000 he served as
General Director of the Albanian Power Corporation (KESH). This is
his third term as a Member of Parliament. Mr. Prifti is member of
Socialist Movement for Integration (LSI) and represents this
political party in the Albanian Parliament.

Children of the Blood Feud
--------------


7. Sitting forlorn on the banks of the Lana river stands a
run-down, three-storey building known by many in Tirana as simply
"the blood feud building." The purple house stands as a relic and a
reminder of Albania's past history with blood feuds. At least one -
and perhaps even several - families live secluded in the house,
unable to leave the building out of fear that they will be killed as
part of an ongoing blood feud.


8. According to the Nationwide Reconciliation Committee, whose aim
is to mediate interfamily revenge killings, more than 800 children
across Albania are essentially imprisoned in their own homes, unable
to leave out of fear of death. For this reason these children do
not attend school. Attempts were made by the Ministry of Education
this year to develop special home-schooling curricula. According to
media reports, however, the home schooling by qualified teachers has
not commenced yet.


9. It is important to note the that blood feud killings in Albania
are rare - the Ministry of Interior reported that in 2009 there have
been only four deaths so far related to blood feuds - the lowest
number in 18 years. The blood feud is an anachronistic practice
codified in the Canon of Leke Dukagjini, a code of law that emerged
in the 15th century to govern life in the isolated north of Albania.
This tradition was banned by the communist regime and ruthlessly
suppressed, but took hold again in the chaos after the collapse of
communism. The Code says that serious wrongdoing must be avenged by
killing a male member of the family that committed the wrong. This
in turn leads to a cycle of killings that put at risk all male
members of the extended family. Feuds can go on for years or

TIRANA 00000700 002.2 OF 002


generations.

Gjirokaster Folk Festival
--------------


10. Gjirokastra was the home of the 2009 traditional Albanian folk
festival. Held every four years, the festival is usually takes
place in the fall. Over 1,000 Albanian singers and dancers from
Albania, Kosovo, Macedonia, Serbia, Italy, Germany, Switzerland and
the U.S. came together for the festival. The National Folklore
Festival had its beginnings in 1968, when it was organized for the
first time in Gjirokastra.


11. This year Ambassador Withers and a group from the Embassy
attended the Festival, while paying a three-day visit to
Gjirokastra. The Ambassador gave a Cultural Diversity award to
group of minority dancers from southern Albania. Overall, the
festival highlights Albania's rich cultural traditions, showcasing
the best in Albanian folk music, art and costumes, with performances
both within the beautiful Castle of Gjirokastra as well as on the
city's famous cobbled streets.


Quote of the Week
--------------


12. "...The time when Albania decided, based on what one person or
another said, has ended. . . Democracy, freedom of speech, freedom
of property are all things that the internationals taught us 20
years ago, and now they are also owned by Albanians; therefore, we
won't be influenced by expressions, requests, or ultimatums, no
matter where they come from." Socialist Party National Assembly
Chair, Gramoz Ruci, responding to calls by several foreign
ambassadors in Tirana on the opposition to end its boycott of
Parliament.

WITHERS