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Shkruar nga Pamfleti
The year 2022 was the best in history for business value gains.
The income that the budget collected from profit tax reached a historical record level of 48 billion ALL, with an increase of 34% on an annual basis. In value, the profits of enterprises, starting from the tax paid, were about 318 billion ALL, or 2.7 billion euros.
The revival of demand after the pandemic, also driven by tourism, the increase in prices for traders of goods (such as energy or minerals), the resilience of entities to withstand external shocks, the transfer of costs mainly to the final prices paid by the consumer, the flourishing of real estate construction, or limited competition, were some of the reasons that influenced the improvement of the profitability of local enterprises.
In the annual ranking of "Monitor 200", the total profit for the 200 largest companies, in 2022, was 174 billion ALL, with an increase of almost 50% compared to the level realized by the subjects of the same list of the year previous.
These enterprises have a high weight in the economy, as their result is as much as 54% of the total total profits generated by over 100,000 entities operating in the country, most of which are based on self-employment ( from 49% which was this share last year).
The more businesses earn, the more positive a country's perspective is, as businesses become better able to withstand external shocks, are encouraged to invest, expand, diversify, increase knowledge, increase productivity, which in the end brings more income in the budget and increased employment and higher wages.
But, this positive panorama "hides" a big structural impasse. A significant part of the companies that have high profits come from sectors that have no long-term added value for the economy.
As never before, in the "Monitor 200" list according to profits, there were 45 companies that are directly or indirectly related to construction, from 34 that resulted the previous year and 30 in 2018.
Construction has been attracting free enterprise capital in recent years due to high and fast profits, also inflated by the entry of informal money into the economy.
This sector holds a record in Europe for the weight in the gross added value, with 11.2%, twice the European average. Concessions are another segment that, despite the problems that are appearing after SPAK investigations, continue to have guaranteed profits from obtaining a concession in the provision of exclusive services, where the financial risk has been assumed by the state.
Both construction and concessions are the two sectors with the highest profit rates in the country. For many other businesses, mainly focused on imports, the increase in profits was simply a "luck in the door" that came from rising prices, influenced by international factors such as problems with supply chains and Russia's attacks on Ukraine, as well as the decline of euros.
If there is one sector that is really suffering, it is that of industry, which remains really vital for the proper functioning of an economy. Unlike construction, which is attracting free capital due to high profit rates, industrialists are disappointed.
The number of enterprises belonging to the processing industry is limited to only a few large enterprises, with a consolidated activity. Industrialists claim that not only are there no new investments, but there are also no reinvestments.
The increased costs, the weak euro that hits especially the exporters, the strong competition from the import, the lack of a clear development strategy are increasingly "sinking" the industry.
Eurostat data show that the weight of the processing industry was only 7.5% of the gross value added, from 16.7% which is the European average and 15-18% in the countries of the region such as North Macedonia, Serbia, Bosnia-Herzegovina and even Kosovo .
For at least two decades, the markets are gradually opening up with the region and Europe, as a normal process within the European Union membership process. This period has been more than enough to boost the industry in those segments where we have competitive advantages.
This has not happened. The battle is lost at the initial stage of the production process. Industries are getting tired and turning to storage.
As the European Commission found in the last enlargement report, Albania's competitiveness is hindered by the relatively low levels of entrepreneurial and technological knowledge, the unmet needs for investment in human and physical capital, the continued low spending on Research and Development and, always and more, from the lack of qualified labor force.
The consequences may not be visible at the moment, as imports are easily flooding the market. In the long term, the country will face a decline in competition that will make imports more expensive, loss of jobs for many professions, deterioration of demographic balances, especially in small and rural towns, with an effect on the decline of the value chain and slowing growth.
It seems that the economy is slowly getting its wings cut off, but for the moment almost everyone is satisfied with the gloss of the figures!/ Monitor
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