FLASH
Shkruar nga Klodian Tomorri
The Albanian government saves at least 1 billion euros a year by keeping pensions at ridiculous levels, 400 million euros by putting the burden of financing diseases in the pockets of citizens and the same amount by underfunding the education system.
Consider just two figures. The Albanian government collects an average of 28 percent of gross domestic product revenue in the budget, while in the European Union the average is about 42 percent of GDP.
But if you compare the investments, the ratio is reversed. Albania invests over 6 percent of GDP from budget revenues. In the best year, the European Union manages to invest about 2.7 percent. And that doesn't tell the whole story. If concessions, roads that are built by private individuals are also counted, the gap is much bigger.
The question is where does Albania find the money to maintain such a high level of public investment? And the answer is simple. From three categories mainly. The government takes money from pensioners, the sick and students in schools.
The Albanian government saves at least 1 billion euros a year by keeping pensions at ridiculous levels, 400 million euros by putting the burden of financing diseases in the pockets of citizens and the same amount by underfunding the education system. These two billion euros fully compensate the negative income difference that Albania has with the EU countries and enable the government to invest more than 2 times more in the economy.
At the theoretical level, the orientation of the budget towards investments is the best budget policy. Investments grow the economy, create jobs, boost production and increase productivity in the economy. In short they increase the pie of the economy and the idea is exactly that. Governments are aggressive with investments for certain periods of time to grow the pie, then distribute more to everyone. But the problem is that in Albania this story has been going on for more than 20 years.
The state budget is no different from that of a family. A family may decide to invest in bonds, opening a business or in real estate with the idea of having a better future economically. But if the money she invests saves her from interrupting her children's education, their malnutrition or not curing the diseases of the elderly, she has destroyed the future. This is what is happening in Albania.
But why does the government insist on this? Is keeping investments so high at the expense of all other vital expenses driven only by the good intention of increasing the pie? In fact, there is another incentive. Pensions cannot be stolen. While investment tenders do.
Take just three sectors, which take the big investment cake. Infrastructure, energy and Information Technology. Road costs in Albania are more expensive than in any advanced country on the planet.
Over 8 billion euros have been invested in the energy sector, but surprisingly, technical losses continue to be reported at double-digit levels. While in IT, Albania has created a small handful of businessmen, who have higher profit rates than even Apple.
The bottom line is this. Albania's budget policy is nothing but a rentier mechanism, which absorbs money from the vulnerable layers of society and takes it to infinitely enrich a handful of state subcontractors. The latter are otherwise known as oligarchs. And as long as this will continue to happen, Albanians will continue to leave the country en masse, as it has happened.
Those who rationally try to discern whether this is a left-wing or a right-wing policy are nothing but naive. This is simply a system created by the incentive to steal. It's that simple.
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