Second Environmental Performance Review of Albania

Introduction3The country has deposits of petroleum and naturalgas. Oil production in 2010 was 11,096 barrels perday, covering about 30 per cent of nationalconsumption. Foreign oil companies have showninterest in developing onshore deposits, but offshoredrilling has been less successful. Oil extraction iscentred in the Berat and Fier districts. Natural gasproduction, estimated at about 37 million m 3 in 2010,is sufficient to meet local demand.In 2010 Albania produced 7,714 billion kWh ofelectricity - all produced by hydroelectric powerplants (HPPs). This covered 89 per cent of thecountry’s electricity consumption. Most of thesector’s ageing production capacity was installedabout 30 years ago and is in need of investment innew generating capacity. Albania periodically suffersfrom energy shortages owing to rapid increase indemand and droughts.Since 2003, Albania’s economy has improvedsubstantially; reforms in infrastructure development,tax collection, property law and businessadministration have worked well and the country’seconomy has outperformed many others in theregion. The average annual growth of GDP between2003 and 2010 was 4.8 per cent.The growth of GDP has been good for the Albanianpeople. Per-capita income as measured by PurchasingPower Parity (PPP) has grown from US$ 4,545 in2003 to US$ 9,102 in 2010. This development hasdiminished poverty levels markedly. According topreliminary data by the World Bank’s PovertyAssessment Programme, the proportion of peopleliving below the poverty line has dropped from 25.4per cent in 2002 to 12.4 per cent in 2008.In spite of the advances in income levels, Albaniastill remains a poor country by Western Europeanstandards. Its GDP per capita (PPP) stood at 27.7 percent of the EU average in 2010. Official GDP figuresmay, however, give too negative view of the averageliving standard since the per-capita GDP figures donot fully capture either remittance income fromAlbanians abroad or income from the informalmarket, which the International Monetary Fund(IMF) estimates to be 30 to 40 per cent of GDP.Figure I.2: GDP by sector in 2003, 2005 and 2010, percentage of total GDP 100%90%80%70%60%50%40%30%20%10%0%54.0 55.0 57.613.7 13.814.28.7 10.6 9.323.5 20.6 18.92003 2005 2010Service activities (ISIC G-P)Construction (ISIC F)Industry, including energy (ISIC C-E)Agriculture, hunting, forestry and fishing (ISIC A-B)Source: UNECE database (accessed on 11.6.2012).Remittances have helped economic growth in the The Albanian banking sector survived the 2008past but, after peaking in 2008, have declined over global financial crisis and economic downturn withthe last few years. According to the World Bank sufficient liquidity, and the system has recoveredAlbanian remittances fell by 12.3 per cent in 2010 from the sharp decline in deposits at the beginning ofcompared with 2009, and their proportion of GDP the crisis. Fiscal and monetary discipline has keptdeclined to 10.9 per cent in 2010. However, the inflation relatively low, averaging roughly 2.8 perdescending trend seems to have stopped as the World cent per year during 2003-2011.Bank estimates for 2011 predict a small increase inremittances. Figure I.2 represents GDP by sector in Unemployment is still a problem, although theselected years. registered unemployment rate has dropped from 15.5