Annual progress report 2015 albanian contribution – input I september 2014 – may 2015 table of contents


Table 10: Herfindahl Index of asset, deposit and loan concentration



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Table 10: Herfindahl Index of asset, deposit and loan concentration30


Indicator

2008

2009

2010

2011

2012

2013


2014

February

2015

Herfindahl index (assets)

0.15

0.14

0.14

0.15

0.15

0.14

0.14

0.14

Herfindahl index (deposits)

0.17

0.15

0.16

0.16

0.15

0.14

0.14

0.14

Herfindahl index (loans)

0.11

0.11

0.11

0.12

0.12

0.12

0.12

0.12


Table 11: Non-performing loans (in percent)




2008

2009

2010

2011

2012

2013

2014

February 2015

Non-performing loans31

6.64

10.48

13.96

18.77

22.49

23.49

22.80

22.45


Table 12: Interest rate spreads




2008

2009

2010

2011

2012

2013

2014

Feb 2015

Interest rate spreads (average lending/deposit rates)32

5.69

6.81

5.96

5.60

5.40

6.1

5.89

5.93


Table 13: Core-activity profitability indicators, in percentage (cumulative)


Ratios

Dec ‘09

Dec ’10

Dec ‘11

Dec ‘12

Dec

13



Dec’14

Feb’15

Interest income/average interest-earning assets (1)

8.10

8.11

7.78

7.73

7.31

6.28

0.95

Interest expenses/average interest-earning assets (2)

4.06

3.78

3.57

3.72

3.42

2.14

0.24

Net Interest Margin (NI M) {(1)-(2)}

4.04

4.32

4.20

4.01

3.88

4.15

0.71

2. CAPACITY TO COPE WITH COMPETITIVE PRESSURE AND MARKET FORCES WITHIN THE UNION


2.1 Endowment with human and physical capital
Employment policy

Table of the legal acts

No

Title

Type of legal act

Institution

Act’s No

Adoption date

Implementation date

1

On employment promotion (as amended)

Law

MSWY

No. 7995

20.09.1995

Amended


21.01.1999

07.03.2002

03.07.2006


05.10.1995
08.02.1999

21.03.2002



17.07.2006


2

For the amount of funding, criteria and procedures for implementation of the apprenticeship programs for unemployed job seekers, who have completed higher education, at home or abroad", (as amended)

CoMD

MSWY

No. 873

27.12.2006

10.01.2007

3

On employment promotion program, through job training" (as amended)

CoMD

MSWY

No. 47

16.01.2008

30.01.2008

4

On the extent and benefit from the program criteria of promoting employment of unemployed job seekers in difficulty" (as amended)

CoMD

MSWY

No. 48

16.01.2008

30.01.2008

5

On the incentive program for the employment of women from special groups" (as amended)



CoMD

MSWY

No. 27

11.01.1012


25.11.1012

6

For the amount of funding, criteria and procedures for implementing the program of promoting employment of unemployed job seekers entering for the first time at work" (as amended)

CoMD

MSWY

No. 199

11.01.2012

25.11.1012


7

On employment promotion program for persons with disabilities

CoMD

MSWY

No.248

30.04.2014

15.05.2014



  1. Institutional framework

Regarding employment policy,the National Strategy for Employment and Skills 2014-2020 has been adopted along with the action plan by the Council of Ministers Decision no. 818, dated 26.11.2014,which was initiated and drafted by the Ministry of Social Welfare and Youth in collaboration with line ministries, donors and other stakeholder’s interest.


  1. Economic and social aspects

Strategy Vision 2014-2020 for employment and skills, encouraged by the general objective of the 'Europe 2020' to achieve rapid, sustainable and thorough growth, aims that up to 2020 we have a competitive economy and an all-inclusive society that relies on "higher skills and better jobs for all women and men".
The overall aim of the Strategy is to promote qualitative job opportunities as well as skill opportunities for all Albanian women and men throughout the life cycle. This goal will be achieved through coherent and coordinated political activities, which at the same time respond to supply and demand for labor and also eliminate the gaps of social inclusion. National Strategy for Employment and Skills focuses on the following four strategic priorities:


  • Promoting decent job opportunities through effective policies of the labor market

  • Providing qualitative education and vocational training for youth and adults

  • Promote social inclusion and territorial cohesion

  • Strengthening labor market governance and qualifications systems.

The strategy aims at regulating the policy of the labor market, improving education and vocational training, reforming social protection systems and strengthening management of the labour market.


Identifying skills missing in the labor market is one of the main activities that develops the National Employment Service under Labor Market Information, noted in the Strategy Action Plan 2014-2020. This study is not only an important source of information to enrich the labor market, but it serves as an estimate of the required skills and lacking in the labor market from the perspective of business. In June 2014, a study was conducted by the Skills Needs central and local staff of the NES. The findings of ISA (Needs Study Skills) are an important instrument for reorienting the NES activity related to education and vocational training and employment mediation, are also valid for the Ministry of Education, Ministry of Economy and Tourism Agency Foreign Investment, Ministry of Territory etc. reaffirming the importance of interagency coordination and cooperation in achieving our goals and objectives of the government program.
This reorganization has given his resultsat the end of 2014, as follow:
- There are 30,600 advertised vacancies, declared at employment offices;

- There are 16,500 employees unemployed, through the mediation of employment offices;

- There are 52,000 employers, which are provided and were given services.
Unemployment

At the end of Q 3 2014 the unemployment rate for population aged 15-64is 18.0% and for young people aged 15-29 the unemployment rate is 33.9%, as reported by INSTAT.

Regarding the data for unemployed job seekers, who are registered in the employment offices, for the end of 2014,in the whole country (36 regional offices / local), resulting as follows:

• Total 141,342 unemployed jobseekers, of which about 50% are women;

• Young people aged 15-30 years were 38,435 unemployed or 27% of the total;

• Unemployed, who receive unemployment benefits are 7,703 or 5% of the total unemployed jobseekers;

• unemployed in economic aid are 69.60 or about 49% of total unemployed workers;

• unemployed jobseekers from Roma and Egyptian communities are 9690 or about 6% of the total unemployed jobseekers;



Employment promotion programs

For the 2014 budget funds for employment promotion programs were 271 million ALL and 3975 people have benefited, which separated by categories are:



  • 65% women or 2615.

  • 41%, from particular groups of unemployed job seekers

  • 30% from long-term unemployed,

  • 7%people treated with economic aid,

  • 34% youth up to 24 years

  • and 4% from the Roma community.

From on apparel industry has been beneficiaries 60%.

6 programs were implemented for 2014, which respectively, according DCMs approved are under the table acts.



For 2015, funds from the state budget for employment promotion programs will be 450 million ALL. 30% of these funds or 150 million will go to youth employment. Above programs will be implemented during 2015.


  1. Increase of capacities of staff

Reorganization of employment offices, through modernization of infrastructure, re-conceptualization and computerization of services offered. Eleven new employment offices have been set up at regional and local level, according to the new model of service, which is unique model of service delivery with three levels, information, employment services and individual counseling. 323 employees of the NES system at all levels are trained for its implementation and for the first time offering similar services with European counterpart institutions. Also, a qualitative step in the modernization of the NES and manner of delivery services accounts in full deployment of Information System of Employment Serviceswww.puna.gov.al, which is accessible by all.
Physical capital
For further information on the physical capital see Chapter 15: Energy and Chapter 21: Trans-European Networks.
2.2 Sectorial and enterprise structure
Status of legal harmonization
Several changes to the legal framework for the privatization of Albpetrol, INSIG, companies in non-strategic sectors and assets has been already adopted by the Government and Parliament during the period October 2014 - April 2015.
Institutional framework
It’s created an ad hoc working group with the joint order of the Minister of Economy and Minister of Energy& Industry, with no.8228/5, dated 11.03.2015 ”For the identification and pursuit of problems on restructuring and preparation of the privatization process of the company "Albpetrol" S.A.” which is chaired by the Deputy Minister of MZHETTS and with the representatives of the Ministry of Economy, Ministry of Energy and Albpetrolsha.company. The aim of this group is to identify and pursue issues for restructuring and privatization preparation Albpetrolsha.company.
It’s created an ad hoc inter-institutional committee with order of the Prime Minister No.8, dated 29.01.2015,“For the establishment of the Inter-institutional Committee for identifying state assets for privatization”,which is chaired by the Minister of Economy and with the representatives of 18 different ministries and public institutions. The aim of this committee is to identify all state property in strategic and non-strategic sectors and drafted the action plan for their privatization.
It’s created an ad hoc working group which is chaired by the Deputy Minister of MZHETTS and with the representatives of the Ministry of Economy, Ministry of Finance and INSIGsha.insurance company.The aim of this group is to identify problems and preparation of the privatization process of the INSIG sha.company.
Economic and social aspects
During the period September – December 2014, the privatization policy of the small and medium non-strategic sector with 100% state capital was revised. Two companies that have a poor economic performance and financial position have gone into liquidation. In addition, seven other companies have been restructured and merged. Unused assets of other companies with poor performance were made available to foreign and domestic investors to be leased for1 Euro. By the end of 2014 such leases were adopted for 1 Euro, according to Decision no.54, dated 5.02.2014. These companies foresee to invest during 2015 about 3.5 million Euro and employ after investing about 1,162 employees.
During this period there has also been prepared the first and second packages of privatization of state assets. The detail information regarding them is put on the MZHETTS website: www.ekonomia.gov.al, which in order to make the process more transparent. The documentation for the privatization and s sale of a 40 further assets has also been prepared during this reporting period. The sales procedures of 12 of them were performed during the first quarter of 2015 and only 3 assets were sold with a value of 148 thousand euros. The sale of assets is carried out through a public auction procedure and the former owners of the land have priority to purchase the assets.

2.3 State influence on competitiveness / competition
The annual state aid report in 2014 is submitted to Ministry of Finance and Justice for their comments.
State aid and other forms of support to the enterprise sector
In 2014 state aid including agriculture and fisheries sector was granted in the amount of 6 503, 12 million ALL (46.41 million euros). State aid excluding agriculture and fisheries sector was granted in the amount of 5,332.3 million ALL (38 million euro).
State aid trend in 2014 is mostly characterized by:


  • An increase of state aid for employment, training, aid for small and medium sized enterprises, included in the category of horizontal aid, and





Table 1: Total state aid in Albania in 2011-2014

Aid for research and development: In 2014, the share of research and development aid is significant within the category of horizontal aid. Based on the National Agency of Natural Resources (AKBN) report, state aid for research and development is granted to all undertakings that sign “hydrocarbon agreements” and their subcontractors, through the exemption from import duties on equipment, machinery, materials, and an exemption from VAT tax on all contractors and subcontractors in the stages of exploration and development of oil. In 2014, it is reported that foreign companies performing operations in hydrocarbons received exemptions on import (VAT and customs), exemptions from excise and VAT exemption for services, in total amount 2,027.68 million ALL (in 2013 exemption amount was 16,629.32 million ALL).
Operating aid: This category includes VAT deferred scheme on imports of machineries and equipment, excise tax refund for fuels consumed in heating greenhouses and industry. For 2014, the Ministry of Finance reports that under the VAT deferment scheme the aid was granted to 59 companies, amounting to 769.07 million ALL and under the excise duty refund scheme fuel consumed in greenhouses with heating and industry the aid was granted to 38 enterprises in the amount 478.92 million ALL.
Training aid: Based on National Employment Service report training aid in 2014 increased compared to 2013. From the employment promotion program of unemployed workers through to job training, in 2014 aid was granted to 51 small sized undertakings (in 2013 aid was granted to 28 undertakings) in the clothing sector, creating in total 1,071 new jobs (compared to the 436 new jobs created in 2013).
Employment aid: Based on National Employment Service report employment aid in 2014 increased compared to 2013. In 2014, the state aid scheme in the program of promoting employment of unemployed workers granted aid to 172 small and medium sized enterprises (in 2013 aid was granted to 8 enterprises) with economic activities in shoes manufacturing creating 2, 221 new jobs (in 2013 were created 282 new jobs). The state aid scheme in the program of encouraging the employment of professional practice for job seekers who have completed higher education level in Albania and abroad, the aid was granted to 97 small and medium sized enterprises creating 426 new jobs. The state aid scheme in the program to promote employment of women from special groups granted aid to 12 small and medium sized enterprises (in 2013 the aid was granted to 4 enterprises) creating 120 new jobs (in 2013 the aid created 36 new jobs). In 2014 a new state aid scheme was implemented for the promotion of employment in unemployed youth generation, granting aid to 21 small and medium sized enterprises in the area of telecommunications, hotels and consulting industry opening 117 new jobs. A new state aid scheme was also implemented during 2014 for the promotion of employment of disabled workers to 8 small and medium sized enterprises in the sector of consultancy and services, creating 14 new jobs.
Aid for SMEs:

In 2014 the state aid scheme of the economy creative fund granted aid to 13 undertakings in the total amount of 13.6 million ALL. The aim of aid was to increase the production capacity of the business, expanding the product line and business growth.


The state aid scheme through the innovation fund granted aid to 24 undertakings in the total amount of 7.76 million ALL in the processing sectors (textile-leather-shoes), agribusiness, manufacturing and marketing industrial electrical and telecommunication materials.

The state aid scheme through the competitiveness fund granted aid to 20 undertakings in the total amount of 22,57 mln ALL. The aim of aid was to increase the productivity, and also strengthen the managerial capacity.


Aid for sport: In 2014, state aid for the reconstruction of the stadium “Elbasan Arena” was granted in the amount of 444 million ALL in the form of grant from the state budget for new internal areas of the existing building in way to fulfil the UEFA criteria’s. Aid was also granted for the construction of the Olympic Park Tirana in the amount of 200 million ALL in the form of grant from the state budget.
In sectorial aid (vertical), in 2014 aid was granted for public services (aid for water supply and sewage sector), followed by aid for the public transport (railways) and aid for mining (closing and conservation). Aid for energy sector was granted in the amount of 195.25 million ALL, an individual aid for KESH sh.a in the form of deferred payment of VAT tax for electricity import.

Aid for public transport was granted from state budget to railways in the form of direct subsidy, aid for public services was in the form of subsidy from the state budget to 55 water supply undertakings managed by local municipalities.



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