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Truthmeter – 365 days of governance - MJAFT


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Truthmeter – 365 days of governance - MJAFT

  1. 1. Truthmeter – 365 days of Governance Report on the performance of the government for 365 days of governance January 17, 2015
  2. 2. Introduction The general elections of June 23, 2013 provided to the public some innovations regarding the political vocabulary, used by the political parties’ representatives, such as the term “the first one hundred days” and “the first three hundred days”, through which they promised radical changes. During the presentation in the Albanian Parliament, regarding the four years governmental programs of the first mandate, Prime Minister Rama articulated a number of promises and reforms that the government will undertake during this mandate. Some of the main promises are the following: the promise for the creation of 300 thousand new jobs, free health service, supply of the citizens with potable water, free legalisation of dwellings, etc. During July, 2014, the government published a document of 40 pages, which included the work during the first 300 days of the governance.i Aims This report, prepared by the ‘Mjaft’ Movement, aims to compare the initial promises of the government, covering the period of the first year of governance with the real work performed during 2014 and with the document of the government. Limitations The report does not consider the whole performance of the government, but only that part relevant to the pre-election promises due to be achieved during the first year of mandate, identified by the working group. Its promises are considered as such once they become public through a written form or through different clips. Data The declarations of the government promises are published in different web pages, including, Facebook webpage of the leaders of the Socialist Party and the media. The performance of the government will be considered by the decisions published in the official webpage or in Official Journal Conventions A promise is a commitment to a deadline, within the first year, with the exception of certain promises already related to the state budget, expected to be achieved “within the first year”, but achievements thereof depend on whether or not they are included in the state budget of 2014-2015. The first year of the governance means the period from December 2013 to the end of 2014. This is not exactly a 300 days period, but this division is conducted to include the State Budget and Fiscal Package as well, in order to analyse the promises on the frame of budgetary planning.
  3. 3. Executive Summary Based on the public declarations of the Socialist Party and the commitments undertaken in the Albanian Parliament, through legal initiatives, are identified 25 promises closely related to the performance of the government during the first 365 days. Out of them, 6 promises result fulfilled in com-pliance with the promises, 7 promises are assessed as partially fulfilled, 2 others are considered as immeasurable and 9 are considered as not fulfilled. Part of the report are some promises that logically could have been included in a single promise, due to the fact that they belong to the same field and purpose, but the team of truthmeter has decided to analyse them separately, because the promises have been mentioned in different electoral speeches. Part of this report are not the promises analysed during the last 3 months of 2013, because we did not want to create confusion between the timelines of the promises, and because we want to be coherent with the periods of the promises that have been declared during the election period by the Socialist Party, periods that coincide with the first 100 days and the first year of the governance January 2014-December 2014. Despite this time element we would like to mention some of the unfulfilled promises that coincide with the last 3 months of 2013, which have been subject to ongoing monitoring and verification by the truthmeter team, in order to identify the level of their fulfilment. On this frame, it is worth mentioning the promise on “Putting the Institute of Statistics under the control of the Parliament”. Referring to the facts, it results that INSTAT continues to be under the subordination of the Prime Ministers’ Office, by not fulfilling this promise yet. For similar institutions that remain public capitals in order to provide services, protection and proper information to the public, a good political will is not enough in order to be objective and independent, but first is required institutional independence by the executive bodies and subsequently integrity and good will by the leaders. Another unfulfilled promise, on the frame of 100 first days of the governance, it is the one on “Reestablishment of legal benefits for disabled persons”. Even for this promise, still no legal initiative or any change of the actual legal frame has been taken to re-establish the legal benefits for this category of people. Another unfulfilled promise, is the one on “Review of the Concession for the Harbour of Durrës”. There are too many arguments and facts held by independent institutions of control, KLSH, regarding the incorrect process, performed in this concession. In the report of High State Control (KLSH), on this issue it results that the procedures of granting the Harbour by concession, as well as implementation of procedures with the private sector, are performed in violation of the law. In this context, the High State Control has filed a lawsuit against the former general director of the portual authority in Durrës, and also against 4 former directors of this authority and 4 workers of the Ministry of Transport and Infrastructure, for abuse on duty and infringement of equality on tenders, causing a damage of 16.9 million euro to the state economy and budget. Even though an audit process was conducted by KLSH, the concession of the Durrës portual authority still continues to be on the same contractual conditions and on the same concessionary firm in possession of this concession.
  4. 4. i List of promises for the 365 days, according to the topics: 1. Decrease by 6% of the electricity bill for family consumers; 2. Territorial reform; 3. Return of TVSH and ATSH to the public; 4. Problem of immigrants, children born in Greece; 5. Establishment of the National Coast Agency; 6. Pension Reform; 7. Support for pension for the policemen killed on duty; 8. Normalisation of the energy system is a priority of crucial importance; 9. Elimination of monopolies; 10. Radical improvements in the Health System; 11. Employment based on merit and competitiveness; 12. Attacking corrupted workers in Public Institutions; 13. Formalisation of Economy; 14. Package on Justice Reform; 15. Taking national assets under control; 16. Starting the legalisation process of illegal constructions; 17. Reduction of the pension age for people working on rough/difficult jobs, miners, etc.; 18. A system for the future, whereby everyone will benefit free health service while the hospital boards themselves shall decide on equipments; 19. Within the first 9 months, all the public works debts will be paid; 20. No new debts; 21. Reimbursement of VAT is your request, and our reflection is that only the unreimbursed VAT, unliquidated fines and public obligations, lead the flat tax to 22% of the tax incomes and we shall reconceptualise the whole chain of VAT and there will be no more delays of the administration to business which shall be liquidated on time; 22. Products “Made in Albania”. We want conditions and standards to be European ones. Together we shall immediately identify the fiscal barriers already delaying exports and we shall eliminate all the taxes on import; 23. “Fight against organised crime and trafficking of narcotic substances”; 24. Education Reform;
  5. 5. 25. We will create 300 thousand new jobs. 1. Decrease by 6% of the electricity bill for family consumers Promise: During the electoral campaign in the elections of June, 23rd , representatives of Socialist Party promised to decrease the electricity bill by 6%, for the family consumers. General description: On each verge of the general elections, one of the main promises of every political force has been the electricity, focused mainly on the regular supply with energy, investments for service improvement, as well as decrease of the tax for family consumers. Despite the main focus of the politics and successive governments, the electro-energy system in Albania has never been efficient and self-sufficient. The abuses with the purchase of energy, the lack on investments, consumer abuses (energy stealing) and failure to pay the consumed energy, make up the main reasons of the almost collapsed energy system in Albania. Fact: Following several months of discussions and debates with the stakeholders, the Albanian government through the OSHEE, requested to the Electrical Energy Regulatory Entity an increase of the energy price with 12 ALL per kWh and removing the division of 300 kWh. ERE fully approved one of the requests, that of removing the division of 300 kWh and approved a fixed tariff for family consumers of 9.5 ALL per kWh, compared to the current system of two tariffs, bringing in a net increase of 500 up to 650 ALL for the poor consumer, as well as a price decrease about families consuming over 600 kWh per month. For the family consumers consuming over 800 kWh that correspond with families of the high middle and richer classes, the charge to be paid to OSHEE will be lower. Pursuant to the approved changes on December, 26 2014 made by the Energy Regulatory Entity, families with an average consumption of 300 kWh shall face an increase of their monthly bill of 650 ALL. This amount shall be compensated by the government through a state-funded budget, approved in December, which amounts to 16 million dollars. Based on assessment of the above facts, it appears as if the change of the energy price shall not have an adverse impact on society, and this fact is relatively real. We believe relatively due to the fact that there are too many other poor families not included in the reimbursement scheme of the government, because they have 1 person in the family, employed with a minimal salary, in a family of at least 4 members. These families are automatically excluded from the reimbursement scheme, which leaves them unprotected by the change of the energy price, thus increasing the consumption cost with 650 ALL. Price for businesses: By decision of ERE of December, 26 2014, it was decided that the energy price for the consumers supplied with 35 kilovolt shall be 9.5 ALL per kWh, while for consumers supplied with 20/10/6
  6. 6. kilovolt the price shall be 11 ALL per kWh. For bakeries and flour production, supplied with 20/10 and 6 kilovolt, the price shall be 7.1 ALL. For more information, refer to the following table. Conclusion: Even though the financial impact on an Albanian family budget may be considered as minimal, referring to the above mentioned facts, the promise of the Socialist Party during the electoral campaign in 2013 is controversy with ERE decision for the change of energy price for families. Hence, this promise is considered as untrue/unfulfilled. 2. Territorial Reform Promise: One of the main electoral promises for the general elections of June, 23, articulated by the Prime Minister Edi Rama and officials of the Socialist Party, was the compilation and implementation of the Territorial Administrative Reform. General description of the promise and the arguments of the Socialist Party: Socialist Party and its head Edi Rama, promised during the electoral campaign that the country needs a radical and integral reformation of the current system of administrative division. The process of discussing the new territorial division started with the “Territorial Administrative Reform” Conference, organised on October 2013 by the Ministry of State for Local Government as well as the Presence of OSCE in Tirana. The main argument, presented by Edi Rama for this initiative, is related with the simplification of territorial division, strengthening of economic, social and cultural space of local units, regarding comprehensive strengthening of the country. The Prime Minister mentioned also that with through the new reform nearly 25 million USD expenditures of local administration, financial incomes that are saved by the tax payers’ budget shall be saved. Another supportive element of the government in this reform, has been the study published in 2012 of the Swedish International Development and Cooperation Agency, whose conclusions suggested a new territorial and administrative division with no less than 100 local units and 6 regions, a result drawn after an assessment of the features and division of local power at that period. Data on the local government under the old territorial division:
  7. 7.  384 local units throughout the country;  65 municipalities of the first and second category;  309 communes with a population of 500-10 thousand people;  Communes, 2.5 milliard new ALL per year for the salaries;  200 communes spend over 40% of the budget for the administration salaries;  100 communes spend over 80% of the budget for the administration salaries;  70% of workers in 80 communes lack higher education;  50% of communes do not make any investment in the community;  50% of communes levy 0-2% of the budget, from the local taxes. Fact: On January, 23 2014, the Parliament approved the request of the Ministry of State for Local Government for the establishment of the special commission on “TERRITORIAL ADMINISTRATIVE REFORM IN THE REPUBLIC OF ALBANIA”, with a deadline of 3 months. Based on the decision, approved by the Parliament of Albania, the commission was chaired by two Co chairmen, from majority and opposition, while it consists of 16 members, 8 of them as representatives of the majority (6 SP and 2 SMI) and 8 as representatives of the opposition (6 DP, 1 RP and 1 PJIU). The representatives of the opposition did not accept and failed to become part of the discussion process for the territorial reform claiming that there is lack of trust and there is no will on the majority side for a real consensus. Meanwhile, the actual attitude of the opposition was related to the inacceptance of the option proposed by its representatives, a proposal that was not taken into consideration by the majority. Following 7 months of intensive work of this commission and public hearings, organised by this commission and the Ministry of State for Local Government, on July, 17, the members of the majority, together with the members of PJIU, decided to approve the option with 61 local units, out of 5 options proposed by the Ministry of State for Local Government. Despite the political opposition of the opposition and theirs arguments on the lack of trust and will of the majority to consider the opposition viewpoints, the commission for the Territorial Administrative Reform, approved the option with 61 local units, an oprion which was materialised in the Parliament upon approval of the Law No. 8653/2000 on “Territorial administrative division of local government units of the Republic of Albania”. In conclusion, this promise is evaluated as: true/fulfilled. 3. Return of TVSH and ATSH to the public Promise: At the beginning of October 2013, in a an open conference with the media, the Prime Minister Edi Rama responded to journalists’ questions regarding the reform processes that are expected to be undertaken by the government and the commitments on the frame of fulfilling the electoral campaign promises. One of the commitments undertaken by the Prime Minister Edi
  8. 8. Rama, articulated during the conference, was the one of “returning” the Albanian Public Television and the Albanian Telegraphic Agency, to the public service. Fact: In the course of 14 months of the Alliance for European Albania governance, still we do not see any concrete action for the reformation of TVSH and ATSH, which makes this promise to be considered as untrue/unfulfilled. 4. Problem of immigrants, children born in Greece (toponyms). Promise: In June, 10, 2013, at a meeting organized by the Albanian immigrants in Greece/Igumenice, the Emigration Secretary of the Socialist Party, Erion Veliaj, today the Minister of Social Welfare and Youth promised in front of the Albanian immigrants that the problem of toponyms will be settled, if the Socialist Party wins the elections in June, 23rd . Fact: Settlement of toponyms problem started since June, 11th 2013, a few days before the electoral elections in June, 23th . An agreement facilitating the free movement of the Albanian citizens, residents in Greece, avoiding the barrier of toponyms written in Albanian in their passports, or for the children already born in Greece, was concluded during the elections period in June, 23th . According to the agreement, there will be no barriers in border checkpoints for the Albanians, residents in Greece. While on May, 8th , 2014, another important agreement was concluded, regarding the toponyms. Albanian emigrants shall use their present passports until January, 1st , 2015, despite the problems they had previously with toponyms therein. Settlement was reached after the agreement concluded between the two respective Ministers of Foreign Affairs, namely of Greece and Albania. Both parties agreed to provide a proper solution to this problem according to the official catalogues of both countries, deposited in the UNO. However, until January, 1st , 2015, all the Albanian citizens facing problems with toponyms have to issue a new passport. In order not to prevent the free movement of citizens between the two countries, was approved the moratorium for the free movement and without any bureaucratic barriers for the people with problems of toponyms in their documents, a decision expected to remain into force until January, 1st , 2015, an agreed deadline between the two countries for the final settlement of the problem. Approval of the DCM. By a decision of the Council of Ministers of august, 27th , 2014, it was decided to change the filling out of the rubric “Place of birth” in the National Register of the Civil Service and in the certificates that are going to be used by the foreign authorities, therefore solving the issue of toponyms in passports and other identification documents of thousands of Albanian emigrants facing such problems, especially with the Greek authorities. This change has to do with some appendices in the former decision of the government, No. 332, dated March, 17th , 2010, where it stipulates that: “In all the models of certificates to be used by foreign authorities, which are issued by the civil service offices in local government units, the information in the rubric “place of birth” should be filled out, in writing according to the following cases: a) For countries that have deposited to the UNO the official catalogues of Romanised geographical names (toponyms), according to the list made available by the Ministry of the Foreign Affairs, as well as the 3-characters code of the respective country, in accordance with the standards of the International Civil Aviation Organisation (ICAO), i.e. GRE for Greece;
  9. 9. b) For countries that have not deposited to the UNO these catalogues, according to the writing in the document compiled from the origin country, but with symbols, Latin/Roman letters, as well as the 3-characters code of the respective country, in accordance with the same standard; c) The other rubrics of the certificates, for use by foreign authorities, should be filled in the official language, “Albanian”. After this change in filling the rubric “Place of birth” in the National Register of the Civil Service, the passports shall be corrected, thus definitely solving also the problem of the biometric passports. Even though this promise covers all the real and legal elements, in order to be true/fulfilled, it still remains to be verified the fulfilment of the duties the Albanian state has undertaken, until January, 1st , 2015. 5. Establishment of the National Coast Agency Promise: On June, 6th , 2013, in an electoral meeting organized in the city of Lezha, Edi Rama promised the establishment of the National Coast Agency, which shall have the whole institutional authority to treat all the problems of coastline. Fact: At the meeting of the Council of Ministers of January, 22nd , 2014, with the proposal of the Minister of the Urban Development and Tourism, the Council of Ministers decided for the establishment of the National Coast Agency, in charge of which is Auron Tare. Despite this fact, there have been too many problems in this touristic season with the NCA, because a certain number of promises are not met by it. First of all, the comprehensive specialization of the stakeholders for touristic guides was not carried out. It was also promised that observation towers for 7 pilot beaches shall be installed, but not all of them are fulfilled. However, in terms of the institutional and structural respect, this agency is established and this promise results as true/fulfilled. 6. Pension Reform Promise: The government has promised the compilation and implementation of the new pension reform, which shall guarantee the increase of contributors in the social insurance scheme and shall guarantee higher pensions for citizens, based on the individual history of contributions. Description of the situation: Compilation and implementation of the new pension reform is a necessity for Albania, taking into consideration the actual scheme with a small number of contributors as compared to the beneficiaries. Based on the data of the Ministry of Finance, this deficit is covered every year by the state budget with a sum amounting to 430 million dollars. Accordingly, the reduction of this deficit, guaranteeing of higher benefits, as well as compilation of
  10. 10. a more attractive scheme for the contributors, remains urgent. Fact: Two months after coming into power, Rama government declared that it will draw up the new pension reform. The draft was prepared by the Ministry of Social Welfare and Youth, in cooperation with the World Bank. The draft was finalized on February 2014 and on April of the same year it was discussed with the stakeholders, despite their preliminary scepticism and objection. On July, 31st , 2014, the pension’s reform was ratified by the parliament, making it enter into force since January, 1st , 2015. The new pension reform provides some significant changes compared to the existing one. Thus, the pension age for men remains unchanged, 65 years until 2032 and following this year, it shall be increased with a month per year until reaching the limit of 67 years. For women, the age will be gradually increased with two months per year, reaching the age of 63 in 2032. The amount of pension will depend on the insurance period and the salary on which social insurance contributions were made. The reform provides even the removal of the ceiling maximum compensation of 24.000 ALL, according to the alleged philosophy, that the more the contributions, the greater the pension amount. The reform also provides removal of compensations and their integration in the pension amount, the unification of minimal salaries into a single one, the unification of the pension calculation, despite the type of job (agricultural co-operative or state and private enterprise). Regarding the Ministry of Social Welfare and Youth, the reform is targeted link the pension amount proportionally with the contributions already paid and no provision was made on any decrease of the pension amount. But, irrespective of the new scheme, the pension amount is individual and it depends on the individual contributing history. The reform provides for the first time the social pension. This means that from the January, 1st , 2015 approximately 5 thousand elder people over 70 years old actually that today do not have any incomes for different reasons, will benefit a monthly pension of 6500 ALL. Nevertheless, it is not sufficient to pay for the basic expenditures of life, such as: water, energy, medications and food. The increase of the contribution years in the social insurance, from 35 to 40 years until 2025, is another change made to the pension scheme. This change of the government, related to the years of social contributions, is assessed as having an adverse impact for the future beneficiaries of pensions, because it decreases the number of people that benefit full pension. This happens for some reasons. Based on the current scheme, (not changed) in order to benefit the pension, you have to reach the age of pension, as well as the years of the social contributions, actually 35 years. The scheme provides that if you have reached the age of pension, but not the years of contribution, you benefit a partial pension and if you have not reached the age of pension, but you have reached the years of contributions needed, you benefit a penalizing partial pension. In the latter category comprises the majority of Albanians currently that have worked in a transition period and find it difficult to reach the working years. These measures the government is undertaking may be interpreted as coercive measures to regulate a system, almost collapsed. These measures, in the future may save the system, but not the beneficieries. Removal of privileges for recognizing the insurance periods, without paying contributions for women, such as recognition of studies years as insured years. It is unclear what impact shall bring in the system the removal of contributions recognized by law, for the four years of study for
  11. 11. women. The impact of this legal intervention and the rationale behind it is confusing. The increases of the contribution rate for rural areas equating the farmers’ contributions with the ones of the urban areas until 2017. This change, undertaken by the government for this category, is by no means real in the social-economic context, in which our farmers live today in villages with minimal incomes. Based on the new scheme, a self-employed person in rural areas should pay 31.500 ALL contributions per year from 17.280 he/she paid pursuant to the old scheme, while a self-employed person in mountainous areas should pay 24.150 out of 11.232 ALL per year he/she paid pursuant to the old scheme. Based on the scheme, it is expected the difference of the contributions to be reduced that is covered by the state budget, namely in plain areas, it will be 59%, covered nearly 21.534 ALL, while for mountainous areas it will be 455, covered nearly 28.884 ALL by the state budget. This change will bring the decrease of the budgetary burden, exceeding the difference already decresed to the farmer. Even though the government seems to be optimistic regarding the success of the scheme, in terms of this component, the fact shows that there is minimal likelihood for success, because the farmer’s economic situation in plain and mountainous areas is not likely to be improved in the following years, to the extent necessary to face the increased contribution payment and their equalization with the urban areas contributors. The new pension reform unifies the method of benefits calculation from the scheme, for all the protected categories as employed, self employed, employed and self employed in villages and cities. Starting from January, 1st , 2015, it will begin the equalization of contribution in villages and cities, a process due to end in 2018. On the frame of the new reform, December 31st , 2014 was decided as the deadline for the amnesty of default interests for the self employed in villages, if they pay their contributions. After January, 1st , 2015 starts the application of default interest. Also, under the frame of the new pension reform, in November 2014, the parliament passed the decrease of pension age for miners, aged 60 to 55. According to the official data of the Ministry of Social Welfare and Youth, from the review of this law, 3850 miners will benefit. It is still unclear how this reform will be implemented from January, 1st , 2015 on and how the above mentioned changes will be really implemented. Taking into consideration these elements, this promise is considered as true/fulfilled/for verification in terms of the legal change aspect (reform), but it will be under follow up and verification process, in order to assess the progress of the implementation. 7. Support for pension for the policemen killed on duty Promise: In January, 23rd , 2013, during a visit in one of the families of the policemen killed on duty, in Rashbull, district of Durrës, the head of the SP, Edi Rama, today the Prime Minister of the country, promised the review of the financial support for the families of the policemen killed on duty, as well as a life insurance for policemen are actually part of the state police. General description: A series of promises are said since September-October 2013, related to the financial support of the policemen killed on duty. These promises vary from the support of
  12. 12. donating dwellings, to the support with considerable pensions for a dignified life. However, a small part of the family members of the policemen killed on duty receive more than just a condolence notice at Christmas and New Year. Fact: The approval in July, 31st , 2014 of the new law for the State Police, No. 108/2014, did not bring any change regarding the promises for the pension review or a special pension for the policemen killed on duty, as well as life insurance for the policemen still working in the police department. As a conclusion, this promise remains untrue/unfulfilled. 8. Normalisation of the energy system is a priority of crucial importance; Promise: The government has determined the normalization of the energy system as its priority of crucial importance. It has promised a radical reform to get the energy system out of the crisis and to return it in a profitable sector for the economy. Description of the situation: Energy sector remains one of the weakest points of the Albanian economy, having greater effects not only for public finances, but even for the economic and social life of the citizens. This sector carries inherited problems over the years, reflected later on a high level of losses and in a low level of encashment. According to the data of the Electrical Energy Distribution Operator (ex CEZ Delivery), at the end of 2013, the level of losses was calculated to be nearly 45%, while the encashment was less than 70%. Meanwhile, the level of debts among companies in the energy sector, but even to the third parties, is evaluated, according to the data of the Ministry of Energy and Industry, approximately 1 milliard dollars. A great part of the family consumers do not have electricity meter and are actually flat rate invoiced. On the other hand, in addition to the family and businesses consumers, even the central and local state institutions result debtors of the energy payment. Electricity supply remains dependent on the import, which means that it is a permanent threat to the state budget. A continuous problem has been even the relation between the Albanian Electro-Energy Corporation and private hydropower plants. KESH is obliged by law to buy the energy produced by these plants at a price that varies according to the data of the Electro-Energy Corporation, from 7-9 ALL per kWh, while it sells it to OSHEE much cheaper. This resulted in a financial deficit for KESH and in an accumulated debt which the corporation has to pay to the private HEC, and at the end of 2013 it reached nearly 60 million euro, according to the official data of the Albanian Electro-Energy Corporation. A heavy burden for the energy sector has also been the failure in the privatization process of the Energy Distribution Operator by the Czech company CEZ. The conflict between the Albanian government and the Czech group reached its climax in January, 21st , 2013, when the Energy Regulatory Entity banned its licence and delegated its competences of managing the company to a temporary state administrator. Despite the above mentioned problems, the energy sector is facing a high level of the network amortization, as a result of the lack of investments for many years. This is the cause of defects and the lack of electricity supply for the citizens. To survive despite the
  13. 13. debts, but even to provide energy to distribution companies, KESH was obliged to receive many credits in banks, while the guarantor was the Albanian government. This increases even more the impact the crisis on energy sector has over the state budget. Fact: The first step undertaken by the government to normalize the situation in the energy sector was the approval of the Council of Ministers Decision, in December 2013, to establish a Task Force, headed by Deputy/Prime Minister Niko Peleshi. This Task Force started its work on 15 January 2014 and it will end in May, 2015. Its duty was to perform a better management of the situation in the energy sector as well as improvement of main indicators, among others, reduction of losses and increase of encashment. Even though these two indicators were improved a bit by the end of 2014, the problems in the energy sector were obvious. The next step the government undertook, was the negotiations with the Czech company CEZ, in order to solve the problem based on understanding and to avoid international arbitration. At the end of June, 2014, was reached a agreement with CEZ for solving the problem in understanding. The government promised a radical reform in the energy sector, which was the same condition of the three-year agreement of cooperation with the IMF. On March, 2014, the Parliament passed the changes in the Criminal Code, whereby stealing of energy was considered as a crime and was sentenced to 3 years imprisonment, while for the collaborator 5 years of imprisonment. In parallel with this measure, the government managed to ensure 150 million dollars of credit from the World Bank for the energy sector recovery. This agreement was signed on November, 3rd , 2014. The reform provides interventions in some aspects, one of which is the price. The Energy Regulatory Entity is expected to make a decision within December, concerning the new tariffs which will enter in force on January, 1st , 2015, while the Prime Minister, Edi Rama declared that in November will be conducted a price restructuring. This means the removal of the protective division of consumption of 300 kWh per month, on the grounds that it is a source of abuse. On the other hand, at the end of October, the government began the nationwide operation against electrical energy stealing. This operation provides prison arrest for all those stealing the electrical energy, break of energy supply for the consumers proved to be debtors and prison arrest if they tend to illegally reconnect the electricity. In order to encourage the citizens to pay their charges, the government decided to grant amnesty of 80% of the default interest if the citizens pay fully their obligations, and also offered the opportunity to pay the debits by installment. This was followed by an influx of people rushing to the OSHEE Customer Care Offices, to pay the overdue bills. According to OSHEE official data, encashment for November increased by 49% compared to those for November 2013. The increase of encashment is stated for current bills and even for the debtor ones. Also, during November 7555 new contracts were signed, 51592 illegal connections were suspended throughout the country and the level of losses decreased by 34.5%. The Energy Distribution Operator has filed 611 denouncements for energy stealing with the Prosecution, while 48 workers of OSHEE are arrested as collaborators of energy abuse. The measure recently undertaken by the government is the dismissal of the workers who have not paid the electricity bill. On December, 6th , the Minister of Justice decided the dismissal of 131 policemen working in the prison system, on the grounds that they were debtors of energy for 13 years, while on December, 8th , 234 workers of OSHEE, who have not paid the energy bills for more than 2 months, were dismissed.
  14. 14. The last measure undertaken by the government for the dismissal of the public administration workers resulting as debtors is considered as the most punitive measure undertaken by the government. Also, this measure has no legal reference on which it can be based, on the contrary, it interferes with several laws that protect and guarantee the rights of the employees in the public administration. Furthermore, in this operation of the government for the dismissal of the public administration workers, there is a reasonable nonsense in the subsequent actions, because a few days following the dismissal of the first workers, the government disclosed its decision for the payment of the unpaid bills, by amnestying 80% of the default interest, a rule which is not available to those working in the public administration. It is still to be verified how this reform in the energy sector shall proceed. Based on the changes accomplished by far, this promise is considered as partially fulfilled. 9. Elimination of monopolies Promise: The government has promised to fight against monopolies, which implies guaranteeing a fair competitiveness between businesses on the market, but even benefits to the citizens. Description of the situation: The monopolies remain one of the main concerns of markets in Albania, resulting in negative consequences for the normal operation of the markets, but even for the citizens whot do no benefit qualitative services and with competitive prices. Monopolies are part of certain markets through the signed concessionary contracts, such as the concession of fiscal stamps, marking of gas stations, scanning of containers, concession of the Harbour of Durrës, as well as the one of commissioning the cars. Fact: Since the electoral campaign, the government promised elimination of the monopoles. This attitude was stressed out by the Prime Minister, Edi Rama after winning the elections and coming into power. At the plenary session of October, 31st , 2013, he declared that: “We shall ruin every monopoly we have found so far and will still find: on the air, sea and ground. Free competitiveness will be placed and every monopoly will be ruined. Every company will be respected by us and will be obliged to respond to every single obligation.” The first concession the government suspended was the one of the containers scanning and on august, 14th , 2014, Rapiscan Company appealed the case to the international arbitration. This concessionary agreement foresaw financing, building and operation of the containers scanning service and of the other vehicles in the Republic of Albania, as well as the scanning service tariff. Since the beginning, the concession faced with the objection of the businesses, while in June this year, the Competitiveness Authority recommended to the Ministry of Finance and the Council of Ministers, the review of the concessionary contract, on the ground tha it interferes with the Article
  15. 15. 33 of the Stabilisation and Association Agreement (SSA). Another concession, warned by the government to be suspended is that of the commissioning of cars. On January, 24th , 2014, the Prime Minister, Edi Rama revealed that the liberalization of the market of the commissioning of cars, without excluding the possibility of suspending the concessionary contract. But, in this respect, no concrete steps are taken. Another concession the government was committed to suspend was that of the fiscal stamps. On November 12, 2014, the Minister of Finance, Shkëlqim Cani stated that the government has begun the negotiation with the company in charge of the concession, and it should be expected the results of such negotiations. Monopoly concessions due to be suspended: 1. Concession of containers scanning; 2. Concession of commissioning of cars; 3. Concession of fiscal stamps; 4. Concession of marking the gas stations. It is still to be verified, what concrete measures are going to be taken in the future. Based on the changes accomplished by far, this promise is considered as untrue/unfulfilled. 10. Radical improvements in the Health System Promise: The reform on health system is one of the most important points of the electoral program of the Socialist Party. Calling the health care service as one of the worst public services of the Albanian citizens, the Socialists stated since the beginning of the electoral campaign that the Albanian health system does not fulfil any of its functions: it does not prevent, it does not diagnostify, it does not cure and it does not rehabilitate. The reform was based on: 1. Changing the contributing system of the health care provision, thus “free health” through financing out of the general taxation. 2. Removal of value added tax in medical services and goods, as effective since the beginning of 2014. 3. Enhancing the role of the public health, as well as health prevention and promotion programs. 4. Development of national programs of early preventing and discovering tumor and cardiovascular diseases. The implementation of a national program on the primary care for the group aged 40-60 as well as for younger people of some specific categories of society
  16. 16. will start within 2014. 5. Correct compilation and implementation of contemporary protocols of medication. 6. The establishment of the National Service of Medical Emergency, in order to provide faster and professional presence throughout the territory of the country, setting the same standards in all the admission centres, responding to the changeable needs during the seasons of the year for care to diseases and traumas. 7. Correct compilation and implementation of the medication protocols and standard procedures at work make up a necessary step with regard to the increase of the transparency, verification, responsibility and accountability, finally aimed at gradual increasing and improving of hospital service quality. 8. Hospitals will be administrated efficiently and will be financed based on the service packages that the single payer will contract for the necessary hospital care of each person. 9. All public and non-public hospitals will be subject to the initial accreditation process and the periodical reassessment. University hospital services will have a primary role, even in the professional mentoring of hospital services throughout the country. 10. Professional standards will be set for providing dental service; the safety of dental and medical materials will be guaranteed, and periodical reassessment of the stomatologists’ professional skills will be required. 11. We will lower the price of selling medications in Albania. There will be no registered pharmaceutical product that will be sold in our country with a higher price than that in the origin country. The Medications Control Center will be transferred into the National Agency of Medications and Medical Materials. Fact: Over the course of more than one year of governance, the left wing party has fulfilled these aspects in the health system: 1. On April 1 2014 the VAT for medications was removed, while 55 new products were added to the list of reimbursable medications. This list of medications, approved by the government was focused mainly on the patients suffering from cancer, anaemia, diabetes, cardiac diseases and neurology. For the first time, in the list were included medications used to cure the alcohol addiction. Removal of 10% VAT for the medications resulted in a reduction of their price. 2. In June, 2014, the Minister of Health, Ilir Beqaj stated that the regular supply of the hospitals with medications is still going on. According to Mr. Beqaj, the Ministry managed to make available the mechanism, which guarantees a continuous supply of hospitals with medications. Also, long term contracts for maintaining important bio-medical equipment were concluded. 3. Even though proposed at the end of September, 2014, the Ministry of Health and the Fund of Insurances and Health Care decided to apply for the first time, on November, 2014, free health packages. A coronary graphic analysis, bypass interventions or dialysis is free of charge even in the private hospitals. Ministry of Health conducted the procedures for purchasing 10 service packages, for which, patients kept waiting for months in the public hospitals. Costs were assessed by the Fund of Insurances and Health Care and contracts with 5 private hospitals in the country were concluded. 4. Launching of the campaign “How are you”, started since January, 2014. For the first time, in the whole country is provided a free entire health control for the age group 40 to 65 years.
  17. 17. Despite the interventions on the medications price, health packages, public hospital supply with medications, as well as the launching of the “check up” campaign, the interventions in the system are considered to be superficial/correcting and not essential for radical change or reformation of the system. Hence, this promise is considered as untrue/unfulfilled. 11. Employment based on merit and competitiveness Promise: Employment based on merit and competitiveness has been one of the electoral promises of Socialists before the parliamentary elections in June, 23, 2013. The Prime Minister Rama specified this promise even during the online conference on October, 1, 2013 stressing out that: “Every servant of this country that is employed based on merit will be on duty and will be respected even more than he/she was respected so far”, responding to the concern related to fear of dismissal. Regarding Rama’s promise, all will have the opportunity to compete and there will be continuous public announcements, in compliance with the law. Fact 1. On October 18, 2013, the government through the Minister of Innovation and Public Administration, Milena Harito, announced the start of organizing open competitions, to give the opportunity to everyone, who is able to work in the Public Administration. These competitions were firstly opened in the National Agency of Information Association (AKSHI), and in some institutions under the subordination of the Ministry of Culture. The candidates were announced through the official websites of institutions, but also through the online database; 2. In February, 2014, the government sent for discussion in the Parliament, the draft law “On some amendments on the law of Civil Servant”, after the decision of the Constitutional Court that abolished the Normative Act of the Government. Two of the most important articles of the draft law were relevant to the job suppression and the compensation which in this draft law was stipulated to be 1 to 3 monthly salaries. These amendments subsequently approved by the Parliament, without voting of opposition, inflicted debate between both parties. According to the opposition, the amendments made to the law on Civil Servant were anti-constitutional and also legalized dismissals; 3. In August, 2014, the Public Administration Department announced for the first time the number of 113 vacancies out of 157 positions at the specialist level, for the whole State Administration. The process was suspended until the fulfilment of the new law for the civil servant with the necessary bylaw acts, the effects of which started in February, 26, 2014. It was the first time that the State Administration did not organize competition for job vacancies, instead, competitions for a group of positions, which means massive competitions and grouped for similar positions. The winners of these competitions were granted the opportunity to choose where they would like to work, unlike earlier practices where the heads used to choose by the list of winners. The applications were made on the online webpage of the Public Administration Department.
  18. 18. 4. Following inspections of the Ministry of Education in November, 2014 where 2056 teachers resulted irrelevant to their professional profile, the institution announced 1984 free vacancies, remaining vacant due to the dismissal of the teachers irrelevant to their professional profile. The test was carried out on 6 December, in 12 districts of the country. Conclusion: The applications for job position within the State Administration, for the first time, following the Socialists arrival to power, started to be transparent through online webpages of the respective ministries, which still remain the same. The amendments made on the law of “civil servant” marked positive developments as to the transparency, too. But whether or not employment following the relevant application and test through merit and competition is truly as such, it remains an immeasurable issue. This promise is considered as immeasurable. 12.Attack of corrupted workers in Public Institutions Promise: On October, 1, 2013, the Prime Minister Edi Rama, held his first online conference as the head of the government. Among the numerous questions asked by the citizens, he stated that he is determined to “impinge” all the corrupted workers in the public institutions. Asked whether there would be any criminal charges against any of the former high rank officials in case of verifying corruptive affairs, the Prime Minister Rama, responded: “Undoubtly, yes.” Facts Dossier “Arben Imami” The former Defence Minister is the only minister directly denounced by his successor, Mimi Kodheli. In December 2013, she accused Imami of abuse with advertisement tenders, the purchase of C-4 (explosive), transfer under his ownership of the sports-club ‘Partizani’, and even of eavesdropping equipment for SHIU (Military Informative Service). But, in September, 2014, the Prosecution Office of Tirana decided to close the investigation process for the dossier Imami. The closure of the investigation process against Imami and the other accused officials, resulted due to the fact that during investigations no evidence of criminal precedent were found, more specifically no abuse with duty. Imami’s legal activity was based on a DCM of 2008, even though this decision is inconsistent with the law on Public Procurements. The Prosecution Office referred to this DCM to quash the case, while the DCM is still in force. Dossier of Sea Pact with Greece On 28 May 2014, the Minister of Foreign Affairs, Ditmir Bushati submitted to the Prosecution Office information concerning abuses of sea agreement with Greece in 2009, concretely the criminal offence of ‘alienating territories.’ At that time, this pact was signed by Lulzim Basha, in the position of the Minister of Foreign Affairs, and was prepared by a negotiating group. Only on November, 22, 2014, the Prosecution Office of Tirana seized the whole dossier of this pact. The Prosecution Office is expected to interrogate also the negotiating group, composed of 11 people, but still is unknown whether the former Minister of Foreign Affairs, Lulzim Basha shall be asked to participate in the interrogation process. Dossier “Ridvan Bode”
  19. 19. After a criminal offence of the Minister of Finance, Shkëlqim Cani, Anticorruption Task Force Unit, in the Prosecution Office of Tirana, received in October, 15, 2014 a criminal offence against Ridvan Bode and Sherefedin Shehu for a credit with 13.5 % interest rate, withdrawn in 2009 for the construction of Durrës-Kukës road. The Prosecution Office is still on the phase of searching information by the Ministry of Finance, the second-tier Banks that participated in tender, as well as from the former Minister of Finance, Ridvan Bode himself, and his deputy, Sherefedin Shehu. Dossier of the former head of the cabinet of Spiro Ksera The High State Control and a former worker of the Ministry of Labour and Social Affairs, filed a lawsuit in October, 2013 with the Prosecution Office of Tirana, at the time when this institution was headed by the minister Spiro Ksera, against four high officials of this ministry. They were accused of corruption, as they prearranged a tender of 20 million ALL for a television spot, which was never realized. All the four accused persons were given the measure of “arrest into jail”, but two of them Kleves Bitro, the former Director of the Cabinet and Murat Mehmeti are still declared as being under search. Dossier “Hysni Burgaj” On February, 2014, the Ministry of Interior, accused the former General Director of the State Police, Hysni Burgaj for infringement with regard to television advertisements, related to a tender of 3.1 million dollars at the expense of the state budget. In addition to Burgaj, nine other former high rank officials of the police department were denounced with the Prosecution Office with the same accusation. Eight months after the investigation process, in September 2014, the Prosecution Office of Tirana, quashed the case on the grounds that that the procedure already followed comprised no elements of law infringement. Other facts: Dossier of “January, 21” Reopening of the case on the serious events of January, 21, 2011 protests that led to the killing of 4 citizens by the Guard forces of the Republic and putting before justice the persons who ordered the killings of 4 citizens, is one of the electoral promises made by Edi Rama and Socialist Party. Even after 1 year and four months of the Socialist Party governance, there is still no official pronouncement by the executive institutions to request officially reopening of the dossier of January, 21. Dossier of “Gërdec” The serious event on 15 March 2008 in Gërdec, where 26 citizens lost their lives and too many others were severely damaged, is one of the most serious events that have happened in Albania, not just for the fact that 26 people lost their lives, but also for the fact that this event revealed a mega corruption among the higher officials of Berisha government and the businessmen whot led the illegal activity of military weapons dismantling, without meeting the technical conditions. The weak and problematic progress of the judicial process for putting the real culprits of the tragedy before the justice bodies, made the officials of the Socialist Party to declare permanently that doing justice for the explosion vicitims in Gërdec, would be one of the main commitments of the Socialist Party, mentioned also during the last elections on June, 23, 2013. Even in this case of a special importance, still there is no official pronouncement by the central institutions, to request reopening of the Gërdec case as a whole, including also the main accused person of this case, Fatmir Mediu.
  20. 20. Conclusions: As already understood by description of the above facts, ‘elimination’ of corruption characterizing former high officials of Berisha government, has remained at the level of the criminal denouncement, which then are qashed by the Prosecution Office, while for some other, silence was the option. This promise is considered as untrue/unfulfilled. 13. Formalisation of Economy Promise: The government was committed to formalize the economy, by expanding the taxpayers’s basis. Description of the situation: The Albanian economy still faces problems of formalism. According to the data from the World Bank, the “grey” part of the economy is assessed about 30%. Due to the relatively high level of the informal economy, the state budget looses millions of ALL every year, while this causes problems on preservation of fair competitiveness in the market, because a business that does not pay taxes and duties is favoured in profits compared to a fair business. Fact: In the first year of the governance, the government aimed to fight the fiscal evasion through its policy of taxation and duties. For the first time in the budget of 2014 it was applied the progressive tax which provided the reduction of the fiscal burden for low-salary employees. By such a measure, the aim was not only to help the poor classes, but also to encourage the businesses disclose their low-salary employees. On the other hand, in the fiscal package of this year was provided increase on income tax from 10 to 15%. According to the business representatives, such as the Confindustry, Chamber of Commerce and Industry of Tirana, etc., this measure will affect the increasing of the evasion, given that increased taxes will cause businesses to avoid disclosure. Official data of the Ministry of Finance show that for 2014, nearly 8.7% of the increase on incomes is a result of well-administration and this is an indicator of the fight against evasion. It is worth stressing out that the majority of the incomes of the state budget results from tax increase in the fiscal package, provided for this year up to 23 milliard ALL. Even in the fiscal package of 2015, the government has provided increased taxes and duties, which will ensure 16 milliard ALL in the state cash desk. At the same time, due to well-administration it has planned to acquire nearly 30 milliard ALL. Meanwhile, a problem of concern for the market remains still malfunctioning of fiscal cash register and the issuing of tax invoice. The General Taxation Directorate and the Ministry of Finance have stated that in July this year a National Lottery shall be organized, whereby citizens can earn various presents by collecting tax invoices and using them on the lottery. This project aimed at receiving the invoice and fighting against evasion has still remained on paper. It is to be seen how the fiscal well-administration and the other measures to be taken in the fight against fiscal evasion shall continue. Based on the progress made so far, this promise is considered as untrue/unfulfilled.
  21. 21. 14. Package on Justice Reform Promise: Justice and its reformation is one of the most important duties that should be fulfilled, and even a major challenge in the work of the new government. General description: Justice in Albania has been the lost challenge of each government in the course of 25 years of democracy. Every government that has governed the country during the past 25 years, both the Democratic Party and the Socialist Party have demonstrated their unwillingness to undo and rebuild a justice system capable of being independent, free from corruption and equal for everyone.  Fact: During this period, which corresponds to the 1 year and four months of governance, too little was done in this respect, almost nothing at all in the context of essential reformation of the justice system. During this period were noticed certain marginal interventions in the system, without direct impact on improving the judicial system performance. Some of the legal interventions and measures subject to verification and denunciation of corruption cases are as follows:  Approval of the anticorruption legislative package, making amendments in the Criminal Procedure Code, classifying corruption as a serious crime, when committed by senior officials, judges, prosecutors, etc., and we decided that these cases shall be judged by the Court of Serious Crimes;  2 judges have been arrested for the criminal offence of corruption;  3 judges are under investigation for concealment of property in millions of Euros (Gjin Gjoni case);  Setting online portal on the webpage of the Ministry of Justice for denouncing corruption cases in the judicial system;  Digital Notary Register through ‘One Stop Shop’ system, for transactions with immovable properties by avoiding corruption phenomena in this system;  Registration and digitalization of the whole AKKP decision-making process over the years, through scanning and registration in a unified database. Despite the above mentioned interventions, a lot remains to be done in comprehensive reformation of the justice system in Albania. Hence, this promise still remains untrue/unfulfilled 15. Taking national assets under control Promise: In May, 21 2013, in the Election Convention of the Socialist Party, the Parliament Member Eduard Shalsi stated that a point of the socialists’ mission after winning elections in June, 23, was putting and taking all the Albanian assets under control. According to Mr. Shalsi, the past government has barbarously exploited the natural resources and the beneficiaries were only a clique close to the government. Fact
  22. 22. 1. Shortly after official start at work, on 1 October 2013, the Council of Ministers annulled 25 decisions of Berisha cabinet, mainly taken during the last months of the governance. These decisions dealt with the concessions in the field of energy and natural resources, as well as granting public assets to be used by private entities. The concessionary permission was banned for seven hydropower plants. The decision for the reconstruction of the Harbour of Yachts, in Porto Palermo, Himara was also annulled. 2. On 23 January 2014, the Council of Ministers abolished the decision taken in august, 2012, which granted for 30 years by concession, nearly 3 km of the Albanian coastline, from the beach of Dhërmi to the beach of Perivolli. The Minister of Tourism and Urban Development, Eglantina Gjermeni, explained at that time that this decision was taken on the frame of the necessary legislative interventions, considered as urgent for freeing these areas from illegal constructions and interventions, to the detriment of the citizens’ interests. 3. On March, 7 2014, the Minister of Energy and Industry, Damian Gjiknuri signed the start of the procedures for revoking of 121 mineral permissions that comprise nearly 16% of the total number of the issued permissions. The Order of Minister was issued following the control exercised by the structures of the Ministry of Energy and Industry to the entities provided with relevant permission for the development of their mining activity. During this audit it was identified the lack of implementation of the rules and financial obligations to the state. 4. Transfer of the Electrical Energy Distribution Operator from the private administration to the public one. On October, 17 20014, the Albanian State concluded the final agreement with the Czech of CEZ, to pass 100% of the shares of OSHEE company to the state. The conclusion of this battle, according to the Minister of Energy, Mr. Gjiknuri paved the way to investments and network interventions, which had been hostage to a failed privatization process. Based on this agreement between the Albanian government and the CEZ Company, the latter benefited 95 million Euros. By considering the actions of the majority so far, the promise to take the national assets under control seems partially fulfilled. However, it still remains to be seen, in the future years of the government mandate, what will happen to the ‘Albpetrol’ company, for which the Minister Gjiknuri has stated that “the Albanian government will try to resell it, but under new privatization conditions”. This promise is considered as partially fulfilled. 16. Starting the legalization process of illegal constructions Promise: The government promised to fulfil the legalization process of the illegal constructions and urbanization of these areas, as a method to put an end to urban chaos and to develop the territory according to urban plannings. According to the promise, legalization will be free of charge. Description of the situation: Informal and not legalized dwellings are one of the most acute problems of the Albanian society and the economy over the past 24 years. Despite each government’ promises, this process was never fulfilled, due to the large number of the objects to be legalized, but even due to the numerous problems of this process. Based on the data of
  23. 23. ALUIZNI, until the end of 2013, nearly 22 thousand legalization processes were carried out and 293 thousands of applications for legalization were submitted. Fact: The first step undertaken by the government to solve the legalization issue was the amendment of the law No. 9482, dated 3.4.2006, “On legalization, urbanization and integration of illegal constructions”, which entered in force in April, 2014. The relevant amendments provided inclusion of illegal constructions built on the territory of the Republic of Albania, in the legalization procedures, until the amendments of the Criminal Code of the Republic of Albania would enter in force, regardless of the function and the fact whether or not self-disclosure was done during the specified deadline. This enables the identification of illegal constructions, built after the legalization period/deadline and treating them finally, through the administrative and legal procedures. In addition, the amendments of the law included creation of fiscal facilities for entities in possession of illegal constructions, used as living environments dispensing them from service fee for the legalization procedures (identification on-site ofillegal constructions, preparation of the technical and legal documents) and providing free service. Accordingly, the dwellings legalization procedures were provided free of charge for the citizens. Amendments of the law provided even other alternative ways of payment, such as partial payment through privatization vouchers, stimulation for immediate repayment of the obligations through reduction of the amount and inclusion of the construction parcel into alternative payment schemes for entities upon impossible conditions to pay or in possession of illegal constructions used as living environments. In addition, the government passed several DCMs to complete the legal package of the legalization process. One of the main DCMs was the amendment of the assessment scheme of land, so that the land shall not have the same price in Tirana, Kukës, or Gjirokastra, etc. Another measure taken by the government was the increased cooperation between ALUIZNI, Immovable Property Registration Offices and the Agency for Property Restitution and Compensation, in order to shorten the operation peroid. ALUIZNI decided December, 31 as the deadline for self-disclosure. Following this date, all illegal constructions that are not under the process of legalization will be destroyed. It still remains to be seen how the legalization and the issuing of property certificates processes will proceed. Based on the progress so far, this promise is considered as partially fulfilled/for verification. 17. Reduction of the pension age for people working on rough/difficult jobs, miners, etc. Promise: The present majority, promised during the electoral campaign of June, 23 2013 increase of the pension age for people working on rough/difficult jobs, mainly the miners. Miners retire at the age of 60.
  24. 24. Description of the situation: Reduction of the pension age for miners has been an early request of the Union of Independent Trade Unions of Albania and of the Independent Trade Union of Miners of Albania. They requested reduction of the pension age to 55 years, with 25 years of work, out of which 12.5 years underground and 12.5 on the surface. The head of the Independent Trade Union of Miners, Mr. Gëzim Kalaja has held continuous negotiation, not only with the current government, but even with the previous ones in order to reduce the pension age and increase the pension payment. Fact: On 3 September 2014, spanning to a period of one year of governing mandate, the Council of Ministers adopted a draft law compiled by the Ministry of Social Welfare and Youth on the reduction of the pension age for miners. The draft law “On pensions of workers who have worked in underground mines”, following submission before the parliamentary commissions, was adopted in the parliamentary session on November, 6 2014 in the Parliament. Therefore, this means reducing the pension age for the underground miners to 55 years old from 60 it previously was. Reduction of the pension age, in this way fulfils the request of the miners’ union, as a need relevant to the difficult/rough work conditions in this sector. Under the law, the social insurance period is predicted 30 years in total, of which 12 years and 6 months make up working underground. In his statements, the Minister of Social Welfare and Youth, Mr. Erion Veliaj, stated: “upon reduction of the pension age for miners, we kept our promise, since the first year of our governance. We apologize about the past 8 years of the previous governance, during which the previous government disregarded miners, who work everyday under rough/difficult conditions.” Who benefits: By decreasing the retirement age for miners to five years, 3 thousand and 840 workers in this sector benefit, of whom 3690 people are actually beneficiaries of the special financial treatment scheme, in reliance of the law No. 8685, dated 9.11.2000, “On a special treatment of workers who have worked in mines, underground”, as amended; and the rest are new beneficiaries. Under the law, based on the actual number of employees working underground mines, it was predected that for four years the number of people to benefit from the reduction of the retirement age, shall actually reach this figure. People due to be treated based on this new law, despite the predicted retirement pension, will benefit even the compensation on low incomes, as well as the compensation resulting from the increase of the electrical energy price, similar to other people who benefit retirement pension. According to the Ministry of Social Welfare and Youth, the law will bring increase of the retirement pension, not only for those due to retire under the new law, but also for those actually retired. The latter, based on the new law, will be paid 5500 ALL more than they actually receive at the end of each month, i.e. 9 thousand ALL. While the miners’ retirement pension already calculated by the new formula will be up to 21 thousands ALL. In total, the annual financial effect for 3 thousand and 840 beneficiaries, will amount to 739 million ALL. Pursuant to the procedure, following approval in the Parliament of Albania, the new law should be published in the Official Journal and shall enter in force after this publication. The law is published in the Official Journal on December, 1 2014, so it enters in force on December, 16 2015. This promise is considered as true/fulfilled. 18. A system for the future, whereby everyone will benefit free health service while the hospital boards themselves shall decide on equipments
  25. 25. Promise: On February 16, 2013, the actual Prime Minister, at that time the Head of the Socialist Party, Edi Rama, stated in Elbasan that in the electoral program of the left wing about the healthcare in the new system proposed, everyone would benefit free health service and the hospital boards would chose what equipment to buy. Therefore, after coming into power the Socialist Party would overthrow the current scheme of the system operation where every person pays 1.7% of his/her own salary which is as much as the employer pays as a contribution, too. The SP Parliament Member, Klodiana Spahiu who led the compilation group of healthcare program, stated in September, 2013 that you just need the Albanian citizenship in order to benefit free health service. Thus, Albanians would pay no more health insurances in order to acquire the necessary service. On the other hand, the hospital boards themselves would decide for purchasing large hospital equipments, and not the Ministry of Health. This promise comprises two sub- promises. Fact: To say that every citizen benefits free health service means that he/she will not pay health insurance contributions, so they will be covered by the general taxation. In the television program “Kapital” of December 5, 2014, the Minister of Health, Ilir Beqaj stated that this scheme, thus the removal of the health insurance, will start on January 1, 2017. According to the Minister, the scheme “the more you earn, the more you pay”, will bring incomes in the state budget, that shall be used about the health funding. This scheme will be functional following approval of a new law, stated Mr. Beqaj. On the other hand, the opposition considered this promise of the majority a big electoral “manipulation”. On the other hand, the government has undertaken for the first time the campaign of the free Health Control, for all Albanians aged 40-65 to visit once a year their health center near their residence and to perform their primary care free of charge. According to the Ministry of Health, this control will start in January, 2015. The 415 health centres all around Albania, will face the inflow of those asking to have their control. “We are drawing a relatively large map, which will function as a mobile unit. There will be five mobile units in about 15% of the Albanian territory which shall not be subject to their control in January, but shall have it from May to September, 30”, stated Mr. Beqaj on December 5, 2014. One of the steps undertaken by the government, on the frame of fulfilling this promise, relates to the proposed initiative by the end of September, 2014. The Ministry of Health and the Fund of Insurance and Health Care started to apply, for the first time in November, 2014 the free health packages. A coronary graphic analysis, by-pass interventions or dialyses are free even in the private hospitals. The Ministry of Health followed the procedures to purchase 10 service packages for the patients who kept waiting for months in public/state hospitals. The costs were calculated by the Fund of Health Care Insurance and contracts with 5 private hospitals in the country were concluded. As to the sub-promise, where the hospital boards will decide for the equipments they choose to buy, still nothing has changed from the actual scheme and the large hospital equipment continue to be purchased by the Ministry of Health. Assessing the above facts, it can be concluded that neither of the two promises was fulfilled. Even though the government, through the Ministry of Health introduced the package for free of charge visits in the private hospitals, this cannot be considered as a radical change of the system or a sustainable policy. This is still on the frame of the tendency to consider this process completed. Thus, this promise is considered as untrue/unfulfilled.
  26. 26. 19. Within the first 9 months, all public works’ debts will be paid Promise: Since the electoral campaign the current majority promised to repay public works’ debts within the first 9 months of its governance, in an attempt to establish new relations with the business in order to return the trust of undertaking to the public institutions and to represent itself as a responsible government which accepts its own responsibilities (even though they were created by the previous government) and respects the contracts. Description of the situation: Outstanding obligations to the business were created during the period of former Berisha government due to failure to pay contracts concluded mainly on public works during the three year period 2011-2013. The business suffered liquidity stagnation as a result of not paying the invoices and it was forced to continue its works on public works already commenced by taking credits from a bank or loans from other entities. This created a network of debts in the economy resulting in the decrease of money in circulation. Facing a financial difficulty, many companies could not repay their credits to banks. Accordingly, the indicator of problematic credits was raised significantly by reaching according to the data of Bank Association a record of 24.4% by the end of 2013. Considering this economic stagnation and also the difficult situation of the businesses, as the main contributor of economic growth by 80% and the main producer of employment, the actual government stood firm on its promise about repayment of obligations. Fact: According to the government, the total amount of debts to business amounts to 72.6 billion ALL. In order to certify this figure, the government contracted in October 2013, the Deloitte Company to assess the debts which in turn was paid 85 thousand euros. In the budget of 2014 adopted by the parliament in December 2013, it was provided an amount of 35 billion ALL about the repayment of obligations to entrepreneurship. In February 2014, by Decision of the Council of Ministers no. 50, dated 5.02.2014, the government adopted the Strategy of Repaying Overdue Obligations and also the action plan to business and individuals. The strategy provided the repayment of these obligations within a three year period, starting from 2014. For the next year, the budget of 2015 provided for repayment of obligations to business an amount of 20 billion ALL or 15 billion ALL less than the amount planned in the budget of 2014. On the frame of the strategy, based on the official data of the Ministry of Finance until July 29, 2014 about 30 billion ALL of outstanding obligations have been allocated according to the following categories: (i) public investments (9.5 billion ALL, were allocated), (ii) current spending on goods, services and other categories (about 6.7 billion ALL were allocated), VAT’s reimbursement (13.5 billion ALL were allocated) and in the energy sector about 4.4 billion ALL. By calculating even the obligations paid in December 2013 to disabled persons where about 2 billion ALL were paid back and also 3 billion ALL for the road infrastructure sector, the total amount of inherited debts allocated so far goes up to almost 35 billion ALL. Concerning VAT reimbursement, after the collaboration with the General Taxation Directorate, the Ministry of Finance has announced the list of entities subject to obligations which belongs to the period till December 31, 2013; for these entities it allocated about 13.5 billion ALL. The activity about repaying outstanding obligations on the “public investment” has proceeded since 2012 and now it is continuing with the repayment of 2013’s outstanding obligations. As to the repayment of outstanding obligations on “current expenditures”, actually outstanding obligations in the health sector have been taken under consideration and repayment of
  27. 27. obligations regarding other sectors is under way. In the “other” category, are proceeded outstanding obligations about court decisions and expropriation. It should be observed how the repayment of outstanding obligations will proceed during 2015 and 2016. Taking into consideration that the actual majority considered as its first promise the repayment of these obligations within the first 9 months, this promise is considered partially fulfilled. 20. No new debts Promise: The government has promised that it will not create new outstanding obligations for the business and that it will repay on time the obligations provided in the contracts with the business, as well as VAT reimbursement. Description of the situation: Payment on time of obligations to bussines and the prevention of creating new debts will lead to a reliable atmosphere between the government and the private enterprise will enable the business to continue its projects and to meet the fiscal obligations or those to third parties on time. This will enable the development of economy in line with the normal cycle and without unpleasant unexpected situations.
  28. 28. Fact: The prevention of recreating outstanding obligations is considered by the government as important as the repayment of inhereted debts. The Ministry of Finance has drawn an analysis on the causes of delayed payments and will adopt specific measures to strengthen the budgetary discipline, especially with respect to the budget planning. These measures require rigorous implementation of the legal demands by the officials, the authorizing employees. The statutory sanctions provided on the legal framework in force will be implemeted if there is any infringement of legal and sublegal provisions. Measures on strengthening the financial discipline include the acquirement of necessary financing for the experimental year as well as the next years prior to procurement start. As a necessary control measure, the procurement register is officially and electronically deposited at the Treasury branch, at the beginning of each budgetary year as well as every relevant review during the year. In any case, the total amount of procurements must be equal to or less than the funding approved for the budget year or for more than one year (multi-year investment contracts). In addition, it is announced that the Council of Ministers will adopt the multi-year limits of commitments as part of the midterm budget documents and in the year 2015, these limits shall be adopted by the Assembly, as part of the annual budget law, following review of the legal base for the management of the budget system in the Republic of Albania. Regarding this matter, even the adherence to the commitments will be monitored and controlled through the Financial Computing System of the government (FCSG). Since January 2014, all procurement orders for goods, services or investments obtained during the year, except urgent buyings costing less than 10,000 ALL, should be in compliance with the procurement register submitted at the Treasury and will be sealed by the district’s treasury branch if there are budget funds available for the institution, before proceeding pursuant to the public procurement rules. As for goods, services, for which the tender process has begun before the strategy entered in force, contracts will be presented at the treasury branch in order to compare them with funds available. So far, the government has not created any new debts. It must be observed how the approval of the legal amendments and the repayment of business obligations will progress. Based on the recent progress, this promise is considered true/fulfilled/for verification. 21. Reimbursement of VAT is your request, and our reflection is that only unreimbursed VAT, unliquidated fines and public obligations, lead the flat tax to 22% of the tax incomes and we shall reconceptualise the whole chain of VAT and there will be no more delays of the administration to bussines which shall be liquidated on time. Promise: The present majority promised during the election campaign of June 23, the solution to the problem for VAT reimbursement of the businesses, which is considered one of the greatest economic deadlocks in the relation business-tax. Description of the situation: VAT reimbursement has been an early problem businesses have faced in Albania especially those who export. Tax Administration did not reimburse on time the Value Added Tax, which often went up to millions of ALL per entity, by plunging the latter one into a liquidity crisis. According to the data of Ministry of Finance, at the end of December 2013, the total value of unreimbursed VAT went up to 78.4 billion ALL. Fact: Concerning this case, in March this year, the government changed procedures of VAT reimbursement. Through a directive published in the Official Journal, the Ministry of Finance specifies that “VAT reimbursement should be directly conducted from the Treasury system,
  29. 29. whereas until now it was conducted from tax bodies. The directive also defined the terms when the reimbursement should be made. Districts’ tax branches, within 2 working days since the conclusion of the process for the verification of reimbursement requirements, delivers the announcement for each Treasury branch respectively through the postal service. The responsible structure of the Treasury in the center takes precautions to ensure the necessary liquidity for paying the reimbursement amount by the Regional Tax Office within 30 days from the date of presenting the request for reimbursement for exporters and within 60 days from the date of presenting the request for reimbursement for other taxable people. Another initiative, undertaken by the government in order to facilitate this process even more, is VAT reimbursement according to risk analysis. This is provided in the draft law “On tax procedures”, as adopted by the Parliamentary Commission of Economy and is expected, to enter soon on the agenda for discussion and approval in plenary session. The risk analysis provides that VAT reimbursement be conducted automatically and without control for those businesses with a good history of relations with taxes and result to be correct in paying their tax obligations. Therefore, it is aimed at eliminating bureaucracy and minimizing time in conducting the reimbursement process as well as stimulating business to create a regular profile in their relation with the tax administration. In the draft law “On tax procedures”, it is also specified that VAT reimbursement period for exporters should be reduced from the current 90 days to 60 days due to the specificities of this sector. It must be observed how this draft law will be implementedd in practice. Based on the changes accomplished by now, this promise is considered immeasurable. 22. Products “Made in Albania”. We want that condition and standards to be European ones. Together we shall immediately identify the fiscal barriers delaying exports and we shall eliminate all the taxes on import Promise: The government has announced as one of her priorities the creation of “Made in Albania” products, as a menas to create the Albanian brand and to stimulate the competitiveness of the Albanian economy. Description of the situation: Our economy suffers from the lack of Albanian brands or products “Made in Albania”. Only a few companies carry out the whole production cycle in the country, by ensuring even the selling markets. What is strongly developed in Albania is the fason industry, where businesses import raw material and produce their products there, especially textiles and shoes according to the models order by the contractor and after this, they export them. The flourishing of the fason industry in Albania is correlated with the exploitation of the cheap labor force in our country. According to the data of the Institute of Statistics, exports of the textile and shoes group reached the value of 72.4 billion ALL for the period January-October 2014, by marking a rise of 25.5% compared with the same period of one year ago. The former period resulted in 34% of the total amount of Albanian exports. Fact: The government has announced as its own priority the transition from the fason production towards the closed cycle, or in other words, the creation of “Made in Albania” products. To support this industry, the government adopted in April 2014 the package of measures in support of the fason sector, drawn up by the Ministry of Economic Development, Trade and Entrepreneurship. The package concerning fasons provides 32 measures. Most of them provide the reduction of administrative bureaucracy. Among the main measures are:
  30. 30. The Decision of the Council of Ministers on the reduction of the land’s price for rent up to 1 euro and which is an initiative which will influence the budget of 24 million ALL. The solution to the problem about the technological wastes through the approval of the new Guideline on January 2014 and which will enable the reduction of the administrative cost and also of the time for businesses. The reduction of the deadlines on VAT reimbursement within 30 days in the case of exporting taxpayers. The simplification of the procedures at the Labor Office and stimulation to the insurance companies created by the Ministry of Youth and Social Welfare through approval of amendments of four CMD and also the creation of the online portal about application from entities. Arben Ahmetaj, the Minister of Economic Development, Trade and Entrepreneurship, stated on November 5, 2014 at a plenary session of the parliament that out of 32 undertaken measures about the fason industry, 23 of them have been implemented by far. Among them, there are 14 legal acts and government decisions. Furthermore, during this year the Ministry of Economic Development, Trade and Entrepreneurship has provided 3 programs worth 36 million ALL, including the Competition Fund, Innovation Fund and that of Creative Industry, which also aim at developing “Made in Albania” products. In the 2015 budget, the government has provided an amount of 2.5 million dollars as a support for the fason sector. Following the supportive package of measures about the fason sector, the government will approve a similar package about the agricultural sector, again intented to promote also “Made in Albanian” products. In order to facilitate trade exchanges, on November 24, the Ministry of Finance and the General Directorate of Customs presented the draft law of Simplified Procedures, where are provided some measures, such as the arrival of the goods directly in the facilities of the Economic Operator, without needing to carry out formalities in an internal customs office and their release in these facilities. It also includes accomplishment of the whole procedure of the goods exportation within the same facilities of the Economic Operator; and that the storage cost shall be reduced to 0 (zero) etc. It should be observed how the implementation of the measures about the fason sector and those for facilitating trade will progress. Based on the current progress, this promise is considered partially fulfilled /for verification 23. “Fight against organised crime and trafficking of narcotic substances” Promise: During the parliamentary electoral campaign of 2013, order and restoration of security in the country were among the main promises of the socialists’ electoral program. The alarming numbers of the internationals, especially those of U.S State Department concerning human trafficking, were a main factor in prompting the socialists to consider the fight against crime and mafia as a “national emergency”. This was described even in the first parliamentary plenary session on September 14, 2013 by Saimir Tahiri, the Minister of
  31. 31. Interior. Facts: Operation “End to Madness” On October 15, 2013, the State Policy began for the first time an operation all over the country related to the blocking of gambling machines. 6 thousand police forces were dispatched in the field based on the argument that illegal entrepreneurship, which provided money to the world of crime should be removed from market. During only the first 5 hours of the operation were blocked 540 facilities supplying gambling machines that did not possess regular documentation and avoided tax obligations. At the end of this operation, which according to the State Policy was concluded on December 31, 2013, it resulted that among other things, over 3700 gambling machines’ equipment were confiscated. Also, based on the Police data, the amount of taxes unpaid by gambling machines’ businesses reached about 110 million dollars per year. Operation in Lazarat: After more than 20 years of resistance against the State Policy, the internationally famous village about the cultivation and trade of narcotic substances became part of a massive operation which commenced on June 16, 2014. 800 police forces were involved in the operation. According to the final data of the State Policy, during the successive days of this operation were destroyed around 133.567 narcotic plants and was also confiscated an amount of 71.087 tons of cannabis sativa. Furthermore, during these inspections were found 5 laboratories 2 of which served for processing narcotic plants and the 3 others for processing cannabis oil. In the operation which lasted more than 5 days were also confiscated guns, C4 (explosive) and gambling machines. Operation in Dukagjin: After the operation in Lazarat, during August 2014, the State Policy started another operation about the identification and destruction of narcotic plants’ parcels in Dukagjin, Shkodër. In the end, during the 8 days of the police operation there were discovered 313 parcels and were destroyed 136.468 narcotic plants. Fight against human trafficking: In a recent television interview (October 2014) of the Internal Affairs deputy/minister, Elona Gjebrea, during the period September 2013-October 2014, it was stated that in Albania were found 88 trafficking victims for the purpose of sexual exploitation. According to Mrs. Elona Gjebrea, in the latest report of U.S Department of State, Albania is described as a country of source and destination, but not as a transit one of human trafficking. Hence, it is not on the observation list anymore, but it has ascended to a higher category. Conclusions: In the progress report that the EU ambassador in Tirana, Romana Vlahutin, handed to the Albanian government in October 8, 2014, among others, was emphasized that “the Government has shown a strong will in the fight against organized crime, especially in the fight against narcotic substances, economic crime and human trafficking”. Actually, this progress report was the epilogue of receiving the candidate status for EU membership, which came immediately after the operation in Lazarat. The government intervention in Lazarat is a fulfilled promise, thus giving it the right to declare that it has reestablished the State Police on duty. However, it must also be emphasized that the successful operation, appeared after a difficult period related to the order situation, after the frequent explosions by C4 (explosive) as well as after the debate initially political about narcotic substances trafficking by air. This debate culminated on May 10, 2014, with the fall of an airplane in Divjakë transporting drug. This promise is considered partially fulfilled /for verification.
  32. 32. 24. Education Reform Promise: During the electoral campaign for the elections of June 23, in some meeting held in different Albanian areas, the Prime Minister Edi Rama, emphasized the need for an urgent improvement of the education system in Albania. Some of the interventions that Rama promised are related to the change of law regarding higher education, state graduation reform subject to fair competition and meritocracy, schools as community centers and the closing of universities that do not fulfil the relevant criteria. The State Graduation will be reformed for the purpose of meritocracy: Prime Minister Edi Rma declared in one of his first conferences as the head of the new government that the State Graduation reform was necessary. The statements made by the end of 2013, were intensified at the beginning of 2014 when the Prime Minister and the Minister of Education, Mrs.Lindita Nikolla stated that “we need to grant more credit to meritocracy and to create more space for the competitors. By granting more credit to meritocracy we will be more successful, not only individually, not only for you, but also for others, who in a motivating system are much closer to success than failure. Our current system is one which does not motivate success and hides failure. One who receives the highest grade is not satisfied either with himself or with the surrounding environment and one who has failed does not know he has already failed”. Facts: On April 2014, after the online registration of the State Graduation, the Ministry of Education stated that it had increased the passing threshold. In other words, in State Graduation tests, students had to take 10 points which is 20% in order to pass. Meanwhile, the evaluation of the average grade for the 3 year period in the State Graduation was changed from 20% to 26%. For 2013-2014 SG comprised around 14.350 State Graduation students. In conclusion of the exams, the Education Ministry, declared that for the first time the State Graduation was well managed. According to the minister, Lindita Nikolla, the increase of the passing threshold resulted in public universities with a better quality of the students in the new academic year than in the previous academic year. On November 24, 2014, the Ministry of Education and Sport, presented a public report of 2013-2014 State Graduation. Considering it a scientific study, Mrs. Lindita Nikolla stated that this public report served as an indicator for the reform and also for the need of a unique test. For the first time, in this study were presented numbers related to the results according to the country’s District, or to the optional subjects which brought good results and those which caused problems for graduated pupils. The closing of the private universities that do not fulfil the relevant criteria: In March 2014, in implementation of the Order no. 106, 03.28.2014 of the Minister of Education and Sport “On checking the application of law in public and private institution of higher education”, the Department for Supervising Implementation of the Legislation in Higher Education, near ISHA, was engaged in the process of inspecting 59 higher education institutions exercising their academic activities in the territory of the Republic of Albania. The inspection carried out by AME in April 2014 resulted in:  18 higher privat education institutions having their licenses revoked;
  33. 33.  13 higher private education institutions having suspended their activity until fulfilling the respective recommendations;  7 branches of public education institutions which failed to guarantee a good service in higher education, having their license revoked; Schools as community centers: At the beginning of the Socialist Party mandate, in November 2013, the Ministry of Education and Sport, introduced the new concept about Albanian schools which was “schools as community centers”. This new innovative concept for Albania, is intended to transform the school environment into a dynamic, recreational, progressive space for youngsters, a space of new collaboration between teachers, families and community. The project “School as a Community Center” has now been implemented in 66 schools throughout the country, following more than 1 year since the launching of the initiative. Drafting a new law on Higher Education: In January 2014, was set up the Commission on the Reform of Higher Education which was proposed by Minister of Education and Sport. Tthe most important purpose of this commission was drafting of proposals on legal amendments and the consultations with the interest groups and other actors of the academic world to receive their suggestions and opinions. In April 2014, the commission released its first report on suggestions about legal amendments, suggestions which were immediately opposed by the University of Tirana and UT students. The official attitude of UT students was pretty clear; the proposed draft does not fulfil the demands about a complete reform of higher education and scientific research. The draft must necessarily represent the proposals of the interest groups. Some of the items which failed to reach an agreement with UT are related to the model of financing, the integration of the boards into the universities’ structures, the way of admitting new students as well as the increase of the tuition fee. These were among the items which were not welcomed by the managing staff of 16 higher education public institutions. Conclusion The policies and legal amendments undertaken by the government during this 1 year and a half of governance on the framework of improving the educational system in Albania can be considered positive, but not adequate to solve the qualitative and structural problem carried out for years. Discussions concerning the new law about education are expected to reopen in January 2015. This would be a good opportunity for the interest groups to advocate and lobby for designing a stable and qualitative law. Considering the facts mentioned above, it results that some of the policies are under implementation, whereas some others are expected to be implemented. Thus, this promise is considered partially fulfilled /for verification. 25. We will create 300 thousand new jobs. Promise: One of the main promises of the actual majority was creation of 300 thousand new job positions within the first governance mandate. The Socialist Party promised that the main sectors due to offer new job positions were: agriculture, fasons and tourism.