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Interview with Ms. Diana Leka, Head of the Secretariat of the Albania Investment Council

– What is the purpose for the establishment of the Investment Council and how will it function?

The Investment Council, launched on April 15th 2015 by the Ministry of Economic Development, Tourism, Trade and Entrepreneurship, is a platform for the dialogue between the private sector and the government, supported by international financial institutions.
The working objective of the Investment Council is facilitation of a constructive dialogue between the government and private sector and the formulation of recommendations for the improvement of the investment climate in Albania. The recommendations will serve as a basis for decisions to be taken by the Prime Minister in the area of investment climate.
The work of the Investment Council is supported by a Secretariat, with experts recruited by the EBRD and supported with funds from the Italian government. The Secretariat will play a role of a coordinating unit for the Investment Council’s activity, by communicating regularly with the representatives of the business and international community in order to understand the challenges faced by the private sector in Albania.
Secretariat’s experts, in the legal, finance and economic areas, will prepare analyses and assessments on the basis of the issues raised by the business and they will present concrete recommendations to the IC members – The aim is to have the business voice considered in the process of economic reforms in the country. The Secretariat will keep direct relationship with the business, business associations and/or donors and commercial attachés of foreign embassies. The highlighted problems, their solution driven analyses and recommendations will serve as a base for drafting the agenda and the organization of the IC meetings.

– Why the establishment of such a mechanism was considered as necessary, while the National Economic Council is currently functioning as an institution which listens to the business voice?

Please allow me to mention that this instrument was not established randomly today, but its beginning dates back in November 2013 with the signing of the Letter of Intent between the Albanian Prime Minister and the EBRD’s President, Mr. Chakrabarti, in London. Afterwards, the Memorandum of Understanding signed in February 2014 clarified further the engagement for collaboration in the area of the dialogue between the private sector and government, improvement of the investment climate and good governance. Establishment of the Investment Council is one of the first elements of this mutual initiative.
With regards to the relationship with National Economic Council (NEC), I think that the Investment Council will treat problems focused mainly in the investment climate, with a discussion more on a technical level, with a “bottom up approach” point-of-view and working method.
While NEC, being an instrument of a higher level, it treats problems in a more strategic level and it is hosted by the Prime Minister, himself. In this context, I think that the recommendations of the Investment Council could serve as technical inputs, focused on the investment climate, which could also serve as a basis for the meetings and discussions of NEC. Therefore, I think that both instruments are complementary.
In principle, I think that NEC and the Investment Council are part of a system which helps in supervising the implementation of the laws and reforms, in order to achieve concrete results. The buy in and commitment expressed by both parties is key. The parties have different interests but a common purpose. I think that this is what makes this initiative so unique.

– Albania has already an agency for the promotion of foreign investments and the promotion of SME-s and Exports (AIDA). What is the difference between the Investment Council and AIDA?

Firstly, I would say that the Investment Council is an instrument or advisory body which will facilitate the debate between representatives of the state, representatives from the private sector and private sector donors. The objective is to reach a professional and transparent dialogue.
Meanwhile, AIDA, is a state institution which has a permanent function, “organic” I would say, to promote FDIs or exports. There are judicial, institutional, or even regulatory differences between the function of AIDA and the Investment Council. In general, I would say that we are dealing with instruments which complement each other to achieve a transparent and stable dialogue in a society which aims to integrate in the EU.
In my opinion, if these parties are well coordinated and in continuous communication, they could complement each-other and they could bring a lot of value added and a unique perspective to the decision-making process in the investment climate policies in the government.

– Based on the work performed until now, what are some of the main impediments identified in the investment climate, either for the domestic or foreign investments? What could be some of the proposed solutions for the well-known problems such as the ownership issue, closing a business, bankruptcy process, etc.?

I think that your questions contain also the problems why it has been proposed the establishment of instruments and platforms such as Investment Council. Main impediments have been indicated in standard reports (international reports) such as “Doing Business 2014”, “Transition Report 2014” from EBRD, Competitiveness Report, or even from suggestions sent from the business representatives to government institutions or donors.
Meanwhile, I think that the stability and credibility of the government politics toward the business, fiscal politics or even the regulatory one, constitute a fundamental condition for any foreign and local investments. Of course, I can mention other factors like property ownership, informality, enhancement of contracts or transparency in the energy sector but the solutions of these problems are interrelated and complex. Issues such as closing a business or bankruptcy process are related to preliminary legal regulations, with institutional executions as well as with relevant dispositions. So there is a line to be followed, and the work has begun before the establishment of the Investment Council. We will monitor the process and keep the businesses informed.

– What mechanisms will the Council use to solve the identified problems and how will this process function? If planned mechanisms will not function, what other solutions could be proposed (the idea is for example how could you impose the government to open the way to an investment which faces impediments).

I would like to emphasize that the Secretariat is a structure that will manage the organization of the work of the Investment Council, while the decisions will be taken by the members of the Investment Council and not by the Secretariat. Therefore, the government will decide if the recommendations of the Investment Council will be implemented or not.
Preparation of the agenda, as a result of the problems identified through an all-inclusive process, meaning not imposed from above, constitutes also the beginning of the work of the Secretariat. With the approval of the agenda, Secretariat’s experts will deliver a thorough analysis taking into account two points of view: one from the business and one from the government. The recommendations will be submitted to the Investment Council for further discussion and consensus within a period of 10 days in advance (in accordance with the Decision from the Council of Ministers) and the internal regulation of the Council. After the approval from the Investment Council, the suggestions will be sent to the Prime Minister for a further consideration within the decision-making process. The Secretariat will publish and follow all the necessary steps until a decision is taken or the problem is left unapproved in silence.

– If a business, either domestic or foreign, faces a problem in its investment project, where could it submit its complaint and how will this be followed up.

Currently, there are some efforts from the Government in this direction, especially regarding the redrafted Law on Strategic Investments. Meanwhile, the Secretariat has a function to deal with the complaints from the business, but not to resolve them being an advisory and informing structure but not a decision-making one. In this context, I would say that the Secretariat will be the “Voice of the Business” within the Investment Council by listening, highlighting and submitting problems, but without any authority to solve them.

– How will you promote green investments, or those which promote sustainable growth? Which are the sectors that you consider as being more of priority to attract investment?

I would emphasize once more that the Secretariat does not have specific sectorial policies, and is not responsible for the promotion of investments. This structure has been established to support the work of the Investment Council in the area of investment climate and anticorruption.
Decisions are not taken by the Secretariat but by the Investment Council, based also on the professional analysis of the Secretariat’s experts.
In principle, I think that the legal and institutional stability, reliability and transparency are prerequisites in terms of attracting investments, and these are precisely the areas that the Investment Council will be working on to provide trust to all investors in Albania – whether big or small, foreign or domestic, and across all economic sectors in the country.

Published on Monitor Magazine, May 2015

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