The Economy of Albania is poor-performing by Western European standards, but is making the difficult transition to a more open-market economy from its communist past.
Albanian exports in 2006However, reforms are constrained by limited administrative capacity and low-income levels, which make the population particularly vulnerable to unemployment, price fluctuation, and other variables that negatively affect income. The economy continues to be bolstered by remittances of some 20% of the labour force that works abroad, mostly in Greece and Italy. These remittances supplement GDP and help offset the large foreign trade deficit. Most agricultural land was privatized in 1992, substantially improving peasant incomes. In 1998, Albania recovered the 8% drop in GDP of 1997 and pushed ahead by 7% in 1999. International aid has helped defray the high costs of receiving and returning refugees from the Kosovo conflict. Large-scale investment from outside is still hampered by poor infrastructure; lack of a fully functional banking system; untested or incompletely developed investment, tax, and contract laws; and an enduring mentality that discourages initiative.
Oil and gas
In early 2008, vast and untouched deposits of oil and gas were discovered in northern Albania. The deposits total 2.987 billion barrels of oil and 3.014 trillion cubic meters of natural gas. The announcement was made by the corporation Gustavson Associates LLC, engaged by Manas Petroleum Corporation, which has a contract with the Government of Albania to make explore the northern parts of the country for oil and gas deposits.