In the economic field a special war-profits tax was levied, which amounted to a confiscation of the wealth and private property of the well-to-do classes. A large number of those who could not pay the tax, because it was higher than their cash and property assets, were sent to labor camps. All industrial plants and mines were nationalized without compensation, and a radical agrarian reform law was passed providing for the seizure of land belonging to the beys and other large landowners and its distribution to the landless peasants.
The 1944-48 period was characterized by an increase of power and influence of the Yugoslavs over the Party and the government. This in turn engendered resentment even among some top Party Leaders, who were kept in check or purged by Koci Xoxe, minister of interior and head of the secret police. Backed by the Yugoslavs, he had become the most powerful man in the Party and government but was tried in the spring of 1949 as a Titoist and executed. By the beginning of 1948 preparations had been completed to merge Albania with Yugoslavia, but the plan was not consummated because of the Stalin-Tito conflict, which resulted in Tito's expulsion from the Communist Information Bureau (Cominform—see Glossary) on June 28, 1948.
The Stalin-Tito rupture offered Enver Hoxha and his closest colleagues in the Albanian Party Political Bureau (Politburo) the opportunity to rid themselves of both their internal enemies, such as Koci Xoxe, and of Yugoslav domination. A few days after the Cominform resolution against Tito, the Albanian rulers expelled all Yugoslav experts and advisers and denounced most of the political, military, and economic agreements. Albania immediately established close relations with Moscow, although Stalin never signed a mutual assistance pact with Tirana, as he had done with all the other European Communist countries. The Party leadership was now concentrated in the hands of Enver Hoxha and Mehmet Shehu. Shehu had been dismissed in January 1948 as Chief of Staff of the Albanian People's Army, because he had opposed the integration of the Yugoslav and Albanian armed forces and the stationing of two Yugoslav divisions on Albanian soil. He was rehabilitated immediately after the break with Yugoslavia.
The period of direct Soviet influence in Albania began in September 1948, when the first joint economic agreement was signed. After the establishment of the Council for Economic Mutual Assistance (CEMA) in February 1949, of which Albania became a member, the other Soviet bloc countries began to extend economic aid. As a result, an intensified program of economic development began. From 1951 to 1955 industrial and agricultural production increased rapidly, and the basis was laid for transforming Albania from a backward agricultural economy to a more balanced agricultural-industrial one.
The de-Stalinization campaign in the Soviet Union had serious repercussions in the internal situation in Albania. Although Hoxha vetoed any relaxation of police controls and stamped out any dissenting voice within the Party after Stalin's death, by 1956 there was a significant minority in the Party elite that hoped to profit by de-Stalinization. The opposition reached its peak at a Party conference in Tirana in April 1956, held in the aftermath of the Soviet Twentieth Party Congress. Some of the delegates, including Central Committee members, criticized openly the conditions in the Party and requested that the topics of discussion be concerned with such topics as the cult of personality, the rehabilitation of Koci Xoxe and other top Party leaders purged since 1948, Party democracy, and the people's standard of living.
Hoxha silenced the dissident elements, however, and had most of them expelled from the Party or arrested. Some were subsequently executed. Among those executed were Lira Gega, formerly a member of the Politburo, and her husband, Dalli Ndreu, a general in the Albanian People's Army. Soviet Premier Khrushchev charged at the Soviet Twenty-second Congress that Gega was pregnant when she was executed.
Workers' riots in Poland and full-scale revolt in Hungary in late 1956, followed by general uneasiness throughout Communist East Europe, gave Hoxha additional reasons to increase his control over the Party apparatus and to sidestep all pressures from Khrushchev for reconciliation with Tito. Indeed, in an article published in the November 8, 1956, issue of the Soviet newspaper Pravda (Truth), Hoxha accused Yugoslavia of being at the root of the Hungarian Revolution and implied that the relaxation of internal tensions in some of the Soviet-bloc countries had endangered the existing regimes. In a speech to the Party's Central Committee in February 1957 he came openly to the defense of Stalin and lashed out against "those who attempt to discount the entire positive revolutionary side of Stalin."
Hoxha did, however, pay lip service to the collective leadership principle enunciated in Moscow after Stalin's death. In July 1954 he relinquished the premiership to Mehmet Shehu, keeping for himself the more important post of first secretary of the Party. But aside from this he made no changes in his Stalinist method of rule. He demonstrated this after the Party conference in Tirana in April 1956, when he suppressed ruthlessly all those demanding the elimination of personal rule.
Hoxha showed the same determination in the summer of 1961, when Khrushchev apparently enlisted a number of Albanian leaders, including Teme Sejko, a rear admiral and commander of the navy who had been trained in the Soviet Union to overthrow the Hoxha-Shehu duumvirate and replace it with a pro-Moscow group. Sejko and his colleagues were arrested, and he and two others were later executed.
In September of the same year Hoxha arrested a number of other top Party leaders who were suspected of pro-Moscow sympathies. Among these were Liri Belishova, a member of the Politburo, and Koco Tashko, head of the Party's Auditing Commission; these two were also cited by Khrushchev as examples of the alleged reign of terror that prevailed in Albania.