ECONOMIC SYSTEM
In mid-1970 the economy, which is wholly controlled by the Albanian Workers' Party, approached the conclusion of the Fourth Five-Year Plan, during which it made a further advance along the road of industrialization, in line with the totalitarian leadership's goal of transforming the economy from the stage referred to as agricultural-industrial to a more advanced industrial-agricultural level. The Fourth Five-Year Plan (1966-70) actually called for a more rapid growth of agriculture than that of industry and for an increase in the share of agriculture in the national product by 1970. This departure from proclaimed policy was dictated by the failure of agriculture to meet the goals of the Third Five-Year Plan (1961-65) and by an overriding need to increase farm production in order to reduce to the maximum extent possible the perennial food deficit.
Despite government efforts, the five-year plan goals for agriculture are not being achieved, even though substantial advances in production have been made. The agricultural output target set by the annual plan for 1970 is significantly below the five-year plan figure for that year. By contrast, the five-year plan goal for industrial output was reported to have been surpassed in 1969 and to have been raised in the annual plan for 1970 substantially above the original level.
The basic reasons for the failure to attain the planned farm output targets, apart from their magnitude, lie in the difficulty of inducing peasants to relinquish age-old traditions in favor of modern scientific farming methods and of motivating them to work industriously in a collective farm system that they strongly reject. Although problems of adaptation and motivation are also present in industry, the much smaller size of the industrial labor force and the presence of foreign technicians in key areas mitigate the difficulties and make possible a somewhat more rapid rate of growth.
Reliable information on Albania is scarce. Few foreigners capable of observing and evaluating conditions objectively have been able to visit the country in the past twenty-five years. Articles from official journals or newspapers available in English translation, which constitute the major source of data, provide only a partial coverage and must be used with caution because of a lack of means for verification. Published statistics, available in detail to 1964 and nonexistent after 1967, leave many important gaps. Because of apparent shortcomings in the underlying statistical methods, only data in physical terms can be accepted with some degree of assurance as to their accuracy.
The economy is administered through a small number of specialized ministries, and most information about it comes from Communist sources. Control over labor is maintained through trade unions, which constitute a political arm of the Party ([see ch. 6], Government Structure and Political System). Economic activity is governed by a series of five-year and annual plans prepared by the State Planning Commission in accordance with Party directives.
Agriculture is organized into state and collective farms, which are dependent upon machine-tractor stations for the performance of mechanized farm operations. Industry is poorly balanced with regard to the country's domestic needs and is heavily oriented toward exports. Foreign trade primarily serves the purpose of obtaining needed resources for the development of production. Limited domestic resources are only partially developed, and the economy depends heavily on foreign economic and technical assistance. The country's political orientation has restricted the sources of such aid to other Communist states, and its alignment with Communist China in the Sino-Soviet dispute brought about the loss of Soviet support with severe repercussions to the economy.
After twenty-five years of forced draft economic development, the country in 1967 was described by a correspondent of a European journal as a mixture of the fourteenth and twentieth centuries, where oxen and buffaloes were to be seen side by side with modern foreign-made tractors, and where a policeman directed traffic in the main square of the capital city like a conductor waving his baton at a nonexistent orchestra.
After a visit in the fall of 1969, a specialist on Balkan affairs reported that austerity and regimentation were still the rule despite a substantial measure of economic progress achieved during the period of independence. He also expressed the view that Albania undoubtedly remained the poorest country in Europe but that the economic and social advances attained could be envied by the countries of the Near East.
LABOR