Whatever happens to Greece, doesn’t stay in Greece. Like it or not Greece crisis proved to be a domino with ripple effects on the Albanian economy. We didn’t go through the economic abyss as many feared, but we sure did feel the drowning effects in terms of remittances, Foreign Direct Investment (FDI) and trade balance.
The Greek crisis hit hardest the economic sectors where migrants are largely employed, like construction and agriculture. In the last 5 years, between 18 to 22% of Albanian migrants in Greece have returned to Albania (around 180,000 persons).
Anna Triandafyllidou, professor of Global Governance at European University Institute who has studied the impact of the crisis on migrants, says in an interview for AgroWeb that the crisis has hit hardest the construction and from the early years, already in 2008-2009 before Greece experienced the overall crisis.
The construction sector, where many Albanians make their start, has culled almost half its workforce, down to just 240,000 last year from around 400,000 in 2008. While the number of migrant residence permits issued has fallen by 20 percent annually since the crisis began.
“Thus Albanian men were left unemployed, including people who had been settled in Greece for many years and who had skilled jobs. The whole sector collapsed”, says Triandafyllidou for AgroWeb.
Migrants can lose their legal status if they are jobless for long periods. Since Greek people have less money, business are unable to invest, many are forced to accept work for lower pay or without social security benefits.
The pace of return of Albanian migrants is one of the most serious risk factors to the economy, since they will put public services such as health and education system under pressure.
For the former Minister of Economy and President of Institute for Public Policy and Good Governance, Arben Malaj, as he states for AgroWeb, the Greek crisis has already given its biggest impact, including the large number of returning migrants.
Malaj sees the solution on reforms by creating opportunities for this new labor of force coming from Greece. “Structural reforms can make our country more competitive by increasing business opportunities for personal success, including immigrants who have several advantages regarding work culture, recognition of technologies, markets and potential partners”, says Arben Malaj for AgroWeb.
According to Malaj, Greece has gradually reduced its influence on our economy. “In 1993 we exported in Greece around 20% of total's export in 2008 around 6%, and by 2015 only 4.2%. In 2000 we imported from Greece about 28% of the total, in 2008 about 19% and about 10% in 2015. Likewise there is a drop of foreign direct investment, especially in the financial system of Telecom”, says Arben Malaj for AgroWeb.
Even though Greece economy is tiny, about 1.8 percent of the entire euro zone (the 19 countries using the euro), if it’s economy sinks further, experts suggest Albanian exports to Greece would become more expensive and thus a significant drop in exports could be expected, deteriorating even further the trade balance.
The return to Albania for many is a one way street. However Albania has also suffered from the collapse of remittances from Italy and Greece and the overall negative economic environment. So even when the returnees had built their houses or bought flats and even a shop, they are not able to make a living in Albania.
Remittances from Albanians working abroad have halved since 2007, when 951 million euros ($1.27 billion) accounted for 10 percent of Albania's gross domestic product (GDP).
But for Florian Mima, the former deputy finance minister who sits on parliament's economy committee, Albania can hold all the migrants if they decide to return.
"To return to Albania with a full bank account and your head full of ideas? The land is there!" he told Reuters in a previous interview. "Agriculture will absorb this labour."
But relatively low wages and high prices will deter others, say other economist. The drop in remittances and strain on the economy could well force Albania to rethink its economic model away from reliance on the huge diaspora working abroad.
The Greek crisis has given us the soar taste of low remittances, a drop in FDI and the return of the emigrants home. And as Mima said, If they have their head full of ideas and some money apart, the land is here, for you to use. Welcome home.