Remittances, A Guide To The Development Of Albania

The role and importance of the Albanian Diaspora in Germany in the economic and social development of Albania was the topic of discussion of a virtual meeting organized with the support of the World Bank thanks to the project “Greenpack 2.0”.

The expert on economics at the Minister of State for Diaspora, Fatos Çoçoli brought to the panel interesting data regarding remittances, announcing according to official data that remittances contribute to consumption for more than a third of Albanian families, which are channeled these funds for food, goods, education, health and to a lesser extent, for home furnishing and much less for investment.

He pointed out some problems regarding the remittances of Albanians abroad such as its cost, the informal way of transfers, etc.

“During the last decade 2011-2020, remittances have exceeded every year the level of international development assistance and have been close to the level of foreign direct investment with an annual average of +28 percent and + -11 percent, respectively. The structures of the Minister of State for Diaspora but especially the Diaspora Development Fund and the Diaspora Chamber of Business, in cooperation with the newspaper “Albanian Diaspora” are doing a good job of promoting to the public the ways to reduce costs, increase the delivery of remittances in formal channels and optimizing the use of remittances in the economy “, it was said during the presentation of Mr. Çoçoli.

Diasporas are a critical resource for countries of origin, from an economic and cultural perspective. They can provide financial support and promote their country of origin in the international arena. While their role is often difficult to measure, remittances are just one of the closest people to measuring some of the diaspora impacts. This is especially the case for Albania, where domestic remittances are very important.

Albania has at least 1.2 million migrants or 40 percent of the current population. The value of remittance flows in Albania was estimated at 10.4 percent of the country’s gross domestic product (GDP) for 2017, which corresponds to approximately USD 1,595 million, exceeding both foreign direct investment inflows and official development assistance in place.

However, such an important source of funding has a very high cost. Sending $ 200 to Albania costs an average of 8.28 percent, well above the regional average and beyond. Moreover, opportunities to send and receive remittances remain quite limited, as migrants and their families continue to opt for informal remittance solutions. Addressing these barriers is essential in unlocking the full potential of remittances for the socio-economic development of the country.

This event brought together sector experts, regulators and other important actors to promote an active exchange of ideas between the diaspora and the Albanian financial sector.