NEWS ANALYSIS
TIRANA, April 19, 2023 – Albania’s political parties have started campaigning across the country for the upcoming May 14 municipal elections, which will determine the mayors and municipal council members of Albania’s 61 municipalities.
By their very nature, municipal elections are supposed to focus on local issues, but as has often been the case in Albania they are also seen as a referendum on national governance.
And while Albania is a highly centralized country when it comes to governance, thus the national election outcomes are far more important for foreign investors, for specific businesses looking to invest or that are already working in areas like tourism, construction and manufacturing, local governments do have a say in terms of permits and taxes, and thus who leads them can have an impact.
Foreign investors in Albania are largely subject to the same municipal rules and regulations as domestic investors. Municipal rules vary depending on the jurisdiction where the business is based and operates — and they include business registration with local authorities, local taxes and fees, land use and zoning as well as building permits and codes.
– Key races to watch for impact –
The race with the most gravitas is in the Municipality of Tirana, where more than one in four Albanians lives. Incumbent Erion Veliaj of the Socialist Party (SP) faces a challenge by Belind Kellici of the Together we Win (TW) coalition, which is trending second in the polls.
Four other candidates for mayor are also running, but, as per public opinion polls, they have little chance of winning and are largely seen as vote-splitters. But the parties they represent have a good chance of getting municipal council seats, which could make for a diverse elected body for the first time in recent history.
Both Veliaj, 43, and Kellici, 36, are U.S.-educated politicians. Veliaj has been Tirana mayor for eight years and is promising to continue developing the city’s infrastructure and the construction boom of recent years. Veliaj’s promises also include completing the 24-hour running water system, more schools and more green spaces.
Kellici resigned from parliament, where he served as a Democratic Party MP, to run for mayor and has promised to make public transport entirely free and to construct a large underpass in downtown Tirana to ease traffic. He says he wants to make Tirana more just and more livable.
While construction permits already issued are not going to be affected by the results, it is likely a change in administration will lower the number of new permits issued, based on campaign narratives. Moreover, the opposition has also promised a lowering of local taxes on businesses.
Either SP or TW will likely win in most if not all of the 61 races across the country — in many races the two being the only political forces running mayoral candidates.
Some of the top of mind issues for the Albanian public at this time are the emigration wave that has shrank the workforce and is a harbinger of social problems as well as the increasing cost of living and lack of economic opportunities.
Other key races to watch for foreign investors include those in the coastal tourist hotspots of Durres (Albania’s second largest city), Vlora (where SP replaced the maverick incumbent mayor for a new candidate) and Himara (where TW is running a Greek minority party candidate); as well as the large cities of Elbasan (a race with a focus on law and order), Shkoder (the only municipality currently run by the opposition), Fier (an SP bastion) and Korca (were TW is running one of few women candidates against decade-long SP incumbent).
A major redevelopment project in the Durres Port area has been spearheaded and approved by the national government and is unlikely to be affected by the mayoral race, but related infrastructure and construction could be affected.
– Political situation –
With SP’s candidates backed by the national party’s large resources and being incumbents in almost all municipalities due to the opposition’s boycott of the elections four years ago, they enter the race with a large advantage. These elections will show whether SP will further be cemented as Albania’s dominant party as it would mean that in many key cities it will continue its decades of uninterrupted rule to complement 12-years of national government rule.
The opposition enters the elections divided and handicapped from the start and faces an uphill battle. The main opposition Democratic Party has split into two factions, with the largest faction being denied by courts the right to use the party logo and name, and forced into the TW coalition with the Freedom Party instead.
Prime Minister Edi Rama is highly featured in the SP campaign, a clear signal that the results are seen to have national implications.
Two former prime ministers and presidents, Sali Berisha and Ilir Meta, are leading the TW coalition, although in places like Tirana the focus has been largely on the candidate himself and not the coalition leaders.
The opposition’s narrative of improper use of state resources to help SP candidates has persisted as it did in the previous national elections, in which PM Rama won an unprecedented third four-year mandate.
– Electoral climate –
The very fact that the elections are competitive is an improvement from four years ago, when an opposition boycott and a refusal from the ruling party to postpone the elections led to one-party rule in almost all of the 61 municipalities and the lowest turnover ever in any Albanian elections. The outcome was seen as the largest blow to Albanian democracy in decades.
Albanian President Bajram Begaj has called on the political forces not to denigrate each other, but to engage with ideas for improving the lives of citizens.
“The phenomena of buying and selling of votes, misuse of financial resources, illegal and non-transparent financing of political parties, disruption or manipulation of the electoral process are intolerable,” the head of state said in a statement.
ODIHR/OSCE is sending more than 300 short-term observers to monitor the local elections of Albania on May 14, while 13 experts and 24 long-term observers have already arrived.
– Business community wants improvements –
In general, organizations representing foreign investors in Albania have expressed concern that doing business in the country is hard as the economic “environment is inefficient and requires significant improvement.”
Five chambers of commerce in Albania, including those representing American, German, French and Italian investors said in a recent joint statement that to attract more foreign investment a better strategy is needed that will stimulate employment, combat corruption, increase transparency in public procurement and engage with interest groups.
