The Vienna Institute for International Economic Studies has recently published an expanded report on the "golden" opportunity that Albania has along with 5 other Western Balkan countries to attract foreign companies after the pandemic.
According to the report dealing with the phenomenon of "nearshoring", in terms of protectionist trends in global trade, a transition from production in Asia to the nearest and most industrialized countries has begun a decade ago. But, this phenomenon explain the experts of the Vienna Institute will increase significantly in Europe after the pandemic. A large proportion of European companies are currently seeking major changes in their production and supply chains. For this reason, the Western Balkans is seen as a golden opportunity.
The report, which is a cooperation with the partnership of the chambers of commerce of the region, as well as with the business representatives from each country of the region (with the Union of Chambers of Commerce and Industry of Albania as a partner in our country) analyzes exactly this phenomenon, not only in theory. Part of the report comes in the form of a survey of over 3,500 German companies operating around the world and Europe.
The survey shows that a large proportion of them, from 20% in the case of those operating in China, to 55% in the case of those operating in the UK, require changes in the supply chain. The percentage of those companies that are looking for other localities to relocate remains at the same rates. Most German companies that exhibit problems in their supply chain operate in the trade, automotive or IT sectors. In fact, over 70% of companies operating in sectors such as chemicals and pharmaceuticals require changes in their supply chain.
Asked about the main problems in the Western Balkans, they say, German companies list poor governance and lack of institutions or instability. On the other hand, when asked if Covid-19 has influenced their plans to invest in the region, 60% of them say no.
But what does Albania and other countries in the region offer for these companies? 71% of those companies that have decided to invest in our country say that the main reason has been the opportunity for a new market. This percentage is the highest among all other countries in the region. Factors such as geographical location and low wages are estimated at 14% each.
In terms of the negative aspects of coming to Albania, the German companies surveyed rank in the first place, with 6.4 points weak support from the government, as incentive schemes. Even weak governance and institutions, including the rule of law or corruption, are highly regarded for their problems. The geographical location, meanwhile, receives the lowest score as a problem, which makes Albania the favorite in the region by foreign companies in this regard.
Regarding the barriers faced by local companies, about 36% of them say that the inability to offer the same standards and quality is a major problem. This percentage is the highest among the countries of the region.
A survey was also conducted on local companies in the region. Asked about the cooperation with foreign companies, in Albania only 40% of them say that they have a partnership. This is the second lowest rate in the region, with Kosovo being the last, with only 25%. (SCAN)