FDI Environment Analysis of Albania - Dissertation Example

Globalization has led to the interests of foreign investors in investing in emerging economies and to developing countries. Logically, these foreign investors conduct an environmental analysis to find out the most efficient economy among various options available. Among the most favored places for investment are the big emerging markets; i.e. Brazil, China, Egypt, Indonesia, Mexico, Philippines, Poland, Russia, South Africa, South Korea, and Turkey. Albania, which is the subject of this analysis, is unfortunately not included among the lists classified by analysts of FTSE, Dow Jones, and The Economists.
The motivation in conducting this research is to find out whether the economic environment of Albania provides an impetus of interest to foreign investors. Findings will be relevant to policymakers to adopt measures that will encourage foreign investors to become players in various investments opened by the government. In this context, a country report analysis will be provided to analyze whether the political and economic trends in Albania will affect the short to medium-term prospects of investments of foreign companies. The report will constitute the issues shaping Albania, the political scene, economic policy, domestic economy, sector trends, foreign trade, and payments.
Albania is a South Eastern European Country situated on the Adriatic and Ionian Coast with a population of 3.2 million (CIA Factbook, 2011). After World War II Albania became a Stalinist state under Enver Hoxha and remained staunchly isolationist until it transitioned to democracy after 1990. The 1992 elections ended 47 years of communist rule, but the latter half of the decade saw a quick turnover of presidents and prime ministers. Many Albanians left the country in search of work; the money they send home remains an important source of revenue. During the NATO bombing of Yugoslavia in 1999, nearly 500,000 ethnic Albanian refugees from Kosovo crossed over the border, imposing a huge burden on Albania's already fragile economy.