Eduard Gjokutaj
Every government must deal with the same issues as its predecessor. However, when the predecessor is the same as the current one, there comes a day when you must repeat promises for some areas where their implementation is expected (infrastructure) and forget about some early promises (300,000 new jobs) that even today, after 10 years if we verify them, appear to be unfulfilled.
Throughout the 10-year journey of the Rama 1, Rama 2, and Rama 3 governments, we have noticed that for the infrastructure sector, agriculture, health policies, social protection policies, as well as policies related to property, integration, and anti-corruption, they are policies that, even though they continue like relays, seem to be far from what was expected by the public after the promises in 2013. This month marks the 10th anniversary of the socialists celebrating their tenure in power. In the overall fulfillment of the government programs, measurements regarding the inclusion of promises in programs and the subsequent level of fulfillment of these programs show that in the best case, it does not exceed more than 52% of the program in the “Rama 2” government, and the lowest level of fulfillment, down to 20% of the program, is observed in the performance monitoring for the first 2 years of the “Rama 3” government. Meanwhile, the level of fulfillment of promises given in the electoral campaign by the “Rama 1” government does not exceed 36 percent, with an increase compared to the previous government by 16 percent. The level of unfulfilled promises is high, accounting for 27 percent of the weight of all the political manifesto promises, but this level is significantly lower than the previous government, with a 14 percent decrease.
In the performance analysis of the socialist government programs in the last 10 years, the sectors with the highest fulfillment of electoral promises included in government programs are healthcare, infrastructure, and energy.
The greatest non-fulfillment is found in the sectors of agriculture, real estate, fiscal policies, and promises for additional budget allocations for social protection and support policies..
In an in-depth analysis of electoral promises from 2013, which also constitute the government program of the coalition between the Socialist Party (PS) and the Socialist Movement for Integration (LSI), the election promises from 2013 covered a wide range of sectors that were important to voters. These sectors include agriculture, energy, healthcare, social benefits, infrastructure, education, as well as tax policies and promises for additional budget allocations. Promises for sectors such as tourism and the environment, social housing, and other broader interests were more prevalent during the Rama 1 government’s term (2013-2017).
Out of the total promises (199 promises) made in 2013 by both coalition parties, 37% of them are not included in the government’s program. When analyzing the government program and comparing it to the promises, it is evident that the government’s program incorporates 86% of the PS’s promises and 33% of LSI’s promises.
Among the unincorporated promises from the PS are social promises, energy promises, and education promises. On the other hand, among the largely unincorporated promises from the LSI are mostly fiscal promises, as well as promises related to social protection, agriculture, and energy.
The government program “Rama 1” and the level of promise fulfilment, 2013 – 2017
From our analysis based on in-depth studies from various sources, referred to in analytical promises, it is seen that the fulfillment of the promise for employment reached up to 66% of the PS promise, or as much as 88% of the LSI promise (PS promised 300,000 jobs, while the LSI promised 175,000 jobs, and, they achieved 198,000 additional jobs).
Promises related to social protection and care held a significant place in government programs, accounting for 51% of the promised budget allocations for the four-year period.
Promises for agriculture, as a sector that received significant attention during the electoral campaign, despite promises of additional spending totaling more than 34 billion lekë, only received around 25% of the promised budget.
The promise to increase pensions, in general, faced budget constraints. While calculations indicated a budget increase to meet the promise, the actual budget allocation for four years could cover no more than 70% of the promised funds.
Education promises ranked among the sectors that had a considerable place in the promises of left-wing parties. However, when comparing the promised budget value of 14.5 billion lekë, the additional budget allocations made over four years covered only 11% of the promised costs.
Promises for road infrastructure, calculated at a value of 75 billion lekë, were mostly allocated to cover outstanding costs from the previous government, although the exact value of the debts of the left-wing coalition has never been fully disclosed. The central role in this promised value is held by expenditures for completing investments initiated by the previous administration. When looking at the actual level of additional funds allocated, it is seen that the fulfillment with funds for the promises of the left-wing coalition is no more than 39% of the promised value to be spent on road infrastructure.
When we analyze the promises for water supply and sewage networks, the calculations occupy a significant portion of the left-wing coalition’s election promises (15 billion lekë). When compared with the budget allocations for this sector, it is seen that the promised value has been fulfilled and exceeded by over 15 percent. From an economic optimization perspective, the promise of increased foreign investment in the country’s economy seems to have reached no more than 3.6 billion euros in the 4 years of PS and LSI governance. However, some investments were signed at the end of the previous government’s term, such as the Devoll Hydropower Plant and the TAP project, and they continued to be implemented during the left-wing coalition’s governance. Our calculations show that they had an impact on the budget revenues, up to 7.5 billion lekë through VAT from the circulation chain’s ripple effect, as well as income tax, including national and local taxes. The promised fiscal policy had an additional impact on budget revenues of 63 billion lekë. This contribution, significantly larger, almost 2.5 times more than the previous government, came mostly from the effects of consumption taxes, where VAT contributed 15.8 billion lekë at the end of the term, and excise tax contributed 4.3 billion lekë. Income taxes also had an impact on this increase in fiscal revenues, where profit tax had an additional income of 10.1 billion lekë, and income tax had an additional income of 3.3 billion lekë. When we analyze income tax in terms of the effects of implementing a progressive tax, it is seen that the largest budgetary increase was given by the increase in the profit tax rate (from 10% to 15%). Progressive taxation, which was applied to salaries in the private and public sectors, provided an additional 14 percent in budget revenues compared to the same salary tax in the previous government. Considering that consumption taxes have a better growth rate than the previous government (+13.9 billion lekë), even though there were exemptions for VAT and a higher refund rate, this shows an increase in consumption due to larger investments, as well as the formalization of informal workers who have now legalized their consumption in the formal economy. For this government, the fight against informality remained a challenge that could not be addressed according to the promises made together with anti-corruption, which experienced a greater increase than in the previous government.
The government program “Rama 1” and the level of promise fulfilment, 2017-2021
Voters accepted the promises made by political parties in the 2017 elections based on a broad and somewhat vague understanding of them, without delving into the lack of accountability and non-fulfillment of promises such as “Free home healthcare for those over 75 years old,” “Ensuring the wage-pension ratio aiming for a 56-60% replacement coefficient,” “Financial resources no less than 5% of GDP for education,” “Doubling the number of vocational schools,” “Quintupling public funding to support agriculture,” “Completion of land reform according to law 7501 within the first 2 years of government,” “Property registration and issuance of property certificates within the first 2 years,” “Review of corrupt concessions,” “Prohibition of river exploitation and discharge of wastewater into the sea,” and more
During the 2017-2021 government, for the first time in decades of political history, a government composed solely of members from the Socialist Party (PS) was formed, following the overthrow of the previous political order. From monitoring the government’s performance, it is observed that the fulfillment level by the “Rama 2” government of promises made during the election campaign amounts to 52%, with a 16% increase in the fulfillment level compared to the previous government. The level of unfulfilled promises is high compared to the previous government, making up 14% of the weight of all the political manifesto promises.
Sectors and promises that have a higher level of fulfillment are education, agriculture, social policies, and fiscal policies. The highest non-fulfillment is found in sectors of promises for increased budget spending on social policies, mainly in youth policies and pension growth.
This time, the election campaign promises in 2017 do not encompass a wide range of sectors, and it’s worth mentioning that security and public order issues are not mentioned at all, unlike the promises in 2013. The sectors covered by promises are those of significance to the voters and in line with the left-wing ideology, such as agriculture, energy, healthcare, social benefits, education, and fiscal incentives and budget allocations. Promises for sectors like tourism and the environment, social housing, and infrastructure are absent, showing a shift in “Rama 2” government (2017-2021). Out of the total promises (59 promises) made in 2017 by the Socialist Party, only 4 promises are not included in the government program.
The main reforms declared as the six key pillars of the government program [1], such as Water Reform, Land Reform, Justice Reform, Energy Reform, Pension Reform, etc., seem to be facing challenges in their progress. In the best-case scenario, these reforms have stalled and are not progressing according to the planned timeline (energy reform, land reform, pension reform). In the worst-case scenario, some reforms have not even started or are in the preparatory stages (water reform).
In the analysis based on the comparison of promise costs with actual allocations and additional benefits from the effect of promises, it is observed that the fulfillment of the promise for employment has not managed to exceed 40% of the promise by PS, with a decrease in promise retention compared to the previous government by 26 percent. During the election campaign, it was promised to increase new job positions by 220,000. Over the course of 4 years, new employment has only increased by 89,000 employees.
A significant influence on these data comes from the effect of the Covid-19 pandemic, which in 2020 halted employment according to the projected rates. However, even if we only analyze the two normal years of the “Rama 2” government, it is noticed that the pace of employment growth cannot surpass the promise fulfillment level of 100,000 employees in 4 years.
This calculation serves as verification of the economic development indicator, which did not increase according to the given promises, and even the foreign investments remained at the same level when compared to the previous government. From the references cited in the analytical tables of this analysis, it appears that foreign investments for the 4 years of governance cannot exceed 3.9 billion euros. These investments are estimated to have had a positive effect on the budget of at least 7.5 billion lek, considering the sectors where the investment was made and the ripple effect on tax revenues.
The promises for social protection and care have not taken up more space in the government programs than in the previous government, where promises were estimated to require an additional 8 billion lek from the budget. In fact, from the measurement of additional allocations, they have only cost the 4-year budget 29% of the promised budget costs.
This category of promises also includes promises related to pensions, which have not been fulfilled, even though this promise has never been fulfilled by any government that we have analyzed for the fulfillment of pension promises. In a comparison of the two promises from 2017 for pensions: (a) The solidarity package for pensioners, 24 billion lek, and (b) Annual pension increases and year-end bonuses of 7-10 thousand lek, from the verification of the budget data from 2017 to 2021 (the latter is being implemented), it appears that the promises have not been fulfilled at the promised levels.
As for promises related to agriculture, a sector that continues to receive many promises and was prominent in the election campaign, it is observed that despite promising to spend more than 35 billion additional lek, the actual additional resources from the budget only reach 19% of the promised amount..
Promises related to education are among the most significant promises included in the government program and continue as part of the consistency of promises from 2013. When comparing the promised budget value estimated at 18.5 billion lek with the actual additional allocations made over four years, it turns out that the budget increases exceed this promised cost by 32 percent. Additional allocations have mostly gone towards increasing the number of pre-university educational institutions, a sector where promises have been fulfilled to a greater extent than other sectors.
As for road infrastructure, the environment, urbanization, and tourism, there are no new promises because after the 2017 campaign, the “Rama 2” government announced the “1 billion” package. The government program continues to cover the part of the expenses paid from the budget in routine years, exceeding most of the cost of road infrastructure to the private sector that has signed partnership agreements with the government. Naturally, this cost will cover fiscal space for the next 10-15 years, leaving little room for planning by future governments. However, even though there are no specific promises, the total value of promises, according to our analysis, amounts to 65 billion lek. In fact, the budget has currently allocated additional resources worth 78 billion lek, but this includes the costs of incinerators and urban and telecommunication plans. Given the uncertainties and incomplete data, we cannot make a detailed comparison for the sub-components that make up the infrastructure, but we express, albeit with reservations, that the promised values have been partially fulfilled with additional budget allocations.
When we analyze the promises related to water supply and sewage systems, the calculations show a significant value in the election promises of the coalition parties (15 billion lek). In fact, when compared to the budget allocations for this sector, the promised value has been fulfilled at an 80 percent level.
The fiscal policy promised in our analysis has been implemented for at least two fiscal years, 2018 and 2019, taking into consideration the extraordinary situation affected by the economic blockade due to the pandemic. For the analyzed period, it is found that the policies implemented according to the promises made in 2017 have provided an additional effect on the budget revenues of 6.9 billion lek. This contribution has been influenced by the increase in revenues from personal income tax by 9.6 billion lek. This significant increase has been influenced by the effect of reducing the dividend tax, favoring payments from large resident companies in Albania, with an annual contribution of 7.8 billion lek [2]. This increase in revenue from this tax has covered deficits in VAT and corporate income tax. Additionally, social and health insurance has provided an added value to the budget of 5.3 billion lekë.
If we analyze the personal income tax after more than 6 years since the start of the progressive tax mechanism, we see that its effect on the budget is 16.5 billion lek, of which 8 billion lek comes from the tax on salaries. Based on this budgetary fact, progressivity is based and concentrated on the salaries of employees, with the highest concentration being in the high-income salaries in the private sector. Naturally, this fiscal effect is important for budget revenues, but when a tax burdens a particular category or segment of taxpayers and does not tax all other categories, it is necessary to reconsider for a new and fair distribution of the tax burden [3].
Government Program and the Level of Promises Fulfillment, 2021 – 2023 (700 days)
The electoral strategy successfully employed by the Socialist Party in the 2021 election campaign functioned as a vision to meet the voters’ expectations for the future, using the past performance of previous governments as a best-case comparison, as well as a justification for non-fulfillment in the worst case. Although there appears to be a reference to the Government Program in sectoral and cross-sectoral strategies (over 15 strategic documents), National Programs, Medium-Term Budget Programs, the Fiscal Macroeconomic Framework, as well as national documents with action plans extending beyond the term of a government, it is nevertheless observed that they achieve a low level of implementation compared to the facts of governance. This corresponds to the level of program implementation and falls below this level for specific strategies (e.g., the National Water Supply and Sewage Strategy, 2020-2030). The lack of coherence in these visionary governance documents has dictated new, more challenging approaches since the government is embarking on policies that are almost overly optimistic without delving into the actual reality of sector management performance. For the most important strategies of the country, there cannot be exclusivity with only the government that approves them, but there is a need for an approach that can bring together polarized politics in strategic documents, especially to assess their sustainability and importance.
In the analysis of the most important sectors that encompass a significant portion of the economy and the workforce, including public finances, it is evident that the realization has not been achieved. Beyond the optimistic approaches that do not reflect the reality of the country’s development stage in each sector, it is necessary to continuously assess the obstacles, deficiencies, and needs to be in line with the 2030 new program[4].
In 700 days of monitoring the performance of the “Rama 3” government, the results are as follows:
20% of the program is considered fulfilled.
62% of the program is in progress towards fulfillment until the year 2025.
18% of the program appears to be unfulfilled, either because the programmed deadlines have passed, or there is still no information available on the program’s progress.
In the detailed analysis of the fulfillment of the “Rama 3” government program and in comparison with the two-year governance study, POLIFAKT experts observe that the performance situation of the program across ministries is as follows:
– In terms of Economy, partial fulfillment has been achieved by progressing towards the completion of 4 points of the program (representing 57% of the economic program). Meanwhile, 2 program points (29% of the economic program) have not been fulfilled. When examining the content of the economic program of the “Rama 2” government, it is observed that only one of the 4 unfulfilled points of this economic program has been carried over to the “Rama 3” government’s program, and the other 3 points have not been included in the “Rama 3” government’s program. One point that still does not appear to be fulfilled is the increase in disposable income for Albanians by 20% in 4 years.
– For Fiscal Policies, partial fulfillment has been achieved for 5 points of the government’s program (representing 71% of the fiscal program). One point of the program (15% of the fiscal program) has not been fulfilled or shows no proven signs of achievement. When examining the content of the fiscal program of the “Rama 2” government, it is observed that none of the 5 unfulfilled points of this fiscal program have been carried over to the “Rama 3” government’s program. It’s worth mentioning the non-fulfillment of the program for the automatic reimbursement of VAT starting from January 1, 2023.
– For Agriculture, 5 program points have been fulfilled (63% of the agricultural program). Meanwhile, 3 program points have not been fulfilled (37% of the economic program). If we look at the content of the government’s economic program “Rama 2,” we can see that none of the 3 unfulfilled points of this program have been included in the government’s “Rama 3” program. One point that is still unfulfilled is the granting of 5000 Euros for immigrants who invest in agrotourism.
– For Environment and Tourism, partially, 4 program points of the government’s program have been fulfilled (66% of the fiscal program). One program point has not been fulfilled or there is no evidence of its successful implementation (17% of the fiscal program). If we examine the content of the government’s fiscal program “Rama 2,” we can observe that 1 unfulfilled point of this program has not been included in the government’s “Rama 3” program. The problematic and unfulfilled point is still the integrated waste management throughout the territory according to the Masterplan.
– For Education, Women, and Youth, 3 program points have been fulfilled (38% of the education program). Meanwhile, 5 program points are in progress (62% of the program). If we look at the content of the government’s economic program “Rama 2,” we can see that none of the 8 unfulfilled points of this program have been included in the government’s “Rama 3” program. A point that still lacks tangible finalization is the recognition of Albanian universities with European or other friendly countries.
– For Social Policies, progress is being made, and fulfillment is expected for up to 8 program points (73% of the social program). 2 program points have not been fulfilled (18% of the social program). If we look at the content of the government’s economic program “Rama 2,” we can see that none of the 3 unfulfilled points of this program have been included in the government’s “Rama 3” program. A point with significant impact on youth retention is still the very low fulfillment of the program to provide 1 million leks for the initial payment and interest rate reduction for young families purchasing a home.
– For Healthcare, progress towards fulfillment or expected fulfillment exists for 7 program points (representing 78% of the healthcare program). However, 1 program point has not been fulfilled yet (11% of the program). When examining the content of the economic program of the “Rama 2” government, it is observed that out of the 1 of the unfulfilled points of this program, none is carried over to the “Rama 3” government’s program. A point of importance but still far from fulfillment is the establishment of 10 model family medicine centers.
– For Energy, progress towards fulfillment exists for 4 program points (80% of the program), and 1 program point has not been fulfilled yet (20% of the program). When examining the content of the economic program of the “Rama 2” government, it is observed that only one of the 4 unfulfilled points of this program has not been carried over to the “Rama 3” government’s program. A point included in the government’s program, which remains a major promise, is the return of Albania to a net energy exporter, but it still seems far from being fulfilled.
- For Infrastructure, progress towards fulfillment or expected fulfillment exists for 3 program points (37% of the social program), and 3 program points have not been fulfilled (38% of the program). When examining the content of the economic program of the “Rama 2” government, it is observed that none of the 7 unfulfilled points of this program have been carried over to the “Rama 3” government’s program. An unfulfilled point that illustrates the weak effectiveness of PPP contracts in infrastructure is the program for the completion of the Arbri Road, which remained unfulfilled as of November 2021. Other delayed and programmed investments have similar effects, including missed business profits and additional costs to the budget.
- For Culture, Digitization, and Policies, 2 program points have been fulfilled (20% of the program), and 6 program points of the government’s program have been partially fulfilled (60% of the fiscal program). There are no unfulfilled points in this category.
Regarding the program for justice and property, progress towards fulfillment exists for 1 program point (10% of the program), and 1 program point has not been fulfilled or shows no proven signs of achievement (10% of the program). When examining the content of the fiscal program of the “Rama 2” government, it is observed that none of the 2 unfulfilled points of these programs have been carried over to the “Rama 3” government’s program.
– For Foreign Policy, progress towards fulfillment or expected fulfillment exists for all 3 program points (100% of the program). When examining the content of the economic program of the “Rama 2” government, it is observed that there were no unfulfilled points in this program carried over to the “Rama 3” government’s program. [5]
Despite the government’s program attempting to address a significant portion of the reports from the Council of Europe, the IMF, the World Bank, allies, strategic partners, as well as various actors within the country, our observation leads us to the fact that their inclusion does not provide comprehensive solutions.
This approach indicates a highly controlled program in relation to its output, leaving room for moderate calculations with the voters and taking advantage of the gaps in the opposition front and the lack of civil society organization.
However, based on the analysis and facing a considerable number of strategies, political documents, legislation, foreign and domestic reports, various and numerous statistics, comments, and reactions on social media, among others, we are mentioning some findings below that have resulted from serious partners and monitors.
Albania’s legal, regulatory, and fiscal systems have improved in recent years, but there are still many serious challenges in their implementation. Systemic corruption, unequal enforcement of legislation, heavy bureaucracy, competition distortion, and a lack of transparency are issues that need to be addressed within the government program and the specific promises made for their resolution.
Despite a healthy legal framework and progress in digital reform, foreign investors perceive Albania as a challenging place to do business. They cite corruption, especially in the judiciary (but increasing in administration year after year), lack of transparency in public procurement, unfair competition, the informal economy, frequent changes in tax legislation, and weak contract enforcement as ongoing issues in Albania.
Corruption reports in government procurements are common. The increasing use of public-private partnership (PPP) contracts has reduced opportunities for competition in infrastructure and other sectors, including foreign investors. Weak cost-benefit analyses and subpar technical expertise in drafting and monitoring PPP contracts are continuous and largely unchanged concerns year after year. Investors face challenges from corruption and the perpetuation of informal business practices.
The government, under the approach of integration into the EU vision, still has ongoing processes that have not been finalized as promised in its public administration reform. Efforts have not delivered the promised results despite the increase in the number of e-services and improvements in data collection and human resource management between the central and local levels.
Most citizens see the non-fulfillment of promises, especially those given during elections, and the implementation of government programs as an impossible reality. It can be said that if electoral promises/government programs of politicians had legal consequences, politicians would be forced to speak the truth and adhere to them out of fear of legal penalties. However, the moment of forming the government and the allocation of duties in the government cabinet is also a distribution of responsibility that extends to ministers. Nevertheless, the responsibility for including promises in the duties of ministries and the accountability for their implementation have been and continue to be a shared responsibility in the political, moral, and little to no legal aspect.
[1] https://shtetiweb.org/wp-content/uploads/2017/09/PROGRAMI-FINAL-PRINT-DIELE.pdf
[2] https://www.tatime.gov.al/shkarko.php?id=7511
[3] https://polifakt.al/wp-content/uploads/2021/03/PERGJEGJSHMERIA-FINANCIARE-E-PREMTIMEVE-TE-POLITIKES-SHQIPTARE-2009-2017.pdf
[4] https://polifakt.al/wp-content/uploads/2023/09/1444-dite-te-Qeverise-Rama-2.pdf
[5] https://polifakt.al/wp-content/uploads/2023/05/600-DITET-E-PARA-TE-QEVERISE-RAMA-3.pdf
[6] https://ec.europa.eu/commission/presscorner/detail/en/COUNTRY_20_1794
