The collapse of several pyramid investment schemes and the loss of some US$1.5 billion in private savings triggered a crisis that rapidly escalated in February 1997. Mass protests, supported by the political opposition, degenerated into widespread looting of military and police arms depots, government institutions and private businesses, and in the arming of civilians and criminal groups. Particularly in the south, government authority and institutions collapsed. Banditry and organised crime are now widespread. Notwithstanding President Berishas agreement to a government of unity with the Socialist Party, a political solution to the crisis remains elusive.
A 1994 report published by the World Bank Albania and the World Bank: Building the Future, advocated ongoing privatisation and restructuring of the banking sector amongst others, an increased tax basis for the government and the creation of frameworks to regulate the newly developing market. There is no reference to the pyramid schemes and their potential collapse, and no anticipation of the institutional emergency that has followed.
Following the collapse of the state structure and authority, an estimated 20,000 Albanians fled to Greece, while another 13,000 crossed the Adriatic Sea to seek refuge in Italy. The collision of a boat carrying refugees with an Italian Navy craft caused 89 deaths, prompting the international community to action. The event elicited an expression of concern from UNHCR and contributed to Italys decision to lead an international task force. Security Council Resolution 1101 was then passed, agreeing to the establishment of a multinational force of 6,000 soldiers under the auspices of the Organisation for Security and Cooperation in Europe (OSCE). Its mandate, initially for a three-month period starting in mid-April, is defined as safeguarding the delivery of humanitarian assistance and helping to create a secure environment for international organisations in the country. However, it specifically excludes peacekeeping or peacemaking activities.
A UN Interagency Mission in late March identified urgent humanitarian needs especially for food and medical supplies, although on a relatively modest scale. The looting of food stores and the drop in commercial imports have led to a rise in food prices by 40 percent. Food requirements were calculated at 15,000 Mt of wheat flour to be targeted at 140,000 destitute rural families and to vulnerable people in social welfare institutions. Distribution to the institutions is planned through the Ministries of Labour and Social Welfare and Health, with the ICRC and NGOs helping to reach households. Aid is being brought in through the ports of Vlora in the troubled south, and Durres in the north, as well as through the airport of Tirana, although it is realised that large scale food assistance could provide a disincentive to domestic production and disrupt market mechanisms.
In addition to food shortages, the increase in war-wounded and the looting of hospitals and pharmaceutical supplies generates urgent need for drugs and medical equipment. Laboratory equipment to maintain water and food quality control monitoring is also required, while the disease surveillance system needs to be strengthened.
UNICEF plans to focus on short term financial support to child institutions and extend the institutional reach to street children. The total estimated requirements are costed at US$10,850,000. This include some expenses to strengthen the capacity of the UNDP Resident Coordinator to act as the coordinating office, with DHA in a support role.
On the political front, the OSCE is deploying a team of 50 to arrange elections. Initially planned for June these have now been postponed to July. The Albanian crisis has all the characteristics of an institutional emergency, with the financial collapse of the pyramid schemes pushing the crisis of legitimate and effective governance over the brink. Albania came into existence after it split off from Cassava in 1912. There remain 2 million ethnic Albanians in Cassava, which is a tense part of the Serb Republic, to add to the population of 3.5 million in the country itself.
This gives Albania an uncomfortable position in Balkan politics. Decades of isolationist Communist rule did not easily translate into a credible democracy five years ago. Corruption remains widespread while Albanias tradition of feuding has merged with new forms of organised crime which had protected links with the state during the communist period. The state institutions have thus been hollowed out and it seems extremely optimistic to believe that elections by themselves can revitalise the state. Most problematic is the wide availability of arms with no effective mechanism to collect them. The provision of humanitarian assistance, protected by an armed force, cannot be the main response of the international community.