IMF praises Albania for economic growth, but points at corruption

The International Monetary Fund said Friday it was pleased with Albania's efforts to keep inflation down and to maintain stable growth, but encouraged the country to fight corruption and improve governance. After spending four days in Albania, the first IMF visit since Albania's July 3 general election, IMF officials said a new agreement on funding was expected by November.

The current three-year, US$42.7 million (Ђ35.7 million) Poverty-Reduction and Growth Facility program, designed to help the tiny Balkan country maintain macroeconomic stability and to accelerate structural reforms, began in June 2002 and expires in November.

Istvan Szekely, head of the IMF mission, said the IMF generally was pleased with the 2005 budget expenditure, and added that Albania and the IMF agreed on key parameters of the 2006 budget.

The IMF praised Albania's efforts in recent years in carrying out fiscal and monetary reform, but also urged Tirana to improve the business environment, further modernize fiscal institutions, improve tax collection and its management, and reduce the economy's dependence on cash transactions and black-market labor, the AP says.

"It's very important to have visions. It is very important to know where you want to go. But it equally important to make sure that you get there," Szekely said at a news conference.

The IMF also has advised Prime Minister Sali Berisha's government that an electoral promise to halve taxes for small businesses must not affect government revenues.

Szekely also urged the country to do more to fight corruption: "When it comes to controlling corruption, we come at its (Albania's) weakest point."

"We were very glad to see the very strong anti-corruption of the new government," Szekely said.

Albania, one of Europe's poorest countries, slipped 18 places to 126th among the 159 nations in Transparency International's 2005 corruption perception index, an annual ranking that is closely watched in eastern Europe.

On photo: Istvan Szekely, head of the IMF mission.