Economic Downturn? Not in Albania

10/28/2010 06:23 pm ET | Updated May 25, 2011

My country of Albania has had an incredible economic transformation over the past few years. When I started in government 20 years ago, Albania had an unemployment rate of almost 80% and no country was more devastated by hyper-collectivization and dictatorships than my country. Since that time Albania has become a business-friendly country whose economy continues to grow despite the state of the world's economy.

Albania has become an upper middle income country which last year had the highest growth in Europe. It was the only European nation whose economy grew in 2009 and continues to do so in 2010. We have a well-educated populous and a government that has reduced the bureaucratic burden on business. These policies have encouraged direct foreign investment in Albania and its natural resources such as; chrome, copper, iron ores and oil, found in the fields of the Adriatic Sea. Exports are up 85% and government has cut its budget deficit to 3.1% of GDP. Additionally, Transparency International's Corruption Perception Index, which measures 178 countries success in fighting corruption, moved Albania from 95 to 87 in their 2010 results, indicating that my government has been successful in fighting corruption and creating a business-friendly environment.

All these changes have come to fruition and become possible because my government and I have followed free market principles that have allowed for economic growth and a business-friendly environment for investment in Albania. We cut the payroll tax in half from 32% to 15%, personal income tax from 23% to 10%, the corporate tax from 25% to 10% and Social Security contribution from 32% to 15%. These measures and steps that were taken were necessary to spur economic growth and to get my country out of the economic doldrums that we had faced for decades.

When the economic crisis hit the US and Europe, I still believed that the only way to get out of the situation is to help and spur business growth in my country. For this reason my government and I have streamlined approval procedures for foreign investors, as well as for local citizens who wish to start their own businesses. Albania has enacted so-called one-euro zones in which land is leased--at virtually no cost--to firms constructing new facilities. We have simplified the tax system from 26 national taxes to six national taxes, as well as creating a good climate for investors by improving business registration and simplifying licensing processes whereby approvals can be granted quicker and at a lower cost.

I encourage the US and other European nations to follow some of the steps that we have taken. Everything we have done will not work for every country, but if we all follow the idea of free market principles, our world economy will be better for it in the long run.