Prime Minister Edi Rama wants to make Albania the first country in the world to abolish money in kind. Critics say that “it is dangerous,” due to the high informality and habits of the population.
The Prime Minister of Albania, Edi Rama, won his fourth term in May, promising to the Albanian citizens that he would lead the country towards joining the European Union (EU) until 2030. In mid-July, he announced another fundamental plan for the same period.
“We have the ambition that, by the end of this decade, Albania becomes a society without money in cashwhich means that all interactions and financial transactions will be completely digital, ”Rama told startup representatives and the technology and innovation industry at the“ Albania 2030 – a vision for European integration ”.
“What is needed is more qualification,” he continued, emphasizing that the tools needed for an albania without cash already exist. “I believe that if we can correctly trace the script for the future, this goal will be totally achievable and will free the country from a heavy burden of outdated practices and inefficiencies that overload the daily life,” said Rama.
Rama wants to do so under the main justification of nowadays many transactions to happen “under the table”, and to slaughter this ‘dirty’ money is the priority of the unprecedented system.
Estimates cited by the indicate that the informal economy – the portion of the economy not accounted for in official statistics – represents between 29% and 50% Gross Domestic Product (GDP).
Everything seems very simple and straightforward. But is it really?
“I prefer cash”
In Albania, cash is still king and many people still make the typical play of hiding packages under the mattress. For example, 62-year-old Mimoza A. from Tyran, says that in her day-to-day the only time she uses a bank card is when she raises her salary at the ATM box near her apartment.
“It is not common for people in my generation to use a card to pay for purchases at the supermarket or the hairdresser. I prefer cash and I will always prefer”He told DW. Mimoza is not alone; most people in the country think so.
When Albania broke free from the ties of the communist dictatorship 35 years ago, she had no modern banking and financial system. Things progressed slowly after the transition to democracy, with the ATM boxes to be introduced only in 2004.
Arben Malaj, who was Minister of Finance and Economy from 1997 to 2005 and currently works as a financial specialist and teacher, believes that the populism It is the engine behind Rama’s ambition to have a money without money. Malaj says there are a number of crucial factors that will make it difficult to realize a money without money over the next five years.
“The high informality rate, especially in the agricultural sector, which represents much of Gross Domestic Product (GDP), is far higher than any other country in the region. A large percentage of the population lives in rural areas. In addition, most of the emigrant’s income – thousands of euros per year – is sent outside the official payment channels. Italy-also have high informality rates, ”the former minister told DW.
The expert also warns that any reduction in the use of cash would require a huge investment in cybersecurity.
“Dangerous” ambition
Cybersecurity experts like Besmir Weekj consider Rama’s plan not only unrealistic but also “dangerous.”
Weekj uses as an example the Massive cyber attacks to government institutions in 2024. The targets included the e-albania system (the Government Services Portal) and the Albanian parliament sites and the Institute of Statistics.
The expert states that these and other major cyber attacks in 2022 show clearly that Albania is not only very exposed, but also does not have the architecture necessary to protect this critical infrastructure.
“Even the most advanced countries in Europe, such as Sweden or Norway, are reevaluating the need to maintain a minimum of money in circulationprecisely for safety reasons and readiness in emergencies or cyber attacks, ”he told DW.
“Thus, while the most digitized nations maintain ‘offline predictions’, Albania says it plans to become 100% digital in less than ten years, without first developing basic cyber protection capabilities. An economy totally dependent on digital systems and without alternative is an unprotected and exposed economywhich would be totally paralyzed by a virus or blackout, ”said Week.
“Small and medium -sized companies will suffer”
Hazis I. has worked as a manager in the tourism sector for about 40 years. Currently manages one of the most popular tyrant hotels, frequented by tourists from around the world.
Usually, foreign tourists prefer to use cards to pay their bills, which contrast Strongly with the hotel’s Albanian guests, who still prefer to pay in cash, and implies higher costs for the hotel, as companies pay bank fees for each card transaction. The manager is not very enthusiastic about the prime minister’s plans.
“I am against this goal of eliminating the use of money in cash, because we can deal with tourists who want to use a card to pay a coffee that costs 1.50 euros. But what should I do with these small companies that provide us vegetables or cheese from the farm to our restaurant?” He asked.
“During the summer, for example, I buy watermelons regularly to the farmer who sells them around the corner. He has never used digital payments and I’m sure he will never use. This plan will take small businesses out of the market. And even we will have a lot of difficulties,” he told DW.
Lack of concrete goals
For former Minister Arben Malaj, the objective of eliminating the use of money in cash by 2030 was not defined and is therefore not measurable. It states that the government can only set concrete goals and compulsory deadlines after institutions, interest groups and academics closely analyze the payment system.
“Currently, there is no [em nenhum lugar do mundo] A zero money economy. In countries where there is minimal financial literacy and lack of digital knowledge, poor governance and poor quality of crucial public services – such as education, health, cohesion and social solidarity – and where perceived corruption is high, it is impossible to achieve significant and sustainable success in the short term, ”says Malaj.
Banco da Albania has registered in the last ten years a Increased electronic payments.
“The public has benefited lower costs, products adapted to their needs and greater access to payment services, which was reflected in a two -digit increase in the use of electronic payments, reaching 21 of these per capita payments [por ano]Compared to just two in 2015, ”said bank director Gent Sejko in a press release last year.
There is still a lot to go
For weekj, all this is still far below the EU standardwhere the Member States count over 300 per capita digital transactions per year.
“O Electronic commerce is limited [na Albânia]”He said.“ International platforms like the stripe do not operate in Albania, and small and medium -sized companies depend on local banks that offer portals that are often very expensive to integrate. Paypal exists for singular people, but it is not an integrated solution for Albanian companies. This means that online trade is limited and blocks Albania’s access to global digital trade. ”
