Russia and Albania in the early 1990s

Dec. 26 (Bloomberg) — Post-Communist capitalism was a rough business in places like Russia and Albania in the early 1990s, a Wild East where fraudsters and scam artists danced circles around the poor and the naive — the rest of the population.

Millions of people, many of them little old ladies, or “babushki’ in Russian, were bilked of their privatization vouchers, savings accounts and whatever cash they had stashed in pillows as a hedge against annual inflation rates of 1,000 percent or more.

Now, in the post-Bernard Madoff era, it is clear that financially uneducated Russians and Albanians have a lot in common with millionaires like filmmaker Steven Spielberg, whose Wunderkinder Foundation lost money in the New York financier’s alleged pyramid scheme.

As it turns out, poverty, ignorance and isolation aren’t prerequisites for falling victim to a pyramid, or Ponzi, scheme. All you need is to believe someone when they tell you they can double your money.

Who would know better than Sergei Mavrodi, the man behind MMM, Russia’s biggest investment pyramid scheme which collapsed in 1994, costing some 2 million Russians an estimated $1.5 billion?

Interviewed on Russia Today, a TV news channel, on July 11, 2007, after his release from four years in prison, Mavrodi scoffed at the idea that his scheme never would have worked in western Europe.

“Of course, it would work not only in Russia, but in any country,” he said. “If you give money away, who is not going to take it?”

Easier Pickings

The interviewer pressed on, noting that in France, or Belgium, systems are in place to stop such things. “Let me assure you, in Belgium, it would be even easier than here,” said Mavrodi. “Here in Russia, people are illiterate; it is difficult to explain things to them. People there understand things. I managed to do it, but I don’t know why nobody there does it.”

Well, it turns out they did do it in the West, right on Park Avenue. And as Mavrodi said, it worked even better with the financially savvy than it did with people struggling to stay afloat in a transition economy. Madoff has confessed that his “giant Ponzi scheme” may have cost clients as much as $50 billion, according to a Federal Bureau of Investigations complaint.

No-Frills Pyramid

The MMM scheme in Russia was more modest, although at its peak in 1994, it was considered the most brazen of its time. It ran an aggressive advertising campaign on television, featuring a character named Lyonya Golubkov, a bulldozer operator, who pitched the deal with a simple phrase, “Eto Prosto Yo-Moyo,” roughly translated as “It’s simply frigging awesome.”

This was a no-frills pyramid: those buying in were paying off those who were getting out, a loop that works as long as more gullible people join up.

There were dozens of such schemes, as Russians tried to figure out what to do with their privatization vouchers — a piece of paper representing their share of the national wealth, issued in October 1991 to 150 million people at a face value of 10,000 rubles, or about $25. A voucher’s worth plummeted almost immediately, as inflation took off, eating away at the value of the ruble and at people’s trust in the new capitalist era.

So it’s no wonder people went running after MMM, and other flim-flam investment schemes with names such as Revenge, or NeftAlmazInvest, literally translated as OilDiamondInvest, which as it turned out, had no investments in either.

Sude the Gypsy

In Albania, the pyramids appeared later, with even more devastating consequences for the national economy. By 1997, the amount taken from Albanians by at least 10 separate schemes had reached almost $1 billion, roughly two-thirds of the gross domestic product.

The meltdown began in November 1997 when a fund run by a 30 year-old former worker at a shoe factory, known only as Sude the Gypsy, stopped making payments. Other funds collapsed in rapid succession, rioting broke out, and the government collapsed.

Writing in 2000, Christopher Jarvis, then a senior economist with the International Monetary Fund, attributed the appeal of Albania’s schemes to “unfamiliarity with financial markets, the deficiencies of the country’s formal financial system.”

That’s not something Madoff’s investors can claim as an excuse. “In the end the best protection is just good judgment,” says Jarvis, now an adviser at the IMF. “If someone makes an offer that sounds too good to be true, it probably is.”

The solution? Jarvis says the Madoff case, like the one in Albania, proves the need for constant vigilance and aggressive regulatory supervision.

So maybe the U.S. should check out how Albania got out of its mess.

This article was from : http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_bohlen&sid=awhS9sW3.FtA

Alternation of energy resources in Albania

TIRANA, Oct 22. (ATA). Alternation of energy resources in Albania is necessary, Minister of Economy, Trade and Energy (ETE) Genc Ruli said at the German-Albanian economic conference “Market perspectives in Albania: Energy-Environment-Construction”, which was opened by Prime Minister Sali Berisha.

“Improvements have been made to the law “On concessions” in 2006, but alternation of energy resources are necessary in Albania, as currently 100% of these resources in the country are water resources,” Ruli said at the conference, which was attended by a large number of Albanian and German entrepreneurs.

“Albania has advantages in developing wind energy,” he said, stressing that the Albanian government “has given priority to the strengthening of inter-connection lines, whose building also enables power export to neighbouring countries.”

Referring to improvements and facilities in doing business in Albania, Ruli said: “The basic legal and regulatory guarantees, which are also found in foreign countries, have been established over the last three years.

“Albania has several competitive advantages, such as tax reduction, and the creation of the legal framework to set up a center in the form of “One Stop Shop” on permits and licenses is also being completed. This will further facilitate procedures for the business,” he said.

Meanwhile, Ruli said that work is underway also for the development of Albanian ports, considering this a very significant step to upgrade standards of infrastructure.

“We are conscious that problems on property titles still exist but we have approved creation of economic zones to facilitate building businesses in the country,” Ruli said, referring to the property title issue.

He added that three industrial parks were approved last September and that other parks were being studied.

The conference will continue for two days in Tirana and a number of government officials and business representatives are expected to read reports.

source: bsanna-news.ukrinform.ua/newsitem

Kosovo nobel

Martti Ahtisaari, the former Finnish president awarded the Nobel peace prize for his mediation in Kosovo and a string of other conflicts around the world, said yesterday that Serbia would have no option but to accept the new Balkan state.

In his first interview with a British newspaper since being named Nobel laureate last week, Ahtisaari shrugged off the apparent setback to his work in Kosovo inflicted when Serbia succeeded in having its declaration of independence referred to the international court of justice.

The 71-year old also argued that it did not matter that the former Serbian province had been recognised so far by only 51 of the world’s 192 countries. That was less important than the economic clout of the nations that did recognize Kosovo, including the US and most of western Europe.

“It really doesn’t matter if Paraguay hasn’t recognised,” Ahtisaari said. “Well over 65% of the wealth of the world has recognized. That matters.”

Ahtisaari was commissioned by the UN in 2005 to find a compromise solution for Kosovo’s status as a way of ending the deadlock that followed the 1999 war and Nato intervention. His plan for supervised independence coupled with extensive minority rights for Kosovo’s Serb minority was rejected by Serbia and Russia last year. However, Kosovo – with western backing – declared independence in February.

Belgrade has vowed never to accept Kosovo’s sovereignty, but Ahtisaari said Serbia would have to relent if it wanted eventual European membership. “You can’t be poking the EU in the eye [while] saying you want to join EU,” he said.

He sent private messages to all parties soon after taking his role as mediator, that Kosovo’s secession was inevitable. “[I said] in light of what had happened in Kosovo, the return of Kosovo to Serbia is not a viable option,” Ahtisaari said. “So since March 2006 no one should have had any illusion what my plan was going to be.”

Russia furiously opposed Kosovo’s independence, and pointed to it as justification of its own recognition of Abkhazia and South Ossetia, pro-Russian enclaves in Georgia. Ahtisaari rejected the parallel.

“We did Kosovo within the UN framework. In Georgia there was not even an attempt,” he argued. “You cannot go into an independent country and do whatever you like. Even if you are Russia.”

Ahtisaari was also involved in mediating Namibia’s independence from South Africa in 1989, and brokering peace in 2005 between the Indonesian government and separatists in Aceh. He said the secrets to successful peacemaking were research, having a clear strategy, and hiring staff who offer independent thinking. “You don’t need a single yes man,” he said. “You have to have colleagues who can challenge your own thinking.”

source:guardian.co.uk

Gianfranco Fini visits Tirana

Tirana oh Tirana

Albania: the state visit to Tirana, the chairman of the House Gianfranco Fini defines”model” collaboration between the two countries on immigration.Fini confirmed Italy’s support to Euro-Atlantic aspirations of Albania. “A model of cooperation that could be proposed also to the countries of the southern Mediterranean” is the judgment that the chairman of the House, Gianfranco Fini has expressed on collaboration Italian-Albanian immigration, legality, security and combating crime.Fini played last Monday in Tirana his first state visit as chairman of Deputies to reiterate the country eagles of the strong support of the Euro-Atlantic aspirations of Albania and other Balkan countries. At its meeting in Fini with the premier Sali Berisha, with the President of the Republic of Albania, Bamir Topi, and the Chairman of Parliament Tirana, Jozefina Topalli, the Italian leader said that, on immigration, there have been “huge “Developments in relations between the two countries.”If we remember that projected the image of Albania during the period of massive and illegal landings and compare to that of today – said – you see that the situation has changed. There is a substantial zero landings in the channel of Otranto. This is done for the strong commitment of the Albanian authorities, but also because Italy did not ever miss economic support, friendship and cooperation, respecting immediately the agreement for joint patrolling the coast. “

Albanian

The Arab countries aim to Islamism the Balkans starting from Albania. Under indictment “primarily” Suadi Arabia. The project for the construction of two thousand mosques in the country proceeds quickly: there are fears that Arabs speculums on poverty Albanian establish a fundamentalist fifth column in Europe
Party in 1996, today more than ten years since its launch is coming to an end the project, so dear to Muslim countries in Asia, led by Saudi Arabia, Islamism Albania, the poor southern state Adriatic sea which should be in the delirium of Islamic fanaticism the starting point for the “recapture” of Europe, a continent where the followers of Mohammed were largely driven out in the fifteenth century, especially on the Queen of Spain, and from where disappeared almost permanently at the beginning of the twentieth century, when the Balkans is one from the domain turkish. Taking advantage of poverty in the proverbial “Land of Eagles” in a subtle first, then increasingly the rich emirs of the Persian Gulf have begun to convince people Albanians to accept their certainly not used for purposes of charity but with a end clear: to be in Albania a sort of fifth column of Islam in his pilgrimage to conquer the Old Continent.
The war in Kosovo was paradigmatic in this sense: most of the so-called “patriots” Kosovars were financed the acquisition of weapons and their equipment with of Saudi princes who also financed the construction of the Great Mosque of Shkodra, now complete. The awards uncritical then made by most of the European Union to the new state entity has further encouraged Arab states that now, even using their secret services, are and the people of Bosnia-Herzegovina to end the existence of that nation, laboriously created after the Dayton Agreement. The Christian church, both Catholic-Orthodox greek that, having underestimated the problem is now aware of the danger and raised the alarm. It is no secret that among the advocates the growth of Islam in the Balkans there are several well extremists willing to lead the Holy War against the infidel West. In some countries of Central Europe, as in Slovakia and Romania this danger is this so well that the governments of Bratislava and Bucharest well have refrained from recognizing the independence of Kosovo. Even in Italy, despite the various parties of right and left have rushed to recognize the independence of Pristina is increasing awareness of danger, especially after that, with some blitz of Police (such as that over the past days in Bologna) was found that in our country citizens immigrants from various Islamic countries are conducting a work of proselytism aimed to train paramilitaries to be sent to Afghanistan or Iraq to carry out terrorist acts against Western troops there present. Some of those arrested had a history of guerrillas in Bosnia or Kosovo, although not ever been citizens of the former Yugoslavia or Albania. Many priests and nuns in the poor country that faces the channel of Otranto tell us that while among young Albanian women spreading a certain sympathy for Christianity, among men over 18 years the message of Islam is winning . Probably, however, because the Koran gives women a subordinate role in line with that under the kanun the medieval text of laws oral Albanian still followed in arrears villages campaign.
Release done and deprived of any sense of ethics from the dictatorship of Enver Hoxa, the Albanian population, in almost all atheist, is facing severe tests of simple physical existence and was by malicious message that came from Arab countries whose emissaries promised their money and wealth in exchange for the willingness to embrace Islam. Needless to say, many have fallen into the trap. Europe is now called upon to intervene decisively, permanently anchoring the wing Albania Western civilization and its principles. It is his own survival if not will one day find themselves Muslims under the walls of Vienna as already happened in the past.