PRESS CONFERENCE BY ALBANIA
Press Briefing
PRESS CONFERENCE BY ALBANIA
19970131
FOR INFORMATION OF UNITED NATIONS SECRETARIAT ONLY
Rioters who protested the collapse of pyramid investment schemes had caused an estimated $50 million in damage and losses to the fragile Albanian economy, Pellumb Kulla, the Permanent Representative of the Republic of Albania told a Headquarters press briefing this morning.
Mr. Kulla said the violent demonstrations had broken out in several Albanian towns and cities, including the capital of Tirana. The pyramid investment schemes, which had been well-known in other eastern European countries, had collected the savings of Albanian citizens with the promise of phenomenal returns of up 30 per cent in one month and up to 300 per cent over several months. Citizens had mortgaged their houses and farmers had sold their cattle.
Paraphrasing a 29 January New York Times article, Mr. Kulla said "why should these poor people be blamed for believing naively in miracles after the great miracle of the collapse of one of the most barbarous dictatorships in history?". Observers had said that because the phenomena had been so widespread in almost every former Communist country, the Albanian people were doomed to be swindled as well. Overcome with despair, the Albanian people demonstrated in the streets against the organizers of the investment schemes, who had already been detained by the authorities. The State had also frozen the deposits of the pyramid funds in order to prevent further losses by investors. Individuals opposed to the ruling party, as well as other destructive elements, had provoked conflicts with the police. Despite injuries to several officers, the police had not used gunfire while attempting to prevent the organizers from vandalizing public buildings, which had been defaced and burned during the demonstrations.
"Why did the unfortunate investors and observers from home and abroad blame the Albanian Government?" Mr. Kulla asked. The Government had always respected individual freedoms and had paved the way towards free enterprise. Its warnings against the pyramid schemes and the publication of the bitter consequences of such schemes in Russia, Romania and elsewhere had obviously not had enough of an impact. The Government had never encouraged investment in those schemes, nor had it made objections to the informal market. The Government, however, now found itself in the middle of a legal vacuum that had not yet been resolved.
After freezing the deposits of the investment swindlers and all their holdings, Mr. Kulla said, the Government was currently faced with the responsibility of settling a painful problem. The frozen funds totalled approximately $300 million, which was not an insignificant amount, but it would not fully reimburse the victims, whose claims had not yet been officially confirmed. The frozen funds would be distributed starting
Albania Press Conference - 2 - 31 January 1997
5 February, with transparent laws and acts to legally manage the procedure. In the process, the Albanian Government needed to balance two tasks: defining the most accurate needs of its people; and controlling the threat of inflation. Yesterday evening, the Albanian Parliament passed a law concerning the issue.
Unfortunately, Mr. Kulla said, there was evidence that local socialist leaders and former secret police officers, of the criminal police of the Communist regime, had been involved in the recent destructive protests. As President Sali Berisha had stated, the Socialist Party had set fire to the municipalities it could not win by vote. Also noteworthy was the fact that not all of the demonstrators who had engaged in acts of vandalism had been investors in the bankrupt pyramid schemes.
Since the beginning of the current week, the situation in Albania had been calm, Mr. Kulla said, and the Government expected that the fallout from the demonstrations would settle harmlessly. However, those events had taken a heavy economic toll on a country where, according to several international institutions, there had been promising indicators in economic stability and growth, reduction of unemployment and inflation control. In such difficult times, assistance had been offered by the International Monetary Fund (IMF) and neighbouring countries.
Asked about the prospects of recovering any of the losses from those directly responsible for the pyramid schemes, Mr. Kulla said that restoring calm to the national situation was the most urgent need. To that end, the Parliament had recently adopted a law dictating how funds would be distributed to the Albanian people.
A correspondent asked if Mr. Kulla saw any connection between the timing of the collapse of the schemes and the worsening political conditions in Kosovo. Mr. Kulla said there was no evidence that the Kosovo problems were related to the present situation in Albania. It was an interesting coincidence, however, that sometimes when there were problems in Kosovo, events occurred in Albania that attracted international public attention.
Asked if the Albanian Government would be seeking additional help from the IMF, Mr. Kulla said Albania would welcome any help. Yesterday, the Greek Government spokesman stated that his Government was ready to help Albania and ensure its democratic development. The IMF understood the problems facing eastern European countries better than any other organization and would be closely monitoring the situation in Albania.
A correspondent asked if Mr. Kulla could predict how long it would take for the problems to be solved to the satisfaction of the Albanian people. In response, Mr. Kulla said the problem was very complicated. He personally believed it would take a period of one or two months, but the repercussions caused by such bitter events would be felt in the economic and social lives of Albanians for a much longer period.
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