Until 1990 Albania's government exercised a monopoly on foreign trade and controlled it through a highly centralized management mechanism. Following Stalin's model, all external transactions were conducted through foreign-trade enterprises under the guidance of the Ministry of Foreign Trade. In the 1980s, six government foreign-trade enterprises dealt in commodities; five covered services; and two more were concerned with foreign copyrights and licensing agreements. Domestic firms paid for imported goods at fixed wholesale prices that bore little relationship to world prices; they also received fixed wholesale prices for exports. The state bank retained all foreign-currency earnings and covered any losses the foreigntrade enterprises sustained. As a matter of policy, the regime stressed exports and maintained strictly balanced trade on an ongoing, country-by-country basis until 1990. Foreign companies could win or lose contracts depending on Albania's current trade balance with their home country. Albanian traders generally purchased only vital goods and usually paid in cash. Western trade restrictions on East European countries applied to Albania for years because the country never formally withdrew its membership from Comecon, even though it did not participate in Comecon activities.

The downfall of the centrally planned economic system brought sweeping changes to Albania's method of conducting foreign trade. The government abandoned its strict monopoly on foreign commerce in August 1990, when it began allowing state-owned enterprises to conduct foreign trade, retain foreign-exchange earnings, and maintain foreign-currency accounts. Private Albanian companies won the right to carry on foreign trade a year later when the government announced that domestic firms would be permitted to export everything except certain food items. Strapped by a balance of payments deficit and mounting external debt, the authorities continued, however, to limit imports. Tiranë also imposed customs duties ranging from 10 percent for food to 30 percent for new machinery and equipment. The Ministry of Foreign Economic Relations, which replaced the Ministry of Foreign Trade, attempted to stimulate exports by establishing a department for trade consultation that provided data on world prices, product availability, types of trade, and other information to state and private enterprises as well as to foreign firms interested in doing business with Albania. The authorities planned to streamline the tariff system and abolish state trading enterprises.

In the lawlessness that beset Albania after the communist order began to break down, trade laws were generally ignored by the country's private businessmen and black marketeers, especially ethnic Albanians from Serbia's province of Kosovo (see Glossary) and émigrés in Europe and the United States. Graft pervaded the customs service. Italian soldiers said customs officers who inspected containers of aid from Italy left the Durrës dockyards with food jammed into their clothing. High-ranking government officials resigned after disclosures that they had smuggled to Greece 1,000 tons of Italian cooking oil sent as food aid. Peasants also smuggled livestock to markets across the Greek order, and border officials in Yugoslavia and Greece complained of Albanians coming across and burglarizing homes.

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Source: U.S. Library of Congress