Report on the regional workshops

“Trade and Increasing of Albanian Economy Competitiveness”

Introduction

As proposed by ACIT and approved by the Trade Policy Committee, our main work program and efforts during the first half of 2003 was devoted to issues related to competitiveness and cluster formation as a tool to promote economic development of the local economy.

Major work was initially undertaken by the research staff of ACIT to familiarize with the new global trends on competitiveness and cluster initiatives. First hand experiences from different countries, methodologies on studying of competitiveness and its determinants, cluster formation and cluster selection, type of assistance and the way the clusters work in practice were studied.  

In addition, preliminary in desk research started to identify the main sectors and categories of products which could potentially be targeted for further in depth research. At this stage, our staff started with data collection and processing which will serve for further completion our job on this subject. Meetings with industry experts from different categories of agrifood industries and textile and leather processing industries were organized during March and April which could complement our in desk research.

On March 12-13, in cooperation with two leading international consulting companies, Chemonics and J.E. Austin, a two days workshop on competitiveness was organized in Tirana with the participation of business leaders from agrobusiness and other interested stakeholders (government authorities, research organization and donor projects). This event also served as a good experience to promote this activity throughout the country.

All this preparatory work served to our ACIT staff to be well prepared for the start of a series of regional meetings.

The meetings were scheduled (Annex 1: dates and places of the workshops) to be organized within one month in order to keep the momentum and build the awareness among the business community throughout the country and promote these new initiatives through the media coverage of the events. As our local partners we selected the district Chambers of Commerce and Industry which were involved in selecting the participants from the business community and other regional stakeholders. For that purpose, visits were undertaken during the month of May to describe and share the ideas for the events and establish work contacts between ACIT and the Chambers.

Workshop objectives

The objective of the workshops was to bring at the attention of the business community the knowledge and practices related to competitiveness and cluster development strategy. Through the presentations and discussions with the participants, ACIT intended to influence the perceptions formed on the role of certain economic factors on the economic developments and stress the new tools and strategies to compete in the new global realities. More specifically, our targets included:

-         delivery of competitiveness and cluster concepts as a new mentality in Albania and as a demonstrated successful tool in global economy, aside from traditional practice known by Albanian businesses;

-         understanding the functions and implications of these concepts and getting to know with the world and regional practices;

-         identification of the common interests and benefits standing behind these practices;

-         identification of Albanian simple forms of these practices;

-         reflecting on opportunities and chances that Albanian businesses can grasp;

-         enhancing the debate on the delivered concepts and practices.

Workshop description

To meet the objectives and target, a formal workshop program was drafted, discussed and agreed with our local partners and distributed to the participants. The program (Annex 2) included two main presentations:

The presentations of the topics were delivered with a simple language trying to avoid the academic breath and underlining the business interests within a global economic context.

Workshops on the eight cities were attended by 165 participants representing different sectors of the economy. Electronic media coverage was also ensured and a number of interviews and articles were prepared for the media.

Main issues of discussion by the participants

After the presentations, the participants discussed and reflected on a number of issues, of which the most critical points worth to be mentioned include (a more detailed information is provided on the reports for each workshop):

Hard infrastructure and government policies

-         Hard infrastructure such as electricity, water and transportation system is still underdeveloped, in particular referring to energy shortage. This has a noticeable effect on company’s operations and their efficiency.

-         Unfair competition has to be resolved in order to facilitate a level-play field for all the business community; unfair competition was stimulated also by multiple-activity licenses.

-         The businesses raised the question of taxation policies and when referring to free trade agreements, the differences of excise tax and VAT from their partners in Macedonia and other countries still act at their disadvantage.

-         The banking sector in the regions was also active in financing the agro-industry sector and found this sector very profitable;

-         Government procurement rules and policies negatively affect on the quality of goods and services, since the main criteria is considered to be the buying price and no attention is given to quality. Therefore, there is no pressure on the business community to improve the quality of goods and services provided to the government (government is one the largest buyer on the market).

Second tier businesses (related and supporting industries)

-         There was a space for business collaboration between purchasers of raw material and their suppliers (for example: raw materials of beer production were not supplied according to the specified request of beer producers;

-         Olive oil processors discussed about a limited quantity of olive production in Albania (due to a lack of labor force in the farms), which was exported unprocessed to Macedonia and Greece, while Albanian olive oil processors have an updated technology that is working under capacity; they see relations with farmers as very crucial in their business, and stated that as far as production will be considered as number one priority in economic development in Albania, more efforts for farm development should take place in order to raise olive cultivation and production;

-         The lack of research institutions was also discussed by the participants; they admitted that institutions would help a lot in generating the ideas and the research aspects of their interests, given the current/future complex status of many issues;

-         The businesses also expressed their diffidence in official statistical data which inhibits a more efficient allocation of resources. At this point, businesses were requested to be more responsive to information needs by the researchers, since they may produce more accurate reports which will be useful to the business needs.

Cluster presence

-         Business associations have failed in most cases, because they have turned to be a formal organization far from the business needs; cluster organization was seen as challenging and unavoidable way to deal with main problems that the association was not addressing.

-         The workshop succeeded to enhance a debate on the potentials for clustering of the actors in different sector, such as fishing, tourism, spices and herbs, etc. Examples on potential clusters were brought by the Regional Development Agencies, such as in Shkodra, Fieri, Elbasan and Korca.

-         Several industry examples were brought by the representative of the Chamber of Commerce and by the businesses themselves as simple forms of collaboration between the businesses.

-         Good example was brought by a milk processor (SOAL shpk) on his efforts as a leader in gathering and discussing with his competitors on collaboration opportunities. This company brought evidences on trust and strong relations with its suppliers.

-         The agricultural machinery sector in this region was assisted by the World Bank and has generated a lot of positive impacts. Machinery sharing was brought as an example of forms of collaboration, but the collaboration was impeded by unfair competition and lack of standards to be set out by the state;

-         The businesses underlined the relations that exist in their way of working. They admitted that the practice of cluster is existent in a simple form of collaboration between them and their business partners/collaborators (for example: trust in credit purchases);

-         The university found their role in educating and supporting the practice of cluster, which was considered by them as a mean in the integration and development processes;

-         Legal aspects of clusters were discussed and elaborated by experts, as well as the presence of cluster not only in production activities, but also in services.

-         Lobbying of clusters in unfair competition, antidumping, other distortions and reaction to business needs were elaborated through real case studies.

Workshop achievements:

The workshop achieved the delivery of the concepts in a comprehensive language. It stimulated the businesses feedback on the new practices. The participation in the debate and the questions raised helped a lot in understanding the interest of the businesses on the topic. Questionnaires on workshop evaluation and cluster analysis were distributed to the participants (Annex 3).

Along the seven questions asked, more than 70 percent of the respondends have evaluated the event above the average level.

The following is the result of the evaluation from the participants of the workshop:

Scores

1

2

3

4

5

Total no.of resp.
             

Information was new

4

6

6

23

32

71

Information was useful

1

1

7

20

44

73

Information comes at the right time

2

6

16

15

34

73

It has application value

0

5

14

24

20

73

Is proper for our companies

2

2

10

12

44

70

Presentations were clear and understandable

1

1

2

6

63

73

Workshop will affect in our future activities

3

1

16

17

35

72
             

In percentage

            
 

1

2

3

4

5

Total no.of resp.

Information was new

6

8

8

32

45

100

Information was useful

1

1

10

27

60

100

Information comes at the right time

3

8

22

21

47

100

It has application value

  

7

19

33

27

100

Is proper for our companies

3

3

14

17

63

100

Presentations were clear and understandable

1

1

3

8

86

100

Workshop will affect in our future activities

4

1

22

24

49

100

Future work on competitiveness

ACIT finds the initiative on promoting the new tools and instruments on establishing and enhancing a competitive private sector to have been very useful and timely.

With the objective to provide a deeper assessment of the competitiveness level of the national economy and of certain industries for potential clustering, we used this event to distribute a questionnaire (to be collected at a latter date by the Chambers of Commerce). The results will be summarized on the final discussion paper on competitiveness which will be prepared by ACIT and presented on a national conference which we plan to organize by end October 2003.

At this stage, we will synergize with the other project of USAID (EDEM) as it may be required and approved on our work program by the Trade Policy Committee.

ACIT - June 27, 2003