Theoretical Aspect Of International Trade In Albania Economics Essay

States all over the universe make trade with each other. Export import is a necessity for all of them to pass on in this manner. This is besides a necessity for Albania, which for many grounds does n’t carry through with goods all the demands for a state. Albania passed a really hard period of passage. After 20 old ages with the free market Albania still has low volume of exports which expresses that is non suited to the unfastened economic system market for many grounds which are still set uping.

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A little state as Albania is confronting a batch of troubles from a once closed, centrally-planned province, in the market economic system. But in this last old ages it is doing advancement in the integrating side and now is member of NATO and other international organisations. The end for Albania in the last old ages is the European Union and this end is related with the development of Albania and the economic system advancement. This end will be a large measure for the state and for the international trade with the states of the EU. Albania will be seen otherwise from these states and import from it goods they need.

A figure of inquiries faced the schemes and planes focused on Albania ‘s international trade of goods. Which are the states Albania makes trade with? Why is the Trade Balance negative? What trade goods are more exported and why? What trade goods are more imported and why? How of import is to do trade with other states? Reasons why Albania exports less than imports? And why is this advancement in these 20 old ages so slow.

Our paper ‘s intent is to give a position of the Albania ‘s international trade and grounds why it has low volume of exports and negative trade balance. Balance between imports and export is really of import to keep internal and external economic stableness that ‘s why we want to explicate in our manner what can be done to do the trade balance positive and to be focused in the goods that can be produced here in low cost and exported. Somehow we want to state that Albania has the possibility to export more than is exporting now.

In the first chapter of this paper there is the debut followed by the 2nd chapter which presents a theoretical position of International trade. In the 3rd chapter we start showing concrete facts and Numberss of the Albanian trade, both import and export and the trade balance in the period of 93-09.

2. Theoretical facet of International Trade

International trade is one of the most of import ways for states to pass on with each other. This sort of communicating is really of import for each economic system.

There is ever a demand for international trade because different states have different capablenesss so that they specialize in bring forthing different things. To counterbalance what they do non bring forth, they have to affect in trade with other states. This trade brings a batch of benefits for each exporting state and this is a ground why the aim for a considerable of states is to increase exports. Increasing exports means receive more hard currency for one economic system.[ 1 ]

Export goods are goods destined to be sent to another state. Trade Balance = Export-Import and Trade Volume = Import + Export[ 2 ]

Figure 1

Factors impacting export volumes

Export volumes

Supply influences Demand influences

Capacity Alternative uses Foreign demand Trade barriers Competitiveness

Inputs Domestic market Market size Tariffs Input costs

Productivity Foreign income Quotas Productivity

Weather Population Regulatory restraints Exchange rate

Stockss Preferences Transport costs

Expected profitableness World export monetary values

World export rates Exchange rate

Exchange rate

Export volumes are affected by supply and demand of goods. Each state has different capacities impacting supply. As we see in Figure1, in factors impacting supply, the higher the stocks, the higher the supply. Foreign demand, trade barriers and fight affect the demand. The higher the trade barriers, the lower the demand. The higher the foreign income, the higher the demand of volume exports.

On the other manus imported goods are goods coming from another state.

3. Trade dealingss in Albania

3.1 Exports

Albania is a state that exports less than imports. During the period of 20 old ages the volume of exports have increased but in little figures compared with imports. Albania was listed in the 143rd exporting state in the universe for 2009.[ 3 ]

Figure 2: Albania Exports in 2009

Beginning: INSTAT, 2010

In the figure 2 we see that the states that Albania exports more are Italy and so Greece. There are different grounds why these states import goods from Albania. One of the chief grounds is that these counties are Albania ‘s neighbours and the cost of import from Albania is low. These states have the most consequence because of the low cost employment fee and the low cost of bring forthing these goods. Besides, during several authoritiess and governments Albania used to hold most dealingss with. These are the states that have largely affected our economic system, so the inclination still stands.

Figure 3: Exported trade goods in 2009

Beginning: INSTAT, 2010

As we see in Figure 3 the most exported trade goods are textile and footwear because of the low cost they are produced and the investings that are made to increase their growing. In the 2nd topographic point of exported goods are minerals, fuels and electricity because Albania ‘s land is rich of minerals like chrome and fuels and because of fluxing rivers. Traveling on with building stuffs and metals: Albania opened ways to many concerns to utilize and work beginnings of these stuffs. If we see the illustration of Tomorri mountain, it is a really good beginning and it being used to hold building stuffs like constructive rocks and cosmetic 1s which are being exported more and more abroad.

Harmonizing to the Bank of Albania there are many factors impacting the low degree of exports: One of the grounds why the Albanian economic system has non exploited the domestic capablenesss adequately was the energetic crisis which has had an of import impact on all economic sectors profitableness. Other: The domination of little agribusiness units with a really small production of market, the domination of little workshops chiefly with old equipment with merely regional importance and so can non carry through the conditions of the European market, the troubles of little manufacturers forming to roll up the equal sums of production, the deficiency substructure and weak selling to better the image for touristry development, deficiency of capital to put on modern equipment, the production degrees are lower than the aimed states etc.[ 4 ]

Albania has made important investings in the two sectors that most influences: deficient energy in one side and the transit substructure in the other. In the last decennary it has made advancement in both sides but there is still a batch to make in both of them. Infrastructure is still on hapless degrees, so that it affects a non good adequate transit. The last one the State Road Durres-Kukes is now really effectual to do trade with Kosovo in low cost.

Import

Import goods are goods coming from another state. During the period of passage Albania imported goods and stuffs which used to turn every twelvemonth.

Figure 4: Import construction in 2009

Beginning: INSTAT, 2010

As we see in Figure 4 Albania imports goods and stuffs largely from the neighbour states like Italy and Greece because of the low trade barriers, low costs of imports and easier ways of imports than the other states use to hold with it.

Figure 5: Imported trade goods in 2009

Beginning: INSTAT, 2010

In Figure 5 we see that Albania imports in 23 % Machineries. The ground why Albania imports these trade goods is: It does n’t hold the right equipments to bring forth them, but the demand for them is a demand so it imports them. Producing machineries is really expensive and Albania does n’t hold developed engineering. Besides as we see in Figure 5, nutrient, drinks and baccy compared with the same goods in Figure 3, they are imported 10 % more of what we export.

Trade Balance 1993-2009

Figure 6, Trade Balance 1993-2009

Beginning: INSTAT ( 2010 )

Trade Balance = Export-Import and Trade Volume = Import + Export.[ 5 ]

In figure 6 in this period of clip we see a lessening of the trade balance and the addition of the trade volume. Trade balance is still negative. In the last five old ages the lessening was higher. One of the most of import factors was the planetary economical crisis and Albania was affected a batch because of the deficiency of economic stableness. On the other manus trade volume continues to be positive and as we see in the Figure 6 the great addition is in the same period of old ages like the lessening of trade balance.

Table1: Trade Indexs for 2009 ( in million ALL[ 6 ]and % )[ 7 ]

Trade indexs

2008

2009

AL-EU trade volume

368,815.0

372,784.1

Share to number AL ‘s volume

66.9 %

69.7 %

Imports from EU

279,207.0

291,130.5

Share in entire AL ‘s import

63.6 %

67.5 %

Exports to EU

89,607.9

81,609.6

Share to entire AL exports

80.0 %

78.9 %

Trade balance

-189,599.1

-209,520.9

Beginning: ACIT ( 2010 )

In the Period of 2008-2009 the Trade Balance = Export-Import is in dependance on the type of the merchandise. This is positive merely in Textile and Footwear which means that Albania in this two old ages it has exported more than imported but with the other merchandises this Trade Balance is negative which means Albania imports more so exports these merchandises. In 2009 the Trade Balance figures for many merchandises are bigger so in 2008, that ‘s why we can state that in 2009 these merchandises are exported more so imported. But besides are merchandises that in 2009 are exported less so in 2008.

In Table 1 we can see that the trade volume have increased from 2008 and besides Imports from EU have increased by 4.3 % . Exports to the EU are valued at 81,609 mln ALL holding experienced a lessening of 8.9 % . Imports from EU amounted to 291,130 mln ALL, holding increased by 4.3 % compared to 2008.

Exports represent 19.4 per centum of the entire trade flows during 2008. This per centum

has decreased merely by 1 % from 2008. Entire trade flows experienced a lessening of 3.1 per centum as compared to 2008. This lessening was caused by the addition of both, exports and imports ‘ flows. Entire exports reached 103,438 million ALL and experienced a lessening of 8.1 % per centum as valued in ALL. Total imports reached 431,107 million ALL and experienced a lessening of 1.8 per centum. Imports construction is more spread than the construction of exports, which is a feature of import construction observed besides in old old ages. Compared to 2008, more subdivisions have experienced a lessening in the value of imports such as mineral merchandises, and base metals.

4. Decision

The Albanian exports to the states of memoranda of trade liberalisation are at a low degree although the inclination is turning up. All the informations presented above show that the economic system of our state is oriented towards import. The higher rise of imports compared to exports has brought about the farther depression of trade shortage. The low degree of the domestic exports shows that economic potencies are non being used as they should. Albania with its geographical place, natural beginnings, clime and a comparatively little domestic market, has all the possibilities to be a possible exporter to European markets.

There are many conditions to be fulfilled by all providers taking to acquire the control of a portion of these markets like hygienic criterions, merchandise presentations supply continuity etc. Despite the fact that Albania could successfully export some merchandises is an grounds demoing that there does exists a general potency to export and that there could be constructed a footing on which it could be attempted to better and enlarge the export footing.

Beside the long term aims, many governmental constructions have to back up the enterprises to utilize other energy beginnings particularly the solar one based on the consequences of some other states. Besides a better direction of H2O supply would hold its effects on cut downing goods class like dikes, sedimentations, H2O pumps, acquire continually analytical informations for every merchandise destined to export. Identify the manufacturers jobbers covering with the exportation of different domestic production, place the merchandises that are potentially exporting but have non still found the ways to come in in the foreign markets and of class receive information and information on monetary values, demands, companies and regulations of foreign markets.

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