Albanians Give Switch to Capitalism Mixed Reviews

WHILE capitalism has produced profit and hope for some in Albania, it has left others impoverished and disillusioned.

After the 1991 collapse of communism, peasants in many parts of the country spontaneously split up state farm land, even dismantling communal offices and clinics. Some have prospered by growing crops on privatized land and selling their produce in town. Others were less willing to leave the state farms.

"We have three children to support," says Aferdita Bequiri, an unemployed state-farm worker. "I was afraid to take the risk." Ms. Bequiri was laid off in mid-July at the state-owned farm in Yrshek village, West of the capital Tirana, and has few prospects for work.

Gjergj Kondo, vice-minister of finance and economy, says Albania's economic situation is bleak.

* Agricultural production is 80 percent lower for 1991-92 than in 1989-90, the last year of communism.

* Industrial production is 50 percent lower than in 1989-90.

* Inflation runs at 12-15 percent a month.

* And industrial unemployment has hit 30 percent.

Over the past few months the Democratic Party government has initiated economic shock therapy. It lifted price controls on many items and cut unemployment benefits that gave workers 80 percent of their pay. The moves have created popular resentment and have contributed to political instability.

Albania survives mainly on foreign aid and remittances from workers abroad. The poverty has produced a crime wave previously unknown in this country of 3 million people. Armed thugs assault and rob in the cities and countryside.

President Sali Berisha says "crime has significantly decreased" since his government was elected in March. "Our statistics show it," he says, pointing to the seizure of about 33,000 illegal arms in the past few months.

Attorney General Maxim Haxhia, however, contradicts the president's claims. "There has been no decrease in crime since March," he says.

Crime is caused by "the difficult economic conditions," Mr. Haxhia says. The justice system is not functioning well either. Low wages for prosecutors and judges leave them open to bribery.

Some diplomats and government ministers see hopeful signs, however. The government recently signed an agreement with a group of foreign oil companies to begin on-shore exploration along the Adriatic coast. The government also hopes foreign investors will rebuild the chromium mining and processing industries.

One Western diplomat notes that by freely floating the lek, the country's currency, against the dollar, the government has virtually wiped out the black market. The lek even appreciated 20 percent against the dollar in recent months, in part because of the dollar's fall.

Naske Afezolli, deputy minister of trade and foreign relations, admits that political instability and crime are "very sensitive issues" for foreign investors. He does not expect major investment in tourism, mineral, or oil industries for some time. In the short run, he hopes Greek and Italian businessmen will open small clothing and shoe manufacturing shops that will help cut unemployment.

President Berisha estimates that it will take two years "to see the first signs" of an economic recovery. "The full recovery will take 15 or 20 years."