Master’s  Thesis  2017        60  ECTS   NORAGRIC         Structural  Transitions  in  Albania:   Profit  over  Environment?     Hege  Skarrud   MIES  –  International  Environmental  Studies Structural Transitions in Albania: Profit over Environment? By Hege Skarrud Master Thesis in International Environmental Studies Norwegian University of Life Science Noragric 2017 The Department of International Environment and Development Studies, Noragric, is the international gateway for the Norwegian University of Life Sciences (NMBU). Eight departments, associated research institutions and the Norwegian College of Veterinary Medicine in Oslo. Established in 1986, Noragric’s contribution to international development lies in the interface between research, education (Bachelor, Master and PhD programmes) and assignments. The Noragric Master thesis are the final theses submitted by students in order to fulfil the requirements under the Noragric Master programme “International Environmental Studies”, “Development Studies” and other Master programmes. The findings in this thesis do not necessarily reflect the views of Noragric. Extracts from this publication may only be reproduced after prior consultation with the author and on condition that the source is indicated. For rights of reproduction or translation contact Noragric. Hege Skarrud, August 2017 [email protected] Noragric Department of International Environment and Development Studies P.O. Box 5003 N-1432 Ås Norway Tel.: +47 64 96 52 00 Fax: +47 64 96 52 01 Internett: http://www.umb.no/noragric       i Declaration I, Hege Skarrud, declare that this thesis is a result of my research investigations and findings. Sources of information other than my own have been acknowledged and a reference list has been appended. This work has not been previously submitted to any other university for award of any type of academic degree. Signature…………………………………… Date 14.08.2017 ii To Arild Vatn and my friends, Thank you for your guidance, laughter, patience, and generosity. We finally made it. I am sorry for the delay. iii Acknowledgements This research would never have seen the light of day without the guidance and encouragement from the people I surround myself with. Most of my gratitude must be directed at my supervisor, Arild Vatn, who despite times of worry, never lost faith in me, recognising my stubbornness and willpower. Thank you for all your guidance, small-talk and inspiration. Furthermore, the completion of the research would not have been possible without the help of a range of wonderful people I met during my visit to Tirana. Albana and Edvin, thank you for your hospitality and guidance. Through meeting you my love for Albania deepened. Molly-Ann Venn, my bank, my proof-reader and my moral support; I am forever indebted to you. I will return the favour. I love you. And last, but not least, thank you to all my friends who have stood by me and supported me through times of frustration, economic crises and complete isolation. I know you will never read this thesis, but this one goes out to you. iv Abstract During the 80s and 90s, many post-communist countries underwent structural transition processes advocated by neoliberal institutions. Rapid transitions from one structure to another resulted in chaos as the implementation of sound institutions to manage new property rights regimes were insufficient. The emphasis of the transition period to open borders and integrate societies into the free market side-lined other concerns such as environmental conservation and protection. The IMF facilitated this move in Albania through structural adjustment programmes and stringent conditionality in its financial lending. The Albanian society was in deep socio- economic crisis emerging from an autocratic communist rule and the natural environment had suffered through industrial pollution and deforestation. Neoliberal restructuring failed to recognise the need for environmental rehabilitation and protection due to its ideological nature, and the pressing socio-economic situation in Albania made funds allocations difficult, resulting in further absence of environmental regulations. This research scrutinises communism and neoliberalism applied in Albania in the late 80s and 90s as insufficient systems for environmental protection. Through an analysis using urban air pollution, industrial pollution and deforestation as measurements of environmental impact of IMF policies and national policies - economic and environmental - the study calls for an alternative system to aid sustainable environmental governance. Accentuating the need for holistic approaches to structural change, with significant participation from the population on local, regional and national levels, for creating new systems which reduce negative environmental consequences as well as socio-economic problems. Keywords: Transition, neoliberalism, communism, governance, Albania, environmental regulations, institutions, policies, economy, property rights, implementation, structural change. v Abbreviations and Acronyms APL - Albanian Party of Labour CEP - Centre for Environmental Protection DPA - Democratic Party of Albania ECE - Eastern Central Europe EGS - Environmental Governance System EIA - Environmental Impact Assessment EPCA - Emergency Post-Conflict Assistance ESAF - Enhanced Structural Adjustment Facility EU - European Union FAO - Food and Agriculture Organisation (UN) FDI - Foreign Direct Investment GATT - General Agreement on Trade Treaty GDP - Gross Domestic Product GHG - Green House Gas GoA - Government of Albania IAD - Institutional Analysis and Development IEP - Institute for Environmental Policy IFI - International Financial Investor IMF - International Monetary Fund NEA - National Environmental Agency NEAP - National Environmental Action Plan NGO - Non-Governmental Organisation NMP - Net Measured Product NPA - National Privatisation Agency PCPP - Preparatory Commission for the Process of Privatisation PM - Particulate Matter REA - Regional Environmental Associations REC - Regional Environmental Centre SAP - Structural Adjustment Programmes SOE - State of the Environment Report UNFCCC - United Nations Framework Convention on Climate Change UNDP - United Nations Development Programme USA - United States of America USSR - Union of Soviet Socialist Republics VAI - Value Articulating Institution WTO - World Trade Organisation vi Table of Contents Acknowledgements ............................................................................................................... iv Abbreviations and Acronyms ............................................................................................... vi List of Figures ....................................................................................................................... ix Chapter 1: Introduction .............................................................................................................. 1 Chapter 2: Background .............................................................................................................. 6 2.1 Communist Albania ......................................................................................................... 6 2.2 The Rise of Neoliberalism ............................................................................................... 8 2.3 Transition through Conditionality .................................................................................. 10 Chapter 3: Theoretical Framework .......................................................................................... 13 3.1 Environmental Governance ........................................................................................... 13 3.2 Resource Regimes .......................................................................................................... 14 3.3 A Framework for the Analysis ....................................................................................... 17 3.3.1 Policies of the IMF .................................................................................................. 20 3.3.2 National Policies ..................................................................................................... 20 3.3.3 Environmental Policies ........................................................................................... 20 3.3.4 Economic Policies ................................................................................................... 21 3.3.5 Environmental Impact: Urban Air Quality, Industrial Pollution & Deforestation . 21 3.3.6 Other Factors ........................................................................................................... 22 Chapter 4: Methods .................................................................................................................. 24 4.1 Study Design .................................................................................................................. 24 4.1.1 Qualitative Data ...................................................................................................... 25 4.1.2 Quantitative Data .................................................................................................... 26 4.3 Data Collection and Analysis ......................................................................................... 26 4.3.1 Sampling Approach ................................................................................................ 27 4.3.2 Form of Interviews .................................................................................................. 28 4.4 Limitations, Challenges and Trustworthiness ................................................................ 28 4.4.1 Limitations and Challenges ..................................................................................... 29 4.4.2 Trustworthiness ....................................................................................................... 30 4.4.3 Ethical Considerations ............................................................................................ 31 Chapter 5: Pre-Transition Process (1950s-1990) ..................................................................... 32 5.1 Emissions and Deforestation .......................................................................................... 32 5.2 National Policies ............................................................................................................ 34 5.2.1 Economic Policies ................................................................................................... 34 5.2.2 Environmental Regulations ..................................................................................... 38 5.3 IMF Influence ................................................................................................................ 40 5.4 Summary of Findings ..................................................................................................... 40 Chapter 6: Transitional Process (late-1990-1993) ................................................................... 42 6.1 Emissions and Deforestation .......................................................................................... 42 6.2 National Policies ............................................................................................................ 45 6.2.1 Economic Policies ................................................................................................... 46 6.2.2 Environmental Regulations ..................................................................................... 51 6.3 IMF Influence ................................................................................................................ 54 6.4 Summary of Findings ..................................................................................................... 58 Chapter 7: Post-Transitional Process (1994-1999) .................................................................. 61 7.1 Emissions and Deforestation .......................................................................................... 61 vii