Report: Albania, the only country in the region without industrial policies

Countries with economic prosperity became so through the development of industry and technological innovation. Albania, in addition to being the country with the most underdeveloped industry in the Region and beyond, still does not have a formal document on industrial policy.

The report “Monitoring and evaluating industrial performance and policy impact in 6 Western Balkan countries” by the Regional Cooperation Council notes that Albania is the only country in the Region that does not have a formal document structuring the country's industrial policy.

The analysis notes that the government is in the process of developing its industrial strategy, but this means that the country still lacks priorities and a structure to intervene in improving industrial competitiveness, increasing production capacities, and improving integration with the regional and European common market.

The report identifies different developments among countries in the region, highlighting that some of them have adopted formal documents guiding industrial policy:

For example, Bosnia and Herzegovina does not have a unified industrial policy for the entire country. However, the entity of Republika Srpska has developed a Strategy for Industrial Development, which aims to improve the production structure and promote investments in the industrial sector.

Kosovo is among the latest countries to adopt a formal document in the field of industrial policy. In 2023, the “Strategy for Industrial Development and Business Support until 2030” was adopted. This document reflects a commitment to the transformation of key sectors, including innovative aspects and compatible with commitments to integration into European markets.

Montenegro has been in the process of formulating industrial policies since 2016. The latest document, covering the period 2019–2023, emphasizes the importance of modernizing the sector, improving productivity, and increasing integration into global supply chains. This document reflects a strategic orientation towards diversifying sectors and stimulating innovation.

North Macedonia is one of the pioneers in this field, having adopted its own industrial policy since 2009. The current document, “Industrial Strategy of North Macedonia 2018–2027”, sets a long-term vision and includes measures aimed at improving production capacities, increasing innovation and integrating into global markets. This document reflects a strong commitment to increasing competitiveness and structural reform in the industrial sector.

Serbia began developing industrial policies in 2011 and has updated its industrial development strategy for the period 2021–2030. This document aims to increase production capacity, modernize the sector through the adoption of advanced technologies, and increase cooperation between the public and private sectors, integrating measures that support innovation and compliance with European standards.

The formulation of industrial policies is closely linked to efforts to accelerate integration with the European Single Market and to meet European standards and requirements, especially in the context of “Initiatives such as the European Green Deal, New Industrial Strategy for Europe” and other EU-supported initiatives.

The manufacturing sector in our country has entered a long recession. The latest INSTAT data show that agriculture fell for the fourth consecutive year in 2024, while industry fell for the second year. Agricultural production fell by -1.1% in 2024 from -1.8 in 2023, while the industrial sector recorded a decline of -6.7%, the strongest since the 2020 pandemic.

The industrial sector entered its second year of decline in 2024, driven mainly by factors related to the decline in the value of the euro and rising domestic costs. The euro's decline from 122 lek in 2021 to less than 100 lek last year reduced exporters' revenues, forcing many companies to close down. Clothing and footwear factories alone cut nearly a fifth of their jobs last year, according to short-term statistics./ Monitor