Albania public administration beats private sector in job creation in year’s first half
Story Highlights
- The number of employees in the public sector rose by a surprising 5,900 to hit a 12-year high of about 170,000 in mid-2018 after fluctuating at about 165,000 for the past seven years, according to INSTAT statistical institute
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TIRANA, Sept. 12 – Albania’s public sector was more efficient in reducing unemployment rates in the first half of this year compared to the key private sector, the generator of about 85 percent of Albania’s jobs.
A report published by Albania’s state-run statistical institute, INSTAT, shows the number of employees in the public sector rose by a surprising 5,900 to hit a 12-year high of about 170,000 in mid-2018 after fluctuating at about 165,000 for the past seven years.
More than three-quarters of public sector jobs are government-funded while almost a fifth includes self-funded local government units and other state-run institutions, enterprises and agencies.
The hike comes at a time when the private non-agricultural sector, the driver of almost half of total employment, saw its jobs increase by a mere 3,270 compared to the end of 2017 to register a total of 504,615 at the end of the first half of 2018.
Growth in the public sector jobs also comes at a time when Albania has on paper had smaller central and local government units in the past four years following a 2014 territorial and administrative reform and a new Socialist Party-led government made a significant cut to the number of ministries and government agencies in Sept. 2017.
The territorial and administrative reform in force since Sept. 2014 ahead of the June 2015 local elections cut the number of local government units to 61 municipalities, down from a previous 373 municipalities and communes.
Prime Minister Edi Rama also cut the number of ministries to 11, down from a previous 16 as he claimed a second consecutive term of office out of the June 2017 general elections, merging several ministries, and vowing to cut the number of government agencies by a quarter to 104, from a current 141.
However, available data shows the number of employees in the main local government units in the past three years has increased while the cut in the number of ministries following the mid-2017 general elections has not been accompanied with the expected slash in the number of central government administration.
Referring to the 2018 budget, a report by local ‘Open Data’ research center shows that while ministries have cut some few hundreds of jobs, the slash was compensated by an increase in the number of some central government agencies and some newly established justice institutions, taking the number of central government paid employees to 81,753 for 2018, some 40 more compared to last year.
The country’s sole employer until the early 1990s when the country’s communist regime and its centrally-planned economy collapsed, the public sector has been constantly losing ground in the past quarter of a century of Albania’s transition to democracy and a market economy.
The public sector accounted for about 191,000 jobs or 18 percent of the total in the early 2000s when major enterprises were still state-owned and the public administration was overstaffed. Eighteen years on, the number of public sector jobs has dropped by about 27,000 to 164,500 at the end of 2017 and its share in the total employment to about 15 percent.
State-run OSHEE electricity distribution operator is the country’s largest employer with 6,300 employees.
Public administration jobs, where links to officials or bribes are often reported as a must, have become much sought after, competing the private sector where wages have in general remained unchanged and working hours are much longer, often including Saturdays and national holidays with no bonuses.
However, uncertainties remain great even in the public administration when new governments or directors take over, often triggering politically motivated dismissals that cause taxpayers dozens of millions of euros every year.
Albanian incumbent governments or local government units have regularly increased public administration staff during electoral years or pre-election years during the past quarter of a century of transition.
Albania is expected to hold its next local government elections in mid-2019.
Official jobless rate at record low
Albania’s official unemployment rate dropped to an almost record low of 12.4 percent at the end of the first half of this year and youth jobless rates were down to 22.6 percent. However, the official numbers don’t include a staggering 462,000 people employed in the largely informal private agriculture sector, where people living in rural areas and possessing land are automatically considered as self-employed in the agriculture sector. Albania had some 36,520 farmers paying social security contributions at the end of 2017, less than a tenth of the total number.
Employing about half of the country’s workforce, agriculture is one of the least productive sectors, generating only a fifth of the GDP, with land fragmentation, lack of infrastructure, poor credit and subsidies as the main barriers to its growth.
High migration rates following an asylum exodus in the past four years and more and more youngsters leaving the country to study or work abroad are also estimated to have contributed to lower jobless rates.
The private non-agricultural sector, where employment is led by trade, the garment and footwear sector as well as call center industry, has seen its workforce in the past 18 years more than double to a total of 475,000 employees at the end of 2017. Employment growth in this key sector has risen by 156,448 in the past four years, according to INSTAT.
However, a considerable number of officially reported jobs in the private sector are a result of nationwide campaign against tax evasion that lifted thousands of workers out of informality and imposed tougher penalties on the shadow economy, estimated at about 30 percent of the country’s GDP.
