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Albania
Military Budget and the Economy
Assessments of the impact of defense expenditures on Albania's
economy were traditionally hampered by the lack of government
statistics on overall economic performance and the Albanian economy's
isolation from the international economy. Albania generally appropriated
1 billion leks (for value of the lek--see Glossary) per year for
the military budget, or about 5 percent of an estimated late 1980
gross domestic product (GNP-- see Glossary) of 20 billion leks--a
relatively modest burden on the economy compared to that borne
by other communist countries. However, the absence of reliable
statistics made it difficult to calculate this budget as a percentage
of total government spending--a common indicator of the priority
accorded defense. It likely represented approximately 10 percent
of government expenditures. However, some significant costs were
probably hidden in nonmilitary elements of the government budget,
thus understating the defense effort as a portion of total spending.
The low subsistence wages paid to conscripts also provided a downward
bias. Given Albania's low standard of living, per capita military
expenditures were high when compared with average family earnings,
the bulk of which were required to obtain such basic necessities
as food, clothing, and housing.
The Albanian Democratic Party asserted that large defense expenditures
during communist rule had impoverished Albania. It cited annual
drills for military reservists and live-fire exercises for infantry
and artillery units as costing Albania 100 million leks--an amount
equal to the yearly municipal budget for Tiranė. Moreover the
new coalition government that took office in June 1991, in a move
that probably indicated that the military budget had imposed a
hardship on the civilian economy, announced an immediate 20-percent
reduction in defense spending.
Data as of April 1992
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