Imposition of the Stalinist System
As World War II drew to a close, Albania's provisional government,
run by the Albanian Communist Party, predecessor of the APL and
a communist-dominated front organization, wasted little time taking
full control of the economy. In December 1944, shortly after coming
to power, the regime adopted new laws providing for strict state
regulation of all industrial and commercial companies as well
as foreign and domestic commercial relations. A "war-profits tax"
and laws allowing the seizure of property belonging to anyone
labeled an "enemy of the people" weakened the country's minuscule
middle class. In early 1945, the Albanian authorities confiscated
Italian- and German-owned assets, revoked all foreign economic
concessions, nationalized all public utilities and means of transportation,
and created a network of government-sponsored consumer cooperatives.
Heedless of Albania's needs and comparative advantages, the party
leaders followed Stalinism's dictates and pushed the development
of heavy industry over agriculture and light industry.
The regime wooed the peasantry by curbing the power of the large
landowners and granting concessions to peasants and sharecroppers.
In January 1945, the new leaders canceled outstanding agricultural
debts, slashed land-use charges by 75 percent, nationalized water
resources, and offered peasants an opportunity to purchase irrigation
water from the state at nominal fees. The Agrarian Reform Law
of August 1945 destroyed what remained of the economic might of
central and southern Albania's large landowners, replacing their
sprawling estates with about 70,000 small farms. In effect, the
government nationalized all forests and pasture lands and expropriated
without compensation land belonging to individuals who had nonfarm
sources of income. The land law allowed farmers to keep up to
forty hectares if they earned their income exclusively from farming
and worked the land with machinery. The landholdings of religious
institutions and farmers without machinery were limited to twenty
hectares. Landless peasants and people who owned less than five
hectares of property received up to five hectares per family and
additional hectarage for married sons who were household members.
In some cases, the law required the new landowners to make nominal
compensation to the former owners.
Another agricultural reform law enacted in 1946 limited rural
property holdings to five hectares of arable land. In April of
that year, military tribunals began giving prison sentences to
peasants caught hoarding grain. The state also nationalized farm
tools and draft animals, banned land sales and transfers, and
required peasants to obtain government permission to slaughter
animals. In June the authorities ordered peasants to deliver relatively
high quotas of grain crops to state procurement centers at low,
officially set prices. Using carrot-and-stick techniques, the
government attempted to persuade peasants to join collective farms.
Despite the fact that collective-farm members paid lower taxes
and had smaller production quotas, the campaign succeeded in convincing
only 2,428 peasant families to join collective farms by 1948.
The government admitted that the campaign had failed. Poor yields,
purges, and coercion characterized the agricultural sector for
the next three years, and grain shortages became a chronic problem.
By early 1947, the government had in place much of the institutional
framework required for a Stalinist economic system, nationalizing
industries and seizing control of foreign trade and most domestic
commerce. A currency reform delivered another blow to the embattled
middle class. In April 1947, the Economic Planning Commission
drew up the country's first economic plan, a nine-month set of
selected production targets for the mining, manufacturing, and
agricultural sectors denominated in terms of physical output rather
than money. Albanian enterprises also began introducing the Soviet
accounting system, and party zealots and teachers set about indoctrinating
the population with the economic catechism of Marxism-Leninism.
Data as of April 1992