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bne May 2019 Southeast Europe I 39
IMF, countenance having the Fund re-entering the equation?
FX deposits hit historical highs
Another difference from last year’s time ‘before the fall’ is the situation with domestic confidence. Local individuals’ FX deposits have hit historical highs in the $109bns across March and April.
At end-March 2018, the figure stood
at $96bn before gradually declining to as low as $87bn in August last year in parallel with the path taken by the USD/ TRY rate. It has progressively grown again since then in line with the sup- pressed USD/TRY.
The government will need to employ a currency devaluation to make locals sell their FX, or dollarisation can only keep growing.
Meanwhile, the central bank’s net inter- national reserves were given as $27.8bn as of April 5, down from $30.2bn as of end-March. Recent developments in the central bank reserves have fuelled suspicions among some market com- mentators who have started talking
of a “cooking of the books”.
The hand of manipulation has also alleg- edly been seen messing about with infla- tion. It officially stands at slightly under 20% versus about half that in April last year. Looking at the growth figures, there are some who are not ready to accept that they are dependable while the real conditions that Turkish banks are grappling with are also a mystery.
A question mark now also dangles over the sustainability of shrinking the cur- rent account gap as Turkish unemploy- ment and impoverishment have reached alarming levels.
Then there’s that ever important senti- ment abroad. Despite a dovish Fed, it is deteriorating once more. “Our Tracker suggests that overall EM capital outflows eased markedly in Q1. However, we think that positive sentiment towards EMs will start to turn over the coming quarters as worries about weak global GDP growth weigh on investor risk appetite, causing capital outflows to rise and currencies to fall,” Capital Economics said on April 17 in its EM Capital Flows Monitor.
Albania clamps down on cannabis but trafficking of hard drugs increases
Carmen Simion in Bucharest
T
a transit country for cocaine and heroin trafficked by organised criminal groups to European markets, according to its latest International Narcotics Control Strategy Report.
The fight against corruption and drug trafficking is one of the priorities of the Albanian government led by Prime Min- ister Edi Rama, as part of its efforts to launch EU accession talks later this year.
The country was previously known as a major marijuana producer – at its peak, the cultivation of cannabis accounted for about half of Albania’s GDP – until
a government crackdown in 2014 when it launched a large-scale military operation at Lazarat, known as Europe’s “marijuana mountain”. This signifi- cantly reduced the number of cannabis plantations, with Rama claiming in 2017 that large-scale plantations had been almost wiped out.
The State Department report said that the volume of seized drug and number of drug-related arrests in 2018 was significant, as a result of Albanian law enforcement cooperation with interna-
tional partners, increased international pressure, and the country’s efforts to join the EU. Albania secured EU candi- date status in June 2014, shortly after the operation at Lazarat.
However, the report adds that: “Albania’s role as source or market for illicit drugs beyond cannabis is minor, but there has been an increase in seizures of cocaine transiting Albania to Europe, in addition to discoveries of heroin and cocaine process- ing labs in northern and central Albania.”
According to the report, the source countries for heroin and cocaine are in South America and Asia.
The State Department noted that corrup- tion at every level of government limits the effectiveness of the fight against the drug and that drug traffickers are largely able to operate with impunity.
It advised Albania to continue the imple- mentation of justice reforms and work to erode the influence of organised crime.
The high jobless rate and weak rule of law have created an ideal environment for the organised crime groups driving Albania’s drug control problem, said the report.
he US State Department has named Albania as a source coun-
try for cannabis and increasingly
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