The ILO and Albania

Strong recovery and the same labour market challenges as before the pandemic

Albania has achieved important development results over the past two decades. The country managed to catch up with EU. While the per capita income was only 18 per cent of the average EU income in 2000, it increased to 32 per cent in 2021. However, the per capita income is still one of the lowest in Europe and the convergence needs to be accelerated. Demographic challenges (aging of the population and continuous emigration), a limited structural transformation (with a third of the workforce employed in agriculture), and incomplete economic and governance reforms hold back the country.

After a decade of solid growth GDP rates, the Albanian economy was hit by the earthquake of November 2019 and the Covid-19 pandemic, resulting in an economic contraction of 3.3 per cent in 2020. The economy recovered quicker than expected from the pandemic and grew by an estimated 8 per cent in 2021and has continued to grow at an average of 4.7 cent in 2022.

The employment rates are back to pre-pandemic levels (66 per cent for the age bracket of 20 to 64 years), but still considerably lower than the EU average (75 ). The key challenges of the Albanian labour market remain the same as before the pandemic and include elevated youth unemployment (21.5 %), high youth inactivity (26% of youth are neither in employment, education, nor training compared against 14% in EU), a significant gender employment gap of 16%, and high informality (57% of Albanian workers are estimated to be in informal employment, 2019).

ILO interventions in Albania

With permanent presence in the country since 2002 and assistance through the new Decent Work Country Programmes (DWCP) 2023 to 26 , the current focus of ILO support is on 1) Effective protection at work, 2) Inclusive and productive employment, and 3) Improved social dialogue.

Important development cooperation projects of the ILO in Albania include:

• Strengthening the State Labour and Social Service Inspectorate in advising companies on compliance with occupational safety and health standards and in tackling informality
• Analysing fiscal space for social protection responses including an analysis of long-term care services and the social cash assistance scheme in Albania
• Technical support to the National Labour Council as the highest national platform of social dialogue on labour and social policies
• Support to workers’ and employers’ organizations to improve services to members and to represent their interests in policy debates
• Sustaining competitive and responsible enterprises by improving productivity and working conditions in small and medium enterprises (SCORE)
• Consolidating the out-of-court labour dispute resolution system

Albania has ratified 55 ILO Conventions: the ten Fundamental Conventions, the four Governance Conventions and 41 Technical Conventions. Albania is the 3rd European country to ratify the new ILO Convention No. 190, which is the first international treaty to recognise the right of everyone to a world of work free from violence and harassment.