One of the poorest of the former communist states, Albania is now moving towards the European Union
Though Albania is a coastal country, not much of its territory is at sea level. Mountains make up more than two-thirds of the land area: north, west, and south—highest in the north and centre; lower in the south where they merge with the mountains of northern Greece. Even the coastal plain in the west and centre of the country is scattered with hills.
Most Albanians live in the coastal plain, which has more agriculture and industry. They are one of Europe's more homogenous populations—a product partly of the country's physical isolation. Nevertheless there are some language differences, since there are two dialects of Albanian. Most people in the north speak Gheg while those in the south, along with Albanians in Kosovo, speak Tosk.
Albania previously had very rapid population growth. The communist regime promoted fertility but following the collapse of communism, the birth rate plummeted as many people left the country in search of work. More than one million Albanians are thought to be overseas, chiefly in Italy, former Yugoslavia, and Greece—and most of them unauthorized. Remittances from overseas workers also provide most of the foreign exchange—around $1.5 billion in 2008.
Because of the way Albania's borders were delineated in 1921 many ethnic Albanians also finished up in neighbouring countries: around two million live in Kosovo and hundreds of thousands in Macedonia.
Living standards were low during the communist era but subsequent economic collapse and social chaos saw standards slip further. Health indicators have improved, however, and life expectancy has increased in recent years. Even though education is free only around two-thirds of school-age children are enrolled
Around one-fifth of GDP comes from agriculture, though despite extensive terracing only around one-quarter of the country is suitable for arable farming. By 1994, the collective farms had been dismantled and almost all land had been returned to small farmers. Privatization boosted the output of grains, maize, and vegetables. Albania could become a significant producer of fruit and vegetables for the EU, but irrigation is limited, technology primitive, and productivity low.
Albanian manufacturing industry collapsed when exposed to world markets. Nevertheless, Albania's relatively educated and low-waged workforce has proved attractive to investors for the production of low-tech products like garments and footwear, in companies working as subcontractors for foreign corporations.
Prospects for the mining industry are reasonable. Albania was at one point the world's third largest producer of chrome ore and has significant deposits of other minerals such as copper. The industry has now been fully privatized and foreign companies now exploit the chrome and copper mines.
Economic development has been held back by poor infrastructure. Only a small proportion of the roads are paved, though new highways are now being constructed.
For 40 years until his death in 1985, Albania was in the grip of the repressive, and steadily more isolated, regime of Enver Hoxha. When the communist system collapsed, two main parties emerged. The first was the reformed communist party, now called the Socialist Party of Albania (SP). The second was the right-wing Democratic Party of Albania (DP).