Fatos Nano
Fatos Nano; drawing by David Levine


In March 1992 a year of political chaos in Albania was brought to an end when the Democratic Party, led by Dr. Sali Berisha, the country’s leading cardiologist, was swept to power with an overwhelming victory in parliamentary elections. After having suffered nearly half a century under the most oppressive and isolated Communist dictatorship in Europe, most of Albania’s 3.5 million people seemed happy about the victory of Dr. Berisha and the Democratic Party, which he had co-founded some eighteen months before the vote. The new parliament lost no time in electing Berisha to the office of president.

The new administration faced immense problems. The Communist regime had left a desperate legacy. The few factories that produced anything were deathtraps; workers in the bauxite, chrome, and coal-mining industries, having inhaled noxious dust for years, were struck by frightful diseases. In the cities, thousands of houses had no functioning water supply. In 1991, a doctor in Tirana gave a group of journalists a tour of the hospital. The dingy operating theater, lit by candles, was covered in blood. “This is just like a slaughterhouse,” one of the horrified journalists remarked. “If this were a slaughterhouse,” the doctor replied without emotion, “they would have closed it down years ago.” Albania is certainly part of European history but by 1991 its economic and social peers were Afghanistan and Mozambique. Already Europe’s poorest country, with a monthly average income, mean and median, of $20, Albania was shaken further by rising unemployment and inflation.

But the new president’s most pressing challenge was lawlessness, a direct result of the collapse of Communist control, which had been established under the draconian regime of the dictator Enver Hoxha, who died in 1985. When Hoxha’s successor, Ramiz Alia, conceded the end of the Communist monopoly in early 1991, many towns witnessed a ferocious outburst of popular violence, aimed in particular at the police and at the notorious secret police, the Sigurimi. After fifty years of having had their lives minutely examined, picked over, interfered with, and, frequently, destroyed, Albanians poured out their anger and frustration in a series of demonstrations, riots, and strikes.

The violence crippled what little was left of Albania’s economic capacity, and exposed the country to the spread of gangsterism. Armed bandits first fixed their sights on the country’s collective farms, herding all the livestock into trucks before smuggling it over the border to Greece and selling it. What remained of the state-owned factories was looted, while the government drained the treasury, handing out welfare payments to the huge number of unemployed people who seemed to appear overnight. Italian military units were invited into Albania in the summer of 1991 to distribute food aid to stem the growing chaos.

The gangsters were not associated with any political force. They were bands made up almost exclusively of young unemployed men who seized the opportunity of chaos to enrich themselves. Stalking the countryside and towns in their blood-soaked balaclava helmets, they considered anybody a legitimate target—civilian or military, foreigner or local. The incidence of murder, looting, and rape rose throughout the country; the utterly demoralized police force lacked any authority to counter the lawlessness.

But although Alia’s successor, President Berisha, was faced with a mountain of difficulties, he also had widespread support. The people had spoken through the ballot box, while the governments of Europe and, especially, the United States gave him unequivocal backing to restore order and embark on desperately needed political and economic reform. Berisha had promises of aid from the IMF and the World Bank. For the first time in Albania’s tragic modern history, there was a palpable sense of optimism in the country. Everybody was rooting for President Berisha and at the time he seemed to deserve that support.

Now, five years later, he has been thrown out of power. Berisha’s defeat by the Socialist Party in the elections of June 29 and July 8 came after an even more appalling period of lawlessness than the one that had preceded his victory in 1992. Albania is once again out of control; once again vicious, murdering gangs, now running lucrative drug- and arms-smuggling operations, are terrorizing the country. Berisha has been accused of virtually every political crime conceivable, from fixing elections to misusing the constitution, persecuting his political opponents, muzzling the press, and allowing corruption and clientism to flourish under his rule.

Berisha indulged in the politics of vengeance and has paid the price for it. Now, it is his nemesis, the Socialist Party leader and Prime Minister-designate, Fatos Nano, who must meet the challenge posed by the wreck of Albania. Nano was one of Berisha’s earliest and most prominent victims, forced to serve four years of a twelve-year prison sentence after a trial on what human rights organizations said were trumped-up charges. He now faces two challenges. The first is to get the country working politically and economically, in cooperation with international financial institutions. The second is to break the spiral of revenge, rooted deeply in modern Albanian history, which has seen the country swing from one wild extreme to the other since the end of communism.


The Socialist Party and its smaller allies, both from the left and the center, have a two-thirds parliamentary majority; its size makes the first task easier but the second task more difficult. In parts of the country, the hostility to Berisha during the election campaign was so charged and violent that Nano will need the most deft political skills to prevent a further round of butchery.


Ten days before the June elections, I was in Cerrik, a small town in central Albania. The people there were anticipating an attack by forces of the National Guard, the paramilitary units loyal to President Berisha. Sixteen anti-aircraft guns had been put in place on the flat rooftops of the town by the local resistance group. Its leader, Commandante Rolando, his face framed by tangled shoulder-length hair and a dirty baseball cap, pointed proudly to a gun facing north. “If Berisha comes here,” he shouted, “I’ll show you what we’ll do!” With the confidence of a seasoned fighter, he strolled up to the tripod and blasted a dozen deafening rounds into the sky.

This particular rooftop defends the town against an attack from the Mediterranean-green mountains, beyond which lies the capi-tal, Tirana. In the shadow of the mountains stand an oil refinery and a thermoelectric plant, both now idle relics of Communist industrialization. Twenty miles to the east across the plain the vast steel and metallurgical plant at Elbasan scars the landscape, a ghostly complex of twisted metal and broken glass that has become the most enduring symbol of Albania’s insane autarchic Stalinism. This huge industrial corpse has been decaying for five years, while unemployment and intense social disaffection have increased throughout the region. Over the mountains in Tirana, the friends and associates of the President have grown obscenely rich by grabbing the choicest fruits of an uncontrolled capitalism.

Commandante Rolando has been unemployed for the five years since he left school. He has three children, and has always been dependent on the pittance known as Social Assistance, about $15 a month. He peers down from his vantage point on the roof at the once-pretty town square below to show me an armored personnel carrier, a rusting monument to the three-hour battle of Cerrik, which took place on the afternoon of May 26, when a well-armed unit of President Berisha’s National Guard stormed the town in order to arrest the members of the local citizens’ resistance group, called the Salvation Committee, and to reestablish Tirana’s control over the town.

Cerrik, with a huge television booster station and a military airport, is of considerable strategic importance. The Cerrik Salvation Committee was formed in March, along with dozens of others in central and southern Albania, to take over the functions of government after anti-Berisha riots and demonstrations in February and early March destroyed state authority in large parts of the country. The committees differed from place to place. In some places, they were fronts for the mafia thugs who exploited the breakdown to expand their operations. In other towns, the committees organized their own police to protect the population against the destruction caused by the mafia.

In Cerrik there are no gangs, since the town lies off the main smuggling routes. The rebels here see themselves as fighting against a man who they believe was personally responsible for the ruination of Albania’s industrial heartland. Before the collapse of communism, virtually everybody in Cerrik was employed by large state enterprises. Within months of Berisha’s victory, all these factories had stopped functioning, and although Albania received considerable financial aid from the IMF and the World Bank during his tenure of office, none of this found its way to Cerrik, Elbasan, or the other industrial complexes of central Albania. As far as Rolando is concerned, the Democratic Party took away his town’s livelihood and replaced it with nothing, and he and his fellow committee members had every right on their side when they defeated Berisha’s National Guardsmen. In the Manichean world view of Rolando and his friends on the Salvation Committee, Sali Berisha is the devil.

Berisha lives beyond the mountains in Tirana but comes from Tropoja, a town in the highlands of the northeast, close to the border with Kosovo, where Albania’s clan system survives in its purest form, and where justice is administered by the concept of besa, or honor. If the besa is violated, the clan that feels insulted resorts to gjakmarrje, or blood revenge. The violence in Albania this year has many different political and economic causes, but it is also blood revenge writ large. Commandante Rolando’s determination to avenge his family and his town against Berisha was partly a reaction to the President’s five years in office; it is also part of the legacy of fifty years of the most appalling Communist system in all of Eastern Europe. Six years after the belated fall of communism in Albania, the country has been caught in a spiral of vengeance, driven by greed and guns, which has left most of the population in a state of extreme deprivation and terror.


The front-line atmosphere in Cerrik, which recalls the war in Bosnia, contrasts starkly with the anarchy of Tirana. The broad Boulevard of National Martyrs, which dominates the town center, was built in the 1930s during the reign of King Zog, who served as president of the Albanian Republic in the early 1920s before being proclaimed king in 1928. The symmetry of the long avenue and the Italianate neo-classical buildings which flank it show the influence of Mussolini, who established an effective protectorate over the country in the 1930s. Countless dilapidated apartment blocks sit uneasily next to the grand buildings of fascism now reserved increasingly for embassies and the growing number of international organizations, like the Organization for Cooperation and Security in Europe (OSCE), which have been invited into the country. Beyond the center, hardly known to the international organizations, lies a new explosion of third-world urban sprawl—miserable shanty towns, without decent hygiene, which in the last five years have attracted hundreds of thousands of impoverished peasants, seeking, and not finding, work in the big city.

Tirana is the capital of “kiosk capitalism,” as it is known locally. Dozens of little stores and shops have sprung up all over the center—tiny spaces colonized by small traders, mainly selling cigarettes, coffee, fast food, candy, and all the consumer items that were denied Albanian consumers under Enver Hoxha. The kiosks are supplemented by hundreds of little boys, the apprentices of both kiosk capitalism and the country’s pervasive gangsterism. In their relentless pursuit of customers, these lads walk the streets with cartons of cigarettes, perfectly packaged Marlboros and Rothmans produced illegally with the nauseating untreated tobacco of Thrace, Macedonia, and Bulgaria.

The narrow streets tremble under the weight of thousands of second-hand diesel Mercedes cars, the great status symbol in a country where until 1991 owning private vehicles was banned. Albania has become a dumping ground for secondhand taxis from all over Western Europe and one of the most important terminals for the continent’s booming trade in stolen vehicles. More often than not the men with Ray-Ban eyes that stare menacingly from the driver and passenger seats are also the proud owners of a Kalashnikov.

In February, several pyramid schemes in which an estimated three quarters of the population had invested $1.2 billion came tumbling down. The sponsor of the largest of these, called VEFA, had begun life as a holding company for a variety of businesses in the construction and import/export trade. Western diplomats suspect that it was also a money-laundering operation that was involved in illegal trade violating the sanctions imposed on former Yugoslavia in 1992. Together with another company, Gjallica, VEFA began offering Albanians monthly rates of between 5 percent and 10 percent interest on savings. Many Albanians had cash from selling contraband goods to Serbia and from the proceeds of the growing drug and gun trade. So successful were these schemes that they began to attract capital from neighboring Greece and from Italy, across the Otranto straits. The pyramid schemes, versions of which had already come to grief in Romania and Russia, depend on their attracting an ever-greater number of investors in order to guarantee the payment of interest. “I gathered the savings of my entire family, $3,000 in total, and placed them with VEFA,” Arben, a forty-year-old taxi driver, told me, “and sure enough I got $300 dollars interest paid. I did it a second time and it worked again.”

At the end of 1995, two new schemes, Popullit and Xhaferi, came onto the market. They started pushing up the interest rates so that both VEFA and Gjallica had to keep pace. By the time of the big collapse in February, the pyramids were offering ludicrous interest rates of up to 150 percent. “It was a sort of madness,” Arben said. “The third time a friend warned me against investing but nonetheless I put in $1,500. This money I lost.” Arben was lucky. In all he had lost only $900, less than a third of his original savings. Most investors lost everything.

VEFA and Gjallica were closely associated with Berisha’s Democratic Party. In the elections of 1996, VEFA made clear its support of the DP, which won with a huge majority. VEFA also organized huge public events—the staging of the Miss Europe contest and expensive rock concerts—which were given extensive publicity on state television. VEFA in Tirana and Gjallica in Vlorë became symbols of the economic “miracle” which the Democratic Party and Berisha claimed to have performed.

The origins of the other big companies, Popullit and Xhaferi, are mysterious. Without any concrete evidence, supporters of the Democratic Party claimed that they were set up by foreign intelligence services—they talked of the CIA—in collaboration with the Socialist Party. Nonetheless, the backers of these two companies, whose market tactics undoubtedly hastened the catastrophe, are still unidentified. The whereabouts of the hundreds of millions lost by VEFA and Gjallica are also unknown although they are presumed to be safely stacked in Swiss and Austrian bank accounts.

As much as 80 percent of the population lost money in the schemes. Large protest demonstrations spread through many parts of the country followed by ferocious battles between gangs and police, rebels and the army, gangs and other gangs, and families involved in vendettas. In large parts of the south, the government suffered what Albanians call a “meltdown.”

Following the collapse of the pyramids, gangsters took over neighborhoods and businesses all over Albania. More looting and murdering began as the competition for Albania’s large drug- and gun-smuggling rackets got hotter—the price of the Kalashnikov started falling swiftly to around $20. Some gangs openly supported the Socialist Party, others the Democratic Party; but most were just mobsters with no specific loyalty except to themselves. In the “meltdown” districts, the gangs looted the army barracks and munition dumps. Not only do most Albanian men now possess a semi-automatic weapon, but the more organized bandits also have at their disposal rocket-propelled grenades, anti-tank missiles, and even some artillery pieces. It is hardly surprising that between February and the first round of the parliamentary elections, held on June 29, over 1,500 people were killed in political or gang violence.

On a recent humid summer evening in Tirana I met my old friend Xhevat Lloshi, a leading member of the Socialist Party until three years ago. He decided to leave politics because he believed that the Socialists were playing the same game of vengeance politics as the Democratic Party. “An influential part of the leadership wanted to take the struggle onto the streets,” he said, “and I wanted no part of that. It doesn’t matter that Berisha was doing it. I was concerned about my own party.” Behind the scenes, a tense battle is going on among the victorious Socialist Party leaders. The rank and file includes many people who mourn the passing of the Hoxha dictatorship; and although Fatos Nano is a committed reformer with a big majority behind him, he still does not feel strong enough to denounce the Hoxha legacy in public.

Xhevat Lloshi is impatient with the much-heard theory that the violence can be accounted for by the ancient tribal tensions between the Ghegs, who live in the north, and the Tosks from the south. These two peoples, divided roughly by the Shkumbin River which runs through central Albania, speak different dialects and have somewhat different cultural histories. The broad plains of the Tosk south have traditionally been more open to outside cultural influences than the inaccessible mountains of the Gheg north. In the stylized English of a philology professor, the job to which he has now returned, Xhevat said that such differences were not the point. “In Africa, it is well-known that the lion never lusts after human flesh. But should the lion once taste human flesh, it will never again eat anything else. These people, north and south,” he continues, “have all eaten human flesh.” Albania is out of control.


Dr. Sali Berisha became President of Albania in April 1992, eighteen months after student demonstrations helped his Democratic Party (DP) set itself up in opposition to the once omnipotent Party of Labor of Albania (PLA), Enver Hoxha’s name for the Communist Party. A large, energetic man, Dr. Berisha had been both the country’s leading heart doctor and, for several years, the secretary of one of Tirana’s Party cells. He was one of a very small number of Albanians who was granted the privilege of foreign travel and was a friend of one of Hoxha’s sons.

It is hard to blame Berisha for doing so well for himself. Until his death in 1985, Hoxha exercised total control over society through the PLA and the Sigurimi. In a tiny country of some 3.5 million people, literally hundreds of thousands were sent to camps, often arbitrarily. Anybody with even the most modest ambition or intelligence was obliged to submit to the authority of the Hoxha regime and to proclaim that they did so. “In Albania there were no dissidents,” says the writer Fatos Lubonja, who spent seventeen years in one of Hoxha’s prisons after his father, a member of the Central Committee and the once-powerful head of Albanian TV and Radio, was purged in 1973. He could not claim to have been a dissident, he said. “The dissident makes a conscious choice to try to enlighten others. But in Albania we were basically just victims, so we did not have this choice. Instead our experience as victims was used to terrorize the others; used by the state to put fear into the others. And it’s a big difference.”

Sali Berisha was as much a victim as many others, living in constant fear of the four AM wake-up call. Toward the end of 1990, as the regime of Hoxha’s successor, Ramiz Alia, began at last to bend in the winds blowing from the new democracies in Eastern Europe, Dr. Berisha and the co-chairman of the DP, Gramoz Pashko, a professor of economics, launched a courageous campaign to demand that the Communist Party allow democracy and put an end to its countless human rights abuses. Pashko began to conceive programs for reviving Albania’s rotted command economy while Berisha concentrated on demands for elementary rights.

These were heady, optimistic days. Tirana’s students demonstrated against the Communist regime with righteous, pent-up anger. Crowds demolished the statues of Stalin and Lenin that glared at each other across the Boulevard of National Martyrs. Then three months later, in late February 1991, on a memorably chaotic day, the enormous gold-painted statue of Enver Hoxha came crashing down in Tirana’s central Skanderberg Square. But in the first democratic elections held a month later, the PLA won a clear majority. Albania’s overwhelmingly rural population was conservative and still very unused to the idea of criticizing, let alone voting against, the Party of Labor. As in Romania and Bulgaria, people were confused and afraid—better the devil that you know, many said.

There were, however, encouraging signs. The elected Communist prime minister was a bright young economist, Fatos Nano. He openly welcomed the prospect of foreign investment and free-market reforms in Albania and called on his party to modernize. Against strong opposition, he forced through a change in the Party’s name in June 1991. The PLA became the Socialist Party (SP). But as Nano struggled to persuade his unreconstructed colleagues that big changes were essential, the government he headed was having to deal with the immense expectations of a people slowly waking up after a nightmare that had lasted half a century. At this point, lawlessness became a dramatic feature of Albanian life, as many people feared it would. This lawlessness revealed how deep the divisions run within Albanian society.

Throughout history, Albanian leaders have protested too much that their people are united. Fatos Nano is saying it today as he prepares to take office again as prime minister. His hair is prematurely grey after almost four years in President Berisha’s prisons (like Xhevat Lloshi, he no longer laughs very much); but he assured me that “wherever I go, north or south, the people do not differentiate about who they are or which part of the country they come from. They feel like Albanians.” Still, there are certain regions in the north where Nano himself dares not travel, just as Berisha avoids most of the south.

Enver Hoxha insisted on the mythical unity of Albanian identity as much as everyone else. “The only ideology of the Albanians,” he proudly announced, “is Albanianism,” although he otherwise spoke the language of Marxist-Leninist internationalism (ironic for a country as isolated as North Korea, if not more so). Seemingly deranged by having absolute power, he used the most extensive repressive apparatus in Europe in an attempt to unite one of the continent’s smallest but also one of its most divided countries.

Albania was a latecomer in the race to form nation-states in the Balkan peninsula. As the Ottoman Empire began to collapse toward the end of the last century, Serbs, Greeks, Romanians, and Bulgarians successfully took part in the carve-up of “Turkey in Europe” with assistance from various Great Power sponsors, Russia, Great Britain, and Austria-Hungary. But like Bosnia-Herzegovina, Albania was different because most Albanians were not Christians but Muslims, who had converted at different times during five centuries of Ottoman rule. Catholic and Greek Orthodox Albanians remain large minorities, but Muslims inhabit most of the Albanian-speaking lands, from south-central Albania up to and including Kosovo and western Macedonia. Muslims were, unlike Christians, permitted by the Ottomans to bear arms, and they developed a reputation as the most fearsome warriors in the region. Whenever the Sultan wished to put down disturbances anywhere in the Empire (often provoked by discontented Muslims), he would call upon Albanian warriors. As hired fighters, Albanians in the Ottoman Empire drew upon the violent heritage of the besa clans whose traditions of blood revenge were particularly strong among the mountain-dwellers of northeastern Albania.

But the Albanians were not just killers. As the historian Stavro Skendi has pointed out, “Considering the small size of the Albanian population, a disproportionate number of Albanians served in high positions of the Ottoman army and administration: at least thirty grand viziers were of Albanian origin.”* Albanians proved themselves skillful politicians, highly mobile traders, and invaluable construction workers. Many of the Ottomans’ finest buildings were designed by Albanian architects and erected by Albanian labor. Outside the impoverished, harsh territory where most Albanians lived, members of the Albanian diaspora were notably industrious and successful, from Istanbul to the northeast United States. (American Albanians dominate the pizza parlor industry of Boston and New York.)

Since the end of the nineteenth century, the Albanian-inhabited territories of the Balkans have been in an almost permanent state of political turmoil with the exception of the long period of Communist rule, when politics was replaced by state terror. In the absence of any convincing political authority, the way was opened for the violent traditions of clan politics to assert themselves. Sometimes violence has manifested itself in the form of Muslim-Christian conflict, sometimes as Gheg-Tosk conflict, sometimes as north-south conflict, sometimes as a socialist-rightist conflict. But behind these broader and seemingly coherent explanations of political conflict in Albania lie myriad local enmities which have no discernible ideological basis other than the violence directly attributable to the breakdown of political authority.


In the brief months of the first freely elected Communist government in Albania following the vote of March 1991, lawlessness swept the country. In addition to the spread of gangsterism, four workers were gratuitously shot dead by police in Shkoder, provoking resentment against the Communists. Factories throughout the country closed down, partly because of looting, partly because they were producing nothing useful, and partly because the state had no money to subsidize them. Within months welfare payments for the growing army of unemployed were placing an intolerable burden on the bankrupt state treasury.

In order to stem the growing chaos Italian military units were invited into Albania in late 1991 to distribute food. As the situation continued to deteriorate, Fatos Nano resigned in favor of a multiparty coalition government which included members of Sali Berisha’s Democratic Party. This so called “Stability Government” collapsed when Berisha withdrew his support. New elections were called in March 1992, and Berisha’s party swept to power with a substantial majority. The following month the new parliament elected the first professedly non-Communist Albanian to hold the office since President Zog installed himself as king in 1928. Berisha promised to do away with communism and corruption and to end Albania’s isolation from Europe and the world.

But his first job was to restore law and order. He set about this with characteristic verve and the enthusiastic support of the American Embassy in Tirana. He immediately conferred new powers on the police and introduced harsh penalties to deter criminals. Berisha was able to reestablish stability in a very short time but he revealed how fierce and autocratic he could be. In the first of a series of purges reminiscent of Bolshevik tactics, Berisha had the DP expel his former co-chairman, Gramoz Pashko. Most of the capable liberals in the party followed, including Neritan Ceka, the country’s most distinguished archeologist and now the leader of the moderate Democratic Alliance. The former president, Ramiz Alia, and several leading members of the ancien régime, including Hoxha’s wife, Nexhmija, were arrested and imprisoned. But Berisha’s most striking act of vengeance took place in the summer of 1994, when he had Fatos Nano, still head of the Socialist Party, imprisoned on dubious charges that he’d embezzled Italian aid funds. The presiding judge resigned halfway through the trial, complaining that he was being put under pressure from above to convict Nano.

The United States and European governments remained shamefully silent about Berisha’s abuses of power. He set about reconstructing the apparatus of state repression and went on to conduct more purges, decimating the Democratic Party. Just at the time when the war in Bosnia was starting, he cooperated closely with the Clinton administration, which was worried that the conflict would spread to the Albanian enclaves in Kosovo and western Macedonia. The US was prepared to overlook Berisha’s abuses in exchange for having a steady, reliable ally in the region.

Many of the intellectuals and professionals who had originally created the DP were now being replaced by Berisha’s friends from the northeast. The clans of Tropoja, Berisha’s home town in the mountains, came to dominate the SHIK police organization, which is the successor to Hoxha’s inglorious Sigurimi. Towns in the south, like the Adriatic port of Vlorë, where the Socialists and Democratic Alliance had most of their support, became subject to extremely harsh police surveillance—roundups of opposition supporters, beatings, jailings.

Hoxha’s power base had been in the south. Hoxha himself was a Tosk from a southern town, and Democratic Party supporters claimed with some plausibility that he had favored southerners over northerners in the state administration. A main cause of Berisha’s failure was his policy of replacing most civil servants with his supporters from the north. Not only were they inexperienced and often disastrously incompetent, they accentuated the sense of division between north and south. The writer Fatos Lubonja believes that the overall effect of the Hoxha regime was to make it easy for an autocratic politician to manipulate urban society in Albania. “People came to the towns from the rural areas and from the north with the sole idea of being mercenaries and just to profit personally. It was a big invasion of Tirana in particular and we did not have sufficient cultural and spiritual mechanisms to resist it; we did not have an intelligentsia to become a new political class.”

President Berisha could afford to distribute his broad smile across the country thanks to the pliant state-run television. He was welcomed in Washington and in European capitals, while inflicting on his people a brand of autocracy that had become familiar in Serbia and Croatia.

Berisha’s political power was sustained for awhile by an apparently flourishing economy. After he restored at least the beginnings of law and order, foreign investment mainly from Italy and Greece began to flow into the country. The IMF and the World Bank gave generous loans, and Albania received more aid and assistance per capita than any other country in Eastern Europe. The injection of capital led to a boom in the construction and service industries, although not in production. Since Albania had been bankrupt in 1992, the rush of economic activity also meant that statistically the country could boast the highest rate of growth in Eastern Europe.

The West appeared content to ignore that much of the cash was generated by smuggling goods to Yugoslavia in violation of the UN sanctions. Many barrels of oil were literally floated across Lake Shkodër to Montenegro in order to fuel the war machine of the Bosnian Serbs, not to mention the repressive forces that the Serbs deployed against the Kosovo Albanians. Kiosk capitalism, although bright on the surface, did little to address the problems of the hundreds of thousands of Albanians once employed by Hoxha’s bloated socialist industries. Those people were now dependent on the money trickling down from the enormous wealth being accumulated by the freelance businessmen who enjoyed Berisha’s favor and made their fortunes from illegal trade and, before long, from pyramid schemes.

Even for the leader of a population used to being bullied, the President began to overreach himself. In May 1996, the Democratic Party won a huge 87 percent of the seats in parliamentary elections, a figure that recalled Hoxha’s electoral farces and not a free and fair poll. The official delegation of the OSCE issued a damning report accusing Berisha’s campaign of a variety of abuses. Albanian television news, the report observed, had become a vehicle for the President’s self-gratification. Opposition officials were intimidated and threatened. Ballot boxes had disappeared. European governments continued to maintain a shameful silence, but at last the US State Department decided to act. Washington issued a statement sharply critical of the elections, demanding that some polls be rerun. American diplomats stayed away from the swearing-in of the new deputies to underline the Clinton administration’s displeasure with Berisha’s megalomania. “He would not listen to what we were saying,” one Western diplomat said. “He was taken in by his own mythology, he began to convince himself that he was invulnerable.”

More damaging than Berisha’s dictatorial methods or corruption, however, were the pyramid schemes. Throughout 1996 diplomats as well as the IMF and the World Bank all issued public warnings that the schemes were heading for a fall. When it came, the economic effects were devastating. “We are now in an economic miasma,” the former finance minister, Genc Ruli, told me. “60 percent of M1—that is, the amount of cash in circulation—is now out of the banking system’s control.” With so much cash circulating, Ruli says, the central bank can no longer do anything about inflation. It is now even impossible to judge the rate of inflation. “The only escape would be to introduce a new currency. As for outside assistance, it would take us six months just to ascertain exactly what type of help we need.”

The violence accompanying the economic collapse was anarchic and brutal. By early March of this year, police in cities such as Vlorë, Saranda, and Tepelena in the south were viciously attacked in broad daylight—revenge not only for the pyramid schemes’ failure but for the heavy-handed methods of the police themselves. The army has been ruined by Berisha’s policy of promoting unqualified DP members; it collapsed in a shambles overnight. Fearing that mob violence would overwhelm the capital itself, Berisha’s defense minister, Safet Zhullali, fled to Italy in late March. In Tirana and elsewhere, Berisha struck back using the National Guard and the SHIK. The offices of the independent newspaper, Koha Jonë, were burned to the ground by the secret police. With his country in flames, Berisha was determined not to relinquish power and had to be pressured by the US to accept elections. With the assistance of international mediators, a multiparty Government of Reconciliation headed by the inexperienced young Socialist Bashkim Fino was temporarily formed.

The Italian government came under enormous pressure as thousands of refugees, facing what they saw as a hopeless future, headed in unseaworthy vessels across the Adriatic to Bari. In response, the Prodi government cobbled together a 6,000-strong, Italian-led Multinational Protection Force (MPF), made up of troops from Greece, France, Spain, Turkey, Romania, and Denmark, with a UN Security Council mandate as spineless as UNPROFOR’s mandate in Bosnia. An OSCE mission was set up to oversee the “elections from hell,” as one international observer dubbed them, under the leadership of the former Austrian chancellor Franz Vranitzky.


A visit to the rebel capital Vlorë underscores just how hellish these elections have been. The malodorous scent of rotting garbage and the Adriatic Sea hangs over the ornate Italian architecture of Albania’s main southern port. “The state just disappeared here in Vlorë,” the twenty-six-year-old Albert Shyti, chairman of the Vlorë Salvation Committee told me. “There is no police, no political control.”

In the town hall, Suela Kondi, a young lawyer speaking impeccable French, says how difficult it has been to get ready for the elections. “Every night someone breaks into our offices and steals some of the election lists. Nobody dares leave his home at night and so it is impossible to provide any security.” Kondi does not know who is stealing the electoral lists or why.

The real power in Vlorë is held by two mafia gangs. One is run by “Zani,” a former army officer in his thirties, the other by “Gaxha,” who controls the city center against incursions by Zani’s men. In the morning under a sweltering sun, the frightened people of Vlorë hurry about trying to find food and water. By one o’clock, however, the streets are empty: the gangs are just beginning to wake up. An exhausted young lawyer who works in the town hall told me, “We have been living in terror for four months now, and since Monday night when the gunfight kept the whole town awake all night we have become very frightened.”

Gianfranco Skalas, a lieutenant colonel in the Italian army, clearly feels sorry for the plight of the citizens of Vlorë. Among the civilians, there is some agreement that, as Skalas says, the Italians have helped considerably with the town’s growing problems. “We are clearing up the garbage, we are helping with the water and doing what we can within the mandate,” he explains. “But we have no mandate to give them direct assistance against the gangs.”At least now the elections have been held, and the new government has a clear mandate to do something. With a two-thirds majority in parliament, Fatos Nano is in a position to force President Berisha’s resignation even if Berisha does not carry out his pre-election promise to leave in the event of his defeat. During the election, Nano promised that he would not engage in a new round of persecution against the Democratic Party. He still has some very unsavory characters in his own party, and it is widely suspected that some gangsters provided him support in parts of the south and will be looking for their payoff. He is under strong pressure to restore the losses suffered under the pyramid schemes and to deal harshly with Dr. Berisha for his part in ruining the country.

While Nano juggles such demands, he faces deep international skepticism about Albania’s ability to function. Franz Vranitzky, still heading the OSCE mission, has said that Nano deserves a decent chance to govern and that the IMF and the World Bank in particular should give him the benefit of the doubt. During his brief spell as prime minister in the early Nineties, he proved himself quite open to economic and political cooperation with the outside world. In June, with only limited access to television, he fought a clean and energetic election campaign, and he has stressed his aversion to the politics of vengeance. Before very long it should become clear whether Mr. Nano has the political and moral strength to turn the country away from violence and hatred, or whether Albania will sink deeper into the morass.

July 17, 1997

This Issue

August 14, 1997