Minimum living standard in Albania, the strata in need at the mercy of fate against the constant increase in the cost of living.

Author: Uendi Biba

“Difficulties never end. I am left alone. I found myself here as I saw it as necessary and I had no other solution.”

With these words, a 66-year-old man who lives in the Tirana Shelter social center begins his story. Economic hardship has forced him to make this choice, since his pension was inadequate for the Tirana living costs.

“I do not receive assistance from the government, nothing. I have been in Tirana for 28 years. What haven’t I  tried, I applied, I was rejected at first, I was a resident of Laprakë and the answer they gave me was: No, because you are a newcomer, and at the same time there were applications from people from other counties” , he says, showing that he has already lost hope for economic assistance from state structures, but his family members are helping him as much as they can.

“I don’t want to be a burden for them, I don’t want to be a problem, they have their own lives. As long as I got here, I came because I saw it as necessary and I had no other way out”, concludes the 66-year-old.

While the cost of living increases daily, where the war in Ukraine and the ongoing economic crises have made it even HARDER for the citizens’ pockets, Albania is the only country in the Balkans, which does not have a legally approved living minimum standard, which would provide an affordable living even for the people in need in our society.

The International Labor Organization (ILO), the World Bank, the IMF, the trade unions, the Ombudsman, and Parliament of Albania, all have put forth suggestions, from time to time, to the government for determining the official indicators of the minimum living standard, but Albania continues lacking an official access to this standard of living.

The Ombudsman has carried out two reports on the “Minimum Living Standards in Albania”, one in 2016 and another in 2021. None of these reports aimed, according to the latter, “to fill the legal gap and directly affect the guarantee of the minimum living standard for thousands of Albanian citizens who live in poverty”, have been taken into account.

“The value calculated in these studies for the minimum living standard for 2019 is approximately 17,875 Lek. This indicative value is 9.9% higher than the minimum pension for urban areas, 37.5% higher than the unemployment payment and about 3 times higher than the economic assistance, while 45.5% lower than the minimum wage. According to the calculations, in the years 2022-2023 the subsistence minimum should be higher”, says the institution of the Ombudsman, which, among other things, recommends that the methodology for calculating the minimum living standard be drawn up and approved in the Republic of Albania.

This institution also suggests that the standard be reflected in the entire legislative package that guarantees and ensures social protection. It also emphasizes that the minimum living standard should become a main part of the national system of social protection and health.

“It is necessary, that in the formulation of the minimum living standard, the objective of ensuring the existence of the individual in accordance with the human dignity provided for in the Constitution and the law, be taken into consideration and properly evaluated.”

In its response to the ACQJ, the Ombudsman emphasizes that in addition to a dignified life, people must be given minimal access to the cultural, social and political life.

How much do those in need benefit from social schemes in Albania?

Social protection schemes in Albania are many and different. According to the data provided by the Ministry of Health and Social Protection, the number of beneficiaries from the economic assistance program is about 64 thousand families, while the number of beneficiaries from the payment program for persons with disabilities is 143,247 people.

In order to have a clear overview of the economic benefits for the people in need, the ACQJ requested information from several municipalities in the country. In Kukës, often considered the poorest district in the country, the Directorate of Social Services and Health Care, says that there are 4734 families or 21,207 people who receive economic assistance, while 517 families or 1450 people belong to the 6% fund, which mean that for the familys in need, the local goverment has dedicated 6% of it yearly budget. According to the data forwarded by this municipality, the head of the family receives a monthly amount of 2170 ALL, the second member of the family 1430 ALL, the same amount as that which is benefited by children of the family over 18 years old. As for the members who are over the working age, the aid is in the amount of 3310 ALL.

Meanwhile, in the Blesh Municipality, the number of families with economic assistance last month was 699. “The amount of economic assistance is based on the members of the family. The head of the family receives 2,000 ALL, the wife receives 1,800 ALL, children under 18 receive 900 ALL while children over 18 receive 1,200 ALL,” this institution officially states.

At a time when the price of a loaf of bread is 100 ALL, the big question is what these families can afford with the amounts of financial support they benefit from state institutions.

Albania vis a vis the Region and Europe

A 2021 UNDP report provides data on the minimum living standards of Montenegro, Serbia and North Macedonia. “There is no data for Bosnia and Herzegovina, Albania and Kosovo so that we could make a comparison between them,” the report states.

Montenegro shows the highest value defined as a minimum living standard, followed by Serbia and North Macedonia. While Albania is not at all on the list of countries in the region as it does not have a standard defined by law.

Table taken from the UNDP 2021 minimum living standard report (values in Euro/month)

In European Union countries, the minimum living standard is times higher than in the countries of the region, where if we compare it with Albania according to the social assistance that citizens in need receive, they are several dozen times higher.

Within the EU, the country with the highest level of minimum living standard for 2021 is Luxembourg, with an amount of 2,124 euros/month per individual. The second country with the highest minimum living standard is Denmark with a sum of 1,604 euros/month, followed by the Netherlands, Ireland, Austria, etc. These countries have a high GDP per capita, excellent health care systems, high levels of education and social services.

On the other hand, some European countries have a lower standard of living due to factors such as economic and political instability, as well as social conflicts. The countries with the lowest amount provided for citizens through the minimum living standard within Europe are Romania (242 euros/month), Bulgaria (258 euros/month) and Hungary (331 euros/month).

The value of the minimum standard has clearly increased ver the years, from 2012 to 2021, which shows that the minimum living costs have increased. Specifically, the average of the European Union for the year 2012 marked the value of 679 euros/month, while in 2021 it came up to 869 euros/month, which shows a 28% increase in living costs, a value that despite the absence of a legal minimum standard in Albania, or the non-indexation of social assistance for a long time, is also reflected in the prices and living costs of Albanian families as well.

Values of the minimum living standard determined by law in EU countries

The lack of a minimum living standard, Prifti: because of the state’s inability to pay

In a conversation with economy expert, Rezart Prifti, he explains that for the calculation of the minimum living standard, there is a formula that includes the person’s diet, living expenses, etc. and with the calculation of this formula, a pretty high value comes out.

“Much depends on the state and what aspects are included in the formula, which means that in America Internet access or recreational activities are also included in the minimum standard, while in Albania they can only calculate the needs of a person to survive”, he says.

But unlike EU countries or beyond, in which the living minimum also includes the mundane needs of an individual, the method used to calculate the standard in Albania is the one known as the Absolute Poverty Method. According to this method, the food poverty line and the non-food poverty line are calculated. Both of these poverty lines are calculated as the cost of basic food and non-food needs, and when added together they give the poverty line as the minimum requirements that must be met to live. The minimum cost of the monthly food basket, in Albania, according to the daily rate of calories for 1 adult, so that the latter has the necessary caloric input is 7,427 ALL, according to INSTAT, for the year 2019. However, this is a calculation which it is not defined by law and is kept only for statistical purposes.

Prifti adds that the Albanian state has refused to define the minimum living stadard by law for over a decade. For him, the essence of the rejection is the fact that the government would have to change the entire system of payments and salaries, as well as it would create chaos in the social pension system.

“If the minimum is set at 300 Euros, the minimum wages, the pension scheme, the scheme for individuals in need, etc. would change. So it is not a small reform, but a fundamental change of schemes, which leads a state to collapse”, he says, adding that there have been many suggestions from the Ombudsman or international institutions, which have been rejected because the state is unprepared to go through such an ordeal.

“Furthermore, the government is unprepared in terms of the budget and the structures it has”

Asked if this minimum living standard has a chance of becoming a reality soon, Prifti says that “determining the minimum living standard is a process that will take a lot of time”.

Among other things, he notes that any of the social support schemes that the Albanian government has at the moment is not up to the economic and social changes to cope with groups in need, because these schemes have never changed.

“They don’t have the effect they should have and they are simply indulgences that are left over from the structures that Albania has”, he says, adding that even though Albania has been in the free market system for 30 years, we are still discussing social assistance schemes.

“A country that has prosperity does not discuss about them but about development policies, entrepreneurship policies and free initiative, infrastructure and education”, he concludes.

21 thousand signatures at the central Elections Commission for the approval of the minimum living standard

In 32 years as a country with a democratic system of government, none of the governments in Albania have dared to open the debate on the minimum living standard. Currently, more than 21,000 signatures from citizens have been deposited in the Central Election Commission, to give life to a legal initiative for this cause.

Emiljando Kita, an activist in the Political Organization, which has collected citizens’ signatures, says that we are at a stage where the CEC has verified 21,300 signatures and declared them true and correct, and the minimum standard is being documentation compiled to be sent to Parliament.

He also adds that political organizations have appealed to all citizens, saying that one signature is not enough.

“The signature is to bring the problem to the ears of the government and the opposition, the members of Parliament, who are not listening to our concerns”, he says.

The initiative is just a first step that guarantees that the request of the citizens will be heard by parliamentarians, but in the end decision-making power stays with the latter.

Despite these development, many families who survive through social assistance provided by the state, with ridiculous amounts that do not even exceed 10,000 lek per month, don’t expect the day when this assistance will meet even their minimum human needs will be coming any sooner.

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