"Our upcoming cooperation programme will be readjusted in the coming years, reflecting both Switzerland’s financial situation and Albania’s progress towards EU integration," said Mr. Philip Arnold, Deputy Head of mission and Head of Economic Development, Embassy of Switzerland in Albania.

Dwelling on problems of energy Mr. Arnold said his country fully supports the country’s aim of securing sustainable and affordable energy supply and becoming a net exporter of clean energy by 2030. Further he spoke about some remarkable achievements, made by Albanian institutions with Switzerland’s support.

"Albanian exports to Switzerland in 2024 reached EUR 21 million and Albanian imports from Switzerland reached EUR 98 million. So, while our economic relations are well-established and fruitful, there is still potential to increase the volume of our trade and exchanges, based on our respective areas of expertise and excellence," said the Head of Economic Development at the Swiss Embassy in Albania in the following interview:

-  Mr. Arnold, Switzerland’s cooperation programme with Albania is undergoing some changes. What areas will continue beyond 2028?

- Our upcoming cooperation programme will be readjusted in the coming years, reflecting both Switzerland’s financial situation and Albania’s progress towards EU integration. As a result of this process, Albania’s cooperation with development partners is evolving and that includes Switzerland. As cooperation modalities established over decades can’t just change from one day to the other, we aim to go through this readjustment in an orderly and responsible manner, allowing for a smooth transition and preparation for our institutional partners. In concrete terms, this means that until 2028 we will complete activities funded by the Swiss Agency for Development Cooperation (SDC) in democratic governance, civil society, health and social protection. What will continue beyond 2028 are activities by the Swiss State Secretariat for Economic Affairs (SECO) on economic development, for example on reliable public finances, an improved business environment, and climate change. Overall, we will continue to promote a socially, environmentally and climate-friendly economic growth to create more and better jobs.

-  Tourism is experiencing unprecedented growth in Albania and this means economic benefits, but also concerns about its impact on the environment. At the same time, the high level of youth migration poses a challenge in the sector. What can Albania learn from Switzerland in tourism? How can such a massive outflow of youth be curbed?

- Albania has seen an impressive increase of tourist numbers from all parts of the world in recent years. Switzerland on the other hand is a long-established market where tourism has developed steadily over many decades. What this means is that we have had time to address some of the challenges that may come with mass tourism such as the environmental impact or overuse of resources. As a result, sustainability is nowadays a key consideration for tourism in Switzerland, also to ensure its long-term contribution to the economy. One example is Swisstainable – a programme that makes Switzerland’s tourism sector sustainable by promoting destinations that meet sustainability criteria, and which works with tourism businesses to apply sustainability throughout their activities. While sustainable tourism offers are also emerging in Albania, I believe there is still potential for further growth in this area.

Regarding your question on migration, in order for tourism to reap benefits for all, policies are needed to ensure decent labour conditions for young professionals. At the same time, as a result of the strong growth in recent years, the demand for highly skilled workforce, in particular for high quality tourism, is growing. To respond to this demand, a vocational education system is required which prepares hospitality students with the relevant skills they need. The new partnership between EHL – one of the world’s best hospitality schools, based in Lausanne, Switzerland – and the School of Hotel Management and Tourism in Tirana (SEMHT) is exactly addressing this point. Hospitality education in Switzerland has a long history and EHL is introducing Swiss quality standards for Albanian students. But this is also happening with other vocational schools supported by our programmes: a better training and preparation of students that involves employers - companies - to ensure the skills match their needs, is paving the way for better employment and quality jobs across sectors.

- Energy has become a key sector: with prices rising and security threats stemming from the war in Ukraine, and a growing demand. What is Albania’s path towards a stronger and healthier energy sector?

- Energy is at the heart of economic development. Globally and in Albania there is growing awareness of its importance. At the same time, we all see and feel the effects of climate change. So, in addition to seeing energy as the driver of our economy, we also have to consider sustainability, by mitigating the impact of climate change. In this regard, it’s good that Albania relies mostly on hydropower for its electricity demand. At the same time, this source of energy is also highly dependent on climate factors and that is why a diversification of energy sources is necessary. Albania is well aware and is therefore moving towards other forms of green and clean energy supply, as well as towards energy efficiency. These are also high on our agenda.

Luckily, there is good potential to diversify the energy mix by adding solar and wind, which are not only abundant in the country but today also cost-competitive and a source of reliable power when combined with storage. We fully support the country’s aim of securing sustainable and affordable energy supply and becoming a net exporter of clean energy by 2030. In fact, we are proud to have supported the Ministry of Infrastructure and Energy with the first ever renewable energy auctions. These are efficient tools that achieve a double purpose: lowering costs and ensuring clean energy. Together with the European Bank for Reconstruction and Development EBRD, we successfully introduced auctions for wind and solar energy investments in the last two years. They will eventually result in securing 506 MW or 10% of the total energy capacity in Albania.

Energy efficiency is the other side of this coin. We currently have a programme introducing smart and efficient energy management for municipalities. It has improved public street lighting and the overall use of energy by public institutions in four municipalities. This has saved 677,000-Kilowatt hours per year, or 115,000 Euro per year on electricity bills, and reduces the equivalent of 250 tons of CO2 annually.

- In your function as head of economic development and employment for Switzerland’s cooperation programme with Albania, what are some of the best achievements in the economic area that you would want to be replicated and become sustainable?

- Some remarkable achievements, made by Albanian institutions with Switzerland’s support, include:

Albanian products are being registered for the first time internationally under Geographical Indication (GI) through the World Intellectual Property Organization – WIPO. This achievement strengthens the identity of the local community and increases the consumers trust due to quality assurance. Traditional methods and regional heritage associated to the product are thereby being preserved. The basis for this success has been laid by a programme for intellectual property (IP) rights, mandated by the Swiss State Secretariat for Economic Affairs SECO and implemented by the Swiss Federal Institute of Intellectual Property. Intellectual Property rights are fundamental for sustainable trade. This type of international certification for products made in Albania has just begun and can have great impact on opening up international markets. One concrete example is the Valmi Olive Oil from Elbasan which recently became the first Albanian product registered as Geographical Indication™?®? by the World Intellectual Property Organization WIPO. And, let’s not forget that certified products of high quality benefit also the domestic Albanian consumers and are not just for exports.

Another area of significant contribution is vocational education. Switzerland is a long-standing, reliable, and respected partner in Albania’s Vocational Education and Training (VET) modernization. Over the past 10 years, educational standards across both public and private VET providers have improved, ensuring higher quality throughout the sector. 45% of public VET providers have integrated digitalization and work-based learning into their programmes. As a result, 85% of VET students now benefit from these enhanced, practical learning experiences. The establishment of a Dual VET system represents another key achievement. This is the famous combination of theoretical learning and practical training, a big part of vocational education in Switzerland, Germany and Austria. Efforts to involve the private sector in VET have been successful, with 800 companies now being part of the system. This ensures that VET remains relevant and that graduates are ready for the job market.

On private sector development and the business environment, Switzerland supports a range of activities to improve SMEs marketability, competitiveness and growth, especially in agriculture, ICT and tourism, with focus on quality and standards and to access new and higher value markets. Such support is often geared towards compliance with EU requirements and standards, therefore also preparing companies for the time when they will be fully integrated into this market. Swiss support also contributes to the development of the start-up ecosystem, in particular the upscaling of growth-oriented start-ups, mobilization of capital and catalyzation of international market access for start-ups.

Other important but less visible achievements are linked with reforming public finance and the financial infrastructure. Here, our support has quietly but surely improved finance management nationally and at municipal level, and it has enabled better financial stability through proper regulations and policies. Last November, Albania was officially accepted into the SEPA – the Single European Payments Area – which brings multiple benefits for Albanian citizens and economy. Our support was crucial especially in designing the Payment Systems Law and related regulations and bylaws that made it possible for Albania’s to join SEPA.

- Recently Albanian food products have been stopped at the entry border and returned by EU countries due to high concentration of pesticides and other quality issues. What can be done to ensure that agricultural exports do not face border rejections?

- Albania’s exports in agriculture and food have high potential. Medicinal and Aromatic Plants (MAPs), fruits and vegetables and olive oil are already successful and valued export products. However, all need to be aware – and I mean authorities, producers and service providers – that compliance with quality and standards is not an option, it is a must. In view of Albania’s aspiration of EU accession and the just opened negotiations on Chapter 2 that includes the free movement of goods and consumer protection, enterprises must comply with international and EU standards.

It is therefore important to create both a quality infrastructure and culture among Albanian exporters, not only to access the EU market but also to ensure higher and better food safety for Albanian consumers. A joint programme with UNIDO, the Global Quality Standards Programme, which works with the line ministries for economy and agriculture as well as with export sectors like MAPs, fruit and vegetables and olive oil, works exactly on these aspects, to ensure that a quality mindset pervades all production processes.

- What is the state of economic relations between Switzerland and Albania? What can be done to increase Swiss investments in Albania?

- Albanian exports to Switzerland in 2024 reached EUR 21 million and Albanian imports from Switzerland reached EUR 98 million. So, while our economic relations are well-established and fruitful, there is still potential to increase the volume of our trade and exchanges, based on our respective areas of expertise and excellence.

We already spoke about tourism, as a now booming export sector of the Albanian economy.  Also between Switzerland and Albania, exchanges in this area are increasing. Besides the collaboration on qualified workforce mentioned above, the two countries signed in May 2023, a memorandum of understanding for closer cooperation between the National Tourism Agency of Albania and the Swiss tourism organization 'Switzerland Tourism'. And of course, there is also growing interest from visitors from Switzerland, evident also by an increasing number of direct flight connections between Switzerland and Albania, from Zürich, Basel and Geneva. Agriculture is another area where exports to Switzerland are taking place already and where we see potential for future growth. As already mentioned, what is crucial here is that such products are not just tasty, they certainly are, but that they also meet all the required quality and safety standards.

In terms of areas of expertise and technology from Swiss companies which are in high demand here, renewable energy, pharmaceuticals, food, construction and environmental technologies more broadly come to mind. While companies such as Novartis, Roche and SGS are present in Albania since the late 1990s, other distributors or branches joined in the following years, for example Georg Fischer, Geberit, Hilti, Ivoclar-Vivadent, Künzli Shoes, Liebherr, Rubi Bahntechnik, Schulthess, Sika, and Swatch. While some of these are well-known Swiss brands, others offer very specialized know-how, for example in the construction or railway sectors. Overall, the most important prerequisite for these and other companies to investment in Albania is the continued strengthening of law enforcement and a clear and stable regulatory framework, providing a conducive business environment.

The Swiss-Albanian Chamber of Commerce SWISSA, active since 2017, is a good entry point for companies and individuals interested in commercial relations between the two countries. /ADN