Bank of Albania: Just 30 thousand dollars a day for the interest-payment schemes pages 2, 3, 4, 5, 6

. The interest-payment schemes and the state have become trapped in a vicious circle. Berisha and his government no longer know what to do. Just a few days ago, state banks decided to turn off the money tap for rentier companies and firms. The decision appears to be final: only 300 thousand dollars a day for each firm. VEFA president Vehbi Alimucaj threatens to report Bank of Albania Governor Kristaq Lumikum for criminal prosecution. Alimucaj’s hopes are high when he recalls that half the justice system, police traders, or the entire government administration have deposited their money in his company. But the reasons that led Lumikum to block the deposits outweigh the interests of the government officials whom the bosses of the interest-payment schemes think they can rely on. For several weeks, the unlucky deposits of rentier companies and foundations had been dwindling rapidly. Sources at the National Commercial Bank emphasize that the rate at which deposits were being withdrawn from the bank to pay interest was such that it could have destroyed all the interest-payment schemes by mid-February. The speed at which deposits were being drained was influenced by people’s loss of faith in the “miracle” of the schemes. This faith began to crumble in October, when Finance Minister Ridvan Bode, under pressure from the IMF and the World Bank, warned Albanians that their money was not safe in the schemes. This is also borne out by data from the Bank of Albania, which report that in October ’96, deposits in the schemes increased by only 13 million dollars, whereas in July they had increased by 58 million dollars. The number of people who distrusted the schemes grew relatively sharply after Grun-as’s departure, Sudja’s collapse, and the earthquake at Gjallica. This led depositors to demand from the companies or foundations not only the interest, but also their original deposits. It was precisely at the end of December and in the first days of January that the companies and firms began emptying their bank accounts to pay their clients. But after citizens took their money out of the banks, a large part of it was put into circulation, thereby causing inflation and price increases of 15–20% within a week. In just one day, the lek fell by 9.5 points against the dollar. At that point the bank intervened, blocking the mass withdrawal of deposits. If the bank had continued to allow deposits to be drained and the money to enter the market, the dollar might today be exchanging for 140–150 lekë. That would mean doubling inflation and perhaps raising prices even more. But while the interest-payment schemes are on the road to prosperity, high prices and popular discontent with Berisha and his elite are reaching their peak. It seems Berisha does not like this outcome. Taking into account that the schemes are temporary, as well as the IMF’s demands, Berisha is relying more on Washington. By closing down the schemes, he is blocking further price increases and poverty among even more sections of the Albanian population. But with this solution he must also consider the popular revolt. Just 5,000 account holders—and the revolt has put all the capital’s police on alert. Yesterday in Vlora, around 10,000 Gjallica creditors showed signs of mass protest. While Alimuca(ja) arrived calmly, today around 2,000 people gathered in front of his counters. If the turmoil frightens Berisha, he will turn the banks’ tap back on for the foundations and companies. But at the same time, he will also open the tap on inflation and further price increases, causing consequences more unexpected than those of the interest-payment schemes.

Voice of America broadcast another report last night without citing its source. Correspondent Raze said in the 20.30 edition that Sudja had been taken to the police station, but that it was not known whether she had been arrested. At the same time, people present in the courtyard of Sudja’s home told “KJ” that she was still there. This is the second time this correspondent has broadcast news without identifying its source. Two days ago he was at the center of attention after the report, later denied, about 130 million dollars having left Vlora. Now Sudja’s mysterious detention has come onto the scene. This correspondent, who works for a prestigious radio station, would do well to say where he gets his news before state authorities come forward to deny it, even with embellished formulas such as “there is not sufficient evidence to...”. We do not know whether the office in Washington is aware of the sources that Raze repeatedly fails to cite, on the basis

Yesterday during the demonstration at Sudja Photo: G. Shkullaku