After decades of isolation of the country, which was partially self-inflicted, Albania's economy was not sufficiently prepared for the opening of its market to the outside. The transition from a planned economy to the free market economy involved further problems, aside from domestic and foreign policy matters.

Industrial production declined heavily and the unemployment rate increased within urban areas up to 70%. Further factors were a rapid inflation rate and outmoded production technology, as well as insufficient infrastructure and transportation, as well as a deficient energy supply (Albania was connected to the European railroad system only during the 1980s).

Albania was already a poor country during communist times. The situation has slowly improved as a result of lifting price restrictions and due to privatisation.

However, such tendencies are a contrast to the abundance of natural resources that are found in Albania. Furthermore, agriculture is facilitated by rather fertile soils. Particularly regions with a Mediterranean climate allow for the cultivation of tropic fruits.
Energy generation is enabled through numerous rivers and water bodies. Additionally, Albania also has oil and natural gas resources.

Nevertheless, 20% of the population continue to exist below the poverty line (2003) while living costs have simultaneously exploded and unemployment has continued to remain enormously high.

The economic crisis of 1997 was yet another set back for Albania.

The most important projects that are necessary for a positive and sustainable development in Albania are:

• Establishment of a transportation network (harbours, railroad, roads, and airports)
• Securing energy supplies
• Establishment of a legal area and strengthening of legislation with simultaneous measures against human rights violations, gang crime and corruption
• Creation of a civil society
• Modernisation and establishment of commercial and industrial production
• Investments into research and development
• Guaranteeing foreign investments and a stabilised legal area