About the Author: Daniel Rosenblum serves as Coordinator of U.S. Assistance to Europe and Eurasia.
Last Wednesday, I had a counter-intuitive experience. As Coordinator of U.S. Assistance to Europe and Eurasia, my job is to ensure that U.S. foreign aid to the region is supporting priority foreign policy goals. It is all about seeing that taxpayer funds are being spent in the most efficient way possible, trying to maximize the benefit to U.S. national interests. But on January 19, 2011, the Albanian-American Enterprise Fund (AAEF), recipient of a U.S. government grant, returned $15 million to the U.S. Treasury. This payback represented the successful completion of a program established by the U.S. Agency for International Development (USAID) in 1995 to promote the growth of the private sector in Albania and assist the country's transition out of Communist isolation and towards a market-based economy.
AAEF had the task of promoting private business development in Albania by drawing on its $30 million grant to invest in a wide array of private enterprises, and by providing management advice and training to promising companies. In view of Albania's decades of oppression and poverty under the Hoxha regime, everyone understood that AAEF faced an uphill struggle. Nonetheless, the American investment professionals on its board of directors, who donated their time and expertise, were determined to show that entrepreneurship could serve as an engine for growth and for Albania's entry into the international economic system.
Despite an investment climate in Albania that was often -- to say the least -- challenging over the past 15 years, the AAEF Board and investment managers helped launch successful companies and create jobs in this exceptionally poor country, while at the same time turning the initial USAID grant into an investment portfolio worth approximately $208 million. The Fund completed over 60 investment transactions with more than 32 Albanian companies, including the privatization of the new Mother Teresa International Airport, the establishment of the American Bank of Albania, and the development of businesses ranging from light manufacturing firms to insurance companies. AAEF's investments contributed an estimated $725 million to Albania's GDP and created over 3,500 jobs.
At a ceremony marking the return of the funds held at USAID, AAEF Board Chairman Michael Granoff recounted AAEF's early struggles and highlighted its close partnership over the years with successive Albanian governments. USAID Assistant Administrator for Europe and Eurasia, Paige Alexander noted that AEEF's successful investments will pay foreign policy dividends for years to come: not only was $15 million returned to the American taxpayer, but the remaining $193 million has been used to establish the Albanian American Development Foundation, which will promote economic development by providing grants in areas such as education for sustainable development, entrepreneurship, leadership development, and cultural tourism. Congressman Elliott Engel, a long-time supporter of Albanian issues in the U.S. Congress, also spoke at the event.
I highlighted the fact that AAEF has promoted the growth of a prosperous Albania while further strengthening bilateral ties between our two countries. Albania is now a member of NATO and on track to eventually become a member of the European Union, provided it continues on the path of democratic and economic reform. I was happy to have the opportunity to join Congressman Engel, the Albanian Ambassador, and other State and USAID officials to mark this foreign aid success story.
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