An Echelon Media Company
Tuesday November 29th, 2022

In hidden mountain air base, Albania stores MiGs for sale

AFP – On a barren hillside in northern Albania lies a portal to the country’s communist past: a massive steel door creaks open to reveal a hidden former air base burrowed into the heart of the mountain.

Made up of 600 metres (1,980 feet) of tunnels that once teemed with military life, the secret Gjader air base is now a depot for dozens of hulking communist-era MiG jets collecting dust in the darkness.

Three decades after shedding communism, Albanian authorities are still trying to sell off the Soviet and Chinese-made aircraft, of which there are dozens more in another nearby air base.

"Aligning our equipment and our weapons to the NATO standards" is part of Albania’s "new chapter" with the Alliance, which it joined in 2009, says the military’s Chief of Defence Bardhyl Kollcaku.

As for the MiGs, "apart from nostalgia, (for which) we will keep some of them in our museum… the rest will be treated according to the domestic legislation for sale or other usage," he told AFP.

The communist-era jets, which include MiG-19, MiG-17 and MiG-21 models among others, have been out of commission for well over a decade.

But museums, collectors and other aviation aficionados have already expressed interest in giving the relics a new home.

When Albania first discussed selling the MiGs in 2016, requests came in from the Air and Space Museum in France, as well as a flight school in Germany.

Yet no sales have been completed to date, with legal paperwork holding up the process.

Individuals are also on the waiting list, including Albania-based French businessman Julien Roche, who plans to install the plane in his garden.

"It’s not so easy to get this kind of aircraft now, because all of them have been mainly destroyed, not stored like they are in Albania," he told AFP, from a house brimming with eccentric items.

He has put his name down for one of the oldest models, a Chinese-made MiG-15 with a price tag of around 10,000 euros ($11,000), which was used by North Koreans before being gifted to Albania.

– Closed to the public –

Like the 7,000 concrete security bunkers that dot the countryside, the clandestine Gjader base was part of former communist dictator Enver Hoxha’s plan to fortify his hermit state against feared foreign invasions that never materialised.

More than 600 military personnel used to work inside the maze of tunnels that were shuttered in 2000 and remain off limits to the public.

Jets flown after 2000 used a different military base, until the last of the planes were taken out of service following an accident in 2004.

After opening up the dark and damp tunnels to AFP, the base’s current commander Fatmir Danaj admits the old planes evoke an unexpected nostalgia.

"The pleasure of flying and of working in this base was unimaginable," 52-year-old Danaj said, as he shone his torch on a row of silver jets, which, as a young pilot, he used to land on the runway that feeds into the mountain.

Today, the scores of rooms inside — including a cafeteria, dorms and array of other offices — are empty except for a scattering of debris and the faded signs on their doors announcing their function.

In one empty office, a reminder still hangs on the wall: "Attention! Put documents in their files and submit them to the secret administrative office before leaving the workplace."

– NATO comes to ‘Stalin City’ –

During his nearly 40 years of rule, Hoxha turned Albania into the most militarised country in the Balkans.

That backfired spectacularly in 1997, seven years after the fall of communism when the country was swept up by an armed rebellion that saw citizens raid armories and military bases for weapons.

Gjader was also breached, with people looting weapons and selling parts of some MiGs as scrap metal.

Today the Albanian airforce has only a small fleet of helicopters and its air space is protected by NATO.

In a sign of the changing times, the first NATO base in the Balkan region will be built in Albania’s Kucova, once known as "Stalin City" as a symbol of friendship at that time between Albania and the Soviet Union.

But Danaj still dreams of seeing Gjader returned to its former glory.

"The base could serve as a museum, but with its modern infrastructure, its tunnel system, it can be functional again and serve NATO," he said.

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A new Sri Lanka monetary law may have prevented 2019 tax cuts?

ECONOMYNEXT – A new monetary law planned in 2019, if it had been enacted may have prevented the steep tax cuts made in that year which was followed by unprecedented money printing, ex-Central Bank Governor Indrajit Coomaraswamy said.

The bill for the central bank law was ready in 2019 but the then administration ran out of parliamentary time to enact it, he said.

Economists backing the new administration slashed taxes in December 2019 and placed price controls on Treasuries auctions bought new and maturing securities, claiming that there was a ‘persistent output gap’.

Coomaraswamy said he keeps wondering whether “someone sitting in the Treasury would have implemented those tax cuts” if the law had been enacted.

“We would never know,” he told an investor forum organized by CT CLSA Securities, a Colombo-based brokerage.

The new law however will sill allow open market operations under a highly discretionary ‘flexible’ inflation targeting regime.

A reserve collecting central bank which injects money to push down interest rates as domestic credit recovers triggers forex shortages.

The currency is then depreciated to cover the policy error through what is known as a ‘flexible exchange rate’ which is neither a clean float nor a hard peg.

From 2015 to 2019 two currency crises were triggered mainly through open market operations amid public opposition to direct purchases of Treasury bills, analysts have shown.

Sri Lanka’s central bank generally triggers currency crises in the second or third year of the credit cycle by purchasing maturing bills from existing holders (monetizing the gross financing requirement) as private loan demand pick up and not necessarily to monetize current year deficits, critics have pointed out.

Past deficits can be monetized as long as open market operations are permitted through outright purchases of bill in the hands of banks and other holders.

In Latin America central banks trigger currency crises mainly by their failure to roll-over sterilization securities. (Colombo/Nov29/2022)

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Sri Lanka cabinet clears CEB re-structure proposal: Minister

ECONOMYNEXT – Sri Lanka’s cabinet has cleared proposals by a committee to re-structure state-run Ceylon Electricity Board, Power and Energy Minister Kanchana Wijeskera said.

“Cabinet approval was granted today to the recommendations proposed by the committee on Restructuring CEB,” he said in a message.

“The Electricity Reforms Bill will be drafted within a month to begin the unbundling process of CEB & work on a rapid timeline to get the approval of the Parliament needed.”

Sri Lanka’s Ceylon Electricity Board finances had been hit by failure to operate cost reflective tariffs and there are capacity shortfalls due to failure to implement planned generators in time. (Colombo/Nov28/2022)

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Sri Lanka new CB law to cabinet soon as IMF prior action

ECONOMYNEXT – Sri Lanka’s new central bank law will be submitted to the cabinet as a prior action of International Monetary Fund with clauses to improve governance and legalize ‘flexible’ inflation targeting, Central Bank Governor Nandalal Weerasinghe said.

Under the new law members of the monetary board will be appointed by the country’s Constitutional Council replacing the current system of the Finance Minister making appointments.

“It will be a bipartisan approach,” Governor Weerasinghe told an investor forum organized by CT CLSA Securities, Colombo-based brokerage.

“The central bank’s ability to finance the budget deficit will be taken out. Thirdly the flexible inflation targeting regime will be recognized in the law as the framework.”

The law will also make macro-prudential surveillance formally under the bank.

There will be two governing boards, one for the management of the agency and one to conduct monetary policy.

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