1997 Rebellion in Albania - Usury

Usury

Pyramid schemes, also known as rentier firms, started their operations in 1991. Their activity was based on obtaining a quantity of money and returning a greater amount based on a percentage. Although apparently functioning as a bank, pyramids had no concrete investment from which to glean money and apparently did not lend. The first pyramid scheme, which opened in 1991, was that of Hajdin Sejdisë, who later fled to Switzerland with several million dollars of Albanian businessmen. It was followed by 'Sudja' of Maksude Kadëna in 1993, a Gipsy who had previously worked as a worker in a shoe factory. By the end of 1996, pyramid schemes reached their peak. Interests that they offered were very tempting, where Sudja managed to provide 100% interest, which warned of imminent bankruptcy. Despite the advice of the IMF to close these schemes, the Albanian democratic government continued to allow their activities, often being involved in and personally profiting from them. In the period between 8 and 16 January 1997, the vast majority of the pyramids schemes collapsed, taking with them the life savings of Albanians. On 22 January, the government froze the 'Xhaferri' firm. 'Gjallica', another firm, was half bankrupt while the 'Vefa' firm, which had managed to carry out some investment in the Albanian market in hotels, fuel and factories, continued normal activity. The social crisis that the collapse of the pyramid schemes brought was arguably the worst in the history of Albania, a history which has often seen the very existence of Albania at risk.

The first protest held to resolve the crisis was that of 16 January in the South. On 19 January, Tirana saw protest of the 'Sudja' creditors. On 24 January began the "de facto" rebellion with thousands of people in Lushnja who had lost money marching on the city hall in protest against the government's support of the schemes. The protest quickly descended into violence. Police forces were routed, the city hall and adjoining cinema burnt. One day later, on 25 January, Tritan Shehu, chairman of the Democratic Party, was sent to Lushnje to resolve the situation; however on his arrival was held hostage for several hours at City Stadium and assaulted by the protesters. State Special Forces intervened in the city to extract Shehu. In the morning, every government institution in the city was looted, destroyed and burnt down. On 26 and 27 January violence erupted in other southern towns such as Vlora on the coast. On 30 January, the Forum for Democracy was formed by opposition parties with the role to lead the anti-government protests. The reasons for the protests were originally economic, with nearly every family in Albania having lost money in the pyramid schemes but naturally, anger was also directed against President Sali Berisha and against the government for allowing the schemes to continue despite the advice of the IMF. As allegations grew that Sali Berisha and others in government had personally profited from the schemes, many became convinced that the democratic party must be removed by force. This was especially true in the city of Vlora. On 4 February, distribution of a portion of lost money began at the counters of the National Commercial Bank, owned by the state. Rather than subduing the protests, this on the contrary increased people's suspicion of government involvement. On 5 February, the 'Gjallica' firm declared bankruptcy, and on 6 February violent protests resumed in Vlora. On 9 February, State Police were attacked in Vlora, and a day later, also in the South, fifty Special Force soldiers attacked and brutally dispersed protesters.