Alliances matter in predicting trade outcomes because governments align trade policies with national security interests and businesses consider political relationships between states when assessing risk[1].
States and businesses not only consider political relationships and alliances when forming international trade, but they also focus substantially on the direct and indirect benefits of the alliance.
It is similar to the partnership between two businesses, where the one who tries to enter into this relationship is known and tries to benefit from the good name of the other partner.Higher levels of trade result when states have more alliances in common and when they are in the same alliance community. Joint membership in an alliance community predicts increased trade. This effect is magnified when considering the countries with the largest influential weight in the alliance network and that also provide the large markets of their countries.
Thus, if we comment on Albania’s participation in NATO since 2008, it seems that all this close approach towards the political-military alliance has mainly contributed to the growth and weakening of territorial integrity and security, creating
– another communication and information network, guarantee of joint expenses for the protection and facilitation of the budget- improvement of relations with partners within the alliance and increased attention to the country’s economy from them- reforming the democratization of the country- higher security and openness for import and export trade relations
If we look at the foreign trade statistics of our country, we can see that since 2008, exports and imports have increased[2] by 16% and this volume has continued to grow since then[3].
Meanwhile, global and ongoing geopolitical conflicts seem to have had their impact on trade, technological innovation and economic growth of each country of the political alliance, as this relationship created based on political security harmonizes in the best possible way the demands for subjects first, goods and services first within the community and further in the same way also provides goods, services and technology that serves the specific interests of each country to maintain its regional balances.
In this relationship, of course, there is an economic approach between the countries, which also adapts to the costs and the level of the economy of the small and developing countries within the alliance. Meanwhile, in the conditions of the implementation of the points of agreement between the countries, of course the countries that also have a prominent geostrategic role are the most suitable to benefit more by creating the adaptation of their territory for technology transfer, establishing military or technological bases, which are an increase in consumption within the country even though the share of consumption at the national level may be modest. But, the benefit in these cases is seen with the time span of such agreements and one case that can be positively mentioned is neighboring Greece and the benefit from the NATO bases in Crete, or the Bondsteel base in Kosovo and similar bases in other countries of Europe[4].
However, the growing influence of China[5] or Russia etc. has generated profound effects on the political and economic decisions of its partner countries, but also on those where it aims to increase its influence through the approach of economic agreements and then conditioning it with stronger political and why not military relations.
Drawing on utility theory, the political relationship appears to be a major determinant of the relationships that arise uncontrolled by states between consumers and trading companies and thus the interactions between importers and exporters. All this happens in the conditions of the use of technology for communication and increasing activity in recent years. Meanwhile, political relations between states seem to be little affected by changes and directions in the relationships of individuals and companies in trade.
Starting from the political and economic disorientation, influenced by the geo-economic and political changes, as well as the increase in the political selfishness of the leaders of small countries like Albania, where the reports that are published e.g. from the Department of State show sharp problems on corruption, beyond the membership in the political and military alliance, a smarter sense of interweaving the positives that this membership should fall further is also necessary.
In this case, it is necessary that the lack of transparency regarding the benefits of membership in political alliances is not treated as a political advantage by governments aiming to increase political capital. In each case of benefits, transparency is needed on how the government has managed the integrity and security offers with a profitable approach in the long term and not for momentary, mainly political and electoral gains.
Economic and security cooperation within the alliance may lead to the loss of the country’s favorable advantages (democratic standards, natural resources, etc.) by putting local businesses and the economy at a disadvantage along with the objectives of increasing well-being. Usually, larger allies tolerate patriotism policies under the national logo from smaller allies to maintain stable cooperation. Although the conclusion of economic and security agreements within the framework of the alliance may result in increased economic exchange between allied states, this should be seen as closely related to long-term policy and the preservation of the bases guaranteed by the Constitution and historical tradition.
However, it is important to note that increased trade between allies reduces the likelihood of wars with any other country, including non-allied states.
Ultimately, Albania’s participation in the military alliance should be based on the fulfillment of several important objectives, such as: long-term improvement of economic relations through the exchange of civil and military technology, cooperation with significant effects on trade policies and the promotion of stability through incentives and facilitating trade policies, where the relationship should be two-way.
Thus, a meaningful example in this direction is the military aid likely to come from the alliance countries in Albania’s defense budget in 2024, where 1% of GDP is covered by internal funds and another 1% of GDP is covered from foreign funds.
Likewise, the work for the NATO air and technological base in Kuçovo, as well as technological and logistical assistance in the fight against crime, illegality and the guarantee of territorial integrity, as well as increasing Albania’s representative role in high-profile forums high political and historical are other valuable examples of Albania’s benefits from participating in the political alliance.
All this flow of direct and indirect influences increases the economy the most, where the case of the increasing number of foreign visitors entering the country in 2023 is also the merit of the security that Albania presents in the troubled regional panorama and beyond.
After all, every relationship between countries and people, since ancient times, has had and has at its core exactly the economy and the benefit for businesses and individuals from the expansion of relationships.
[1] https://www.jstor.org/stable/43920602
[2] https://www.instat.gov.al/media/1472/foreign-trade-2005-2009.pdf
[3] https://www.instat.gov.al/al/temat/tregtia-e-jashtme/tregtia-e-jashtme-e-mallrave/#tab3
[4] https://ministrialajmeve.com/lista-e-bazave-ushtarake-te-shba-ve-ne-evrope/
[5] https://jshippingandtrade.springeropen.com/articles/10.1186/s41072-020-00076-w