"The art of losing things isn't hard to master"
About two weeks before the evacuation, the currencies were going wild, and I had to change my lek back to American money before it lost any more value. I had rent money, grant money and money for future
travel. In one week the value of the dollar dropped 25%. It was to be a
repeat of the hyperinflation found in Bulgaria. I walked with a sense
of urgency past Skenderbej Square in search of the man with the best
rates. I took pride in my ability to figure out exchange rates and the
best value for them. I brought about $300 or $400 and a calculator. I
found a man with the best rates, sat at a cafe with him and counted my
money. But in my haste I'd made a mistake. Instead of looking for the
best rates, I ended up exchanging my lek with the man who had the worst
rates for the dollar. I didn't realize it until the next day. I
discovered my error at the same time I discovered that fifty more
dollars were missing or unaccounted for. I frantically searched my bags
in the hopes that it had fallen somewhere. Perhaps I traded it the day
before. Perhaps the man who did the money exchange accidentally took
it. Maybe I should go back the next day and ask if he was $50 over.
That day and the next were spoiled. How could I have been so stupid!
And I for so long had prided myself on my quickness with numbers! The
$75 I had lost was nothing to sneeze at either. To someone living in
America, it was an annoyance, but in Albania, it was about 2 weeks of
living expenses. I couldn't believe it. Suddenly I became more
conscious of what I was spending. Perhaps I didn't need that extra bag
of Cheetos on the way to Peace Corps. Perhaps I could skip the Stephen
Center (the only American restaurant in town) a few times. My
misfortune was too embarrassing to mention to other Volunteers.
Sometime, in November 1996, I visited my Tirana host family and
mentioned the Peace Corps director's warning about the pyramid schemes. I'd heard about
it on and off before; a banking volunteer had told me as early as 1995 that Albania's
biggest company, Vefa, was probably a pyramid scheme. It started hitting the Albanian
newspapers in that month or the month before, but the dangers warned by the newspapers
seemed more hypothetical than real. Nelson, the new country director, prepared us for
contingency plans and talked about possible scenarios for the next year.
"Did you invest a lot?" "Yes, a few thousand dollars, why?" My heart sank
as I realized the implications.
At first, Bashkim, my host father didn't understand what I meant by
"schema pyramida," and then when I mentioned
"fajde," he replied that
yes, he had invested money just recently. I stared at him with
surprise. "Did you invest a lot?" "Yes, a few thousand dollars, why?"
My heart sunk as I realized the implications. I explained to him what
the embassy had been fearing. But how can you tell a man that the money
he'd invested (probably 1 or 2 year's salary) would probably never be
seen again? Of course, he was concerned and wanted to know exactly what
I heard. But I knew only sketchy details. He had invested most of his
money in Gjallica ( the investment company based in Vlore) and some in
Vefa, the country's largest company. He planned to use the profits to
buy a taxi and become a taxi driver. His business as a drink shop owner
was worsening. It was hard work, the profits weren't great, and his
shop was not large enough to compete. He was renting from somebody, and
the owner wanted the land back. I tried to tell Bashkim that I really
didn't know if he would get his money back. I was only an English
teacher and shouldn't be trying to give people investment advice.
Baskhkim, a private vendor of drinks, invested several thousand in the "fajdes."
His dream was to buy a taxi.
Upon returning to Vlore, I tried to spread the word about the schemes to my Albanian
friends at the university. Or at least to find how many of them had invested their money.
Some like Abdyli, an English
professor, waved off the question together. "Where would I get the
money to do such a thing?" I mentioned it to Ermelinda, the best
business student at the university whose father worked for Vefa. What
did she know? What had Vefa been telling her dad? She smiled and
shrugged. "Nobody knows these things. Maybe it is a good investment,
but how can anybody find out?" She said it with a bit of good cheer, as
though merely wishing would make the schemes work. I remember my
discussion with two young business professors whose opinions I
respected. Both were enthusiastic free market people. Selman, the
professor of marketing and investment, showed a grasp of what a Ponzi
pyramid scheme was, noting the need to make company reports more
transparent to potential investors. Still, he assured me that the big
investment companies were probably legitimate. He had "played the
market" by investing a little bit in each of them. Natasha, an
economics professor who had studied in America and Italy, said,
"capitalism in your country is more developed. Americans have more
experience. In Albania, people don't understand the concept that you
might lose your money when you invest." These professors were not idiots, but in their
enthusiasm for free markets they had overlooked the
necessity of skepticism in making investments. Neither individual was
really bothered by the possibility of economic collapse. They viewed it
as one of the consequences of a free economy.
A new English teacher, Ilka, confessed that she'd invested the money made from the
sale of her house in Berat to Gjallica. She had never heard anything bad about Gjallica
before. After all, the company seemed successful. They were building a new business
complex a few blocks from the university and had sponsored the Miss Europe extravaganza
in Tirana a month or two ago. I didn't want to say what I thought would happen to her
money, but I didn't want to lie to her either. I was only an English teacher. Ilka
was not one to be disturbed easily; she took the news calmly, but at least she had
come to her senses. Although it is true that a lot of money invested in these
pyramid schemes came from family members overseas and savings, many people sold
their homes, rented an apartment and used the money from the sale to invest in
a company. One legacy of the communist system is that almost every family owned
their apartment and didn't have to pay rent. The apartments were not pretty, and
many were downright awful, having
problems with electricity and water, but at least nobody had to worry
about being evicted. Many of the best houses I'd seen in Albania were
those built by the family themselves. The Sako family, a family I met
in my first year, built a stylish house and artist studio in the
center of Tirana. It was their pride and joy. Another family in Kruje,
a small village outside Tirana, had invited me and another volunteer
into a spacious and magnificent villa amidst the olive trees and
haystacks. This was not poverty but grandeur.
Vefa, the largest pyramid scheme and the last to go bankrupt, reassured potential
investors by massive advertising and the purchase of things like boats
But the house was an financial asset, and Albanians were starting to realize that. I
lived with an Albanian family in Vlore who
an already small apartment into a smaller one in Uje Ftohte nearby. The
parents were shrewd people who jumped on the opportunity to invest in
Vefa in the latter part of 1995. Pavli, the father who once taught
physics, showed me how by earning 10% interest a month, the family
would be able to buy a new and even bigger house. I was skeptical when
he told me in 1995, but later in Tirana, I bumped into them taking
their evening stroll. They had found a nice house in Tirana that they
were overjoyed with. Should I begrudge Pavli his good luck?