Anarchy stalks Albanian cities as cheated investors vent fury in orgy of destruction

Government unable to maintain order after collapse of pyramid schemes, writes Andrew Gumbel

Albania was on the brink of total anarchy last night as tens of thousands of people who had been cheated out of their life-savings took to the streets, tore up paving stones, battled with riot police, ransacked public buildings and started fires, including one that raged through the country's biggest petrochemical complex.

The wave of popular anger, triggered by the collapse of three of Albania's so-called pyramid investment schemes and fuelled over the past few days by a swelling tide of public protest, seemed to know no bounds. The efforts of President Sali Berisha and his government to bring the country to order had little or no effect.

In a move late yesterday, parliament authorised the use of the military to guard roads and government buildings as the protests continued.

"We shall overthrow the government today at all costs," shouted one demonstrator at a rally organised by the opposition at a football stadium in the capital, Tirana. In towns and cities across the land, protesters clamoured for the return of their money and the immediate resignation of the government.

Between 20,000 and 30,000 people turned up to the Tirana rally - a very large showing in a country gripped by fear of government repression. They then clashed with police as they tried to march from the stadium to Skanderbeg Square in the city centre. For two hours there were pitched battles as the demonstrators hurled stones and pieces of marble paving from the steps of the Palace of Culture. When they attempted to storm parliament, where deputies were meeting in emergency session, they were repulsed by water- cannon and gunshots fired into the air.

There were even more extraordinary scenes over the weekend in Lushnje, a small town about 60 miles south of the capital where thousands of people clamoured for the release of Rapush Xhaferi, the organiser of one of the failed pyramid schemes who was arrested last week in an ill-fated attempt to appease the public.

Believing that the release of Mr Xhaferi would be the answer to their problems, the rioters set fire to the town hall, smashed the windows of a state-owned bank, gathered up documents and burned them in the main square. They also set up barricades of burning tyres on Albania's only north-south main road.

On Saturday afternoon Albania's Foreign Minister Tritan Shehu, the second most powerful man in the country after the president, decided to fly into Lushnje by helicopter to try to calm things down. But as soon as he arrived he was struck on the back of the neck by stones, beaten up and dragged to a changing room in the football stadium. At least 10 police officers were also badly beaten.

It is still not clear whether Mr Shehu was kidnapped or whether he hid himself to avoid a public lynching. But it was only several hours later, under the cover of darkness, that he got away and returned to Tirana.

Yesterday, the mayhem in Lushnje resumed with the ransacking and burning of the law courts and the comprehensive wrecking of the local office of the ruling Democratic Party.

There were similar scenes in Berat, a little further to the south, and in the port of Vlore, Albania's second city, where a crowd of 3,000 set fire to the town hall in defiance of serried ranks of riot police and a unit of army troops.

The attitude of the authorities has looked like blind panic, with President Berisha promising the repayment of all lost investments - which nobody seems to believe - and pledging to launch a full investigation into the financiers he once described as investment experts but now refers to as usurers and criminals.

The pyramid schemes worked rather like a chain letter, with unrealistically attractive rates of interest of about 10 per cent per month being maintained only as long as more and more investors came forward to fill the coffers.

Popular in many parts of Eastern Europe since 1989, such schemes are widely recognised as excellent cover for money-laundering and personal enrichment by public officials and racketeers. They also have a habit of collapsing all at once, leaving poor investors bereft of what little hard currency they ever possessed.

In Albania, the schemes and their collapse have been particularly brutal, partly because of the autocratic nature of the regime, which almost certainly approved of and actively colluded in them, and partly because of the extreme poverty of the population. Many people were so dazzled by the promises of riches that they sold their houses and valuables in order to take part. The riots do not, however, express widespread revulsion at the government, but rather an irrational desire by people to fight for what they believe to be their right - the return to them of their money and the high returns which it was supposed to earn.

Several people who have lost hundreds, even thousands of dollars in the past few days say that all they want is to find a new pyramid scheme in which to pour another pile of money.

Pyramid of greed, page 15

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