Club Med feels the heat in Albania after resort scheme draws protests

Albania has not exactly rolled out the red carpet to overseas visitors in recent years. During the 40-year Stalinist dictatorship of Enver Hoxha, pill-boxes and bunkers, rather than luxury hotels, scarred the idyllic coastline. In the 1970s, tourists with long hair were shorn at Tirana airport - to stave off "capitalist moral pollution".

For Club Med, the French-owned global travel company, the policy of isolationism had tragic consequences. In 1984 one of its senior executives was shot dead by border guards as he came ashore during a diving trip at Kakome Bay.

This week, the holiday company once again received a hostile reception from the locals, with its plans to build a luxury 350-villa complex at the same pristine bay, 160 miles south-west of the capital. After four days of protests, in which 300 opponents of the plan blocked the way into the proposed site, the riot police moved in.

With the help of one of the developer's bulldozers, security forces used batons to scatter the crowd. A dozen people including Kakome Bay's mayor, Vladimir Kumi, were arrested and several others were injured. Local women, who stoned the police, were beaten. A cameraman was also beaten up during the four-hour confrontation. "The bulldozer broke their ranks and then the police beat them up in a beastly way," a villager said. Florion Serjani, a spokesman for the Public Order Ministry, insisted that officers had shown restraint. "Police have removed the people and work has started. No one has been badly hurt. We used force but not violence," he said.

Residents say that Club Med's local business partner, Dritan Cela, is developing land that is not his. They say the site, three miles from the highway, is rightfully theirs. No compensation has been offered, they say, after the long-term lease deal was agreed by the Socialist-led government of Prime Minister Fatos Nano. The opponents of the scheme are backed by the opposition Democratic Party. Its leader, the former president Sali Berisha, has warned the Prime Minister not to stoke the conflict ahead of forthcoming elections.

Mr Cela, head of the Riviera company which is developing the site, claimed that he had tried to reason with the protesters, but his argument that the resort would bring benefits to everyone in the region had been ignored. "Building this tourist village is the only hope for the development of tourism that meets modern criteria," said Mr Cela.

Critics say Albania is riddled with corruption. Only yesterday the European Union expressed its mounting concern at the insufficient pace of reform. It said key areas such as fighting organised crime, strengthening the judiciary and completing the transition to a rule-based economy were still below acceptable standards.

But the potential of Albania as a tourist destination is undoubted. According to Neil Taylor, who has been leading tourist parties to Albania since 1973, the country has much to offer. "Albania is somewhere very unspoilt because during the communist era tourism was discouraged. It did not undergo the ravages of neighbouring Yugoslavia or Greece," he said.

While there are few facilities for the independent traveller, there is mounting interest in its Greek and Roman antiquities, as well as its impressive Byzantine heritage. There is also a growing market for retro-communist travel to a country where Norman Wisdom was regarded as a national hero.

Kakome, a short boat ride from Corfu, benefits from a warm climate and cooling summer breezes. Olive and oak trees abound in the valley, with dense forest growing down to the water's edge. A medieval monastery overlooks the bay. A Club Med executive spotted the site during a helicopter reconnaissance of the Ionian coast last year. Work had been due to start in November but after a series of delays the project only got off the ground this week.

In a separate development yesterday the government selected a French-Croatian company to carry out a World Bank-backed research project into tourism along the south-western shore. It wants to attract 1.25 million visitors to the region by 2012.

During the dictatorship, British visitors were usually left-wingers eager to enjoy a bond of solidarity. Others came from the right, eager to "check out the communist menace", said Mr Taylor.

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