Tales From Albarado: The Materiality of Pyramid Schemes in Postsocialist Albania

Peer Reviewed


The Albanian pyramid schemes (1992–97) drew in almost two thirds of the country's population with the promise of sure financial returns. When the schemes collapsed, many thousands in Albania lost their savings, remittances from immigrant relatives, even their recently privatized apartments. How might we understand such widespread involvement in this high-risk economic activity? Moving beyond explanations that stop at “mania” or “ignorance of market logic,” this article looks to accounts from former participants (kreditors) that emphasize the materiality of the schemes—especially the presence of stacks of cash and the circulation of immigrant remittances in multiple currencies—for a more grounded understanding of how the pyramid schemes actually took hold. The central argument of the article is that the schemes came to fill the gaps between the liberalization of financial markets after socialism and the coeval flows of cash coming into the country beneath the regulatory frameworks of formal financial institutions. The rise and collapse of the Albanian pyramid schemes may then be viewed not as an abstract financial “bubble” but as the result of historically specific “translations” of the wider neoliberal push for rapid and unregulated privatization. As such, these schemes, which were embedded in the particularities of postsocialist transformations, were also active forces that contributed to processes of wealth and value transformations and to the formation of a specific kind of business culture that combines conspicuous consumption with networking and entrepreneurial skills established during the socialist years.


The notebook of a pyramid scheme sekser (broker) listing the deposits of former creditors to Gjallica in various currencies. The notebook keeps an account of the deposited amounts, the dates of deposits, the interest that the depositors are supposed to receive in the future and the currencies in which the deposits are made.

Editorial Footnotes

Cultural Anthropology has published a number of essays on post-socialism, including Dominic Boyer and Alexei Yurchak "American Stiob: What Late-Socialist Aesthetics of Parody Reveal about Contemporary Political Culture in the West" (2010), Nancy Ries' "Potato Ontology: Surviving Postsocialism in Russia" (2009), and Paul Manning's "Rose-Colored Glasses? Color Revolutions and Cartoon Chaos in Postsocialist Georgia" (2007).

Cultural Anthropology has also published essays on investment. See for example, Julie Livingson's "Suicide, Risk, and Investment in the Heart of the African Miracle" (2009), Peter S. Cahn's "Consuming Class: Multilevel Marketers in Neoliberal Mexico" (2008), and Karen Ho's "Situating Global Capitalism: A View from Wall Street Investment Banks" (2005).

About the Author

Smoki Musaraj is a PhD Candidate in Anthropology at The New School. Her dissertation explores how the Albanian pyramid schemes were made possible and legitimate through specific political and business practices, how they were entangled with socialist and postsocialist materialities, how they mediated the transformations of value and wealth across different temporal and spatial scales, and how the experience of their collapse still haunts the economic landscape of contemporary Albania. She is also working on a study of corruption indicators as a type of expert knowledge characteristic of the global anti-corruption movement of the mid-1990s. Here, she approaches corruption indicators ethnographically, focusing on how this type of expertise is produced on the ground, how it circulates among different governmental and non-governmental actors, and how this expertise generates new kinds of politics.

Additional Work by the Author

Musaraj, Smoki. 2009. "Passport Troubles: Social Tactics and Places of Informal Transactions in Post-Socialist Albania". In Anthropology of East Europe Review. 27(2):157-175.


Top Channel Documentary “Viti 1997” on the events leading to the civil war of 1997 - Exclusive Part I includes interviews with key politicians, former creditors waiting in line for their deposits in early 1997, and ends with an interview of VEFA’s Vehbi Alimucaj a few months before VEFA’s collapse, promising to help those who had lost their savings in the other schemes.

Exclusive Part II continues the interview of Alimucaj, discusses the anarchy of 1997 and the collapse of the incumbent government.

Euronews Reportage on VEFA, 1996 (in Italian): http://www.balcani.tv/video.php?id=1801

Description: Video clip from European Union News Network, Euronews, presenting a profile of former pyramid scheme VEFA and president of the firm, Vehbi Alimucaj. Released in 1996, the year before the collapse of the scheme, the reportage presents VEFA as one of the companies that has successfully embraced Albania’s market reforms. Euronews characterizes VEFA as “the very image of emerging capitalism” in Albania. The reportage features VEFA’s president Vehbi Alimucaj accounting for the company’s success. Alimucaj describes the key to VEFA’s success as a particular “strategy for making the most of the immigrant savings”. VEFA, according to Alimucaj, has “acted as a good Messiah, doing the best possible for Albanians’ savings”. Alimucaj then lists his many businesses and the numerous countries with which he claims to be in business relations. The clip then moves on to discuss VEFA’s investments in tourism, highlighting the reopening of the entertainment center, Iliria Island, described as “an imposing platform on the sea built by VEFA in front of Durres”. The “Island,” according to Alimucaj, “represents the Albanian desire for rapid change and the country’s ability to invest in tourism.” The clip ends with Alimucaj speaking at Iliria’s spectacular inauguration party (discussed in the essay).

"Copy of the economic page from the newspaper Koha Jone." September 17, 1996.
"Copy of the economic page from the newspaper Koha Jone." September 17, 1996.

The newspaper announces that, alongside the daily monetary exchange rate and the exchange rate of letra me vlere (privatization bonds),  it will now regularly display the interest rates of the different kompani and fondacione. Koha Jone describes them as firma te fajdeve (money-lending firms), after their collapse these were all considered as pyramid schemes. The headline of the accouncement (typed in bold) says "Koha Jone will tell you everyday: Where and How Much to Get Richer".

"VEFA ad from 1996."
"VEFA ad from 1996." November 1, 2012.

The company advertises its motley collection of values at its five-year anniversary: "incarnation of humane capitalism; valuing national priorities; confirmation of stability and broad perspective; direct investment and rapid circulation of money; dynamism and intuition; contemporary tendency in the area of application of technology; accurate planning and economic pragmatism" diverse portfolio of activities including "air, land, water transportation; tourism and urban construction; light and food industry; agriculture; culture and marketing".

"Photos of the post-1997 spacious and luxurius high rises build near Vlora's water front."
"Photos of the post-1997 spacious and luxurius high rises build near Vlora's water front."

Related Readings

Bezemer, Dirk (2001) Post-Socialist Financial Fragility: The Case of Albania. Cambridge Journal of Economics 25(1):1–23A version of this paper can also be found at http://www.tinbergen.nl/discussionpapers/99045.pdf

Comaroff, Jean, and John Comaroff. (2000) Millennial Capitalism: First Thoughts on a Second Coming. Theme Issue, “Millennial Capitalism and the Culture of Neoliberalism,” Public Culture 12(2):291–343.

Guyer, Jane (2004) Marginal Gains: Monetary Transactions in Atlantic Africa. Chicago: University of Chicago Press.

Harvey, David (1989) The Condition of Postmodernity. Oxford: Blackwell

Jarvis, Christopher (1999) The Rise and Fall of the Pyramid Schemes in Albania. IMF Working Paper, 99/98. Washington, DC: IMF.http://www.imf.org/external/pubs/ft/wp/1999/wp9998.pdf

Latour, Bruno (2005) Reassembling the Social: An Introduction to Actor-Network Theory. New York: Oxford University Press.

Roitman, Janet (2005) Fiscal Disobedience: An Anthropology of Economic Regulation in Central Africa. Princeton: Princeton University Press.

Tsing, Anna Lowenhaupt (2000) Inside the Economy of Appearances. Public Culture 12(2):115–144.

Verdery, Katherine  (1996) What Was Socialism and What Comes Next? Princeton: Princeton University Press.

Yurchak, Alexei (2002) Entrepreneurial Governmentality in Post-Socialist Russia: A Cultural Investigation of Business Practices. In The New Entrepreneurs of Europe and Asia. Victoria Bonell and Thomas Gold, eds. Pp. 278-324. Armonk, NY: M. E. Sharpe.

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