The Albanian Civil Unrest of 1997: A Pyramid Scheme’s Deadly Consequences

That time a Pyramid Scheme caused a full on civil war…. Sort of.

Understanding the Pyramid Scheme

Now if you don’t know, a “Pyramid Scheme” is a model of business where persons are recruited by members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sales of products. Supposedly it’s an “easy” way to make money while working for yourself. But in reality, Pyramid Schemes are probably the sketchiest business model there is, and the only persons who make money are the ones at the very top of said Pyramid.

The Vulnerability of Post-Communist Albania

But while most in the West know better than to invest in such a venture, the people of Albania were not as fortunate. Decades under Communist rule had more or less made the people susceptible to individuals pushing such business plans. Worse still, even the government was pushing these plans, as they thought it would be a means to improve the Albanian economy. Keep in mind, this was just a few years after the fall of Communism and the Albanian people were completely unaware of just how predatory Pyramid Schemes can be.

But like all Pyramid Schemes, people began to notice that they were not making the amount of money they thought they would. In fact, many of them lost their money, amounting to an estimated total just north of $1 billion.

The Escalation of Protests and Revolts

Needless to say, people were quite angry about this and soon, demonstrations and protests began to erupt across the country at the beginning of 1997. Even after the prime minister resigned and a new government was sworn in, the protests continued to escalate and soon a full-on revolt had begun.

Both the military and the police began to struggle against the protesters and gangs. Military stockpiles were looted as some personnel sided with the protesters. This went on for almost a month before 7000 UN peacekeepers entered the country to restore order.

By the time it was all over, 2000 people were dead and the country was in ruins. Many of the rogue entities which benefitted from the schemes were sued while others were sentenced. Many of the weapons that were looted soon found their way to Kosovo and would be used by the Kosovo Liberation Army in the war that followed the next year.

~NC