In 1997, Albania experienced widespread civil unrest due to economic problems caused by the collapse of pyramid schemes.

Beginning in February, thousands of people launched daily protests demanding reimbursement from the government, which they believed had profited from the schemes.

[5] On 11 March, the Socialist Party of Albania achieved a major victory when its leader, Bashkim Fino, was appointed prime minister.

Although the government quelled revolts in the north, its ability to maintain order began to collapse, especially in the southern half of the country, which fell under the control of rebels and criminal gangs.

[6] The United Nations Security Council authorized a force of 7,000 troops under Resolution 1101 to direct relief efforts and restore order in Albania.

Consequently, the US and NATO provided assistance by managing refugee camps, airlifting displaced populations across Europe, and securing the borders.

[7] On 15 April, a multinational peacekeeping force launched Operation Alba, which helped restore the rule of law in the country by late July.

The rudimentary financial system soon became dominated by Ponzi schemes, and even government officials endorsed a series of pyramid investment funds.

By January 1997, the schemes, many of which were fronts for money laundering and arms trafficking, could no longer make payments, leading to their collapse.

[3][18] By then, the number of investors lured by the promise of getting rich quickly had grown to include two-thirds of Albania's 3 million population.

A significant number of Albanians had sold their homes to invest, and emigrants working in Greece and Italy transferred additional resources to the schemes.

[19] On 26 May 1996, general elections were held, and the conservative Democratic Party won by a large margin, securing 122 out of 140 seats in Parliament.

"Gjallica," another firm, was on the verge of bankruptcy, while "Vefa," which had invested in Albanian hotels, the fuel industry, and factories, continued operating as usual.

By the morning of 26 January, every government institution in the city had been looted and destroyed, except for the Interior Ministry building, which was protected by the Director of Communications, seven of his engineers, and a guard who refused to abandon his post.

[citation needed] On 26–27 January, violence erupted in other southern towns, including the major port city of Vlorë.

[citation needed] On 4 February, the government began distributing reimbursements for some of the lost money at subsidiaries of the state-owned National Commercial Bank.

[citation needed] On 20 February 1997, roughly 50 students at the University of Vlorë began a hunger strike on campus, demanding the government's resignation and the full return of invested money.

"[citation needed] On 26 February, thousands of people surrounded the university building in Vlorë to defend it from a rumored attack by SHIK (Shërbimi Informativ Kombëtar), the national intelligence service.

When southern Albanian bases were looted, it was estimated that, on average, every male aged ten and older had at least one firearm and ample ammunition.

As part of a peacekeeping mission based on UN Security Council Resolution 1101, a multinational protection force of more than 7,000 troops was sent to Albania in mid-April.

[37] Meanwhile, the parliamentary elections resulted in an overwhelming victory for the opposition Socialist Party of Albania, which won 100 of the 151 seats, with a voter turnout of 72.6%.

The most notable case is that of Zani Caushi, who escaped from the high-security prison in Larissa in February 1997 and, with a group of associates, established the gang of Çole in Vlorë.

The cities ruled by gangs included Vlorë, Berat, Tepelenë, Memaliaj, Ballsh, Sarandë, Gjirokastër, Lushnjë, Pogradec, Çërrik, and Tropojë.

[43] Many of these committees were rooted in local organizations affiliated with the Socialist Party of Albania and saw themselves as protectors of democracy against authoritarian, one-man rule.

The Albanian government, however, perceived them as reminiscent of Communist-era local party organizations and, therefore, as a potential threat of a return to Communist rule.