The communist regime faced perhaps its most severe test in early July 1990, when a demonstration by a group of young people in Tiranė, the nation's capital, led about 5,000 to seek refuge in foreign embassies. To defuse the crisis in July 1990, the Central Committee held a plenum, which resulted in significant changes in the leadership of party and state. The conservatives in the leadership were pushed out, and Alia's position was strengthened. Alia had already called for privatizing retail trade, and many businesses had begun to operate privately. Then in late July, the Politburo passed a law stating that collectivefarm members should be given larger plots of land to farm individually (see Land Distribution and Agricultural Organization, ch. 3).

In a September 1990 speech to representatives of Albania's major social and political organizations, Alia discussed the July crisis and called for electoral reform. He noted that a proposed electoral law would allow all voting to take place by secret ballot and that every precinct would have at least two candidates. The electors themselves would have the right to propose candidates and anyone could nominate candidates for the assembly. Alia also criticized the bureaucratic "routine and tranquility" of managers and state organizations that were standing in the way of reform.

Despite Alia's efforts to proceed with change on a limited, cautious basis, reform from above threatened to turn into reform from below, largely because of the increasingly vocal demands of Albania's youth. On December 9, 1990, student demonstrators marched from the Enver Hoxha University at Tiranė though the streets of the capital shouting slogans and demanding an end to dictatorship. By December 11, the number of participants had reached almost 3,000. In an effort to quell the student unrest, which had led to clashes with riot police, Alia met with the students and agreed to take further steps toward democratization. The students informed Alia that they wanted to create an independent political organization of students and youth. Alia's response was that such an organization had to be registered with the Ministry of Justice.

The student unrest was a direct consequence of the radical transformations that were taking place in Eastern Europe and of Alia's own democratic reforms, which spurred the students on to make more politicized demands. Their protests triggered the announcement on December 11, 1990, at the Thirteenth Plenum of the APL Central Committee, that a multiparty system would be introduced in time for the general elections that were set for February 1991. The day after the announcement, the country's first opposition party, the Albanian Democratic Party (ADP), was formed.

The Thirteenth Plenum of the APL Central Committee also announced an extensive shakeup in the party leadership. Five of the eleven full members of the Politburo and two alternate members were replaced. Among those dismissed was Foto Cami, the leading liberal ideologist in the APL leadership. Cami's oue61 ouster came as a surprise because he was on close terms with Alia, but apparently Alia was dissatisfied with his failure to deal with the intellectuals effectively.

The student unrest that began in Tiranė gave rise to widespread riots in four of the largest cities in northern Albania. Violent clashes between demonstrators and security forces took place, resulting in extensive property damage but, surprisingly, no fatalities. Apparently Alia had given the police strict orders to restrain themselves during confrontations with demonstrators. However, Alia issued stern public warnings to the protesters on television, claiming that they had been misled by foreign influences and opportunistic intellectuals.

The crisis was analyzed in the Albanian press in an usually candid manner. On December 17, the Democratic Front's daily newspaper, Bashkimi, described what had occurred and then warned that such violence could lead to a conservative backlash, suggesting that conservative forces posed a real threat to the process of democratization in the country. The outspoken nature of the article, the first instance of open criticism of the security agencies, indicated that the government was prepared to allow intellectuals and reformers to express their views in the media. Later that month, the Council of Ministers set up a state commission to draft a law on the media and formally define its rights, thus reducing the APL's direct control over the press. The council also authorized the first opposition newspaper, Relindja Demokratike.

Another important sign of democratization was the publication on December 31 of a draft interim constitution intended to replace the constitution of 1976. The draft completely omitted mention of the APL. It introduced a system with features similar to those of a parliamentary democracy, while at the same time strengthening the role of the president, who would be elected by a new People's Assembly. The president was to assume the duties of commander in chief of the armed forces and chairman of the Defense Council, positions previously held by the party first secretary. Also on December 31, the government eased restrictions on private trade in the service and light industry sectors, indicating a general trend toward a less centralized economy.

In his traditional New Year's message to the Albanian people, Alia welcomed the changes that had been occurring in the country and claimed that 1991 would be a turning point in terms of the economy. But despite positive signs of change, many Albanians were still trying to leave their country. At the end of 1990, as many as 5,000 Albanians crossed over the mountainous border into Greece. Young people motivated by economic dissatisfaction made up the bulk of the refugees.

Data as of April 1992