Hoxha had basically used the threat of external enemies to justify a repressive internal policy. His primary goal was to stay in power, and an isolationist foreign policy suited this goal. But some members of the APL leadership began to question the efficacy of such a policy, particularly in view of its adverse economic consequences. At the end of the 1970s, Hoxha was pressured into sanctioning a cautious effort to strengthen bilateral relations with Albania's neighbors, in particular Yugoslavia. Bilateral cultural contacts between the two countries increased, and by 1980 Yugoslavia had replaced China as Albania's main trading partner. In the early 1980s, however, Yugoslavia's military suppression of ethnic Albanians demonstrating in the province of Kosovo led to a chill in Albanian-Yugoslav relations. Approximately two million ethnic Albanians lived in Kosovo, and Albania supported Kosovo's demands that it be granted the status of a republic. Yugoslavia responded by accusing Albania of interfering in its internal affairs, and cultural and economic contacts were severely reduced. Trade between the two countries stagnated.

In the early 1980s, a diplomatic shift toward Italy, Greece, and Turkey occurred. In November 1984, Alia, as Hoxha's heir apparent, gave a speech in which he expressed an interest in expanding relations with West European countries. He noted that "Albania is a European country and as such it is vitally interested in what is occurring on that continent." Relations with Italy and Greece became noticeably stronger in the early and mid-1980s. In 1983 Albania signed an agreement with Italy on establishing a maritime link between the ports of Durrės and Trieste. The two countries also ratified a long-term trade agreement, whereby Albania would send Italy raw materials in exchange for industrial technology. Albania entered into a longterm economic accord with Greece in December 1984, and the two countries also signed a series of agreements on road transportation, cultural exchanges, scientific and technological cooperation, telecommunications, and postal services. Albania's closer relations with Italy and Greece caused Yugoslavia concern, primarily because it appeared preferable to Belgrade to have Albania isolated. But Albania worried that West European countries would allow Yugoslavia to dictate its policies if it failed to develop strong relations with other countries in the region.

Data as of April 1992