Until Yugoslavia's expulsion from the Cominform (see Glossary) in 1948, Albania acted like a Yugoslav satellite and Tito aimed to use his choke hold on the Albanian party to incorporate the entire country into Yugoslavia. After Germany's withdrawal from Kosovo in late 1944, Yugoslavia's communist partisans took possession of the province and committed retaliatory massacres against Albanians. Before World War II, the Communist Party of Yugoslavia had supported transferring Kosovo to Albania, but Yugoslavia's postwar communist regime insisted on preserving the country's prewar borders. In repudiating the 1943 Mukaj agreement under pressure from the Yugoslavs, Albania's communists had consented to restore Kosovo to Yugoslavia after the war. In January 1945, the two governments signed a treaty reincorporating Kosovo into Yugoslavia as an autonomous province. Shortly thereafter, Yugoslavia became the first country to recognize Albania's provisional government.

In July 1946, Yugoslavia and Albania signed a treaty of friendship and cooperation that was quickly followed by a series of technical and economic agreements laying the groundwork for integrating the Albanian and Yugoslav economies. The pacts provided for coordinating the economic plans of both states, standardizing their monetary systems, and creating a common pricing system and a customs union. So close was the Yugoslav-Albanian relationship that Serbo-Croatian became a required subject in Albanian high schools. Yugoslavia signed a similar friendship treaty with Bulgaria, and Marshal Tito and Bulgaria's Georgi Dimitrov talked of plans to establish a Balkan federation to include Albania, Yugoslavia, and Bulgaria. Yugoslav advisers poured into Albania's government offices and its army headquarters. Tiranė was desperate for outside aid, and about 20,000 tons of Yugoslav grain helped stave off famine. Albania also received US$26.3 million from the United Nations Relief and Rehabilitation Administration immediately after the war but had to rely on Yugoslavia for investment and development aid.

The Yugoslav government clearly regarded investment in Albania as investment in the future of Yugoslavia itself. Joint Albanian-Yugoslav companies were created for mining, railroad construction, the production of petroleum and electricity, and international trade. Yugoslav investments led to the construction of a sugar refinery in Korēė, a food-processing plant in Elbasan, a hemp factory at Rrogozhine, a fish cannery in Vlorė, and a printing press, telephone exchange, and textile mill in Tiranė. The Yugoslavs also bolstered the Albanian economy by paying three times the world price for Albanian copper and other materials.

Relations between Albania and Yugoslavia declined, however, when the Albanians began complaining that the Yugoslavs were paying too little for Albanian raw materials and exploiting Albania through the joint stock companies. In addition, the Albanians sought investment funds to develop light industries and an oil refinery, while the Yugoslavs wanted the Al 144a lbanians to concentrate on agriculture and raw-material extraction. The head of Albania's Economic Planning Commission and one of Hoxha's allies, Nako Spiru, became the leading critic of Yugoslavia's efforts to exert economic control over Albania. Tito distrusted Hoxha and the other intellectuals in the Albanian party and, through Xoxe and his loyalists, attempted to unseat them.

In 1947 Yugoslavia's leaders engineered an all-out offensive against anti-Yugoslav Albanian communists, including Hoxha and Spiru. In May Tiranė announced the arrest, trial, and conviction of nine People's Assembly members, all known for opposing Yugoslavia, on charges of antistate activities. A month later, the Communist Party of Yugoslavia's Central Committee accused Hoxha of following "independent" policies and turning the Albanian people against Yugoslavia. Apparently attempting to buy support inside the Albanian Communist Party, Belgrade extended Tiranė US$40 million worth of credits, an amount equal to 58 percent of Albania's 1947 state budget. A year later, Yugoslavia's credits accounted for nearly half of the state budget. Relations worsened in the fall, however, when Spiru's commission developed an economic plan that stressed self-sufficiency, light industry, and agriculture. The Yugoslavs complained bitterly, and when Spiru came under criticism and failed to win support from anyone in the Albanian party leadership, he committed suicide.

The insignificance of Albania's standing in the communist world was clearly highlighted when the emerging East European nations did not invite the Albanian party to the September 1947 founding meeting of the Cominform. Rather, Yugoslavia represented Albania at Cominform meetings. Although the Soviet Union gave Albania a pledge to build textile and sugar mills and other factories and to provide Albania agricultural and industrial machinery, Stalin told Milovan Djilas, at the time a high-ranking member of Yugoslavia's communist hierarchy, that Yugoslavia should "swallow" Albania.

The pro-Yugoslav faction wielded decisive political power in Albania well into 1948. At a party plenum in February and March, the communist leadership voted to merge the Albanian and Yugoslav economies and militaries. Hoxha, to the core an opportunist, even denounced Spiru for attempting to ruin Albanian-Yugoslav relations. During a party Political Bureau (Politburo) meeting a month later, Xoxe proposed appealing to Belgrade to admit Albania as a seventh Yugoslav republic. When the Cominform expelled Yugoslavia on June 28, however, Albania made a rapid about-face in its policy toward Yugoslavia. The move surely saved Hoxha from a firing squad and as surely doomed Xoxe to one. Three days later, Tiranė gave the Yugoslav advisers in Albania forty-eight hours to leave the country, rescinded all bilateral economic agreements with its neighbor, and launched a virulent anti-Yugoslav propaganda blitz that transformed Stalin into an Albanian national hero, Hoxha into a warrior against foreign aggression, and Tito into an imperialist monster.

Albania entered an orbit around the Soviet Union, and in September 1948 Moscow stepped in to compensate for Albania's loss of Yugoslav aid. The shift proved to be a boon for Albania because Moscow had far more to offer than hard-strapped Belgrade. The fact that the Soviet Union had no common border with Albania also appealed to the Albanian regime because it made it more difficult for Moscow to exert pressure on Tiranė. In November at the First Party Congress of the Albanian Party of Labor (APL), the former Albanian Communist Party renamed at Stalin's suggestion, Hoxha pinned the blame for the country's woes on Yugoslavia and Xoxe. Hoxha had had Xoxe sacked as internal affairs minister in October, replacing him with Shehu. After a secret trial in May 1949, Xoxe was executed. The subsequent anti-Titoist purges in Albania brought the liquidation of fourteen members of the party's thirty-one-person Central Committee and thirty-two of the 109 People's Assembly deputies. Overall, the party expelled about 25 percent of its membership. Yugoslavia responded with a propaganda counterattack, canceled its treaty of friendship with Albania, and in 1950 withdrew its diplomatic mission from Tiranė.

Data as of April 1992