In the turmoil of a rapidly changing economy the Albanian government needs accurate and timely information for management of their natural resources and formulation of land-use policies. The transformation of the forestry sector has required major changes in the legal, regulatory and management framework. The World Bank financed Albanian National Forest Inventory project provides an analysis of spatially explicit land-cover/use change dynamics in the period 1991-2001 using the FAO/UNEP Land Cover Classification System for codification of classes, satellite remote sensing and field survey for data collection and elements of the object-oriented geo-database approach to handle changes as an evolution of land-cover/use objects, i.e. polygons, over time to facilitate change dynamics analysis. Analysis results at national level show the trend of natural resources depletion in the form of modifications and conversions that lead to a gradual shift from land-cover/use types with a tree cover to less dense tree covers or even a complete removal of trees. Policy failure (e.g., corruption, lack of law enforcement) is seen as the underlying cause. Another major trend is urbanisation of areas near large urban centres that change urban-rural linkages. Furthermore, after privatisation agricultural areas increased in the hills where environmental effects may be detrimental, while prime agricultural land in the plains is lost to urbanisation. At district level, the local variability of spatially explicit land-cover/use changes shows different types of natural resources depletion. The distribution of changes indicates a regional prevalence, thus a decentralised approach to the natural resources management could be advocated.