Thursday, November 27, 2014


Kosovo

Kosovo's Economy Still Struggling Five Years After Independence

The disused refinery and other facilities of the Trepca mining complex in Mitrovica testify to the derelict nature of Kosovo's economy since 1999.
The disused refinery and other facilities of the Trepca mining complex in Mitrovica testify to the derelict nature of Kosovo's economy since 1999.

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Interview: Kosovo President On 'Symbolic But Important' Talks With Serbian Counterpart

The presidents of Kosovo and Serbia are due to meet in Brussels in what will be the first such high-level meeting since Pristina declared independence from Serbia nearly five years ago. Kosovo President Atifete Jahjaga spoke to RFE/RL about her expectations.
By Ron Synovitz
PRISTINA -- Aleksandar Josifovic was studying computer programming in northern Mitrovica five years ago when Kosovo declared independence from Serbia.

Josifovic hoped his studies would lead to a job in information technology or as a teacher. But five years later, the 25-year-old Serb from the town of Gracanica can only find work behind the cash register of his father's small grocery store.

With Kosovo's widespread poverty and an official unemployment rate of 45 percent, Josifovic sees himself as a victim in a game of politics and corruption where the rules are stacked against all but a handful of elite families.

Many young ethnic Albanians also share his view, saying they await the day when their generation has a chance to run things and more people can be prosperous.

Half of Kosovo's 1.8 million people are 25 or younger. Half of those under 30 are unemployed, and the situation is getting worse. Every year, more than 30,000 young people enter the job market. Fewer than 8,000 find work.

Aleksandar Josifovic, a Serb with a computer-science degree, can only find work at his father’s grocery store in Gracanica.Aleksandar Josifovic, a Serb with a computer-science degree, can only find work at his father’s grocery store in Gracanica.
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Aleksandar Josifovic, a Serb with a computer-science degree, can only find work at his father’s grocery store in Gracanica.
Aleksandar Josifovic, a Serb with a computer-science degree, can only find work at his father’s grocery store in Gracanica.
Economists estimate Kosovo's economy must grow by 8 percent each year to absorb the young people entering the job market and hold unemployment steady. But Kosovo is in recession, struggling to maintain growth of about 3 percent.

Put simply, Kosovo has not yet fully recovered from its 1998-99 war and has failed since declaring independence to build a production-based economy that can employ most of its people.

Kosovar Deputy Prime Minister Mimoza Kusari-Lila says the government's political agenda has distracted it from dealing properly with economic woes.

"Focusing always on political issues or having politicians engaging in the political agenda -- be that the declaration of independence and dialogue -- has left a little bit aside the economic development," Kusari-Lila says.

"I believe that we'll be working and focusing more on the economic agenda [in the future] because the economic agenda will actually assist and help the political agenda as well."

Playing Catch-Up

To be fair, Kosovo's infrastructure in 1999 was less developed than in other parts of former Yugoslavia. About $1 billion has been spent since then to build a four-lane highway linking Pristina with Tirana and Albania's Adriatic port at Durres.

It is meant to eventually connect with the pan-European transport corridor at Nis, Serbia -- which runs between Salzburg, Austria, and Thessaloniki, Greece. Construction is also meant to start this year on a 55-kilometer highway between Pristina and Skopje.

Planners say both projects will improve Kosovo's trade links with its neighbors. But municipal officials complain that the projects have drained money away from their budgets, making it difficult for them to fund their own infrastructure improvements that would improve the business climate.

Kosovo's economy also still hasn't recovered from lost production at the Trepca mine complex in the divided city of Mitrovica.

Oliver Ivanovic doubts Trepca can be reopened without at least $650 million in investment.Oliver Ivanovic doubts Trepca can be reopened without at least $650 million in investment.
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Oliver Ivanovic doubts Trepca can be reopened without at least $650 million in investment.
Oliver Ivanovic doubts Trepca can be reopened without at least $650 million in investment.
Trepca once employed 23,000 and accounted for 70 percent of Kosovo's gross domestic product (GDP). But since the war ended in 1999, the de facto partition of Mitrovica between Serbs and ethnic Albanians has kept most of Trepca's facilities closed.

Kusari-Lila still hopes Trepca will contribute to GDP in the future. But she admits Trepca is unlikely to have the economic impact it had in the past.

Oliver Ivanovic, a Serbian political leader in northern Mitrovica and former Trepca manager, doubts the complex can be reopened without at least $650 million in foreign investment to repair and update smelters and refineries.

He says it will be impossible to get that investment without a political resolution on northern Kosovo, where Serbs insist they will never recognize Pristina's declaration of independence. "Under these circumstances, with permanent political tensions, you simply cannot even have thoughts about economic development," he says. "We have to make some solution that somehow can be acceptable for both sides."

A Lack Of Production

Meanwhile, half of Kosovo's citizens struggle to survive on social benefits of less than $2 per day.

Informal employment provides some with a cushion against rising food prices. Many more depend on relatives who work abroad to send them money. But those remittances have been falling since 2011 due to the global economic crisis.

The structural problems with Kosovo's economy are evidenced by the kind of businesses dominating Pristina's industrial zone and the route to its airport. Most are trading firms or retailers that import food, clothing, and other essentials. Little is being produced in Kosovo for domestic consumption or export.

That means most remittances going into Kosovo immediately exit the economy to pay for imports instead of bolstering the local economy.

There are notable exceptions. One is the Pestova potato-chip factory in a village north of Pristina, a firm that employs 120 people and brings income to local farmers

Workers pack the finished product at the Pestova potato-chip factory north of Pristina, one of Kosovo's few production success stories.
Workers pack the finished product at the Pestova potato-chip factory north of Pristina, one of Kosovo's few production success stories.

Founded in 1991 and reregistered in 1999 after the war, Pestova retooled in 2008 with investment from the European Bank for Reconstruction and Development (EBRD). It now supplies Kosovo's domestic market with fresh potatoes and "Vipa" brand potato chips. Pestova also exports to Albania, Macedonia, Greece, Montenegro, Croatia, and Germany.

But despite Kosovo's agricultural potential, Pestova manager and majority shareholder Bedi Kasumi says local banks make it difficult for agricultural firms to borrow money. He says interest rates charged by Kosovo bankers for short-term agriculture loans are as high as 18 percent, compared to 5 percent in Serbia and 7 percent in Albania.

"The situation is very bad with the banks. The interest rates here are very high -- the highest in the region," Kasumi says. "These are very bad interest rates for loans in agriculture and also for production. We hope that this situation will change."

Investment Discouraged

Substantial foreign direct investment -- which should be a driving force for economic growth -- has failed to materialize in Kosovo amid corruption scandals that have led to investigations against several senior government officials.

Pristina's landmark Grand Hotel now stands dark and empty in the center of the capital, just one example of a high-profile privatization delayed by a corruption probe.

PTK telecom's privatization was pushed back for a second time in January after an investment fund run by former U.S. Secretary of State Madeline Albright, Albright Capital Management, withdrew its bid amid international scrutiny over possible conflicts of interest and alleged special treatment by Kosovo's political leaders.

Kosovo's Deputy Prime Minister Mimoza Kusari-Lila says the government's political agenda has distracted it from dealing properly with economic woes.Kosovo's Deputy Prime Minister Mimoza Kusari-Lila says the government's political agenda has distracted it from dealing properly with economic woes.
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Kosovo's Deputy Prime Minister Mimoza Kusari-Lila says the government's political agenda has distracted it from dealing properly with economic woes.
Kosovo's Deputy Prime Minister Mimoza Kusari-Lila says the government's political agenda has distracted it from dealing properly with economic woes.
Ilir Deda, executive director of the Kosovo Institute for Policy Research and Development, claims that some members of Prime Minister Hashim Thaci's government have driven away potential foreign investors in order to protect their political and business allies from competition.

"It affects enormously the bigger picture. This government has proved quite successful at expelling every serious investor since 2008 who was willing to come here and invest here," Deda says. "Investors from Austria, Switzerland, and France have complained over corruption where they wanted to invest, regardless of privatization."

Arta Istrefi, a spokeswoman for Kosovo's Ministry of Trade and Industry, says the government is crafting legislation aimed at reducing the potential for corruption by eliminating half of the business licenses needed to start a new firm.

But Safet Gerxhaliu, president of the Kosovo Chamber of Commerce, says the real corruption problems faced by businesses come after a firm is already registered. Gerxhaliu says the most important thing Pristina can do to improve the economy is to enforce the rule of law.

But Deda says Kosovo has a "culture of impunity" when it comes to corrupt officials. "Any investigation that leads to big political players in Kosovo is stopped for the sake of political stability -- and it feeds on the culture of impunity, political impunity, that has been created in Kosovo in the last 12 years," he says. "Short-term stability [is favored] rather than midterm stability or long-term stability."

The World Bank has said that, like other economies in the western Balkans, speedy recovery for Kosovo is unlikely without improvements in public-sector governance, the labor market, and the overall investment climate.
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Comment Sorting
Comments
     
by: Jack from: US
February 14, 2013 14:56
who could have thought that Muslim-overrun patch of territory carved out of Serbia by NATO minions would not thrive on illegal drugs, arms and human organ trafficking? Looks like NATO minions miscalculated again.
In Response

by: Jorjo from: Florida
February 14, 2013 19:27
Jack is right. I would add that it was calculated 'miscalculation'. If you watch videos of Hashim Thaci - you'd notice how quick his reaction is if suddenly there is an unfamiliar sound or movement around him. He knows that bullet may hit him from any direction. Especially when running a narco-sex-gun criminal fiefdom in the heart of Europe. The Colombian drug-lords can only envy the power Thaci was able to amass. And the corruption to thrive on that power.
In Response

by: Eugenio from: Vienna
February 15, 2013 09:50
Well, Jorjo, hard to agree with you when you say that "Colombian drug-lords can only envy... Thaci". Colombian drug-lords (or what remains of them) have very nice villas surrounded by beautiful selvatic landscapes, nice climat and always go for a vacation on excellent beaches of Cartagena de las Indias.
Thaci and his friends, on the contrary, are stuck on a tiny piece of ugly unproductive land they stole from others, they have no interesting landscapes, no beaches at all (ok, sometimes they are allowed to go to one in Montenegro). They can not any more even carve people's kindneys and sell them - what used to be the field of their core competence. So, no wonder the economy of this "beacon of democracy" is not doing all that well :-)).
In Response

by: Demetrius M from: My House
February 14, 2013 20:09
My G-d, a consensus between Jack, perhaps one of his pseudonyms and myself!
Full blooded American, no Serb ties ancestrally, definitely not a pacifist, and yet I am opposed to Kosovo and our involvement in '98.
Having been in the region for a few months back in 08-09, I did not see a country on the rise. On the contrary, it seemed bent on criminal activity in every sense. It was as if we owed the Turks (or Albania) a favor.
We bombed the heck out of Serbia, yet today we sit on our hands while N.Korea, N.Sudan, etc murder their own. It made no sense then and it makes no sense today. Just like when Israel turned over Gaza to the Pals, what did they do? They tore apart the orchards and vineyards, destroyed the infrastructure and then cried they had no economy.
I have always placed the Kosovar-Albanians and Palestinians in the same class, one built upon deceit, imagery and self-destruction.
So when each of them fail, the Pals have Israel to constantly blame, who will the Kosovars blame? Yeah, you know the answer.
In Response

by: Camel Anaturk from: Kurdistan
February 14, 2013 22:51
Aaah,Jack and Dim have finally found each other and now all Jack has to do is to invite Eugenio to complete the Holy Trinity:Well,Eugenio,tretiym budyesh???Dearest Dim,you`re just the Langley mirror image of your soviet-russian counterpart,or as Konstanteen from LA would say-an american Rashka.And please rest assured-nobody is blaming the shamericans or Mad Elaine All Brite for what they did in Serbia and what they do everywhere-they are the west`s allahtans-only God is responsible for their actions and he is the one to blame!!!
In Response

by: Demetrius M from: My House
February 15, 2013 23:08
Dearest Camel, (boy that sounds funny!)
I can barely make out what your saying here, but if you are making an inference that I am in league with Mr.Jack, you are very wrong. 95% of the garbage he say's make me cringe, but the Balkan policy is but one instance we seem to agree.

And if you are also referring that I work for the CIA,
1. No I do not.
2. Langley is not where they are located, it's McLean, VA. Only Hollyweird constantly locates the Christians in Action in Langley. So stop watching Mission Impossible movies for a while.

You do have some acrimoniousness feelings toward America, but having been in Kurdistan for a longer period than I would have liked, perhaps you should concentrate on your own backyard. Kurds can't run a shawarma stand without trying to blow each other up so perhaps a little self-reflection would do your people some good.
I don't blame G-d or Allah, I blame brainwashed wahabis and Barrack Hussein Obama for everything. Get with it man.

PS - No ill will toward you Camel, but while I'm visiting family in Canada and staying in a nice warm house with cable tv, eating veal cutlets and donuts, I'll take pity on you Kurds crying for an independent state that will never come. But hey, that's your and Massoud Barzani's problem.

by: Anonymous
February 15, 2013 12:29
"foreign investment" needed, widespread poverty, "corruption", but independence.
well, it's somewhat tragic that due to a specific conflict kosovo was created as an independent state in the first place. yet, somehow some ratiocinations behind the decision are understandable.
haven't heard though of a place for armenians within the borders of turkey, haven't heard either of a nation state for kurds within anatolia due to killings and historical evidence of armenian and kurdish presence there that dates back centuries and even millenia.

and now? having independence, of course the citizens of kosovo have to learn about values, transparency, altruism, etc.
so, education should be the primary objective.

good luck kosovars, but don't expect others to invest in your recently created state as long as corruption is endemic and nepotism prevails.
kosovars therefore first and foremost should strive to eliminate corruption. then, due to various factors, they could establish links to neighbours, serbia included, and turn the poverty-stricken nation around. less than 2 million inhabitants. should not be that difficult if there is a real desire to improve the economic situation.

yet, mentalities, tribal structures, the influence of violence and ancient laws and customs don't change over night.

still, since kosovo is europe and it is independent now (!), people should try to come up with progressive ideas, efficient projects and effective actions that follow suit aiming at the creation of a tolerant and enlightened state that resembles a model in which democratic, transparent structures provide equal chances for various groups (knowing of course that there might be less and less serbs in the future, but there are still christian kosovo-albanians).
a homogenous, tradition-based society has some challenges to take on.
racism, chauvinism, nationalism, islamism, corruption, violence, tribalism, nepotism should clearly have no place in kosovo, if people want development and freedom.
it's up to the kosovars themselves to create their future in the heart of europe.
quite curious about the years ahead. some hopes were already shattered and disillusion is palpable and almost omnipresent. few kosovars return to the independent nation.
still, there are a lot of chances. kosovars should not miss their appointment with / or their chances in history.

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