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UNMIK confirms progress in the economy of Kosovo

Prishtina, Apr 06, 2005 – The DSRSG and chief of UNMIK's Pillar IV in Kosovo, Joachim Ruecker, said yesterday in Prishtina that progress has been made in the past weeks in the economy and expressed his confidence that there will be more positive developments in Kosovo soon. “Economy is not only a Standard that will be reviewed by the international community. It affects everybody, every day. If we put our efforts together, we can make a difference”, said Ruecker during a news conference in Prishtina.

He also confirmed that this month he would launch the 5th wave of privatizations and sign the contracts of the 4th wave. "KTA is already preparing the 6th round. Our goal is ambitious, but we will try to privatize 90% of the value of the SOEs under KTA jurisdiction within 12 months".

Ruecker expressed his hope that the KTA regulation will soon be changed to further facilitate the process. He also
welcomed the recent statement by Serbian Deputy Prime Minister Miroljub Labus to allow UNMIK to have access to property-related documents. "This will make the status
determination easier", he said.

Ruecker also talked about attracting investors to Kosovo and mentioned the possibility for municipalities to set up, with UNMIK approval, up to 99-year leaseholds
on land under their administration. He then stressed the importance of the UNMIK Regulation on Foreign Investment which provides basic legal safeguards for foreign
investment such as non-discrimination, free movement of capital and protection against expropriation. "UNMIK with full support of the PISG now wants to enhance this process
of attracting foreign direct investment by concluding bilateral investment protection agreements. There was one as you know signed with Albania. And we are very close to
signing the second one with Turkey, and others will surely follow with countries in the region.”

The recent framework agreements with the European Bank for Reconstruction and Development and with the European Investment Bank are two important tools to help financing projects in Kosovo, which are currently being identified. “I very much welcome the focus of the international community on the finance sector.” This focus on credit and micro finance has been evidenced in a recent seminar. In this seminar, among other things, it was noted that commercial lending in Kosovo has gone up by 60% in last quarter of 2004, compared to the same period of the previous year.

DSRSG Ruecker also recalled the Energy Community Treaty having been initialed in March by representatives of the European Commission, Southeast Europe countries and
UNMIK after Serbia and Montenegro and Bulgaria withdrew their objections. Being part of the Energy Community Treaty, Kosovo will be further integrated in the regional
energy market and its institutions. “It makes Kosovo more attractive for the urgently needed investments in the energy sector and facilitates potential exports of energy to the countries in the region and the European community at a later stage,” said Ruecker.

The DSRSG also noted that the energy situation has improved. During the winter, the power supply was definitely more stable than in the past. This shows that donor and KCB investments are producing results though much remains to be done. Both UNMIK and the Provisional Institutions of Kosovo are supporting KEK’s vigorous revenue collection policy. Consumers in Kosovo must pay for their electricity. In this context, DSRSG commented on media reports on villages affected by KEK’s network failure and reconnection policy: “The Batuse solution can apply to other villages as well. There is no doubt about that.”

Regarding the Kosovo Consolidated Budget, DSRSG Ruecker expressed his satisfaction that, in close cooperation with the international community and UNMIK Pillar IV, the PISG had started preparations for the budget for 2006 and for the Medium Term Expenditure Framework 2007 - 2009. One area where the Pillar IV chief hopes to see fast progress is the mining sector. After the two new mining laws have been promulgated in January, the interest of foreign
mining companies has increased. Two big companies have expressed serious interest and have already sent delegations to start exploring the terrain. From 10 to 12 May, all big exploration companies of Southeast Europe will meet in Sofia and from 12 to 17 May, a mining conference will take place in Tirana. The Ministry of Energy and Mining and the Independent Commission for Mines and Minerals have been invited.

Concluding, DSRSG Joachim Ruecker emphazised that close cooperation between UNMIK and the PISG is crucial for the success of all endeavors. "The better we work together the better results we will achieve", he said.

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Background information for foreign investors

Kosovo: General Information
Kosovo: Key economic indicators
Why do business in Kosovo?
Legal Framework in Kosovo
KTA and Privatisation in Kosovo

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