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Assembly discussed economic situation in Kosovo

Prishtina, July 8, 2005 - For the first time at the Wednesday session, the Assembly debated over the economic situation in Kosovo, at the request of the Assembly Group of the political party ORA.

PM Bajram Kosumi said that despite the good work of Government, the failure to transfer of economy competencies from UNMIK to Kosovo institutions has hindered the work of the Government.

“Kosovo has its legal framework, tax administration, advanced budgetary process, and liberalized market, and most of them are the best ones in the region,” said Kosumi. According to Kosumi, the undetermined status of Kosovo is an obstacle to the economic development.

“The undetermined status is hindering the economic development, because nobody is interested in investing in a place with political instability,” said Kosumi.

Meanwhile UNMIK Pillar IV Chief, Joachim Ruecker, said that if the status question were solved, it would certainly facilitate private investment in Kosovo.

“Economic Development in Kosovo is faced with a huge triple challenge,” said Ruecker. “We are dealing with a transformation economy that goes from war to peace, a transformation economy that goes from a peculiar type of communism to a market economy and on top of all that we do not have a final status yet.”

According to Ruecker, the Standard V goals are generally met and much credit for this positive development goes to Kosovos donors, both multilateral and bilateral.

“In this context, we as well as the EAR and other donors strongly support the drafting of the medium term economic strategy, the drafting of the Kosovo Development Plan, and we appreciate that the Prime Minister has asked for a first draft to be ready quite soon later this year,” said Ruecker.

Ruecker said he was convinced that this plan will show that Kosovo is not a “black hole”, but that is has the chance to have a sustainable economy, relying on its comparative advantages, firmly integrated in the regional market, under European standards and, very important, with a European perspective.

“There is no doubt that, despite the legal and institutional framework, the current economic performance is worrying,” said Ruecker. “We are in a vicious circle of low economic growth (if at all), much too high unemployment, a huge foreign trade imbalance and severe fiscal constraints.”

Meanwhile, Veton Surroi, Chairman of ORA said that so far Kosovo was in economic stagnation, and now it is entering economic degradation. “A large number of gas stations in Kosovo indicates the lack of economic development vision,” said Surroi. “The value of these gas stations is estimated at €1 billion, which is half of the financial means that the EU has so far allocated for Kosovo.”

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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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