A non-existent economy

Kosovo:

KOSOVO

By : Ibrahim REXHEPI (Pristina)

As far as Kosovo is concerned, just one fact cannot be put in doubt at the moment: its area equals 10 887 square kilometers. All other data, including those concerning the present state of the economy, are not only utterly unreliable, but for the most part unknown. To start with, it is difficult to determine the exact number of people living in Kosovo at present and, consequently, a lot of other things as well. The last regular census dates back to 1981, and the one organized by Serb authorities in 1991. was boycotted by ethnic Albanians. In the meantime, following the NATO bombing campaign, the Serb authorities instigated the largest exodus in Europe since WW II which was - after the withdrawal of the Serb army and police forces and the arrival of NATO troops - in turn followed by the flight of a significant portion of the Serb, Montenegrin and Romany population from Kosovo.

Work suspended in most firms

According to recent demographic estimates, Kosovo should have a population of around 2,2 million inhabitants. But, the said figure is merely approximate, since the exact number of people living in Kosovo at present cannot be determined in any other manner but by means of statistics. What the real numbers are, no one can say for certain. The registration of citizens carried out by OSCE last year, came up with a figure of 1,1 million inhabitants above the age of sixteen living in Kosovo. But, Serbs and a portion of Romanies and Turks did not take part in the registration.

In 1991, the gross national product ( GNP ) was lower for 47,5 per cent compared to 1989. In 1989, the per capita income amounted to 700 dollars while in 1991. it fell to 340 dollars. At the moment, the per capita income is estimated to be 400 dollars.

In 1991, because of the massive dismissal of Albanians, the majority of enterprises suspended business or continued work employing minimal capacities. Consequently, there was no export-oriented production at the time. In fact, in 1990, export grossed 171 million dollars, import 191 million. There were 120 000 employed persons and 861 000 ones out of work.

With the beginning of the war in republics constituting former Yugoslavia and, later on, economic sanctions imposed by the international community, economic activity was brought almost to a stall. Longtime business connections were cut off, the market diminished, the exchange of goods sunk to a previously unheard low level...During the period, a number of companies were merged with enterprises in Serbia. As a result, records pertaining to production, salaries and all other relevant economic parameters were kept in " head offices " outside of Kosovo.

Damage: 1,1 billion DM

According to the Kosovo Chamber of Commerce, the overall damage to the economy amounts to around 1,1 billion DM. Not included into the assessment are the 120 000 badly damaged buildings of which 60 000 are beyond repair.

The process of privatization has not yet begun in Kosovo. It seems that UNMIK has decided to postpone the solution of the problem until some future times, i.e. the period after the political status of Kosovo is determined. In the meantime, the cement works in Djeneral Jankovic and the plant for the production of concrete blocks in Klina have, through an international tender, been put under a ten-year management of the Swiss Holder Bank and the Italian company SACET.

At the moment, the Deutch mark serves as the national currency in Kosovo. The founding of banks, mostly in the form of joint-stock companies, is in progress. Just one bank, the MEB Bank in which the majority holders of the founding capital are Komertz and Komertz Bank from Frankfurt, is in operation. Six more banks, mostly with domestic founding capital, have been issued a temporary work permit, but they all have trouble securing the necessary working capital.

Data show that over 700 million DM have been invested in Kosovo in 2000. and the largest investments came in the form of donations. According to the projection of the institution entrusted with the enforcement of the monetary and fiscal policy in Kosovo - the Central Fiscal Authority - in 2001. investments will amount to 1,3 billion DM, again mostly in the form of donations.

Economic regulations are yet to be set up. At the moment, just one ordinance regulating the registration of firms is in effect in Kosovo and in December last year a series of regulations aimed at creating the necessary normative infrastructure for the functioning of the economy were adopted.

Corruption is comprehensive, particularly in the bordering region. Due to the fact that Kosovo is entirely dependent on imported goods, there are numerous instances of merchandise going over the border-line without customs clearance.

The average salary in the budget-financed administrative apparatus is 250 DM. No set criterion concerning salaries is in existence in the economy, while employment in international civil and military organizations present in Kosovo pays far above any standard applicable to Kosovo.

Around 60 000 ethnic Albanians have not received their pension checks in past 18 months. Only pensioners of Serb nationality are being paid out their allowances by the Serb pension fund. At the same time, UNMIK maintains it has no obligations whatsoever towards this particular portion of the Kosovo population.

It is estimated that the administrative sector of the Kosovo authorities employs 53 000 persons, while another 150 000 citizens have found employment in government and private companies and international organizations.