YET, IT IS HARDER WITHOUT THEM

Kosovo After the Suspension of the Economic Sanctions

AIM Pristina, November 30, 1995

Problems in the Kosovo economy started before the introduction of the economic blockade by the international community against the FRY, with the imposition of extraordinary measures in local enterprises on the basis of a decree of the Serbian Parliament. Under the present conditions it is unrealistic to expect any turnabout towards the increase of production, fresh investments, higher employment...

Compared to the situation five years ago, the economic structure of Kosovo has completely changed today. This difference is not apparent when we take into account the number of production organizations in social state ownership. Still the structure of industrial production has shown that the major producers have stagnated in relation to the "discarded" ones. A new era of sorts has started, characterized by reasoning of the type: "On account of the devastating effects of the unjustly imposed economic sanctions TREPCA, FERONIKL, SAR, BALKAN had to shut down production, while power generation capacities are operating at reduced level". However, private entrepreneurship is at full swing, operating "sub rosa" under state incentives so that all the possibilities to penetrate the blockade would be exploited, which it sometimes indeed managed to do. During the years under the sanctions Kosovo never registered a market crisis, and this period will be remembered by extremely low flour and bread prices.

However, data show that the effect of the sanctions was not devastating on all spheres of the economy. During the first year under the blockade industrial production was 20 percent lower compared to the previous one, i.e. 44 percent lower as compared to 1988. Compared to the situation two years ago, 55,789 workers lost their jobs. The situation deteriorated already in the next year as comapred to the previous one, as 1992 registered a 15% fall of production or half of that in 1988. Economic analysts recorded that the level of production equalled that from 1972. Only 88,423 workers, i.e. even 95,875 less than in 1989, "worked" in production that year. It is worth mentioning that both on account of interrupted production as well as the export prohibition "Trepca", "Feronikl", the agro-industry, the capacities of which were more idle than operating, had neither foreign exchange nor any other revenues.

Was all this the result of "unjust sanctions"?

Local analysts of economic, as well as other spheres of life, qualify this as a result of the lethal policy pursued by Serbia, which started with the introduction of interim and later all other measures. Dr.Mustafa Bljakaj, professor at the Faculty of Economics says that "the international economic sanctions could not have affected the overall situation to that extent as the economy had disintegrated much earlier, i.e. had practically been destroyed. Therefore, even without the sanctions better results should not be expected. Without qualified manpower, with already severed connections and cooperation within Kosovo, but also with the international market, the economy has no prospects. It can be therefore concluded that to this very day Kosovo is suffering more from the sanctions imposed by Serbia, then from those of the international community" emphasizes Bljakaj. For this whole problem the local media blame the Security Council which "should not have hastened to suspend the sanctions until the resolution of the Kosovo problem".

Consequently, it is unrealistic to expect under such circumstances that everything will turn for the better without the sanctions. The Albanians have small chances of returning to their working posts as, according to the official estimate of the Serbian political leadership, they have not been dismissed nor proclaimed redundant labour on account of the sanctions. Rather, the problem is of a political nature. The Albanians were clearly given to know that they first had to recognize Serbia as their state before they could count on their active participation in the economy. The second aggravating circumstance is the question of refugees, which are not many, but represent a burden for the local economy. As soon as that becomes possible they will get jobs, the same as the local Serbs and Montenegrins who are waiting for employment. Given the number of inhabitants, this reduces the employment prospects of Albanians.

The Union of Independent Trade Unions, whose members are mostly fired Albanians, firmly adheres to its previous conclusions that "there can be no partial return to work nor by way of filling advertised job vacancies, but that all of them have to be reinstated so that the 1990 'situation could be reintroduced'". In other words, all the 125 thousand workers should be returned to their work places, all the transformation and integration processes carried out to date annulled and the five billion worth damages compensated for. Even under better conditions Serbia would not be able to agree to such demands, which means that the chances for resolving social problems are slim.

If peace is within reach and thus the general lifting of the sanctions, then critical times are ahead for the Albanians. This will be particularly reflected in the economic and social spheres. Anarchy stimulated by the Serbian state, was welcome for private businessmen - gamblers. The border with Macedonia which is very near Kosovo, as well as the ethnic structure of that country, made it practically porous at all points. It was possible to import all sorts of goods - oil, gasoline, food, alcohol, tobacco and what not. There was everything in ample supply at all times and at very low prices. For this profile of "businessmen" neither Bulgaria nor Turkey were far.

Now the question arises - is it worthwhile to invest so much money and effort into smuggling goods that can be legally imported? Also, if imports and exports become free, then supply and demand on the market will become more abundant and diversified. Perhaps the times when one had to buy what was offered are behind us. In addition, Serbian businessmen, both those in state as well as in private firms, will enjoy the support of their state, thereby seriously endangering their Albanian colleagues. This is evident even today: four years ago mostly old Yugoslav-made cars were parked in front of Serbian firms, while the Albanians had foreign ones. Today the roles have changed. As rumour has it Serbian businessmen also get the use of choppers as compensation for services rendered.

Consequently, the only chance lies in the process of economic liberalization, including the exchange rate. Kosovo does not lack foreign currency as there are many Albanians who are "temporarily" at the European labour market. It is mostly in individual and private hands, but the foreign exchange circle still closes in the vaults of the National Bank of Yugoslavia, where this money converges. In case of inflation, and even hyperinflation, the Albanians can peacefully wait for the post - embargo era, for, viewed from the foreign exchange aspect it is possible to handle both the demands of the market as well as those imposed by the state of Serbia with only a small amount of foreign currency. Without inflation and with more stable economic trends the situation, especially in the social sphere, will deteriorate even further.

Ibrahim REDZEPI AIM Pristina