By Skender Ghilaga
September 1st, 2018 – Kosova, nearly 20 years after liberation, is in desperate need of economic development and the creation of employment for her population in order to advance her status as a unified national entity so that it is accepted by the United Nations, European Union and the US. Nearly 20% of its GDP is provided through remittances by the diaspora of over 500,000 people in Europe and 300,000 people in North America while her population of 1.8 million is suffering an intolerable unemployment rate of 33 % with youth unemployment at 60%. Her people are the youngest in Europe and yet it is the second poorest nation in Europe after Moldova. Kosova has a highly educated youth of 85% through secondary and nearly 60% university level. Many young Kosovars pursue their studies abroad including the US and Europe, and are multi-lingual. However, after they finish their studies few options remain for them: return to Kosova and remain unemployed as many of their peers do; stay in the country where they studied (if they are allowed to); or join an administration which lack experience and professionalism. None of these options are desirable career choices for a group of young graduates who could contribute so much more to Kosova by leveraging their knowledge to create a better environment and advance the economy.
Kosova and her people were admired by the world at large when nearly one million of her displaced population returned to their wrecked homes and savaged country after the Serbs forcibly expelled them during their war on the unarmed civilians of Kosova in 1999. After the NATO intervention to free Kosova of the Serbian oppression and occupation over decades which culminated in this final act of barbarism, Kosovars began the arduous task to restart their lives and re-construct the war-ravaged country. It has now been nearly 20 years since it was liberated in 1999 through the intervention of NATO and it has been 10 years since the declaration of independence in 2008. Regretfully, each administration since then has mostly been comprised of the freedom fighters who valiantly fought for the liberation of Kosova but had no experience in governing the young country or the economy and yet played musical chairs to retain power. Most of the bureaucrats, technocrats and intelligentsia of Kosova had fled to parts of Europe and North America to escape oppression by the Serbs. That exodus also included farmers who sought employment in Europe and US in order to feed their families at home. As a result, Kosova is suffering the tragic consequences of unemployment and poverty which are so often created and/or aided by inexperience and corruption.
During the UNMIK Administration from 1999 to 2008 and after independence in 2008 there was very little investment in Kosova though most of the public land and social enterprises were privatized. Farmland was similarly distributed to entities which did not invest in agriculture but kept the land for future speculation. Whereas Kosova was historically recognized as the bread basket of the Balkans, this most fertile land stands un-cultivated resulting in importing the majority of food products into Kosova. Remittances from the diaspora in Europe and North America which approached hundreds of millions annually were mostly used for the livelihood of their families. The only major infrastructure project was the construction of the road to Albania which was awarded to a large North American/Turkish Conglomerate and created very little opportunity for local small business and entrepreneurship except for those who received “commissions”. Therefore, I submit that the Government of Kosova and the business sector explore the following recommendations in order to develop a new economic policy for the future:
A. A coal-powered power plant in Prishtina has been under consideration by the Government of Kosova and was recently contracted to a company for turnkey construction even though the EU and the World Bank are in opposition to it for environmental reasons and have not agreed to financing it. Prishtina is already suffering of pollution and this project will create much worse environmental conditions because a truly clean coal plant would be prohibitively costly to build. Even the present projected cost of nearly $1.5 Billion is not affordable because it would triple the usage rate per KWH which cannot be afforded by the public. In anticipation of the new coal plant the Administration, for years, did not launch any energy conservation or alternate energy ventures which has now created a dire lack of reliable source of electrical energy. Kosova is an ideal location for green and alternate sources of energy because its energy needs started from almost ground zero as the name “Kosova e Re” implies. Therefore, whether the coal plant proceeds or not the following measures should be taken in order to reduce/optimize total demand of energy prior to and/or simultaneous to embarking on the transformation of the energy sector:
– An energy building code needs to be established for all new construction.
– An immediate Energy Efficiency Analysis of existing public facilities should be started to be followed by an implementation program. Some work has already been done by the World Bank and other agencies for schools and other facilities but I don’t believe implementation has started.
– Universities and hospitals which are technology intensive require special attention to make them energy efficient in order to avoid critical interruptions of power.
– Solar farms should be provided for remote villages and for housing complexes
– Solar panels should be offered to individual homes with provisions to buy back the excess energy.
– Wind energy should be investigated though it is more prevalent in coastal areas.
– Hydro requires constant water supply which is not reliable in all parts of Kosova.
None of these programs, even if they were all implemented, would come close to the capital cost of building a coal powered plant, and would greatly reduce total demand, and as a consequence, the total energy expenditure. Furthermore, they would create much needed work opportunities for the unemployed and would educate them in an industry of the future which is a very important derived benefit because it would contribute to achieving the following additional recommendations and proposals:
B. I stated above that agriculture which was the mainstay of Kosova for centuries has been neglected and currently represents only 12% of total employment with industry at 14% and service at about 70%. In order to promote economic progress in Kosova, in addition to investment in agriculture, employment opportunities have to be created especially for the youth of Kosova before it is too late because “Economic Determinism” is the first step towards the achievement of a country’s well-being even though it may not be the only factor. In Kosova, this can only be accomplished through education/training and the creation of work opportunities. Therefore, the Government and Municipalities of Kosova should explore launching the following programs:
– Digital transformation of the services, records and capabilities of the Central Government as well as the Municipalities
– Developing E-Government portals that enable citizen engagement and self-service capabilities for citizens requesting government services.
– Digitization of infrastructure
– Provide data sharing for selected ministries, institutions, business and the public.
– Develop training and education programs for youth and the unemployed so that they can be used for the implementation of these programs.
– Launch incubators to develop and create small business enterprises such as accounting, IT and big data which can be marketed and offered to other countries for outsourcing.
– Programs and initiatives that position Kosova’s public and private sectors to capitalize on a resurgence of off-shoring/near-shoring due to digital transformation efforts globally, high-tech skill shortages, and the growing demand for third party partners who can implement digitalization, automation, and cloud technologies.
C. In order to accomplish the above, which are not easy tasks, efforts should be made to secure financing by enlisting the support of International agencies such as:
– World Bank, European Central Bank, USAID, EBRD, etc. which will lend to the Government of Kosova and in some cases to Public/Private entities.
– NGO’s and Multinational Enterprises should be contacted to assist in creating incubators, small business and out-sourcing enterprises.
– Green projects and alternate energy sources will attract financing for environmental reasons. When my partners and I developed International Village of Prishtina, a 110-unit housing complex, I was able to obtain financing from The Overseas Private Investment Corporation (OPIC) for the infrastructure of the project precisely because we included Geo-Thermal heating for all the homes and recreation areas as well as new central sewage and water treatment plants. The savings in annual electrical consumption were abundantly justified for the capital investment as proven by the fact that electrical power consumption represents only 25%of the total heat whereas 75% is provided by the heat pumps of the Geo -Thermal System which is the largest installation of its kind in Europe.
Remittances by the Kosova Diaspora have contributed Billions to support their families since the 80’s most of which has gone towards sustaining their livelihoods with only a very small amount being invested in Kosova except for some possible small business. Hundreds of millions are still being sent annually for similar reasons without being reinvested for obvious daily necessities. I believe that a portion of these funds could be leveraged for use in an investment fund (to be created and managed by a trustworthy International Agency or NGO) without detracting from the primary goal of family support.
In conclusion, I want to express my serious reservations for the path taken by the Kosova Leadership in as far as the economic conditions and future of the country and its people. Additionally, the political difficulties which the country is facing with Serbian instigations backed by Russia and the uncertainty of US positions on the border issues may create civil l disruptions which will aggravate the socio-economic circumstances. Therefore, serious measures need to be taken to convince the UN, US and EU to regain their trust and support. Admittance of Kosova into the EU is indispensable and is the only way for world recognition and it can be greatly influenced by economic progress.
President, Services Group Int’l, Inc., www.sgi-inc.net,
Founding Member of Nat’l Albanian American Council (NAAC)
Founding MemberAlbanian American Chamber of Commerce (AACC) and Kosova American Chamber of Commerce (KACC).