page 4 page 14 STUCK IN NEUTRAL - Prishtina Insight · 2018. 4. 1. · Rector Ramadan Zejnullahu...

PI Guide: Where baked chicken gets serious. page 12

Rocky implementation of Brussels agreements leaves northern Kosovo caught

between Belgrade and Prishtina. Page 6

Together again: pDK, LDK rekindle union to end crisis.page 4

albania roars: economic tigershows its teeth.page 14

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November 21-December 4, 2014 l #146 l Price 1€

STUCK IN NEUTRAL

2 n November 21-December 4, 2014 n Prishtina Insight

The court failed Kosovo – againThis newspaper has been hard on the Constitutional Court lately. We have picked apart its two contro-versial decisions in the aftermath of the June elections, and raised questions about how three inter-national judges have continued to serve on it beyond their mandates.

Unfortunately, the court has yet another troubling notch in its belt, following its recent decision not to hear a case brought by the Ombudsman, Sami Kurteshi.

The Ombudsman’s complaint, i n shor t, was that President A t i f e t e J a h -ja ga v iolate d t he con s t it u-tion when she “confirmed the e x te n s i o n o f the mandate” o f t h e t h r e e judges whose terms were to expire at the end of August.

Kurteshi argued that Kosovo’s treaty with the EU did not give the President authority to effectively appoint the judges outside of con-stitutionally mandated proce-dures.

As Prishtina Insight reported in October, the President’s office was initially uneasy about the process because it avoided parliamentary approval, which the constitution requires. EU officials convinced the President’s office that the pro-

cedure was sound.I’m not sure if what happened

was indeed unconstitutional. What is clear is that the case deserved a proper hearing. Instead, the court concluded that the case was so devoid of merit that it wasn’t worth evaluating in a comprehensive way.

One can only speculate why the court did this. But it may have had something to do with the Om-budsman’s request for so-called “ i nter i m measu re s ”. Ku r te sh i asked the court to take the inter-national judges out of commission while the case was being evalu-ated. This was a fair request: if the judges were potentially there ille-gally, they should not be hearing cases until their future is decided, one way or the other.

In a sense, that request forced the court’s hand. Had the court accepted Kurteshi’s case, it would have had no reasonable choice but to sideline the judges and poten-tially the entire court, which would have been left without a quorum.

Perhaps the only solution then would have been for the court to wait until Kosovo’s political lead-ers ended their deadlock and for parliament to approve the judges, as the constitution envisages.

This would have been the right course. Instead, the court decided to affirm one dubious decision – the extension of the judges’ mandates – with another, eroding its own in-tegrity in the process.

NateTabak

Editor-in-Chief

from the editor

Balkan Investigative Reporting Network • Mensa e Studenteve, first floor, 10000, Prishtina, Kosovo • PhoNe: +381 (0) 38 24 33 58 • edItoR-IN-chIeF:

Nate Tabak •StaFF: Jeta Xharra, Marcus Tanner, Valerie Hopkins, Petrit Collaku, Parim Olluri, Nektar Zogjani. • deSIgN: Trembelat • Prishtina Insight is supported by the Norwegian Embassy, Rockefeller Brothers Fund and the Balkan Investigative Reporting Network.

PrishtinaInsight

PageTwoA 2009 memorandum signed between Kosovo Liberation Army associations and the University of Prishtina established the practice of automatically registering new students whose names appear on lists sent regularly to the university by these associations. These applicants are accepted and registered, whether or not they pass their entrance exams. Rector Ramadan Zejnullahu has taken a stand against this memorandum and has called for its annulment, while the Minister of Education Rame Buja released a decision calling on the university to respect the memorandum.

How to get into the University of PrishtinaStep 1. Prepare the following documents: birth certificate, high school report cards, high school diploma, a photo, and ID.

Step 2. Fill out the online application form.

Step 3. Print out the application form and four copies of the payment forms.

Step 4. Complete the entrance exam. Pass the entrance exam.

Step 5. If accepted, fill out the registration form and complete a 50 euro payment for full time studies, 250 euros for studies via correspondence.

Step 6. On the day of registration, present the completed registration form, proof of payment for the semester, and a photo.

Step 3. Welcome to the University of Prishtina!

Step 1. Get your name on the list of a KLA association as the child of a KLA veteran, invalid, or casualty.

Step 2. Complete the entrance exam. Pass or fail the entrance exam, it doesn’t matter.

For ordinary applicants: For applicants whose parents are KLA deceased, veterans or invalids:

Prishtina Insight n November 21-December 4, 2014 n 3


Nation

By Nektar Zogjan and Nate Tabak

The last time Kosovo’s two larg-est political parties got together in government, it did not end well. But, late on Wednesday, President Atifete Jahjaga announced that the Democratic Party of Kosovo, PDK, and the Democratic League of Kosovo, LDK, were getting back together – four years after their gov-erning coalition fell apart in 2010.

LDK leader Isa Mustafa, the former Mayor of Prishtina, an-nounced on Facebook that the LDK would lead the next government, implying that he intends to take the Prime Minister’s post. Prime Minis-ter Hashim Thaci’s PDK has yet to comment on the deal.

“Bearing in mind the situa-tion the country faces, following a lengthy discussions, we agreed in principle with Hashim Thaci, lead-er of the PDK, to reach an agree-ment on a coalition government,” Mustafa wrote.

The deal promises an end to five months of political stalemate fol-lowing the June 8 general elections.

EU and American officials re-cently piled pressure on Kosovo leaders to reach a deal on forming

a government amid growing con-cerns that the EU-led dialogue with Serbia was being neglected, and that the economy was suffering in the absence of a government able to approve budget revisions.

The deal offers current Prime Minister Thaci’s PDK political sur-vival: It allows the party to stay in power, which had seemed all but impossible after the LDK and other former opposition parties formed a coalition after the June elections.

For Mustafa’s LDK, the deal represents a risky gambit for rel-evancy and power a year after its humiliating loss of control of the capital.

The LDK had agreed to play second fiddle in a coalition of the Alliance for the Future of Kosovo, AAK, the Vetevendosje [Self-deter-mination] movement and NISMA, which united to prevent Thaci and the PDK from getting a third man-date.

Although the largest party in the coalition, the LDK agreed to let Ramush Haradinaj of the AAK become the next Prime Minister.

Mustafa would be the Speaker of Parliament, with the promise of the Presidency once Jahjaga leaves office in 2016.

Rivals reunite to govern Kosovo

Albania aiding EULEX bribery probe

The amount of money that a French consortium has agreed to invest to develop Brezovica ski resort. The deal is a 99-year concession, which technically keeps the ownership with Kosovo. Disputes between Bel-grade and prishtina over ownership of the existing resort have thwarted a series of plans over the past decade to privatise Brezovica.

€410m

By Aleksandra Bogdani and Flamur Vezaj

Documents obtained by BIRN show that Tirana District Court on Sept. 19 approved a prosecutor’s office request to assist the Kosovo judicial authori-ties in investigating an Italian EULEX judge and two others suspected of corruption.

According to the legal assistance request pre-sented by the prosecu-tor’s office to the Tirana District Court, Kosovo authorities suspect that between 2009 and 2011 Francesco Florit accept-ed promises of bribes 750,000 euro in bribes and actually received a bribe of 360,000 euro to “disregard all evidence in a murder trial.”

T he tr ia l involved three suspects, Besnik Hasani, Shpend Qerimi a nd Nu sret Cena , ac-cused in two cases in 2007, a deadly bombing in Prishtina and a triple murder in Kacanik. The defendants are all former members of a Kosovo po-lice special unit.

In 2009, Hasani and Qerimi were found guilty in the blast trial, while Cena was acquitted. Florit was the presiding judge in a three-member panel.

The three men were tried earlier for a 2007 tri-ple murder that took place near Kacanik. In that case Cena was also the only suspect to be acquitted, although Florit was not involved in that trial.

F l o r it h a s d e n i e d ever considering a bribe. “I have never received, and never been offered, any bribe from anyone,” he told BIRN.

Kosovo authorities suspect that the bribe was arranged in 2009 between Flurim Hasani - Besnik Hasani’s brother - his lawyer, Mahmut Hal-imi and Judge Florit.

According to the court document, the Kosovo authorities asked their Albanian counterparts to verify all dates of en-trance to Albania in 2009 of Flurim Hasani, lawyer Halimi and Judge Florit.

The Kosovo’s pros-ecutor’s office and EU-LEX have also sought the point of entry of the sus-pects into Albania, the vehicles they used, and the names of any other passengers in the cars they traveled in.

Florit has denied visit-ing Albania in 2009, and maintains that the story is an effort to secure a retrial - which the family is urging in the Kacanik murder case.

Isa Mustafa says LDK will lead the next government in coalition with Hashim Thaci’s PDK – four years after the parties’ union fell apart.


A

B

C

However, a ruling of the Con-stitutional Court in August spoiled that agreement, annulling Musta-fa’s election and confirming that the PDK, as the largest single party in parliament, had a right to the post.

In the aftermath of the court ruling, which effectively allowed PDK to stall the formation of a gov-ernment indefinitely, the coalition failed to reach a new power-shar-ing agreement.

Mustafa demanded the Prime Minister’s post, if he could not be Speaker, which Haradinaj refused to cede.

“From the beginning, the PDK knew the weak points of the bloc, which was the leaders’ interest in getting power, not ousting the PDK. As Thaci knew this, he blocked the process, which led to serious rifts inside the bloc,” Fisnik Korenica, an analyst from the Group for Le-gal and Political Studies, observed.

If the LDK leads the next gov-e r n me nt , p re s u m a bly u nde r Mustafa, it is unclear how much real power the party will have. The PDK has 37 seats in parliament while the LDK has only 30. The par-ties have reportedly agreed to a di-vision of ministries, however.

The deal is already proving a

tough sell for the LDK. Many of the party’s supporters detest the PDK and had high hopes of breaking its seven-year hold on Kosovo politics.

“ This definitely breaks the hearts and the trust of our LDK voters,” one LDK MP, Vjosa Osmani, said.

“Such a decision is at odds with the will of the electorate because in hundreds of meetings we had all over Kosovo they told us that their only request was not to go into gov-ernment with the PDK.”

The LDK pulled out of a govern-ing coalition with the PDK in Octo-ber 2010 after party leaders said their voices were not being heard. The coalition had nearly collapsed the previous year.

The coalition, which emerged after the 2007 elections, was always tough to stomach for both parties.

The founders of the PDK were former chiefs of the Kosovo Libera-tion Army, KLA, including Thaci himself, and the party’s support base was in rural Kosovo, although that is starting to change.

The LDK, on the other hand, was founded by a pacifist intel-lectual, Ibrahim Rugova. Always a more urban party, its core support lay in Prishtina.

Briefly

Former Prishtina Mayor Isa Mustafa, left, and Prime Minister Hashim Thaci seem to have set aside their parties’ acrimony, for now.

BACKTOGETHER

Android game makes light of Serbia-Albania match. In only a week, a simple android game based on the recent tumultuous Albania-Serbia football match, published on Google Play Store on Nov. 11, has received more than 3,500 reviews. The game has become a hot topic among Serbs and Albanians. While Albanians approve of the game, often giving it a five-star rating, some Serbs complain that it is offensive and say Google Play Store should never have released it. The game depicts a drone in a soccer stadium carrying a flag. The player has to keep the drone up in the air and protect it from another footballer who is trying to grab it. “ ‘Autochthonous’ is not offensive,” says Yusuf Aliya, the author. “It’s a harsh metaphor for what happened in Belgrade, which includes all sides, the Al-banian national team, the Serbs and UEFA.”

EU appoints legal expert to probe EULEX. The EU’s foreign policy chief Federica Mogherini has appointed an indepen-dent legal expert to investigate allegations of corruption at Brussels’ rule-of-law mission in Kosovo, EULEX. Mogherini said that veteran French law profes-sor Jean Paul Jacqué, a senior legal adviser to the EU, would conduct a four-month review of the situation at EULEX after the corruption allegations made by one of its own prosecutors.

Regional truth commision one step closer to establishment. The coalition of groups working to establish a fact-finding com-mission into the Yugoslav wars, known as RECOM, amended its statute ahead of the hoped-for formation of the commission next year. If it is finally estab-lished, RECOM will produce a report a definitive list of all those killed and missing along with a list of camps and other places of detention during the armed conflicts from 1991 to 2001 in former Yugoslavia.


Cover

Moc Prirode Pharmacy in North Mitrovica is one of the businesses in northern Kosovo struggling to adhere to regulations imposed by Prishtina.

PHOTOS/LAYLA BARAKE


By Valerie Hopkins

A raft of agreements reached between Ko-sovo and Serbia since 2011 are designed to improve relations and make life easier for people on both sides of the border. But, for pharmacist Blagoje Savic, from Zvecan in northern Kosovo, they've just made life more complicated and expensive.

“Once we raised our prices, people went to buy their medicine in Serbia, so they did not have to pay the additional tax,” he lament-ed, referring to the fact that he now pays Ko-sovo Customs duties of 16 to 27 percent.

His pharmacy is one of many businesses, organizations and public institutions that have had to start operating under Kosovo law as a result of the EU-brokered agreement between Kosovo and Serbia reached on April 19, 2013.

According to Savic, Kosovo Customs told him in October that he must bring his phar-macy into line with Kosovo regulations - and that his staff must have qualifications recog-nized by Kosovo - from next January.

“The people who are discussing this situation in Brussels don’t know the situa-tion on the ground,” grumbled Savic, who is worried by all the red tape he must deal with in a short period of time.Kosovo Customs referred Prishtina Insight’s queries about Savic’s situation to the office of Deputy Prime Minister Edita Tahiri, which is overseeing the implementation of the agreements. Tahiri’s office said it was aware of the issue and was working on it.

The Brussels agreement focused primar-ily on reintegrating Kosovo’s four northern, mainly ethnic Serbian, municipalities into the rest of Kosovo. Serbia had continued to run them de facto following the end of the war in Kosovo in 1999.

Signed after two years of technical dis-cussions on issues like energy infrastructure

and diplomas, the accord has yet to be imple-mented in full, however.

Many people in the north feel left in lim-bo. Currently, they have no access to any ju-dicial system, must pay taxes to Kosovo and rely on Prishtina-funded municipalities for services. At the same time, Serbia continues to fund and run their schools and hospitals.

The northern territory has slowly come under the Prishtina government’s control. Elections administered by Prishtina were held in November 2013 and June 2014.

Since May 2014, as per the agreement, only one police force, the Kosovo Police, has functioned in the north.

However, the implementation of other ac-cords has stalled – in part because of national elections in Serbia and Kosovo, followed by the prolonged period of deadlock over the formation of a new Kosovo government.

Serbia’s courts have ceased to function in the north as per the agreement, but Kosovo has not yet filled the vacuum with its own judi-cial institutions because of disputes over the structure of the judiciary and its future staff.

“The government in Belgrade keeps us on ice,” said a judge in the north who did not want to be named because of the sensitivity of the situation.

“They have limited our activities and they forbid us to act outside of official author-ity,” the judge added.

“At the same time, we have had no in-structions on our authority. We are forbid-den to communicate with the public and the media. We accept wages that we do not earn. There is no public strategy, what we should do and for how long.”

The judge’s sentiments express the un-certainty felt by many people in the north, who are caught between two governments.

An association of Serbian-majority mu-nicipalities, designed to include the four in

As the transition of power proves dif-ficult, the mainly Serbian community still awaits the promise of a normal life.

Brussels accords leave North Kosovo in limbo

CONTINUES ON PAGE 8


Cover

the north and another six across Kosovo, has yet to be formed. Dis-putes continue over how much autonomy it will enjoy. All that has been agreed is that it will oversee health, education, urban planning and culture.

Savic’s business, “Moc Prirode”, (‘The Power of Nature’) has outlets in North Mitrovica and in Zvecan. It serves residents of those towns and Serbs across Kosovo who come to hospital in North Mitro-vica for treatment.

In October, the Kosovo Customs Agency told him that as of January 1, 2015, his business would need to be licensed and verified accord-ing to the standards of the Kosovo government. All medicines he im-ports will have to be approved and licensed by Kosovo institutions.

In addition to the new cost of customs taxes, one of the major problems that Savic and other medical businesses face is the is-sue of pharmaceutical firms regis-tering in Kosovo.

Companies like his will not be able to purchase goods from busi-nesses that have not registered and been licensed in Kosovo. However, Galenika, the pharmaceutical com-pany that supplies much of Savic’s needs, is owned by the Serbian state. Since Serbia disputes the in-dependence of Kosovo, it will not “re-register” in Kosovo.

Savic fears that the higher costs of medical supplies bought at home will prevent people from getting treatment. “What will happen if pa-tients cannot receive the medicine they need? This could be a humani-tarian disaster,” Savic said.

Lidia Tabakovic, assistant di-rector of Galenika’s export divi-sion, said she had not heard about this possibility. “All sorts of stories are going around,” she said. “I am confident that our chambers of commerce will sort this out.”

Savic’s pharmacist, Miodrag Trajic, faces another obstacle. In 2011, Kosovo and Serbia agreed on mutual recognition of each other’s higher educational qualifications.

Trajic, who graduated from the University of Kragujevac in Serbia in 2012, has not been able to get his diploma recognized by Kosovo authorities.

The Ministry of Education in Kosovo directed him to SPARK, a

CONTINUES ON PAGE 10

2011

20122013

noprogress

someprogress

Cadastre

TelecomAssociation/

Community of Serb-majority municipalities

Mutual Acceptance of Diplomas

IBM

Regional Representation and Cooperation

Neither will block

Judiciary

2011

20112011

2011

20112011

2012 2013

2013

2013

2013

2013

2013

2013

2013

2013

KOSOVOSERBIA

AGREEMENT

CONTINUED FROM PAGE 5



partiallycompleted completed

Freedom of Movement

Energy

Civil Registry

Customs Stamps

Municipal elections

Establish an implementation

committee

Police and Security

Discussions on energy and telecoms

IBM

Regional Representation and Cooperation

Neither will block

Year No progress Some progress Partially Completed Completed2011 1 2 1 2

2012 1

2013 3 1 3 2

Total 4 4 4 4


Cover


Dutch organization that has served as an interme-diary between Kosovo and Serbia on the issue.

SPARK applies on behalf of graduates from both countries for recognition by the European University Association. However, SPARK’s two-year contract expired in mid-2014, and has yet to be renewed.

Serbs from across Kosovo also come to uni-versity in North Mitrovica, as it is the only higher education institute in Kosovo with a curriculum in Serbian. Its 12,000 students follow Serbia’s study system, however, and Kosovo has refused to recognize its diplomas.

It was not included in the 2011 agreement on mutual recognition of diplomas, which means that its graduates cannot apply for jobs in the public sector in Kosovo that require higher edu-cational certificates.

The bureaucratic infrastructure also re-mains absent in the north of Kosovo. By Koso-vo law, sanitary inspectors must inspect each pharmacy. Each municipality usually has at least one inspector. However, at present, none of the northern municipalities has any.

As a businessman, Savic is concerned that unless a solution is found to enable chemists like his to import goods from Serbian pharmaceuti-cal companies, doctors will have to sell medi-cines that they have no experience with.

Healthcare is a major concern for Kosovo Serbs, most of whom travel to Mitrovica for treat-ment. While some in Prishtina complain about the Serbian-financed “parallel structures” oper-ating in the north, officials working in Mitrovica maintain that when it comes to schools and hos-pitals, the systems are not parallel structures but the only structures.

The Kosovo government this year has budgeted 3 to 5 million for each of the northern municipalities, which is markedly less than Bel-grade spends in the four municipalities.

Savic fears some Serbs will leave Kosovo if they lose confidence in the medical system and can’t access the care they need. “Serbs from all over Kosovo come to the hospital in Mitrovica to be treated in their native language,” he said.

“If we cannot ensure quality care and access to medicine, people will begin to leave for good,” he added.

Adrijana Hodzic, who runs the Kosovo govern-ment's office in North Mitrovica, which provides municipal services, says residents of northern Kosovo thought the Brussels agreement would finally bring them the normal life they craved.

"People in the north expected living condi-tions in all aspects of life to improve: better rule of law, education and health care,” Hodzic recalled. ”The question is: are people too ambitious?”

This story was written as part of BIg DeaL, a civic oversight project examining the implementation of agreements between Kosovo and Serbia. The project is being implemented by BIRN Kosovo, In-ternews Kosova and Center for Research, Transpar-ency and accountability - CRTa, with support from the British Foreign & Commonwealth Office and the Rockefeller Brothers Fund.

“People in the north expected living conditions in all aspects of life to improve: better rule of law, education and health care. The question is: are people too ambitious?”

— Adrijana Hodzic, head of Kosovo government’s office in North Mitrovica.


Moc Prirode’s owner, Blagoje Savic, is concerned that the new regulations will negatively affect the supply of medicines he can sell to his customers next year. Pharmacist Miodrag Trajic, left, has faced obstacles in his attempts to get his Serbian diploma certified and recognized by Kosovo. Adrijana Hodzic, above, oversees the Kosovo government’s North Mitrovica Administration Office, which has served as a municipality office in everything but name for more than two years.

PHOTOS/LAYLA BARAKE


piguideBy Hana Marku

Te Halimi literally means “at Hal-imi’s.” And just who is Halimi? A quick visit to the restaurant's web-site reveals the toothy smile of a white-haired man who looks to be the patriarch of a chicken dynasty.

Located both in Prishtina and Prizren, Te Halimi offers the Ko-

sovar version of comfort food: a variety of meats, white

bread, salt - and amazing, tender baked chicken.

You really have to go for the house chicken. You can ei-

ther get half of a portion (3.50 euro) or an entire portion, but we found that a whole portion is just right for two hungry people. The chicken is generously marinated in salt, pep-per, garlic and what tastes like a sort of gjize (cottage cheese), kajmak (cream), or kos (yogurt) of some kind. It’s not clear what’s in it, but it doesn’t matter.

The chicken is really the star of the show, so we’d advise against or-dering any other competing meat dishes (the majority of which are comparable to what you can get anywhere else in Prishtina). The best combination my dining part-ner and I stumbled upon is a whole portion of chicken, a “combination” salad (consisting of carrot, cucum-ber, cabbage, shope, and potato salad), and french fries. Count the complimentary bread basket as well and you have enough food to keep you full for days.

Te Halimi is a bit out of the way on Tahir Zajmi street – past the bus station – in the Kalabria neighbor-hood, but is one of those rare restau-rants in Prishtina that has a regular stream of diners throughout the week – and it’s tastefully elegant. Expect to see groups of friends, cou-ples, and a few families. The dining room is relaxed and comfortable, and the service is fast and friendly. Also check out the selection of Ko-sovo wines, which includes some of the best bottles you can find in the country, including Stone Castle’s Cabernet Reserve. A meal with two salads, two side dishes, a half portion of chicken and a bottle of mineral water set us back 15 euros.

« « « «

SUPERB

Four stars: Perfection three stars: Superb two Stars: Good one Star: Just OK No Star: Don’t Bother

Te Halimi: Go for the chicken

te halImI Tahir Zajmi street (past bus station, off road to Peja).Monday-Saturday,8am-11:30pm.Contact: 049-102-020 or online at tehalimi.net.

EAT

The only thing you need to know about Te Halimi is its amazing chicken.


A EULEX memo shows that advisors of President Atifete Jahjaga had reservations about extending the mandates of three interna-tional members of the Constitutional Court without going through Parliament.

The only thing you need to know about Te Halimi is its amazing chicken.


“This is it? This is Albania? Oh God, we are so finished!” my grandmother said. She was 86, and had just spent 36 hours on a military truck, traveling through northern Albania during a stretch of several rainy and gloomy days in April 1999.

She was one of half-a-million Koso-vars forced from their homes during the conflict that spring. Other refuges joined

my grand-mother in their disap-pointment a b o u t what they

saw on their journey: dilapidated build-ings and houses and unpaved and danger-ous roads that led through a depressing grey landscape, in spite of the grandeur of the mountains.

Those downbeat observations reflect-ed reality in Albania where people were still waking up from the nightmare of com-munism and then the financial meltdown in 1997, when one of the largest “ponzi” schemes in history descended into chaos that left some 2,000 people dead.

But, as with most things Albanian, the story of Albania in the recent past is a tale of extremes.

Since the economic debacle of 1997, Albania has experienced the most dra-matic economic transformation of any transition economy in Europe. It surprises many people to learn that Albania leads 26 Eastern European countries in terms of economic growth per capita in the last 25 years.

On November 4, Branko Milanovic, a noted Serbian economist, published a post on his website entitled, “For Whom The Wall Fell? A balance-sheet of Transi-tion to Capitalism.”

Milanovic used per capita growth to see how Eastern Europe countries had

fared from 1990 to 2013. By posting an av-erage real per capita GDP growth rate of 3.9 per cent, Albania came out on top, fol-lowed by Poland on 3.7 per cent, Belarus on 3.5 per cent, and Armenia and Estonia, on 3 per cent each.

Consistent growth in Albania’s GDP is also reflected in a low unemployment rate of 14.5 per cent compared to around 31 per cent in Kosovo, which is only the official figure. [The real one is likely to be above 40 per cent.] Macedonia is on 31 per cent, Bosnia, 28 per cent, and Serbia, 24 per cent.

While part of this expansion may be explained as Albania’s natural economic catch-up, the economic transformation was especially unparalleled for a country that almost self-destructed during 1997.

So, what made Albania to grow so fast in such a short time? The economic trans-formation of major sectors of the economy went through fundamental changes. Over the last two decades, many people moved to cities in search of jobs, which led to cha-otic urbanization but also spurred growth and created demand for all kinds of ser-vices. The government stepped in to help manage this environment by privatizing state firms, deregulating the economy, cut-ting red tape and reducing taxes. The gov-ernment borrowed money and invested it in roads and other infrastructure projects. These multiple-year billion-dollar projects then created additional demand for ser-vices and put more people to work.

Other investments in energy and tourism added more fire to the economic engine. Private-sector firms then stepped in to provide a multitude of services, from consulting to insurance and engineering to finance. All this economic activity in the private sphere needed more capital, which was abundant and easy to get from private banks in Albania, which put the country into Top 20 in the World Bank’s

Doing Business report in 2014 for ease of getting credit.

Remittances meanwhile helped thousands of families with small-scale investments or increased their demand for more things, boosting consumption. The economy opened up to foreign in-vestment, cut tariffs, reduced other trade barriers, and allowed more goods and services to circulate.

In the background of all this stood the Bank of Albania, which played a key role in ensuring a stable financial environment, with low inflation, and well-capitalized and regulated banks and insurance com-panies. In fact, low inflation and a stable fi-nancial system created confidence in the national currency, allowing more capital and credit for firms and businesses. The government’s zeal for improving the business climate was evident in the lat-est Doing Business report, which showed Albania rising 40 places, with the biggest improvement coming in the areas of con-

Albania - the Balkans’ unlikely economic tiger

OpinionSend us your thoughts to [email protected].

MikraKrasniqi, a

native of Kosovo, is a

senior econ-omist with

the Govern-ment of

Maryland’s Department of Economic

and Busi-ness Devel-

opment in Baltimore.

His opinions are solely

his own and not reflect

those of his employer.

MIKRAKRASNIQI

Kosovo has much to learn from its neighbor’s startling economic transformation over the last two decades.


struction permits and property registra-tion – key to improving business dynamics.

These developments at multiple levels made it possible for the birth of firms, lead-ing to job creation and the expansion of the domestic consumer market. Growing em-ployment in Albania was helped by a labor market marked by lower costs and flexible wages. This meant that when the economy slowed, wages fell slightly, which allowed firms to maintain employment while ad-justing to new conditions. This balancing act helped keep productivity in line with wages and employment relatively stable compared to other countries.

What lessons can Kosovo learn from Albania? First, Kosovo doesn’t have a monetary system, so that option is not available to work with. But, the govern-ment can show more zeal for economic development in more pragmatic ways, by creating a more functional business envi-ronment in which firms can grow.

It has made strides in some areas –

especially in starting businesses. But, the gap between adopted legislation and reality remains wide. It is still dif-ficult for firms to obtain credit at rea-sonable interest rates in Kosovo, which hampers growth because firms need money to invest in their businesses. Paying taxes is still too cumbersome, securing permits for construction is a notoriously bureaucratic process, and so is contract enforcement and trade across borders.

I n add it ion , Ko s ovo cou ld he lp workers, and help employment grow, by improving labor-market legislation. Greater protection of workers might lower the turnover and encourage firms to invest more in their staff. While Ko-sovo lacks the mechanism of currency depreciation to maintain competitive wages, it can work to improve its labor and social security taxes to help firms maintain competitive wages for their workers. Finally it can also look into de-

signing more effective unemployment benefits and create positive incentives for job searching.

All these standard short-term re-forms should run alongside longer-term educational, political, legal and other in-stitutional reforms. While the benefits of road and infrastructure investments are hard to see in the short run, they are important in the long run in helping the country to integrate with its neighbors and facilitate regional trade.

Having said that, other sectors of the economy, including education, health-care, energy and the environment are equally important for long-term growth. Ultimately, Kosovo’s biggest problems are too deep to be fixed by just tinkering with them on the margins. Politicians should adopt a transformational vision for the country. They need to engage with zeal and passion on multiple fronts and so propel the country in a safer, more stable direction.

Having its own currency, the lek, has given Albania an important tool for promoting economic growth.

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