http://www.voanews.com/english/2005-03-17-voa61.cfm
VOICE OF AMERICA
Analysts: Kosovo's Transitional Economy Rapidly Improving
By Barry Wood
Pristina
17 March 2005
Wood report - 427k
Wood report
In Kosovo there are the signs of a service-based economy that is
capable of producing overall growth without reliance on foreign
assistance.
Kosovo economy is experiencing a painful transition. The old
industrial, government-run Yugoslav model is dead. In its place a
service, small business-based economy is being born.
International Monetary Fund representative in Pristina Marc Auboin is
optimistic. He believes that despite the 50 percent decrease in
foreign assistance during the past few years, a new Kosovo economy is
producing growth of four- to five percent a year.
This, he says, is fast enough to absorb the 35,000 new entrants into
the work force each year.
While some analysts say the unemployment rate is as high as 65
percent, Mr. Auboin says 30 percent is a more accurate figure. It is
true that most Kosovars work outside the formal economy and most
workers are underemployed-meaning they work less than full time. There
are no government payments to the unemployed.
Kosovo experienced a kind of economic boom four-years ago as huge
volumes of reconstruction money flowed into the territory following
the civil war with Serbia's government. Growth rates reached 11
percent, a rate that could not be sustained as aid flows fell.
Mr. Auboin, an advisor to the government, says the small business
sector is now growing at a rapid pace.
"It shows everywhere. It is a services-based economy. And it is
growing. And its growth even offsets the withdrawal of donor support,"
he said.
Analysts say the absence of clarity on Kosovo's final status has been
a deterrent to foreign investment.
Kosovo is Serbian territory. Following revocation of its autonomous
status in the former Yugoslavia, Kosovo's ethnic-Albanian majority
revolted. Fighting ended in 1999 after NATO intervention and Kosovo
has been administered since then by the United Nations. Kosovar
Albanians want independence, but Serbia insists the province should
remain its territory and its final status has not been determined.
But despite that, Albanians living abroad are bringing money into Kosovo.
Michel Svetchine is the French civil servant who serves as managing
director of Kosovo's de facto central bank, the Banking and Payments
Authority. He says the territory's banking sector is beginning to
function as loans to business rose by 60 percent last year.
"This is showing that, first, there is initiative from the private
sector. And there is, secondly, a supply from the financial sector,"
said Mr. Svetchine.
Despite progress, immense problems remain.
The privatization of state industries is not complete. There are
significant disputes over land and enterprise ownership. Traditional
trade flows have not been re-established. The trains are not running.
The electricity supply is erratic.
But analysts detect clear signs of progress as Kosovo moves towards a
likely resolution of its status over the next 12 months.
Serbian News Network - SNN
[email protected]
http://www.antic.org/
