Kosovo’s long, slow recovery
But things may be a bit better than they look Print edition | Europe <https://www.economist.com/sections/europe> Jan 11th 2018 | PRISTINA <https://www.economist.com/node/21734411/comments> https://www.economist.com/news/europe/21734411-things-may-be-bit-better-they-look-kosovos-long-slow-recovery IN 1991 Armend Malazogu leapt off the back of an army lorry. Then aged 18, the Kosovo Albanian was escaping being drafted into Serbia’s fight with Croatia. The Yugoslav civil wars were just beginning and would eventually spread to Kosovo. Now, 18 years after the end of the Kosovo war and almost ten after the statelet declared independence, most indicators paint a bleak picture. Unemployment is around 33% and GDP per person, at $3,660, is the lowest in the region. Yet Mr Malazogu, now one of Kosovo’s most successful entrepreneurs, reckons things may be less gloomy than the numbers suggest. Kosovo’s officials say that their country’s economy is being hobbled by disputes with Serbia, which refuses to accept its independence and threatens legal action against major foreign firms wanting to invest in it. Russia has led objections to Kosovo becoming a member of the United Nations, and five members of the EU do not recognise it. But for Mr Malazogu, all this is just an excuse for the government’s flat-footedness. External pressure has not stopped his IT companies from prospering and subsidising Frutomania, his fruit-juice brand. In the past five years production at the Frutomania plant has increased by 60% a year. Since 2016 an agreement with the EU has opened its giant market to him. In a small plant set in the orchard-covered hills of Kravarice, machinery is squelching and squirting. Bottles trundle around the production line, labels are slapped on and a lorry outside is waiting to be loaded up with juice for Hungary. Frutomania has contracted supplies from a thousand small fruit producers in Kosovo and Albania who, until now, often just sold their crop in buckets at the roadside. Mr Malazogu says the problems he faces are more down-to-earth than the issue of UN membership. He has to import bottles, caps and labels because Kosovo produces none and the government is not doing anything to encourage potential manufacturers. And Kosovars are the only Europeans west of Russia who still cannot travel without visas to the Schengen zone. Gjirafa, an internet company, is another of Kosovo’s new business successes. It is one of a handful of Kosovar firms to have raised capital abroad. (Funding is a big problem for most companies in Kosovo.) Its revenues have increased tenfold a year for three years. It has prospered by filling niches deemed too small to bother with by the world’s internet giants. Its search-engine algorithms are designed to hunt for Albanian-language pages. It runs an Albanian equivalent of YouTube and Netflix. In a region without Amazon or Alibaba, on December 10th it massively expanded its e-commerce capabilities. This means, says its CEO, Mergim Cahani, that even tiny local firms can now sell to anyone in Kosovo, Albania and Macedonia. Gjirafa will collect and deliver for them. For the western Balkans, that is a business revolution. Education is another big headache, though. Kosovo’s system is “obsolete” says Vllaznim Xhiha, another entrepreneur, who made his fortune in Switzerland. He is not waiting for the government to modernise it. He has opened two “maker spaces” to encourage hundreds of young people to learn about technology. Kosovo has some statistics to be thankful for: its economy is reckoned to have grown by 3.5% last year. Remittances from the diaspora can be a lifeline for many, though they also distort the economy. Why work for the average income of €360 a month if someone already sends you that? More than half of young Kosovars dream of leaving, it is true. But, says Mr Xhiha, “our image is worse than our reality.” This article appeared in the Europe section of the print edition under the headline "After the war" -- You received this message because you are subscribed to the Google Groups "serbia" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send email to [email protected]. Visit this group at https://groups.google.com/group/serbia. For more options, visit https://groups.google.com/d/optout.
