Brussels, 14/06/2004 (Agence Europe) - Last Thursday, the Centre for European Policy Studies (CEPS) welcomed the presentation of a report by the World Bank on Kosovo's economic prospects. After being supported by international aid during the post-conflict period, to reach a rate of 21.2% in 2000, growth progressively declined to 4.7% in 2003. Although some progress has been made, mainly allowing for a liberal commercial regime and a flexible labour market to be set in place and for a close to zero inflation rate to be achieved in 2003, the authors of the report also note several continuing difficulties. They make a number of recommendations. These recommendations are also addressed to the United Nations Interim Administration Mission in Kosovo (UNMIK) and to the provisional institutions of the Albanian autonomous administration and to the whole of the international community, Robert Jauncey, Kosovo official at the World Bank, stressed.
According to the report, two interdependent facts will be determining for growth: a stronger private sector and conditions of peace and stability for all. Above all, the report notes that unemployment is still at a level of between 23 and 33% of the active population (the official unemployment rate is 50%). The fight against corruption and more uniform and consistent implementation of the legal framework throughout the province should contribute to creating an environment that will promote enterprise and attract foreign direct investment (FDI). Estimates in FDI since 1999 only amount to EUR 30 million. According to the authors of the report, the energy sector constitutes the main obstacle to business operations. It is too dependent upon public funding and proves very ineffective, while it could allow Kosovo, in the event of rehabilitation of infrastructures, to become an exporter to the rest of the Balkans. The mining sector, where there are privatisation possibilities, is also awaiting considerable foreign direct investment. Given these difficulties, and the fact that it is also an election year, Satu Kristiina Kahkonen, one of the authors of the memorandum, warned that the authorities should carefully select the expenditure that has the best returns. Orsalia Kalantzopoulos, World Bank Coordinator for South East Europe, concluded that, with a good economic policy and its central position in Europe, Kosovo could be a viable entity.