Kosovo is a lower-middle-income country which has experienced solid economic growth over the last decade. Kosovo is one of only four countries in Europe to experience growth in every year since the onset of the global financial crisis in 2008.
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Kosova Sot: What happens if the budget does not get approved this year?Jan-Peter Olters: There are emergency provisions in Kosovo's legislation that give the authorities a little extra time to finance... Show More + current -- but not capital -- expenditures, in function of the previous year's budget. But even this contains a number of important implications and risks. First, by having to delay public investments until a new budget will have been approved by a Parliament that was able to constitute itself will reduce overall growth rates in the economy -- beyond the amounts not spent by Government. The uncertainty alone will have the private sector delay its own decisions on large expenditures as well. Second, without the mid-year budget review for the current budget, the ability to accommodate the salary increases within existing line-item constraints risks the Government's ability to pay (all) public sector salaries by year's end and rectify any arrears situation early in 2015. If the January Show Less -
Reporter Reisen: Mr. Olters, is it correct to say that the project of a new coal-fired power plant in Kosovo has become the most controversial one within the World Bank?Jan-Peter Olters: It is at... Show More + least one that everyone knows. It is one of the most controversial.RR: The World Bank has announced to reduce investments in new coal-fired power plants. Why does Kosovo need a new coal power station?Olters: The issue is not a new, additional power station but the ability to decommission “Kosovo A” as quickly as possible and replace it with a modern power plant. “Kosovo A” is an ancient, fragile, and very inefficient power plant, which—even with the new filters—causes significant pollution.RR: Would it not be more sustainable to rely on alternatives to reduce the country’s dependency on coal energy?Olters: We did ask ourselves: are there options to close “Kosovo A” without replacing it with another coal-fired power plant, while ensuring that, at the same time, energy security is assured ( Show Less -
Koha Ditore: Since 2008, the Government of Kosovo had road construction as a priority, including here the three next years that will swallow 33% of capital investments. Has this concentration only on roads... Show More + been a mistake? Would investments in other sectors lead to more jobs and sustainable growth?Olters: Especially as a small, landlocked country, a transport network that guarantees secure access to seaports and the most important trading partners is an important priority. It still holds true that the only route to markets in central Europe, such as Germany or Switzerland, that does not cross a country that has not yet recognized Kosovo’s independence is via Albania and Italy. There is no doubt that Route 7—if well maintained—will continue to generate important economic benefits. Any discussion on whether the money spent on the motorway to Albania has maximized the development impact, relative to the same amount of money that could have been spent on alternative projects, has become pur Show Less -
Mr. Olters, let us start from an issue which has created lot of debate and suspicion in Kosovo – the problem of unemployment. KAS, supported by WB, brought the rate of unemployment to 30,9 per cent, or... Show More + 4,2 per cent less than six months ago. However the registration of population brought the unemployment rate at 44,8 per cent. How were these figures “produced” and how trusted they are? Which indicators have brought these results?Olters: For the first time in four years, the Labour Force Survey has taken a close look at labor market outcomes in Kosovo. These are the most reliable data and most accurate source for the calculation of the unemployment rate, with methods and methodologies that reflect those being employed by Eurostat and surveys that were verified by the World Bank experts. The public reaction to the findings, including the suspicions you have mentioned, relate to the conceptual distinction between the “economically inactive” segments of the population (capturing also those Show Less -
“The problem that is usually being visualized, is how capitalism administers existing structures,” Austrian-American economist Joseph Schumpeter wrote in 1942, “whereas the relevant problem is how it creates... Show More + and destroys them.” In many debates on economic development, it is often underemphasized that dynamic rates of economic growth are the result of an almost violent process, unsettling for companies and households, and a conscious and courageous choice by all who commit to it.Almost six years after independence, Kosovo finds itself at a critical juncture, at which important development priorities will need to be defined to be able to set its economy onto the right track towards vigorous growth and lasting improvements in social indicators. Given the recent performance of its economy, Kosovo is currently well-positioned to base a long-term growth strategy on the foundation of macro-fiscal and financial stability and avoid having existing fragilities (the private sector’s low productiv Show Less -