Twenty years after the end of the war in Kosovo, the young republic still faces serious economic and political challenges, but there are many signs of progress.
According to the World Bankexternal link, Kosovo has experienced “solid” economic growth over the last decade, but this has not significantly impacted unemployment or reversed the trend of large-scale emigration. About half of the 2-million-strong population is under the age of 25, and an estimated 60% of them are out of work. Patrick Etienne, who has directed the Swiss Cooperation Office in Pristinaexternal link since 2015, told swissinfo.ch, "More than 30% of young people don’t take jobs as salaries are so low, so they do 'informal' work, and many receive money from relatives abroad. There is limited social security”. swissinfo.ch has reported on Swiss job-boosting projects in the past.
The economy still relies heavily on remittances from the diaspora, including the 260,000-strong group of ethnic Albanians in Switzerland. The country also receives international donor assistance accounting for approximately 10% of GDP. The main donors are the European Union, the United States, Germany, Switzerland and development banks such as the World Bank and the European Bank for Reconstruction and Development (EBRD).
Switzerland is a key donor
Switzerland was one of 116 countries to recognise Kosovo’s independence from Serbia in 2008 and remains one of the country’s main partner countries and donors. Diplomatic relations were established with Kosovo in 2008 and the two states have signed a number of bilateral agreements, mostly in areas of technical and financial cooperation. Switzerland's overall contribution to strengthening economic development and employment amounts to CHF80 ($79) million for the period 2017-2020.end of infobox
Business in Kosovo got a boost in May 2019 with the official opening of a new Kosovo-Swiss Chamber of Commerce. This has its work cut out as there is a low level of interest in direct investment in the country. Poor infrastructure, corruption and bureaucracy scare off business. The political turmoil surrounding Kosovo’s sovereignty also presents risks for investors, with the Serbs and Russia refusing to recognise its independence. The European Parliamentexternal link recently backed visa liberalisation in Kosovo, which would be good for business, but the changes have yet to be implemented.
Patrick Etienne helped to steer many of the recent bilateral agreements with Kosovo. Looking back over the last four years, he says the country is slowly transitioning to a market-based system. However, it performs poorly in Transparency International’sexternal link corruption index, coming 93rd out of 180 countries measured. According to Etienne, “legal insecurity scares a lot of investors including many from the diaspora”.
The Swiss have been helping to reinforce accountability in the municipalities and improve transparency. Etienne added that there is “better governance locally, than at the top government level”. The Swiss Agency for Development and Cooperation (SDCexternal link) also supports efforts to fight corruption by training officials and journalists in how to investigate financial crimes.
Finding jobs for young Kosovars
In the last decade, hundreds of thousands of Kosovars are said to have left the country in search of work elsewhere in Europe, and the exodus continues. Niklaus Waldvogel, who works for the Helvetasexternal link development organisation, believes that while it is impossible to stop economic migration, work can be done to help reverse the trend: “You can improve the situation by facilitating systemic collaboration between the education and private sectors, following the Swiss example. This will keep future generations from leaving Kosovo.”
Although many young people in the country are highly educated, employers complain that they cannot find workers with the right skills. Helvetas implements the EYEexternal link project, which supports vocational education, job creation in the private sector and matching the right person with the right job. Helvetas is drawing up learning modules for companies and vocational schools, aimed at training 20,000 young people by 2020. “This is what we call systemic development, because it’s much more sustainable in the long run”, Waldvogel explained.
IT is the future
Many international companies outsource parts of their IT-based services to the Balkans, driven by the availability of a young and smart labour force and relatively low labour costs. Waldvogel believes Kosovo is well placed to participate as young Kosovars have strong foreign language skills. A few years ago, Swiss Public Television, RTS, reported on Drenusha Shala, who co-founded the Baruti market research company in Pristina, which works in German. Many of its 400 employees have lived in Switzerland or Germany. The salaries in this sector are quite competitive.
Waldvogel thinks that with a clearer national vision and more investment, information technology-based services could really take off. “The public and private sectors need to invest their money in the skills of the future IT labour force. The many development projects in the country focusing on youth unemployment should support innovative collaboration rather than just paying for training. In the long run, the country has to learn to stand on its own two feet.”
Economic growth may be slow but cultural life is blooming in the province, with Pristina gaining a reputation for its vibrant nightlife. Prizren is popular because of its fortress, church, and café-filled old town. Meanwhile in Peja to the north, Swiss projects have helped to improve tourist attractions, to promote the area internationally and to train people in this sector, boosting visitor numbers by 75% over a four-year period. swissinfo.ch found out more about these initiatives in 2017.
Etienne says there is still much to be done: "The project in Peja external linkhas been a big success. There was no tourism infrastructure here before. But the infrastructure has to be further developed, and there is a dearth of hotels that meet international standards”.
The untapped potential of the diaspora
Remittances from Germany, Switzerland, and the Nordic countries above all are estimated to account for about 17% of GDPexternal link. Many Kosovars that live in Switzerland spend a fortune building large family houses in their villages of origin, they regularly send money home and they fly in each summer.
Hilmi Gashi is among those who return in the warmer months with the family. He works for the UNIAexternal link trade union here in Switzerland, and believes the Albanian diaspora represents a huge and largely untapped opportunity. He’s a board member of Germinexternal link, a non-governmental organisation that encourages the Albanian diaspora to get more involved in the development of Kosovo by transferring knowledge and funds. It’s run by a group of professionals from many different fields. Gashi believes Kosovo can grow through bottom-up change, by encouraging the development of civil society and removing dependence on political leaders, parliament or international organisations. Gashi said, “if projects are funded by international money, they fail when the money stops”.
One of Germin’s successes was the setting up of a “Diaspora School”, which brings together young professionals from the diaspora and the Western Balkans to address some of the most pressing issues facing local communities in Kosovo. In his opinion, “we have to show people you don’t have to wait for the government to solve your problems”.
Peacekeeping in Kosovo
NATO continues to garrison the country and retains overall responsibility for security. The Swiss are part of the KFOR multinational peacekeeping force, providing 190 staff for SWISSCOY.end of infobox