Thursday, June 16, 2005

World Bank Approves $12.5 Mln Projects for Kosovo

PRISTINA (Serbia and Montenegro), June 16 (SeeNews) - The World Bank said on Thursday it has approved two projects worth a total of $12.5 million (10.3 million euro) to help improve business environment and effective use of public resources in the U.N.-run southern Serbian province of Kosovo.

The World Bank's board has approved a $7.0 million project aimed to improve the business environment in the province by increasing transparency and accountability of implementing institutions, the bank said on its website.

The second project, worth $5.5 million, is designed to strengthen public expenditure management in Kosovo by improving ability to use public resources more efficiently and transparently.

Kosovo, population two million, is legally part of the loose union of Serbia and Montenegro that replaced rump Yugoslavia two years ago. The province has been under U.N. administration after NATO bombed Serbia in 1999 to halt Serb repression of the ethnic Albanian majority in Kosovo.

The World Bank has granted over $80 million to the province since the end of the 1998-99 conflict.


Chris Blaku said...

Very appropriate grant, yet the ammount is unsubstantial.

Let's be realistic, thats $6.50 for every Kosovar citizen. And with the way the allocation is spread, urban areas such as Prishtina and Peja receieve a larger allocation, as well as Serbian enclaves, due to their sob stories.

Anonymous said...

True true. And by the time you subtract 10-20% in bribes hell you get less then that per citizen. But hey with the summer so close Rugova, Thaqi, Kraniqi, Rambush, and others need swimming pools soon.

Anonymous said...

That's the story everywhere where there is need for financial aid.

But if that money is spent on one specific thing, i.e. building wind farm for Dukagjini, or renewing the hospital in Prishtina and another city in Dukagjin, the money might become of some use?

Guessing here...

Anonymous said...

Wind farm? :) The approach is right, nervertheless. You have to start with the economic and politicla infrastructure. Immediately after that I would choose DSL internet offering for all of Kosova's cities supported by a fiber ring.

Chris Blaku said...

The country needs a lot of other things ahead of a broadband infrastructure.

The country is in dire need of revamp in many areas, including electricity, roads, water production, security in urban and rural areas, and also to prioritize their spending in ways that would encourage domestic and especially foreign investment in the nation.

By the way, that money goes through UNMIK, so Ramush, Krasniqi, Thaci, and Rugova wouldn't have access to it for your suggested bribes, but the UN sure would.

Anonymous said...

Living in Kosovo. the 12.5 would be better spent improving the power grid. The village of 300 people that I live is experiencing power restrictions 3 or 4 times a day.
If electricity can't be porvided to everyday citizens how in the heck can electricity be provided to the businesses that will coming into Kosovo after it gets it's independence?
The education system could use some work too. Who wants to invest in a country whose adverage citizen has an 8th grade education?
Broadband infastructure.....get a grip on reality.

Anonymous said...

The thing about broadband is it is quite possible to implement in Prishtina, but of course this is not something that is built out of aid money, its pure luxury.

But the above poster is right, electricity is the biggest problem.

Chris Blaku said...

In regards to education... Yes, the money would be better spent on education for the students of Kosova, however, that's not to lure foreign investors. Albania has a literacy rate in the high 90's and that has failed to lure any foreign investors, yet it has worked in their favor and will continue to in regards to empowering the masses to take advantage of new opportunities once the foreign investors do arive.

What foreign investors want, very simply, is the ability to turn a profit. I'd be hard pressed to believe that the average Kosovar has an 8th grade education, but nonetheless, the lower-than-average wages of the region can be seen as a gold mine for regional manufacturers. It provides an alternative to expensive shipping costs that are embedded with manufacturing in the Far East, and gives European manufacturers the ability to bring low cost development of their product to their own backyard. Manufacturing has the ability to employ a large portion of Kosova's population, as do other fields.

The necessary step is independence... After that, Prishtina must prioritize its spending and cost-cutting in a manner that is benefitial to foreign investors and the wealthy individuals that would invest within Kosova's borders.

Anonymous said...

Mr. Blaku and others,

I am aware that electricity comes before DSL. I have lived myself through three years of black-outs. There is electricity all around, we just need people to pay it like they do any good or service.
My point was that Kosova must find its niche and sacrifice in other fields in order to create the environment for the furhter development of that niche. Electricity is very important, but you cant' stop with that nor hope that investors will flock to you once you have electricity.
Also, it is clear that you have the essentials of economics, which is a good first step. But how can you attract industry if wages are higher than in the neighboring countries and people will rather stay unemployed than work for comparable balkan-level wages? Heck, we dont'/can't produce even our own food. Kosova is full of anomalies and we must come with genuine ideas to find ourselves in the pan-European market.
My claim is that Kosova should emulate India in software engineering, call centers and similar services. Start-up costs are low, people are young although you have to work with them a lot, and knowledge of European languages is widespread.

P.S.1 Wind farms are heavily subsidized and Kosova doesn't even have the winds for them. Rather, how about tomato and grain farms? I guess you have to sell your soul to the devil (i.e. Russians) when electricity is concernced, since people don't want to pay for it.

P.S.2 It is clear that you haven't been living in Kosova recently. The party that openly favored unification with Albania, LKCK, got about 5,000 votes in the last elections. I doubt such parties would achieve even half of that in Albania.

Chris Blaku said...

Openly favoring unification with Albania at a point in time when independence is in question, is in a word- STUPID. The 5,000 that voted for the party can be categornized within that word as well.

The reality is the potential wages and possibility for income in Kosova is much lower than that in any other Balkan state. People are willing to work for 150 euros a month, and 200 is a Godsend. However, the work is not there for these people. Manufacturing is short of a niche, but it does suit the situation and the model brilliantly, as the extensive limitations of the Chinese government as well as expensive shipping costs have brought the patience of foreign investors in China to a boil. Kosova is a clear and easy solution to lower-cost manufacturing, an energetic young population, willing to work for less-than-average wages is what has made China the economic powerhouse it is. Obviously, Kosova is not a nation of 1.2billion, however, if we can emulate those results with the 2million that we have, we are in good shape.

I do agree with your notion that we should emulate India in finding a niche in software. This can be done rather simply with the creation of a Computer Programming faculty at the University of Prishtina. Obviously, manufacturing is a welcome solution in the rural parts of Kosova, where factories are already present in many cases, however it is unrealistic for the inhabitants of Prishtina. Software could be a very realistic niche that could be developed, as the aptitude of our students meets international standards.

I never made the claim that investors would flock provided we have electricity, but you can't deny that the possibile investors in the region, would pass on the opportunity because of the lack of electricity in the nation. I do not claim that investors will line up to invest in Kosova because we have 24/7 electricity, but for those that have considered it, electrical power will bridge that gap and help Kosova's economy.

P.S- Yes, I lived in Kosova last year, and am familiar with the problems you present. They are insightful and very informative.