Kosovo's prime minister warns of economic difficulties ahead

PRISTINA, Serbia (AP) - Kosovo's prime minister warned Monday of social difficulties ahead in the economically depressed province even after its disputed status is resolved.

In his weekly radio address, Prime Minister Agim Ceku told Kosovo's citizens they should not believe that once the final status of the province -- which ethnic Albanians insist should be independence -- their economic worries will get solved.

"Problems will not be solved like with a magic wand," Ceku said. "It's important to be psychologically ready for the difficulties that will follow after the status has been resolved."

The province of 2 million has an estimated 50 percent unemployment rate and nearly as many living in poverty, making the province a potential social time-bomb.

The economy has mostly been kept afloat by international aid injected in different reconstruction projects, with Kosovo largely failing to attract foreign investment due to the unresolved political status and fears of instability.

The province is the poorest region in the Western Balkans with an annual gross domestic product per capita of around euro1,000 (US$1,300), according to European Union figures.

Formally part of Serbia, Kosovo has been under U.N. rule since mid-1999 when NATO's air war halted Serb forces crackdown on independence-seeking ethnic Albanians.

After over seven years of international administration, U.N.-brokered talks are under way to steer ethnic Albanian and Serbian leaders toward finding a solution to Kosovo's disputed status, which Western envoys hope to wrap up by the end of the year.

So far, the province has not been able to work with the international financial institutions because of its unresolved international status.