Kosovo Braced for Economic Downturn

As the situation in Kosovo stabilises international organisations are going elsewhere leaving unemployment in their wake

Kosovo Braced for Economic Downturn

As the situation in Kosovo stabilises international organisations are going elsewhere leaving unemployment in their wake

Tuesday, 6 September, 2005

Edmond Syla, a 24-year-old Kosovo Albanian from Pristina, recently lost his job with the United Nations Interim Administration Mission in Kosovo, UNMIK, as a result of cost-cutting measures.


The Pristina resident, who had worked as a driver for the largest UN mission in the world for two years, heard the news on July 16.


There is little hope that he will get a more work soon as he joins an estimated four thousand local and foreign employees let go by such international organisations.


One after the other, NGOs are shutting up shop in the province - the World Food Programme, among the area's biggest donors, closed its Pristina office in June.


Such groups are one of the primary sources of employment and consumer spending in Kosovo and there are fears the closures and sackings will leave the local economy in tatters.


The departure of Serb forces from Kosovo in June 1999 and its new status as an international protectorate under UNMIK control saw more than one thousand non-governmental organisations pouring in and providing employment for 50,000 locals.


UN administrator in Kosovo Michael Steiner estimates that during this period overseas donors have pumped over two billion euros into the province.


However, as the situation stabilises and attention turns to new conflicts emerging around the world, some international organisations are leaving or devolving work to local groups. It's estimated that some 3,000 people in the NGO sector will lose their jobs by the end of the year.


The new fiscal year, which begins in July, will see 61 million US dollars slashed from UNMIK's annual budget, which last year stood at over five times that amount, according to the institution's finance department.


The 40,000 KFOR soldiers from 38 countries who have proved a powerful consumer force in Kosovo are also set to see their number substantially reduced. Commanders have spoken of rationalisations - and its already been announced that the Bondsteel base in the south-east of protectorate is to lose 8,000 servicemen.


UNMIK spokesperson Susan Manuel says the reduction in the administration's workforce would affect all areas of Kosovo, with a 15 per cent cut by the end of September.


Of the 900 OSCE employees present in 1999, spokesperson Svin Lindholm says only slightly more than 400 now remain. Further drastic lay-offs will follow the province's local elections, expected in autumn, say informed sources.


Probably one of the only sectors witnessing an increase in employment is Kosovo's multi-ethnic police force, which currently numbers around 5000. The force works alongside UNMIK's international police, and in exceptional circumstances KFOR, but is gradually gaining more independence.


Otherwise, there is widespread gloom surrounding the departure of foreigners with local experts claiming unemployment has already topped 57 per cent.


Economic giants during the time of former Yugoslavia such as the Trepca metallurgic company and the local textile industry, which used to employ around 30,000 people, are still not in operation.


Those employed in the state sector, meanwhile, receive an average monthly salary of only 150 euros per month, forcing many to take on two jobs.


Directly hit by the NGO cutbacks are workers like interpreters, drivers, security guards and the like, but they've also worried small business owners such as restaurateurs, hotel operators, landlords and taxi drivers, with many already feeling the consequences.


Gani Sopi has lived well for the last two years renting his Pristina house to foreigners. But despite halving the monthly rent to 1500 euros, it now lies empty like many others in cities throughout Kosovo.


Ramiz Muharremi from Prizren told IWPR that his salary as an interpreter for an NGO allowed him to support his family and save something for the repair of the family house damaged during the war.


However, things have changed drastically since his job was declared "surplus to requirements" this spring and he is now a seller at a vegetable market, flicking futilely through newspapers each day for jobs requiring foreign language skills.


Urosevac, a town in southern Kosovo, which was at one time an attractive business centre, saw its economy largely destroyed during the conflict. It underwent something of a revival when around 5,000 of its residents were employed at Bondsteel, but now many of them could lose their jobs.


Philosophical, the father of a worker at the base told IWPR, "It has fed half the town in a direct and indirect way. We will be grateful for it until the end of our lives."


Gezim Murati, an economics graduate from Pec, says the rationalisation hitting the protectorate was only to be expected once it began to stabilise. He believes there will be a tough period ahead, exacerbated by the international administration's delay in introducing privatisation that could stimulate growth.


As aid levels decrease, the question also remains whether Kosovo will succeed in attracting foreign investment, with one of the major preconditions being a stable political and security situation. Some hope that Albanians from the diaspora might start investing in the local economy.


Ismail Kastrati, president of Kosovo's chamber of commerce, warns that if money doesn't start coming in soon there could be social unrest. "The world should give us its support by opening credits for small and middle size businesses which would create additional income and generate new jobs," he appealed.


Nehat Islami is IWPR's representative in Kosovo


Balkans, Kosovo
Support our journalists