Institute for War and Peace Reporting | Giving Voice, Driving Change

Kosovo: Trade Booms Between Old Enemies

Albanians may have thrown off Belgrade rule but they are still part of the Serbian economy.
By Tanja Matic

Every week, ethnic Albanians from Pristina head into the city’s supermarket and fill their shopping baskets with goods from Serbia - a republic that most of Kosovo’s majority think of as enemy Number One.


Four years after the armed uprising that resulted in Kosovo throwing off Serbian political control, the region remains reliant on its powerful northern neighbour for many of its most basic needs.


Stores in the international protectorate are lined with Serbian goods, ranging from foodstuffs to shopping powder and even bricks and mortar – all evidence of the fact that while political dialogue between Serbs and Albanians remains stalled, trade between the two is booming.


The goods pour in from every part of Serbia. Favourites from the sweet section include “Medeno Srce” (honey heart) and “Plazma” biscuits, from the northern town of Subotica and from Slobodan Milosevic’s home town of Pozarevac respectively. Over in the dairy section is “Imlek” milk from Belgrade, while the hardware shelves stock “Tesla” light bulbs from Pancevo in Vojvodina and Merix soap powder from Krusevac.


Pristina store owner Avni says no one makes a fuss, "I sell these products and people do not complain. Some even ask for ‘Beogradsko Mleko’ (Belgrade Milk) that they used to buy for years, though we don’t have that one any more.”


Avni laughs at the idea of boycotting Serbian goods out of patriotism. Shoppers, he says, easily distinguish between much-loved products and the state that produced them. “We don’t identify Serbian products with the Serbian state,” he said with a smile, “and what’s most important is that these products are mostly the cheapest ones.”


The Albanians certainly do not buy Serbian goods out of any nostalgia for the former regime. Geography and simple economics play the largest part. Under UN Resolution 1244, Kosovo has remained part of Yugoslavia pending a decision on its final status. That means no customs duties are paid on goods from Serbia and Montenegro, the successor state to Yugoslavia.


The other factor is that Kosovo simply doesn’t produce much these days. With very few home-grown products to offer, people here have to buy their goods from somewhere.


One obvious area of cooperation is building. The armed conflict between Albanians and Yugoslav forces left thousands of homes destroyed. As a result, one of the main economic activities in the entity is the construction industry.


If Kosovo Albanians see any irony in buying bricks and mortar from the republic whose forces destroyed their homes, they are not disturbed by it.


Milos Boskovic, sales director of the Vojvodina-based Potisje brick factory, told IWPR that since the end of conflict cooperation has blossomed with Kosovo Albanians. “Kosovo is a very important market to us. Up to 70 per cent of our annual production goes there,” he said.


But not everyone is happy with the flourishing trade relations between these two former enemies.


Kosovo economists point out that business is very one-sided. Thanks to the entity’s undeveloped economy and Serbian reluctance to recognise Kosovo travel documents, the goods only travel one way - south.


Mustafa Ibrahimi, of the Kosovo Chamber of Economy, complains that even if the region’s economy was more developed, container trucks from there would not be in a position to enter Serbia.


“Serbia has the advantage over exports to Kosovo, as Albanians are not able to travel to Serbia on Kosovo licence plates,” he said.


Statistics from the entity’s ministry of trade illustrate the stark imbalance. Serbia exported goods to Kosovo in first nine months of 2003 worth 108 million euro, just over 15 per cent of the region’s total imports. Over the same period, Kosovo sold Serbia goods worth some 3.5 million euro.


Goods heading north were worth less than one-thirtieth of the amount travelling south.


Kosovo trade minister Ali Jakupi says the duty-free regime between Serbia and the protectorate hinders the growth of local industries and makes Serbian products more competitive than local ones.


“We should trade with Serbia under different conditions, because without proper customs duty, Serbia has advantage in selling us products such as flour, oil, sugar, which are consumed in huge amount here,” he said.


“There are no psychological reasons for this trade – Serbian products are just cheaper.”


While Milos Boskovic’s brick factory in Vojvodina is flourishing, Shemsedin Rashiti’s in Podujevo, north-east Kosovo, is close to bankruptcy, owing to competition with Serbia.


“Bricks bought in Serbia costs 13 to 19 cents each but in Kosovo they cost about 30 cents per brick,” he said. “People have no interest in buying from us here in Kosovo.”


Until Kosovo starts producing goods that are cheaper and as good as Serbian products, the Albanian money will continue to flow north to Serbia.


“People want the lowest prices and we have to meet customers’ needs,” said Agron, a store keeper from the Besa supermarket in Pristina’s Bregu i Diellit district, pointing to shelves covered with products from everywhere but Kosovo.


“I have to buy this container of Serbian salt, as that is the only one in this shop,” a customer explained defensively. “If there was any other one, I wouldn’t buy this Serbian one.”


Tanja Matic is IWPR Kosovo project coordinator. Altin Ahmeti is an economics journalist with Koha Ditore.