ECONOMY

Kosovo is facing a considerable economic challenge after declaring its independence

PRISTINA (AFP) – A jubilant Kosovo declared independence yesterday but it will face an uphill task to be economically viable after the celebrations die down, analysts warn. The United Nations mission that has run Kosovo since its 1998-1999 war, soon to be replaced by one from the European Union, has failed to stimulate the Albanian-dominated province’s moribund economy. This in spite of the international community spending up to $3 billion a year until 2004, including donations and funds for rebuilding, according to various estimates. But, based on semi-official appraisals, the figure amounts to $11 billion taking into account sums sent in by Kosovo Albanians who live and work abroad. Whatever the figure, these funds were used to create a consumer society, with production having been neglected in particular due to foreign investor uncertainty about Kosovo’s status. While Kosovo’s road network remains dilapidated, many towns are sometimes without electricity for around 12 hours a day. In Kosovo, unemployment stands at 45 percent and about 37 percent of the estimated 2 million mainly ethnic Albanian population live below the poverty line on less than -1.50 a day, according to the World Bank. Around 15 percent are further below that and survive on less than one euro a day. «More than one out of 10 Kosovans is hungry in the morning and is also hungry in the evening,» says Frode Mauring, the resident representative of the UN development agency (UNDP) in Kosovo. «About -1.3 billion are devoted each year to security and to the administration of Kosovo, while -135 million are intended for development,» says A.D. Melkert of the UNDP. «This proportion should be reversed,» he says. The people of Kosovo are banking on a surge in foreign investment following a donors’ conference – which the EU envisages – to quickly put the territory on track to development. An independent Kosovo «will have the confidence of foreign investors,» says local analyst Muhamet Mustafa. «And we will also have access to the international money market. We have a young population which wishes to work,» Mustafa adds, stressing that real prospects exist. According to experts, the energy sector represents a ray of hope. Kosovo’s coal reserves are estimated at 15 billion tons, while its minerals could represent several billion tons. «Chromium and nickel, gold reserves could be higher than the estimates,» a commission on mining and minerals said after a conducting a study that also revealed the presence of aluminium, copper and zinc. «Kosovo has hundreds of prospective zones and several foreign companies are exploring the possibilities. Others will follow,» says Nick Burcham, who was a consultant to the study. But according to some analysts, to present independence as though it was a panacea for economic woes was deceptive.