http://www.reuters.com/article/homepageCrisis/idUSBYT832920._CH_.2400
Reuters
November 20, 2009
After billions in aid, Kosovo still poor and idle
By Fatos Bytyci
-"The country with the highest unemployment rate in Europe has a surplus?
This is an economic phenomenon that does not happen anywhere in the world."
Many people give up the search for work and leave for the West, sometimes
illegally.
DRENICA VALLEY, Kosovo: Nezir Jonuzi sips black tea, stares at Prime
Minister Hashim Thaci's boyhood home and wonders whether he can get a job to
feed his family.
Thaci came to power in 2007 promising jobs, less poverty, better roads,
24-hour power and water. But while Kosovo elected local officials on Sunday
in its first vote since independence from Serbia in 2008, many are
pessimistic about the future.
In the heartland of the ethnic Albanian rebellion against Serb rule 10 years
ago, people like Jonuzi and his ethnic Albanian family are among the 15
percent of Kosovo's two million people living in extreme poverty, making
less than 93 cents a day, according to the World Bank.
"I know there will be nothing, no work during the winter," said Jonuzi, 42,
who has done odd jobs at construction sites.
For decades the poorest part of socialist Yugoslavia, Kosovo is weighed down
by the destruction of the 1998-99 war and a legacy of waste and corruption,
illustrating the limitations of international help.
Over the past decade it has received 3 billion euros in aid, according to
the World Bank, and is expecting another billion by 2011. Yet officials in
Pristina say they may need more.
The government has talked with the International Monetary Fund about a loan
of $200 to $300 million and hopes to conclude a deal this month, according
to the central bank governor.
In Kosovo, unemployment is 40 percent and average per capita income is 1,760
euros. That compares with average joblessness of just under 10 percent in
the European Union and an average salary of about 24,000 euros ($35,930).
BUDGET SURPLUS
The government hopes big public projects will pull the roughly 45 percent of
the population who earn up to 1.42 euros a day out of poverty.
"If nothing improves in the next two years there will be social unrest from
those who have no jobs and those working in the public sector but are not
paid well," said Alban Hashani, an economist working for development and
research group Riinvest.
Its lack of exposure to financial markets, the unilateral use of the euro,
fiscal stability and a balanced budget has saved Kosovo some of the woes of
the global economic crisis.
Deputy Economy Minister Bedri Hamza says energy, roads and the private
sector will fuel future growth. The country is expected to grow 4 percent in
2009, down from 5.4 in 2008.
But years of high growth will be needed to gain ground on even the poorest
EU states. "To reduce poverty and unemployment we need to have economic
growth of more than 8 percent for the next six or seven years," said Hamza.
Economists are sceptical. An investment boom, widely expected after
independence, has not materialized.
This week Kosovo abandoned a project to build a 2,000 megawatt power plant
due to lack of investor interest, a problem in a country where water and
power shortages happen every day.
With a budget surplus, privatisation and pension revenues this year, Kosovo
has a billion euros in unused cash, but officials are unsure how to use such
funds effectively.
Hashani said government should use it to create jobs.
"The country with the highest unemployment rate in Europe has a surplus?
This is an economic phenomenon that does not happen anywhere in the world,"
he said.
Many people give up the search for work and leave for the West, sometimes
illegally.
"The last day I worked was four months ago for ten euros a day," Jonuzi said
at his house in the village of Buroje. "I am thinking about leaving the
country and going somewhere to work, but I don't have 3,000 or 4,000 euros
to pay the traffickers." (Editing by Benet Koleka and Adam Tanner)
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