Kosovo in the ‘90s: an economy for the darkest hour
Economic structures from decades past continue to shape Kosovo’s economy.
By Edison Jakurti | March 18, 2025
From today’s perspective, living in Kosovo in the 1990s can be best captured by reversing Charles Dickens’ monumental opening in “A Tale of Two Cities”: “it was the worst of times, it was the best of times.” Within just a decade, we went from losing the best we were given in Yugoslavia — autonomy; to gaining the least any nation deserves — freedom; and eventually, independence.
Much is known about how it started. Slobodan Milošević comes to power as president of Serbia in the late ‘80s, revokes Kosovo’s autonomy granted by the 1974 Yugoslav constitution and subjugates the region with brute force. Much is known how it ended. Serbia conducts ethnic cleansing by imprisoning, beating, raping and killing thousands, to finally displace around 1 million Albanians, many of whom returned home after the liberation in June 1999.
Much less is known though what happened in between. Especially about how Kosovo’s economy survived through its darkest hour.
My own childhood belongs to this era, filled with stories of resilience and survival. Having a family member politically imprisoned in the ‘80s meant that I had to go back in time to understand the roots of our problems in the ‘90s. Having family members politically persecuted, who fled to Western Europe, exposed me to the critical role of the diaspora in economic survival. And having relatives expelled from their jobs during the massive purge of 1989-1990 made me realize the breadth of such historical events.
Back in those days, these were personal stories. As years passed, I came to realize that those were not just my stories. Those were our stories, shared by many of my peers who are the children of the ‘90s.
Among older generations, however, there are more nuanced views of the past, particularly before the 1990s. While there is little dispute about the facts and events, there is less commonality in perceptions and metrics. For some, Kosovo’s economic development in Yugoslavia, relative to its initial level, was seen as considerable progress. For others, progress was not merely measured in terms of Kosovo’s own position but relative to the other republics within the federation.
To fully understand Kosovo’s economic landscape in the 20th century’s last decade, it’s essential to briefly reflect on the four preceding decades, particularly Kosovo’s economic organization during the Socialist Federal Republic of Yugoslavia from 1945 onward. These years left enduring economic imprints that shaped, and continue to shape, Kosovo’s economy today.
Kosovo in former Yugoslavia: a history of persistent inequality
Comparing standards of living under different economic systems is inevitable, especially for countries that have transitioned between them. Kosovo is not unique in this regard. Memories of life under Yugoslav socialism are mixed: for some, it was a period of stability, while others recall harsh economic realities.
In transitioning economies, nostalgia for socialism often reflects unfulfilled promises of capitalism, which was heralded as a model that would blend socialism’s social safety net with new political and economic freedoms. Yet, many countries got trapped in a prolonged “transition” — with restricted political freedoms, economic opportunities that failed to deliver widespread prosperity and a rapidly eroding social safety net. For many, this protracted period deepened disillusionment rather than delivering the promised economic gains.
Groups like party elites enjoyed privileges that set them apart, while regions like Kosovo were marginalized, valued mainly for their natural resources rather than substantial investment or development.
Despite socialism’s flaws, it generally produced lower levels of economic inequality, seen in more equitable distributions of income and wealth. Yet, this is a broad generalization. Socialist systems like those of Yugoslavia, the Soviet Union and China varied significantly, and the differences between within-country and between-country inequalities complicate the picture.
Even within socialist systems, some groups and regions were “more equal” than others. Groups like party elites enjoyed privileges that set them apart, while regions like Kosovo were marginalized, valued mainly for their natural resources rather than substantial investment or development. This inequality in resource allocation highlights how Yugoslavia’s socialist ideals often fell short of truly equitable outcomes.
If I tell you that Kosovo was the least developed country in Yugoslavia, I have not told you any news. But, thanks to data from The Maddison Project Database — a research initiative founded by the late economist Angus Maddison — we can examine and quantify the magnitude of income inequality between former Yugoslav republics and Kosovo from 1952 to 1990. The data for Yugoslavia are unpublished estimates supplied to the Maddison Project in 2011 by Branko Milanović.
While this analysis will not resolve all perspectives on the socialist era, it provides crucial data-driven insights into Kosovo’s persistent economic disadvantage within Yugoslavia. This historical inequality laid the groundwork for the economic challenges we in Kosovo faced in the 1990s.
Unequal beginnings
Kosovo’s economy in the immediate post-World War II years was severely underdeveloped. Long centuries of occupation by various empires and numerous bloody wars left little room for progress. In 1948, approximately 81% of Kosovo’s economy was agriculture-based, compared to about 67% in Yugoslavia as a whole. Kosovo’s population, 69% of which was Albanian, faced severe educational challenges; an estimated 78% of those over age 10 were illiterate.
The earliest data we have from the Maddison Project Database, dating to 1952, reveal that Kosovo had by far the lowest income levels in Yugoslavia — a fact that may come as little surprise given its history.
Although Kosovo had the lowest income level in 1952, its cumulative income growth by 1960 surpassed only that of Montenegro; all other republics saw larger increases. A similar pattern emerged during the 1961-1970 period, with all republics — except Bosnia and Herzegovina — experiencing faster income growth than Kosovo.
As an economist, I must acknowledge that while per capita income is a widely used metric, it falls short in capturing the many dimensions of inequality, which in Kosovo extended beyond income, encompassing disparities in opportunities and overall quality of life.
According to the 1953 Yugoslav census, although only about one in four residents in Kosovo was a Serb or Montenegrin, they occupied two out of three “administrative and leadership” positions and made up half of the factory workforce.
Life expectancy and mortality rates in Kosovo were also disproportionate to the other Yugoslav republics, further indicating huge disparities in development levels.
Although industrialization was long overdue in Kosovo’s primarily agrarian economy, it took over 12 years after the end of World War II for Kosovo to start receiving federal investment funds for industrialization. The disparity in industrial capacity across Yugoslavia was stark. By 1958, Slovenia had nearly 10 times as many industrial enterprises as Kosovo: 464 compared to 49.
The interwar and the post-World War II agrarian reform was a major hit to the agrarian economy, and resulted in great food shortages. So, what was the policy response of the regime to a majority-rural population whose land was being confiscated and whose industry was developing at snail’s pace? Emigration, especially the massive emigration of Kosovo Albanians to Turkey, a process preceded by demographic engineering by Yugoslav authorities, who recorded Albanians as Turks. While official figures are non-existent, it is estimated that from 1945 to 1966, around 100,000 Albanians emigrated to Turkey.
Life expectancy and mortality rate
Life expectancy in 1954 further shows these disparities; while the average life expectancy in Yugoslavia was approximately 57 years for men and 59 years for women, men in Kosovo lived an average of eight years less, and women lived 14 years less than their counterparts in the rest of Yugoslavia.
Another indicator of the quality of life is the mortality rate. Infant mortality was also disproportionately high; in 1955, while Yugoslavia saw about 113 infant deaths per 1,000 live births, Kosovo’s rate was approximately 51 deaths higher. The same year, Kosovo had around 18 deaths per 1,000 inhabitants, compared to the Yugoslav average of 11.
The 1968 turning point
For Kosovo, 1968 marked a critical historical turning point, although with different developments than elsewhere in Europe. Albanian demands for a republic and university, along with shifts in the approach by Josip Broz Tito, president of the Socialist Federal Republic of Yugoslavia from 1953 to 1980, created new circumstances. While Kosovo was not granted the status of a republic, which would have made it an equal constituent of Yugoslavia, the constitutional changes of 1968, followed by the 1974 constitution, elevated Kosovo to the status of an autonomous region. These changes brought significant legal and political shifts, paving the way for progress.
For example, prior to 1970, only a handful of Kosovo Albanians attended universities in other Yugoslav capitals like Belgrade or Zagreb. A key milestone for Kosovo was the establishment of the University of Prishtina in 1970, the first university in the country. Interest in higher education surged, and between 1968 and 1978, the share of Kosovo Albanians in Kosovo’s total student population grew from 38% to 72%. This substantial increase produced a skilled labor force that no longer fit within an agrarian economy.
For many, higher education became less a pathway to employment than a way to avoid being labeled as unemployed or to postpone emigration.
Although industrial development began to accelerate, much of the investment was directed toward extractive industries — chemicals, minerals, metals and power plants — that supplied raw materials and energy to other Yugoslav regions. This approach reinforced Kosovo’s place as a periphery supporting the economic core elsewhere in Yugoslavia. Kosovo’s population was the fastest growing, and the industrial workforce expanded during this period, yet industrial policies were not crafted to address the rising supply of labor.
As a growing number of highly skilled graduates from the University of Prishtina entered the labor market, capital-intensive investments meant that the demand was more for machines than workers. For many, higher education became less a pathway to employment than a way to avoid being labeled as unemployed or to postpone emigration.
Persisting ethnic disparities in employment meant that the socialist self-management system in Kosovo mostly empowered workers from certain nationalities. By 1980, one in five Serbs received a state salary, while only one in 11 Albanians was on the state payroll. As a result, many Albanians sought better economic opportunities abroad, leading to another wave of emigration, this time primarily to Western Europe.
Although the late 1960s and 1970s are often regarded as a period of substantial development, the income per capita growth in Kosovo tells a different story.
Kosovo’s per capita
Between 1971 and 1980, Kosovo's per capita income grew by only about 30% — lower than any of Yugoslavia’s republics, which averaged over 49%. For comparison, the next lowest growth rate was 44% in Macedonia, followed by Bosnia and Herzegovina at 47%, Croatia at 51%, Serbia at 52%, Slovenia at 55% and Montenegro with the highest rate of 60%.
A balance sheet of four decades
In the decade before the wars of the 1990s, political tensions and an intense economic crisis gripped Yugoslavia, hitting Kosovo’s already fragile economy hardest. Hyperinflation severely eroded purchasing power in Yugoslavia, with the average annual inflation rate surging from 36% in 1981 to a staggering 1,240% by 1989. From 1981 to 1990, Kosovo experienced a sharper decline in average income than any Yugoslav republic, with per capita income plummeting by 25%. By comparison, Macedonia and Montenegro — which had the next largest drops — saw a roughly 14% decrease, while the Yugoslav average was about 11%. This disparity is unsurprising, as less developed economies tend to be the least resilient during recessions and crises.
Unemployment in Kosovo also soared, rising from around 40% in 1981 to 60% by 1988. Parallel to the rising political tensions, which culminated with Milošević revoking Kosovo’s autonomy status in 1989, Kosovo’s economic landscape in the 1980s was marked by skyrocketing prices, surging unemployment and sharply falling incomes.
The crises of the 1980s remain vivid memories for many, yet, as the first decade after Tito’s death, this period is often seen as distinct from Tito’s era. While each decade had its own developments, from a long-term macrohistorical perspective, the preceding decades were far from idyllic. Reflecting on Tito’s Yugoslavia from the perspective of Kosovar Albanians, the historian Noel Malcolm writes:
It is understandable that, looking back from a vantage-point after 1989, the Albanians of Kosova should view the Tito years with somewhat rosy-tinted indulgence. But a more complete judgment on Tito’s Kosova policy must also be a much more heavily qualified one. Some of his measures to respect the rights of the Albanians were only half-measures; some developed only under the pressure of circumstances (including the pressure of unsatisfied Albanian demands); and some were made for pragmatic reasons quite unconnected with the needs of Kosova itself (such as the desire to divert Serb colonists to the Vojvodina instead).
From the visuals above, we can draw several conclusions.
First, from 1952 to 1990, Kosovo had lower per capita income growth than any republic in Yugoslavia. Second, even during the period considered the most prosperous for Kosovo, from 1971 to 1980, Kosovo’s per capita income growth remained the lowest in Yugoslavia. Finally, during the severe economic crisis leading up to the 1990s wars, Kosovo’s income suffered the largest decline in all of Yugoslavia. In fact, the income drop in Kosovo was nearly double that of Macedonia, the second largest decline. As a result, at the dawn of the ’90s, the per capita income in other republics was three to eight times higher than that of Kosovo, indicating pronounced degrees of between-country inequality.
First shock to the economy: the massive expulsion of workers
As we have seen, by the late 1980s, Kosovo was Yugoslavia’s least developed and most vulnerable region. Soon after Milošević rose to power, in March 1989, Kosovo’s autonomy under the 1974 constitution was revoked, paving the way for Serbia’s annexation. By July 1990, the Serbian Assembly had established the legal framework to take over enterprises in Kosovo and expel Albanian workers, thus delivering a severe shock to Kosovo’s economy.
12 public enterprises, which constituted virtually all strategic national and regional public enterprises, were placed under Serbian control, and 238 socially-owned enterprises were merged with counterparts in Serbia and Vojvodina. Besides taking over enterprises, there were forms of looting the machinery and transferring equipment to factories in Serbia. By the end of 1990, 146,025 out of 164,210 Albanian workers had been removed from their jobs. In other words, nearly nine out of 10 Albanian workers across civil administration, public services and various enterprises were abruptly dismissed by Milošević’s regime.
Some of them did not only lose their job but also shelter, since they were evicted from the apartments granted to them by their workplace. This was particularly devastating, as housing in Yugoslavia was often tied to employment, with enterprises granting apartments to workers as part of their benefits. When jobs were lost, eviction from these employer-provided apartments followed, leaving many families in precarious situations.
Kosovo's assets began to be sold off rapidly, a process often described as "shock therapy," but the socio-political marginalization of Kosovo Albanians made it nearly impossible for them to buy apartments or other state-owned properties.
The economic crisis of the 1980s demanded significant structural reforms, largely influenced by international institutions like the International Monetary Fund (IMF). As in other socialist countries, these laws aimed to transition the economy from a socialist model to a market-oriented system, introducing privatization as a cornerstone of the reforms. Privatization began in earnest in 1989 under the “Marković laws,” named after Ante Marković, Yugoslavia’s then-prime minister.
However, the revocation of Kosovo’s autonomy in 1989 meant that Kosovar Albanians were excluded from participating in these reforms. As Kosovo came under Serbia’s grip, the process of privatization in the region was marked by significant discrimination. Kosovo’s assets were sold off rapidly, a process often described as “shock therapy,” but the socio-political marginalization of Kosovo Albanians made it nearly impossible for them to buy apartments or other state-owned properties.
The massive dismissal of workers affected all trades: healthcare, education, manufacturing, media and so on. Doctors and healthcare workers were removed from hospitals, approximately 6,000 teachers were fired for protesting and the rest for refusing to follow the Serbian-imposed curriculum. Trepça miners were among the first to resist Milošević’s actions, and journalists at the Rilindja, the Albanian-language daily newspaper, who covered these strikes, were swiftly dismissed. Soon after, Serbian authorities seized control of Radio Television of Prishtina, expelling most of its Albanian staff. Starting in the 1991-92 academic year, Albanian students and faculty were barred from the University of Prishtina’s premises.
Alongside political repression enforced through police and military force, the expulsion of nearly 90% of Albanians from their jobs marked the first economic shock of the 1990s in Kosovo. This mass dismissal created a massive wave of unemployment, thrusting tens of thousands into poverty and economic uncertainty.
Double sanctions, hyperinflation and growing poverty
As discontent grew in the Yugoslav republics, the dissolution of Yugoslavia by the late 1980s was all but inevitable. The wars that followed in the 1990s led to U.N. sanctions on Serbia, which also impacted Kosovo. Albanians in Kosovo thus faced a double layer of sanctions: those from Milošević’s regime and the international sanctions imposed on Serbia.
Meanwhile, the self-managed Yugoslav economy had been in crisis since the early 1980s, with hyperinflation becoming a significant consequence. The outbreak of wars in Croatia (1991) and Bosnia and Herzegovina (1992) compounded the situation, causing output to plummet and hyperinflation to return with a vengeance in 1992. In an attempt to combat the spiraling economy, Milošević’s regime resorted to printing money, which only worsened inflation.
The magnitude of the severity of the hyperinflation in the early ‘90s is vividly described in this passage:
The Yugoslav hyperinflation of 1992-1994 was historically unique and significant due to its extreme peak and duration. At its peak, in January 1994, the monthly inflation rate reached 313 million percent, thus becoming the second highest recorded rate of inflation after the Hungarian hyperinflation of 1945-1946. In addition, the Yugoslav hyperinflation lasted 24 months so that, after the Russian hyperinflation in the 1920s which lasted 26 months (Cagan, 1956), it is the second longest ever recorded. During these 24 months, between February 1992 and January 1994, the price level rose by a factor of 3.6 x 1022, which is second only to the most severe Hungarian hyperinflation (3.8 x 1027), but well ahead any other: 1011 in China after World War II, 1010 in Germany in the 1920s, etc. (Cagan, 1987).
Another significant economic blow during this period was the confiscation of personal savings. In 1990, the main bank in Kosovo, Bank Kos, was deactivated, resulting in the seizure of approximately $98 million in foreign currency deposits from 66,000 individuals. This substantial sum was effectively taken over by Jugobanka in Belgrade, stripping many Kosovars of their hard-earned savings.
A common saying that we hear to this day when reuniting after a long time, “Ke hup si Faksi!” — “You’ve disappeared like Faks!” — refers to a laundry detergent that became notoriously scarce due to sanctions.
For many, these savings represented not just a financial safety net but also a crucial resource for navigating the economic hardships of the time. The loss of these funds compounded the already dire situation faced by Kosovo Albanians, who had been expelled from their jobs and evicted from their homes, leaving them without employment, shelter or financial stability. This deliberate act of economic disenfranchisement further marginalized the Albanian population, deepening its poverty and heightening the challenges of survival under the Serbian regime’s oppressive policies.
Combined with political oppression, mass job loss, runaway inflation and the impact of sanctions — which created severe shortages of essential goods — these conditions plunged Kosovo into deep economic destitution. For example, a common saying that we hear to this day when reuniting after a long time, “Ke hup si Faksi!” — “You’ve disappeared like Faks!” — refers to a laundry detergent that became notoriously scarce due to sanctions.
Poverty soared as increasing numbers of families fell below subsistence levels. The Mother Teresa charity, one of the first humanitarian organizations established to alleviate poverty and socio-economic hardships in the early 1990s, noting an average family size estimate of 6.5 people, reported that the number of families receiving basic food assistance rose by over 32% in just a couple of years — from 43,320 in 1992 to 57,353 by 1994. This escalation meant that the number of individuals living in extreme hardship grew from roughly 282,000 in 1992 to 373,000 in 1994.
By 1994, this crisis had left one in five Albanians in Kosovo reliant on humanitarian aid. Additionally, the vast majority remained without social insurance, effectively excluding them from access to state-provided healthcare services. This deprivation compounded the struggle of hundreds of thousands of families, highlighting the dire socio-economic impact of the era.
The rise of new institutions and the birth of capitalist entrepreneurship
The expulsion of Albanians from Yugoslav institutions and the sweeping political shifts in Europe following the fall of the Berlin Wall and socialism’s collapse throughout the Soviet Bloc opened a pathway to political pluralism in Kosovo. In response to the imposed apartheid by Serbia’s regime, on July 2, 1990, the Kosovo Assembly declared a new constitution for Kosovo, in an attempt to resist the apartheid that was being installed. Despite Serbian authorities deeming the Assembly illegal, it succeeded in forming a shadow government that operated in exile, led by the Democratic League of Kosovo (LDK) under Ibrahim Rugova, who became Kosovo’s president in 1992.
The entrepreneurial spirit became a defining feature of the period, demonstrating the resilience and adaptability of the community amid adversity.
The LDK government in exile initiated the 3% Fund, which called on Albanians, particularly those working abroad, to contribute 3% or more of their salaries. This fund primarily financed Kosovo’s parallel institutions, supporting education, healthcare and basic provisions for the poorest in the community. Although it had limited policymaking power, the fund represented efforts to mobilize resources for Kosovo’s Albanian population under extreme conditions.
While the parallel system is praised for sustaining essential services, notably education and healthcare, it lacked the economic policies needed to tackle the escalating issues of unemployment and poverty after the mass expulsion of Albanian workers in Kosovo.
One initiative that aimed to tackle such issues was the establishment of the Union of Independent Trade Unions of Kosovo (UITUK) in 1990. Acting as an umbrella organization, UITUK coordinated trade unions and organized protests to resist Serbia’s oppressive “emergency measures,” which included the revocation of autonomy, mass dismissals of Albanian workers, suppression of political and civil rights, takeover of key economic resources, increased police and military presence and cultural and educational restrictions targeting Albanian identity. Yet this union was not able to secure economic sustenance for the expelled workers, many of whom were young; in 1991, approximately 58% of Kosovo’s population was under 25. Thus, Kosovo Albanians faced two main paths: emigration or entrepreneurship.
With limited options, many Kosovo Albanians sought work abroad, particularly in Western Europe, while others embraced entrepreneurship, creating small businesses or engaging in informal trade in local markets. This entrepreneurial spirit became a defining feature of the period, demonstrating the resilience and adaptability of the community amid adversity.
Entrepreneurship predominantly revolved around small family-owned businesses, including trading firms, travel agencies, restaurants and some small-scale manufacturing. These ventures, driven primarily by survival rather than profit, underscored a resourcefulness born out of necessity during one of Kosovo’s most challenging times. These events are vividly described in the following passage:
Immediately several hundred cabs, vans, lorries and minibuses were registered and took over the city and intercity lines (twice as many began operating without registration). A similar process occurred with thousands of mini-markets and supporting merchandise networks, where the supply of goods was completely privatised. Tourist agencies mushroomed because a family could support itself solely from the tickethandling fees. Coffee bars, restaurants and other enterprises were also quickly established. Many civil servants discovered latent talents for business, and did not regret losing jobs that brought them $100 a month when they found themselves able to earn three times more and make considerable profits.
In addition to dealing with a host of issues imposed by the Serbian authorities — unlawful raids, interrogations and confiscations — the economic environment for newly formed Albanian businesses was highly unfavorable. Several structural challenges contributed to this bleak outlook.
First, there were virtually no public institutions available to support these businesses. Financing was equally challenging, as banks were fully controlled by the Serbian regime, restricting access to credit. Second, Albanians faced substantial barriers to privatizing assets from socially-owned enterprises, limiting their ability to establish or expand businesses. As in other cases of post-socialist crises, though, in ex-Yugoslav republics too, such a process was accompanied by many opportunities for corruption and asset stripping, as politically connected individuals or firms took advantage of the privatization process, often acquiring valuable assets at below-market prices and further entrenching economic inequalities. Third, unemployment and hyperinflation had severely depressed demand, creating further obstacles for businesses to thrive.
Hyperinflation also led to a sharp depreciation of the dinar, Yugoslavia’s official currency, making it unreliable for savings or transactions. The formal economy, weighed down by state-controlled prices and restrictive regulations, struggled to adapt to the devaluation, with centralized bureaucracy exacerbating inefficiencies. Many businesses, unable to secure resources or produce goods affordably, increasingly turned to informal channels. As a result, the gray and black markets flourished, shifting economic activity away from the formal sector.
Kosovo Albanians were particularly impacted by the dinar's devaluation, leading them to shift transactions to more stable currencies, primarily the Deutsche Mark.
Illicit activities, although present earlier, intensified throughout the 1990s as hyperinflation, wars and sanctions fueled Serbia’s black-market economy. The Serb criminal networks dominated trade in smuggled goods and currency exchange, with gang leaders and football hooligans controlling black-market imports and currency conversions. Kosovo Albanians were particularly impacted by the dinar’s devaluation, leading them to shift transactions to more stable currencies, primarily the Deutsche Mark. This opened up a new entrepreneurial path: operating as street dealers on black currency markets.
Despite these hardships, Albanian-owned firms increased markedly. Between 1987 and 1995, the number of small Albanian-owned firms grew by over 969% — from 1,733 to 18,534. However, only about a third were fully operational, employing roughly 20,000 workers. These businesses, often limited to small ventures like pizzerias, petrol stations and minimarkets, primarily relied on family labor, providing minimal outside employment. In 1997, about 65% of the working-age population was “economically inactive — or ‘unemployed,’ as put by local experts.”
The absence of national economic policy manifested in various ways. Information asymmetries were particularly stark, as Kosovo lacked institutions that could effectively coordinate resource distribution. For instance, Kosovo was able to produce 75% of the wheat it required, but due to disorganized distribution, it had to import over half of its wheat from Serbia, costing 60 million Deutsche Marks. While it produced more milk than it consumed, almost a third of the milk consumed was imported, as 22 Kosovo dairies were absorbed by a dairy headquartered in Belgrade.
In Kosovo’s case, however, the lack of viable alternatives and the severe limitations imposed by the regime led to an economy of necessity rather than a purposeful boycott.
While parallel institutions succeeded in resisting the regime’s oppressive measures, Kosovo’s economy largely adhered to a laissez-faire model — one of survival rather than self-determination. This survival-driven approach contrasts with economic strategies historically pursued by other colonized populations striving to resist their colonizers’ control.
In numerous cases, economic resistance has played a pivotal role in the struggles of oppressed groups to counter colonial and systemic exploitation. For example, during the Haitian Revolution (1791-1804), enslaved Africans dismantled the French colonial plantation economy by destroying sugar plantations, the backbone of colonial wealth and adopting subsistence farming systems. This economic disruption contributed to Haiti becoming the first independent Black republic and the first modern nation to abolish slavery.
In India, the Swadeshi Movement in the early 20th century responded to British economic dominance and the partition of Bengal by promoting the boycott of British goods, especially textiles and revitalizing local industries like khadi production, undermining British economic interests and strengthening Indian nationalism. Later, Mahatma Gandhi led the Salt March in 1930, a powerful act of economic defiance against British-imposed salt taxes. By marching to the sea and producing salt, Gandhi and his followers challenged colonial monopolies, inspiring mass participation in acts of resistance and galvanizing the independence movement.
Similarly, during apartheid in South Africa (1948-1990s), Black South Africans resisted economic exclusion and political oppression through campaigns boycotting white-owned businesses, the creation of cooperatives and collaboration with international allies who imposed sanctions and boycotts on apartheid-linked businesses. This combined internal and external pressure significantly weakened the apartheid regime, contributing to its eventual dismantling. Together, these cases highlight the profound impact of economic resistance in challenging systemic exploitation and fostering liberation movements.
In Kosovo’s case, however, the lack of viable alternatives and the severe limitations imposed by the regime led to an economy of necessity rather than a purposeful boycott, focusing on immediate survival rather than targeted resistance against the oppressor’s economic systems.
Ties that bind
The resilience of Kosovo’s population during the 1990s, despite the oppressive circumstances, was largely sustained by the solidarity within Albanian families and communities. With nearly 90% of Albanians purged from their jobs, survival was made possible by generous support from family members both within Kosovo and abroad. This solidarity was not just a social phenomenon; it was also deeply financial, with the diaspora playing a crucial role.
The Yugoslav regime had long encouraged Kosovo Albanians to emigrate, and during the early ‘90s, the number of Kosovar Albanians leaving the region surged as the situation worsened. Massive waves were especially in the early ‘90s as the situation was rapidly declining. About 100,000 Albanians ignored the call to join the Yugoslav Army, so many of them had to flee the country, mostly to Western Europe.
KS migration
Between 1992 and 1993, the number of immigrants from Kosovo in Western European countries grew by almost 70% — from 217,000 in 1992 to 368,000 in 1993. Also, by 1993, about 25,000 had settled in Albania.
Although they had left Kosovo, their connection to home remained strong, and they contributed significantly through remittances that supported their families back home. These remittances helped to sustain families, fund institutions through the 3% Fund, and even finance the war effort through emergency funds such as Vendlindja Thërret — Homeland Calls — founded as early as 1993.
From an economic point of view, quantifying their help is interesting. While exact data on remittances is lacking, we can estimate their impact on Kosovo’s economy by looking at the difference between GDP (Gross Domestic Product) and GNI (Gross National Income).
The following visuals explain this in further detail.
From 1990 to 1999, Kosovo had a larger gap between GNI and GDP than any former Yugoslav republic. Recognizing the two caveats — first, that these are not direct measures of remittances, and second, that we are using rough estimates of GDP and GNI from the U.N. — our estimates should be interpreted more for intuition rather than accuracy. Nevertheless, while we cannot claim with certainty the exact portion of the difference attributable to remittances, given the economic circumstances described earlier and anecdotal evidence from that time, these estimates strongly suggest that the Albanian diaspora played a major role in financing Kosovo’s survival economy during its darkest hour.
Estimating Kosovo’s economic losses
The hardships of the ‘90s set Kosovo’s economic progress back by decades, with the impact reverberating well beyond the turn of the century. Although liberation in June 1999 brought hope and new opportunities, Kosovo’s economic losses during the ‘90s were unique, as they stemmed not only from the systemic challenges of transitioning from socialism to a market economy, but also from the oppressive apartheid policies imposed by Serbia, which crippled the economy and society.
To estimate the overall economic cost of this period, I estimate the output gap by constructing a counterfactual scenario where Kosovo’s economy remained stagnant at its 1990 level. In other words, let us assume zero economic growth from 1990 onwards and then calculate the annual difference from the actual GDP.
The political and economic hardships faced in Kosovo during the ‘90s are stories that deserve remembrance — not to fuel hate, nor to inspire vengeance, but as scars from a long struggle that ultimately led to the country’s triumph. These memories are a testament to resilience and a reminder of the path toward freedom and independence — without which, no economic gain holds true value.
Feature Image: Creative Commons.
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