October 6, 2019 was a special day for many reasons.
Kosovo’s seventh parliamentary elections were well-organized, calm and hopeful. After citizens fulfilled their obligation and the election process was finished without any major incidents, political parties proceeded to act with political rectitude as they accepted the election result.
It was clear: Voters punished the parties of the governing PAN coalition, and voted for opposition parties, the Self-Determination Movement (Lëvizja Vetëvendosje, LVV) and the Democratic League of Kosovo (Lidhja Demokratike e Kosovës, LDK).
Due to LVV’s slim lead and the interpretation of the 2014 Constitutional Court decision that the party to win the election leads the dialogue for the formation of the government, it is clear that for the first time in history, the government will be headed by LVV, with Albin Kurti as prime minister.
Certain political parties, media, analysts and foreign representatives failed in their attempts to portray LVV as an unsafe alternative for the future of Kosovo. Citizens of Kosovo preferred an “unsafe future” over the “security” provided to them by the misgovernance and corruption of the parties that have led them until now.
However, although citizens must still have enthusiasm and hope for change, LVV’s enthusiasm should have ended on October 7. From then on, their enthusiasm should have opened the way for intensive preparations that ensure a proper start for the new government. The bigger the change in government, the bigger the demands of citizens.
Considering that LVV promised radical changes, it is expected that the pressure to perform will be very great. Long-standing multi-layered problems will not go away quickly. And this pressure will not characterize LVV’s governance alone.
In the late ’60s, researcher Samuel Huntington noted that the main factor that influences social and political instability in developing countries is the growth of the expectations of citizens for the fulfillment of government objectives in situations where the government lacks the capacity to deliver. The pressure for quick and easy changes is even greater in the 21st century. A new generation with many problems and constant access to the internet — which doesn’t compare progress to preceding governments, but to events in developed countries in the West — will demand quick changes, otherwise they will consider resorting to migration.
According to the election results, a potential LVV-LDK coalition would achieve at least 61 seats in the Kosovo Assembly, and together with parties that represent minority ethnic groups, the new government coalition would have enough power to push forward its governance plan.
From the first days of its mandate, the new government must address the challenges that I elaborate below:
Composition of the new government
Based on the statements of LVV’s candidate for prime minister Albin Kurti during election debates, the new government will be comprised of the prime minister, two deputy prime ministers, 12 ministries and 24 deputy ministers at most. LDK is in favor of implementing this formation, more or less.
So the first signal will be sent to citizens by the new government in its first day at work. Will it hold its promise to halve the composition of the government cabinet? If it does, Kosovo will have the smallest government since 2004, when it had 13 ministers, 26 deputy ministers and one deputy prime minister.
The reduction of the number of ministers and ministerial posts will influence a reduction in expenditure related to these departments. By cutting down the number of posts in the government cabinet, the government can save over 11 million euros over its four year mandate. It can save even more in fact, when we consider the other spendings that come from ministers, deputy ministers and political advisers, such as working lunches, cars, phone calls, additional salaries for trips abroad, etc. Less ministries means less procurement offices, and consequently less potential for corruption.
Savings are not the only effect produced from having a smaller government, it also produces more efficiency. In the current government structure, there are nine ministries who cover different aspects of economic development. One deals with trade and industry, one with energy, another with regional development, and another with strategic investments, etc. So as to coordinate these ministries, it was necessary to create interministerial groups, and later coordinators for the fields for which ministries had been established by now.
As such, a smaller government, like the one that has been promised in the election campaign, will reduce expenditure, reduce the potential for misuse of office, increase efficiency and create a clear chain of accountability.
Contract for the construction of ‘Kosova e Re’ power plant and issues in the energy sector
By signing the contract for the construction of the “Kosova e Re” power plant, Ramush Haradinaj and the PAN coalition left a huge burden that Kosovo’s citizens will have on their shoulders for a long time. The foreseen cost for constructing the terminal is 1.3 billion euros.
This comes with the risk of energy taxes being increased by at least 44%. Moreover, with this contract, the state of Kosovo guarantees to the investor that all production will be purchased by the state and then sold at market costs, thereby violating Kosovo’s laws and European Union regulations for state aid.
Fortunately, it seems the investor has not managed to secure the funds required for the construction of the new power plant, and that the state of Kosovo has no obligation toward the investor if the contract is terminated. The termination of the contract with Contour Global would avert one negative effect, but it wouldn’t mean that the new government would easily solve the energy problem. Kosovo must find an alternative for the outdated “Kosova A” power plant, which should have been shut down in 2017.
An alternative supported during Kurti’s election campaign is the offer made by German company Bilfinger, which foresees the revitalization of “Kosova A” in a period of 18 months to 6 years, and then immediately handing it over to the management of the government of Kosovo.
LVV’s potential coalition partner LDK might agree to revitalize “Kosova A” through the Bilfinger offer. In a meeting between former Prime Minister Isa Mustafa and German Chancellor Angela Merkel in June 2015, the Bilfinger was presented as a form of “economic aid” for Kosovo by Chancellor Merkel herself. But due to plans for the construction of “Kosova e Re,” Kosovo never responded clearly to the German offer.
The revitalization of “Kosova A,” one of the oldest power plants in Europe, might be a cheaper option than the construction of “Kosova e Re” through the contract which the government has signed with Countour Global, but it would not address the issue of sustainable energy supply.
After it withdrew its support for the “Kosova e Re” power plant project, World Bank offered to help Kosovo find solutions that are oriented toward renewable energy sources, one of which was the installment of Tesla batteries. The old government mocked the World Bank offer, but it must be reviewed by the new government. If Tesla batteries have managed to solve problems with energy supply in Australia, why not Kosovo?
Limitation of expenditure for war veterans
The new government is awaited by an “army” of over 38,000 people who receive pensions as war veterans. The average monthly cost for veterans’ pensions is around 6.4 million euros, while the annual budget is close to 80 million euros. According to preliminary investigations conducted by the Prosecution, more than half of the people who receive veterans’ pensions are fake veterans (around 19,000 people).
The government led by Mustafa (LDK) in the 2014-17 period and the one led by Ramush Haradinaj (PAN coalition) from 2017-19 never issued a final report for veterans. The approval of the final report would conclude the process of categorizing veterans and would allow the amendments to the Law on Kosovo Liberation Army War Veterans to come into force. These amendments foresee the categorization of veterans and caps the annual spending on veterans’ pensions.
The categorization of veterans implies that veterans would be paid between 120 euros and 250 euros per month. The number of those who are paid 250 euros is very low, as it includes all former soldiers who were active from 1991 up until the end of the war. As such, veterans’ pensions are not linked to the minimum wage, as foreseen by law.
But most importantly, the approval of the final report for the categorization of veterans limits annual spending to 0.7% of GDP. If this regulation were to be in power now, this year’s veterans’ budget would not be more than 49 million euros.
Such an expenditure limit implies that the list of veterans could include up to 100,000 veterans, but they would all have to share the budget proportionally. As such, clearing the veterans’ list of fake veterans would be easier as there would be more support from real veterans of the war. Kosovo currently spends more than 1% of its GDP on veterans’ pensions.
In addition to veterans’ pensions, the new government must also deal with 16 demands for new pension schemes, most of which are for activism during the ’90s, such as pensions for health care workers from the ’90s, police officers who were expelled from their jobs during the ’90s, civil servants who were expelled from their jobs during the ’90s, etc. In order to prevent the establishment of new pension schemes based on these categories, the new government must completely reform the system of social schemes, so that they are based on social condition, not “patriotic status.”
Solving the issue of unemployment and migration
Unemployment and migration of the population are problems that are related to one another. High unemployment and difficult living conditions forced 15% of the population to leave Kosovo between 2007 and 2018. While unemployment causes migration, the high level of migration, especially of the workforce, renders economic development impossible.
According to economist Ruchir Sharma, never in history has there been economic growth without an annual increase of the working age population by 2%. To understand which countries have the biggest problems with the loss of workforce, we must compare the number of working age population, people who are 15 to 65 years old, with the number of people who are under or above these ages.
According to data provided by the Kosovo Agency of Statistics, if the current migration trend continues, we will experience a huge decline in the number of working age population and people who are under 15, and an even bigger increase in the number of people who are over 65.
As such, whatever the new government does, its success will be measured by the creation of jobs and the improvement of living conditions. And this won’t be easy. According to a National Democratic Institute (NDI) poll, employment is the main concern of 80% of the population, and six out of 10 surveyed youths said they would leave the country if they had the opportunity.
The new government will inherit a difficult environment of economic trends, because during the PAN government mandate we witnessed a decline in the number of jobs, a decline in direct foreign investments, and an increased trade deficit. The main priority of the new government should be to regain the trust of investors.
Transparency, accountability and the war against corruption
The best indicator of the level of transparency in past governments is that citizens never knew the number of deputy ministers, which is basic information. The mandate of the PAN government started and ended with all media and civil society reports stating that the government has “around 80 deputy ministers,” never knowing the correct number.
The most important contracts that have taken billions of euros from the state budget, such as contracts for highways, continue to be kept away from the eyes of the public. The luxury spendings of ministers have never been reported.
Financial audit reports for public institutions include shocking instances of misuse. When we quantify all irregular spending of the budget that has been identified in annual reports published by the National Audit Office, it turns out that on average 15% of the state budget is spent illegally. And few are held responsible for this.
The new government should prioritize radical transparency. Many studies have proven that transparency, especially regarding budget spending and planning, increases the trust of investors in the government, prevents corruption and eliminates budget manipulation during election campaigns.
Dialogue with Serbia
The conclusion of the dialogue with Serbia is a concern for only 7% of Kosovo citizens. But it is the main priority of the international community. As such, from the first days of its mandate, the new government will be faced with the pressure to continue the negotiations and reach a final agreement with Serbia. This won’t be easy either.
Serbia has managed to convince the international community that, without its approval, Kosovo cannot move on from the status quo. The international community, including the U.S., demands that Kosovo make the next sacrifices, in exchange for securing a final agreement with Serbia.
What compromise can Kosovo make while at the same time preserving state functionality? Its state functionality is already on the brink of collapse due to the veto power of Serb minority representatives, and their continuous opposition toward Kosovo’s statehood.
Opening the Ahtisaari Plan and giving more rights would render institutional decision-making impossible and risk turning Kosovo into a second Bosnia, under the eternal influence of Serbia. On the other hand, any final agreement that foresees border changes would not have the support of the citizens.
Will the new government manage to change course and ease the pressure against Kosovo to compromise? Hardly believable, especially when we consider that from the beginning, the Kurti government will be viewed with mistrust by international partners, due to the position that the party has held regarding the dialogue until now.
The negotiations that have been led by past governments have seemingly brought Kosovo to a situation where it has to make a compromise. This course can change only if they manage to reach a wider consensus with all political parties. However, this too is a difficult feat in such a polarized political scene.
These challenges, together with big problems in the field of education, health care and environmental protection, will not be easy to solve. Governments of the past have been continuously criticized for their failure to address these challenges, not because they have been considered to be easily solvable, but because these problems have been neglected.
That is why it is very important for the new government to have a proper start and to start addressing these challenges as soon as possible. Creating jobs, halting migration, solving the energy issue, reforming social schemes, governing with transparency and accountability, reforming the education and health care sectors… the government has many tasks at hand that need to be fulfilled simultaneously.
Otherwise, their punishment by voters will come quicker than it did for the parties of the PAN coalition. According to South American economist Moisés Naím, “in the 21st century, power is easy to win and hard to keep, but even easier to lose.”
Feature image: Arrita Katona / K2.0.