Although elections have become a common occurrence in Kosovo, discussing what is genuinely important for the lives of constituents is rare.

In political party rallies, televised debates and what is written and said by and about political parties, there is a lot of talk of party calculations and maneuvers, polls, slogans and individuals; and less on the practical issues that would inform voters of what to expect after the electoral campaigns. In principle, the electoral campaigns themselves should serve this purpose — so that voters know what they are voting for.

Amid all of this and, above all, to challenge this context, we at K2.0 spoke with experts in various fields. Through their answers we have endeavored to list some of the issues that are not discussed but will be important for voters when they head to the polls on February 14.

Through the series “Elections 2021, a different perspective” that comprises eight articles, each focused on one specific field, we elaborate on what exactly is not receiving due attention, what is the current situation and what should be done to change things in favor of the citizens. We also try to inform voters and make their well-being the focus of the discussion by providing forward looking solutions.

A different perspective on our growth as a state

The sporadic and essentially unstable attempts of successive governments on economic progress have deepened Kosovo’s already numerous challenges in this area, especially in recent times. Almost one year ago now, with the emergence of the first cases of those affected by COVID-19, restrictive measures were taken to prevent the spread of the virus, which cost the economy a lot.

In most economic sectors, tens of thousands of workers lost their jobs, while the state budget revenues were reduced. For 2020, the Central Bank of Kosovo reported a 5.9 percent decline in economic activity.

In an effort to mitigate this huge economic damage caused by COVID-19, in 2020, two government packages were offered: First, the Emergency Fiscal Package, at the end of March, with about 178 million euros, and then the Law on Recovery, with 200 million euros, approved in November but not yet fully distributed.

And even in this campaign, as usually happens, the candidates of all competing parties were vocal with their commitments to “help the economy” and “economic development.” But beyond the statements, what do their programs provide for achieving economic development in Kosovo?

Despite the differences between the parties, their political programs in this election are united by the starting point, which is the economic crisis caused by the COVID-19 pandemic.

AAK summarizes the economic development plan in two pillars: The “Reconstruction Package” and the “Development Alliance.” For them, these pillars represent a summary of measures and policies that, according to them, respond to the acute issues facing the country and that at the same time pave the way to move from reconstruction to restructuring and development. “This is how we achieve complete economic recovery,” says their program.

AAK also envisages measures for “business assistance” and “assistance to citizens” through the allocation of billions of euros for the two categories and the application of fiscal facilities and facilities for obtaining loans.

PDK promises to establish a fund of over 500 million euros to help businesses, reducing Corporate Income Tax from 10% to 8%, 7%, 5% and 0%, depending on investments and number of employees. Also, PDK promises that businesses and individuals will benefit from loans by increasing the capital of the Kosovo Credit Guarantee Fund up to 100% and promises to guarantee various investment projects in the amount of 100% for businesses.

On the other hand, the LDK summarizes the promise for economic development of the country in five points, in which it provides assistance to businesses through grants, support for economic zones, protection for new investors and encouragement of businesses to formalize. It also envisions exempting businesses from raw material taxes, supporting the IT sector and pushing for the digitalization of the economy and public administration. The LDK, among others, aims to reduce cash transactions, provide consumer protection for financial services, and integrate the Central Bank of Kosovo (CBK) into international mechanisms.

VV promises that, with its policies, it will create more space for women, youth and the diaspora. “An economy where there is more production and more exports, more workers, more employment contracts, and more respect for workers’ rights,” their program says. VV also promises an increase in the minimum wage, from 135/170 to 250 euros per month, allowances for newborns, 12 months maternity leave, partially paid by the state, abolition of the obligation to pay VAT at the border, guaranteed employment for young people aged 16-18 up to 1 year. Removing monopolies and unfair competition, as well as making timely payments for each public sector contract, are the other promises from VV.

For an economic development that genuinely puts focus on citizens and their needs, we spoke with two economists: Florin Aliu, university lecturer of economics and Dita Dobranja, economics specialist with an expertise in labor market analysis.

To our questions about what we lack, what aspirations we should have and how change could come about, the experts answered:

What do we lack?

Florin Aliu: Development is a slow yet very difficult process. Today, many countries are in very low stages of development and the reasons are different. [Economist] Michael Spence in his book “The Next Convergence” addresses the problems of economic growth in many countries and justifies why some countries have lower growth rates than others. One part of the book deals with the case of when the IMF [International Monetary Fund] asked South Korea to specialize in rice production. South Korea did not accept it because it believed that even if it becomes the first country in the world in rice production, rice still has a low market price and they will remain poor. That is why South Korea focused on the country’s industrialization and today we are aware of where it stands in terms of income.

Therefore, even if we shift to the Kosovo context, many industries provide little market value due to the very low prices of their output. Take the gastronomy sector, for example, where salaries are very low and in many cases informal employment. I think we need to do analyses and studies to move our workforce toward higher value sectors [that enable] profits and as a result higher incomes for workers. Since economic migration is considered a major problem, we need to take the economy seriously.

Dita Dobranja:  [We lack a] comprehensive vision or approach to sustainable development. It is the year 2021, we are in the middle of a pandemic, which in addition to the severe impact on health, has caused global economic problems. We can no longer talk about development in a narrow framework, just business development, or of specific sectors. It is clear that the development sectors are closely related to each other and we should not focus only on one aspect or the other. Private sector development should be driven by value and job creation, but above all by innovation and solving societal problems and the economy through innovative ideas.

In terms of employment, the public sector must develop and implement policies and legislation that support the investment in skills and abilities needed for the 21st century, but also protect employees, not by punishing employers, but by creating an regulatory environment that does not allow the benefit of one party to be to the detriment of the other. This includes the reform of the Labor Law on parental leave. The private sector should provide opportunities for the development of skills and abilities of employees and enable career guidance, so that talent remains within Kosovo and is offered the opportunity to apply itself in the country’s economy.

What aspirations should we have?

Florin: Today, economic development is measured by the level of income or,  more simply, by the level of economic growth (GDP). All other problems are derivatives of this problem. What is key to raising the pace of economic growth is difficult to say, as studies are lacking.

We have been able to identify some problems, such as those related to the financial system due to the problems of financing firms and the cost of financing. But development must be realized on the basis of an integral plan for the restructuring of the economy, always based on studies.

Why am I mentioning studies — because they are the only way to identify development problems. Given the level of discussion in the media, I would like to mention an American Nobel Prize laureate, Daniel Kahneman. He believes that there are two forms of thinking, and he calls them fast thinking (system one) and slow thinking (system two). Kahneman classifies system one as automatic thinking and actions that come as a result of human memory, while slow thinking is associated with in-depth analysis of certain issues and problems. Kahneman says animals also base their survival on system one, as do humans. It reminds me that the discussions on our country’s economy are related to system one, that is, fast thinking, and that is why we have no progress because there is a lack of analysis.

Dita: Now is the time to focus on an economy that interconnects all aspects, including the environment, with sustainable and inclusive ideas and approaches — not to mention underrepresented groups, including ethnic communities, women and youth, and above all to build an economy that does not exacerbate inequalities, but that eradicates poverty and inequality. Aspirations in terms of sustainability should focus on preserving the environment, promoting a green economy, including renewable energy.

In terms of education and employment, we need to focus on promoting skills and abilities that will transform the existing economic model. In addition to that, in order to avoid long-term problems, work should be done to close the inequality gap at different levels. We must prioritize the empowerment of girls and women, both in education and in the economy; and above all, our main aspiration should be an approach that focuses on problem solving — whatever they may be.

Innovative solutions to economic, social and environmental problems lead to a more comprehensive economic vision, which enables the sustainability of society and the economy. Examples of countries that have prioritized human development and sustainable development should be followed. These priorities have brought about more substantial economic development than prioritizing the economy [itself], and this is something we should have as a model.

What changes are needed to fulfill aspirations?

Florin: The basic problem of Kosovo’s economy is unemployment, as well as emigration as a result of unemployment and low income levels. Then, the question arises: How do you reduce unemployment and how do you increase the level of income? The answer is easier said than done, and that is economic growth — GDP. Kosovo needs to reach a growth rate of 8 to 9% in order to have more leeway.

Therefore the next government should focus on the economy and only through in-depth studies with local and international experts. The reason why I am mentioning local and international experts is because I am convinced that the problems are not sufficiently identified. The actions of our economy must compete in a global market. We buy Chinese products every day, so we are in competition with China, not to mention the economies of the region.

Dita: Simply said, we need changes in our approach and vision.K

Feature image: Atdhe Mulla / K2.0.