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.