KOSOVO
faces up to the challenges of the future


V.I.P. INTERVIEWS

Interview with :

Mr. MICHAEL STEINER
Special Representative of the Secretary General of the United Nations in Kosovo

April 30th 2002

What is your assessment on the present political and economical situation in the UN protectorate of Kosovo?

After 1999, we started a process that underwent certain stages. In 1999 Milosevic tried to solve political questions, such as the status one, by basically putting all people in the region on wheels, which was the reason for the NATO intervention. After 1999, when we started our mission here with the Security Council's resolution 1244, we had to deal with an emergency situation where we had to provide the population with food, housing and shelter. That was in the beginning, when Mr. Kouchner arrived, it was the beginning of another phase where we started building or rather we had the pre conditions of establishing a functioning society or the platform for such endeavor. This precondition was the constitutional framework, reinforced by the elections we had last that year. Now, we have entered into a new phase where we have an established government since March, and don't forget that we had to put it all together from scratch, there were no democratic institutions here, everything had to be built in a way out of need. As a result, we now have a government, a functioning police force, and of course why not say it, also a number of shortcomings, especially in the economical framework, but these will soon be resolved. The current economic framework is based on the old socialist system of Tito´s time, where you have socially owned companies and state owned companies but you don't have private property on land. The economic framework needs not only to be modernized but also recreated, and this is exactly what we are doing. Kosovo has good natural resources for a successful economy. Let's also not forget that the most valuable asset a country can have, is of course its people. People in Kosovo are different from people in Bosnia; the difference lies mainly in the fact that this is a very young population, more than 50% are under the age of 20. This is a very industrial, inventive, business oriented population. Kosovars want to create; you can see that everywhere you go, so the human resource is present, but we have to take into consideration that the level of professional education is very low, and of course they are still traumatized by the past, and this society has still to emerge psychologically from the tragic decade of the 90´s. The second enormous advantage is the incredible engagement of the international community, both the military and the civilians like UNMIK that has far more than 10.000 people. Everybody is working hard here and they all have produced results, the ones that I mentioned before, the police, the functioning legal system with its judges and prosecutors and so on. We can see that serious progress has been achieved and everybody would confirm you on that fact. Kosovo is still far away from resembling to any society in the EU but it surely has enough potential for achieving that state. I think that investments from non-Kosovars that are not coming from the Diaspora would be interesting only in some particular areas. Nevertheless, I also think that potential investors should be aware and ready in order not to miss the train. Seeing that there is this potential in human resources, seeing that there is no danger of war any more, or the danger of total instability, it is also clear that this is a very market oriented society. People were born capitalists and there is not even the slightest danger of people wanting to have back the old economic system. Kosovo is ready; the international engagement is there. It will still take some time, we do not have any illusions, and it is not the place where one would say now is the time to invest all over the place, but in some particular areas and projects yes, and it might come very quickly. We have an enormous speed of development, and to finish the picture, we are also seriously fighting against crime. That is an issue that we take very seriously. So all in all, I think Kosovo has an interesting commercial potential, it is not a big place but it is acceptable and seeing the mentality of its population it certainly has a potential and a bright future ahead.

KTA, Kosovo Trust Agency, is just about to be established; this agency will be in charge of the privatization process and spin off of all SOE´s and State owned companies. Can you tell us a little bit more about the draft of the privatization law, how will this proceed and KTA´s role in it?

KTA was formed because we cannot really touch upon certain issues, which cannot be regulated by UNMIK, so KTA is just a clever way of avoiding the question of former property while creating a framework that allows and encourages investments. In regards to the state owned companies, KTA will mainly take over the management of the enterprise. In the case of the socially owned companies, which are around 350 and mostly bankrupt, the idea is to let them go through the liquidation process, so that we can better mobilize their assets. After that, KTA will manage the group of socially owned companies and only the ones that are vital and viable will be privatized. KTA will present these companies to potential investors and follow on normal privatization procedures. I think this will be interesting, the market that we are talking about has probably 20 or 30 companies, but interesting and viable businesses. We should also not forget that at the same time the Eastern market and the enormous amount of money floating around here, mostly from the Diaspora, the best way to assess the influx of FDI is to look at the constantly increasing number of newly built houses.

Going back to the issue of privatization, it is clear that one of the biggest issues will be the status of the state and socially owned enterprises as this is a function of the future status of Kosovo. You have just returned from a trip to New York where you met the Security Council, could you tell us about the progress you have achieved with regards to the future status of Kosovo and what results you have brought back from New York and also from your trip to Germany?

I am really happy with the reaction of the Security Council as a whole, they have given me 200% of their support. The approach is: First standards then status! First, homework, then we can talk about the whole situation. What I mean with that is, before you address the formal question on how substantial the autonomy of Kosovo should look like, we must transform Kosovo into something, which will be able to handle this autonomy. Kosovo must have a serious society, a society where there are reliable institutions, where you have an acceptable level of security and freedom of movement, where you have what we discussed here, a somehow reliable economic framework for people to earn a living, where you have an acceptable rule of law and an energetic fight against crime. Each of these elements should have reasonable level of development before we can address the issue of status and nationality and to determine how long the UN and other international organizations will be engaged in Kosovo. What we demand here is not something, which is against the interest of people. This is what people want. They want jobs but in order to have jobs you need to fulfill the structure that would support and create them first. So it is all in the interest of these people and also in the interest of the region. Once we have achieved the previously mentioned goals, then the question of the status would look less important. So, I think it is right to have these benchmarks, first homework then status, that way everything will be easier.
If we were to address the question of status now, it would only create enormous difficulties in the region and internal tension. If you want to become substantially autonomic, then you must be capable of carrying it out, you can't just demand it, and you must work for that. Our duty is to bring Kosovo to the position where they can deliver what they want to achieve.

What is the investor's profile you are seeking? Of course private enterprises but from where, Europe, America, Asia or do you think the best would be a diverse and international investor base?

Absolutely, I think what we need here is like everywhere else, a mix of investors. A funny thing about Kosovo is that though it was thrown backwards, thanks to our presence it is internationalized. That is the basis of all, we have an enormous number of nationalities and a high number of organizations engaged, we have the EU, the OSCE the UN, and I think that the investors should come as well from the whole international community.

How do you foresee the investments climate in a couple of month's time?

What I can only say to you is to look at the development, look at the situation in 1999 and look at the situation last year and this year. You will see that the development is breath taking. How to evaluate it? I am not an expert, so I cannot evaluate the climate, there still have to be regulations accepted, but one has to look on the dynamic side of it. I am sorry to say that this not the ideal place for investments, but eventually there is a big potential and you will see it very soon.

UNMIK has been doing a tremendous job at improving and developing the economic foundations of Kosovo; do you think that the international community and public opinion in general is aware of the efforts and improvements made by the UN to foster a healthy economy in Kosovo?

You cannot be engaged in every place in the world, mainly because of limited resources. In international politics, if you have a crisis, you don't necessarily have to be engaged in it because it may find its solution regionally, on the ground, but if you decide to engage yourself and to interfere, then you are in a different situation. Here, we decided to interfere in 1999 and our philosophy has been that once start doing something you must finish it, because if you don't, then… and that's what happened in many places in the Balkans. If you do not do your job until the end, then you cant have a perspective. In Kosovo, we started doing the right thing, but now we have to finish what we started in order to avoid complications, and also because we have taken over the responsibility. Now, coming to your question, the problem is of course that the media, the journalists, and the television drive the attention of the international community. Kosovo is no news for them anymore, which is fine, because it is easier to work for us. But it is bad for us at the same time, because if it is no news the attention isn't going to Kosovo. The problem is that you have this beauty contest of crisis and the focus of the media is turning to other points of the world, like Afghanistan or the Middle East. Things are aggravated and you can make an even more dramatic mistake, which is, to touch something and to leave it, because the media is focusing on somewhere else. If you don't solve your problems until the end, it will come back and if it comes back it will hit you and it will cost you a lot of money. I am not asking for constant media attention but I am asking for awareness of the so called international community, I want them to know, that we need to finish this here. If you finish it, then you can shape it in such a way that it will eventually become interesting from the point of view of the economy. This is not a superpower, Kosovo is not a big country in Europe, but it is economically important to have a stable area here. That's why our goal is to create a responsible, global, economic management as well as a political management. This is UNMIK´s job, that is, to follow this line of consistency.

Would you argue that economic prosperity should be the main pillar for the peaceful coexistence of Albanian's and Serbs in the region?

There are different schools that argue against and in favor of this perspective. One school says that the economy does it all. But, the economy works only if you have reliable institutions. So it's not just the economy, it would be nice if it was that simple; obviously it must be a combination of both these elements. After the war, we had to develop the region and to bring things under control because the situation was very bad. We started by establishing a sound security structure in the region, but then we needed to provide the people with jobs, there are lots of young people who need work and means to live. What does investment mean? Investments come when you expect positive changes to take place in the future. This society is definitely oriented towards the future. There is a reason why a poll from a recently conducted survey found out that the most optimistic society in the world is in Kosovo. That means that the people here have trust in their future. If people themselves trust in their future, it is a very good indication that things are going in the right direction.

You are generally labeled as a charismatic person with strong opinions and convictions. Kosovo is a challenging project and behind any great project there is always a great man. Can you describe your personal profile for us and what you consider to be your main goals and challenges?

Many, of course…Yes, we have the institutions set up, but they need to do more than just establish their roots, we have to make them function and turn them into operative and viable institutions and enterprises. Then, we have to transfer the authorities, to transfer our powers from the international community to these newly established institutions. Of course, there are still reserved powers and matters that only I can decide on, but they will only remain for some time. Then we have talked about the economy, we have talked about how to build a reliable economy, and we have to build the trust between different ethnicities. We have to hand over the police duties from UNMIK police to the Kosovar police, so there is still a way to go.

Note: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions.

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World INvestment NEws, 2002.
This is the electronic edition of the special country report on Kosovo published in Far Eastern Economic REVIEW. September, 2002 Issue. Developed by AgenciaE.Tv