Can you tell us about the main responsibilities of the EAR in Kosovo and some of the projects you are managing?
Our role has involved basic infrastructure and the reshaping of public utilities. Our main sector of intervention has been electricity in which we have invested around 320 million Euro. We managed in this area through our investment to multiply by four the production of electricity in Kosovo and to double the production of coal. The second sector is housing reconstruction, with about 100 million Euro, we are financing the reconstruction of over 15000 houses. A third sector has been the rehabilitation of roads, we have managed to rehabilitate almost 400 Km of roads, the main access of communication. We have improved the water supply systems and after the first eighteen months we have moved towards, what we call in our job institution building related activities, this means that we are increasingly providing money to strengthen the public administration at central and local level. We have also reshaped the judiciary through the training of judges and prosecutors, the rebuilding of prisons and courthouses. In addition, we are providing money to strengthen the main actors of civil society, namely the NGOs and the media; we are main donors of RTK, the public broadcaster. We will as well be the main providers of expertise to the nine ministries, which were set up this past February, as you must be aware. This means we will provide them with technical assistance that will help them draw up their policies and strategies and to train the new civil servants. In addition to that we have also provided funds towards the development of the private sector. For that we have been doing what we do in all transition countries. Namely, we have established credit lines for the small and medium businesses and have been providing business advisory services and we will also provide assistance in the establishing of the KTA. The KTA has asked us for assistance and we have put some money aside for it, but it is for them to decide
What about other projects that you may be planing to implement for the remaining of the year
One of our most important project this year, funded out of the 2002 budget and (which has not yet has started the creation of a resource unit within the office of the Prime Minister. This resource unit will provide technical assistance to the nine ministries in the drawing up of policies and strategies in all main sectors of economic and social life as well as provide civil servants with the necessary training. This will be a very important project for the new institutions that have been set up this year, because it is clear that if these nine ministries are provided with good advice they will be able to take on the responsibilities of the UN mission very quickly
One of the main objectives of the European Agency for Reconstruction is to lay the foundations for a market based economy. Can you give us specific examples on how you try to stimulate free enterprise and market base economics?
Basically these fall under institutional activities which mainly have to do with the Ministry of Trade and Industry and the small and medium enterprise sector. We have also set up regional enterprise centres, which directly link with the enterprises. We have three financial activities., The first is the provision of credit to small and medium-sized enterprises; the second is micro-enterprise lending through banks, and third is the Industrial Development Programme which involves giving loans and technical assistance to viable socially-owned enterprises.
I would like to touch on many points since we don't have very much time and I would like your opinion on many issues. In regards to the process of European Integration, how does this look like for Kosovo?
As you know Kosovo is still legally a part of Serbia, and Serbia as part of the Federal Republic of Yugoslavia is engaged in a so-called Stabilisation and Association Process with the European Union. This is a process, which links each state of the western Balkans with the European Union. The objective of this process is to draw the western Balkan countries closer to the EU, the ultimate objective is the integration of each of these western Balkan countries to the European Union. Kosovo will participate in this process which is already taking place. There are regular meetings in Belgrade between the European Commission with its fifteen members states on the one end and the representative of Yugoslavia on the other side, Kosovo is represented by UNMIK in there meetings. This process of rapprochement between Kosovo and the European Union has already started and one of our tasks is to make sure is that all new legislation adopted here be EU compatible.
Economic integration is the cornerstone of political integration, does the fact that the Euro is already used here as the main currency reduces the distances between Europe and Kosovo? Do you think that the presence of the EAR, as well as OSCE just to name two of them, brings Kosovo closer to Europe than other states within the region.
No I don't think so, I think that countries like Macedonia, like Croatia are moving towards Europe at great speed and I don't think that Kosovo will progress faster, each country will progress on the basis of its own merit. There are important problems that remain to be solved in Kosovo. The respect of the right of the minorities for instance is one of the political conditions to get closer to the EU. I think Kosovo will progress at its own pace but not necessarily quicker than Croatia for example, which is making tremendous progress
The economic development of Kosovo is critical to the proper institution building process, taking this in consideration do you think that there is enough being done to attract foreign Investment which would propel these development perhaps at a faster pace. Do you think this is perhaps not being done quick enough and FDI should play a more important role in this?
It's difficult to say whether we should do more, we always have to do more. To attract foreign investors you need three main elements; you need infrastructure, and we have worked on this throughout our funding of the realisation of the roads, the improvement of the public utilities.
| Then you need the legal and regulatory framework and that is up to UNMIK to take the lead of the UN mission. We are providing technical assistance to them, but it is up to this body to make sure that the legal and regulatory framework is properly in place. Then there is another element, which is the rule of law, you can not attract foreign investors if you don't have the rule of law for obvious reasons. UNMIK has one pillar, which is dealing with the judiciary system and police, we are providing assistance to them as well. Do they do enough? They do what they can. Good progress has been made in the last two years and I hope they will mange to attract foreign investors with that. At the micro level, our Agency's main task has been linking SMEs in Kosovo with businesses in the rest of Europe through the Euro Info Correspondence Centre that was established by the Agency in Kosovo in October 2001. .
In terms of the rule of law I do agree with you that you're first need to establish rules that would ensure fair competition and guarantees to investors. But for instance in regards to infrastructure development and other economic elements tightly related to this, don't you think that the Role of FDI could be critical and could aid the efforts of the EAR?
Yes in certain sectors you are right, like in the telecommunications sector. Strategic foreign investors could play a leading role in the development and improvement of this infrastructure. We have public utilities and roads for instance, but I don't think foreign investors would be interested, the rate of return might just not be there. We have to finance the rehabilitation of infrastructure, we grant money, and we give loans. It will be difficult for foreign investors aside from very specific cases.
In what regards the future; how do you foresee the future of Kosovo and the role of the EU' s long-term commitment to this region? How do you then see Kosovo is two to three year's time and the role that the EU will have in this?
Kosovo as part of the Western Balkans is engaged in a long-term strategic partnership with the European Union. Kosovo is part of Europe geographically today, and it will be we will part of Europe politically tomorrow. We have no choice but to make sure that this area or region as we are calling it for the time being, will move towards the road of the EU by improving its democratic laws, developing a market economy and by participating in this Stabilisation and Association Process. Things will not be easy, but the EU has no choice. This is not part of Africa or Asia, if they don't make a move, if they don't behave correctly we can not say, ok we just go. They are in Europe, if we don't stabilisze this part of the Balkans the impact will be immediate tomorrow in our countries.
Is that the main objective here?
To stabilise the region and to bring Kosovo and the western Balkans as soon as possible to the EU family.
Does Europe really benefit from the proper institutionalisation, economic development and stabilisation of Kosovo. Aside from the political stability of the region in what other ways does Europe benefit from its involvement here?
The first benefit with the stabilisation of the region would stop illegal immigration. You may have heard that this is a major concern in the EU countries today, and for the EU countries it is essential to stop illegal immigration and one of the main sources of illegal immigration to the EU is the Western Balkans. Also one of the main routes for illegal immigration on their way from the middle east and Asia is the Western Balkans.
It is clear that if we manage to develop a market here in the Western Balkans for EU companies, it will contribute to job creation.. We have the interest to stabilise politically and develop economically the western Balkans.
Can you tell us about yourself, your previous experience and also what you consider to be your main challenge ahead as the director of the European Agency?
I am an official of the European Commission and I have been dealing over the last fifteen years with, first developing countries in Africa, and then transition countries in the former Soviet Union. My greatest challenge, I don't know what since I have so many. Perhaps when the Soviet Union collapsed, it was a challenge to try to avoid the total destabilisation of the Eastern border of the EU my work as a whole it's a challenge. Kosovo and the western Balkans is a challenge but it's not more difficult than to stabilise Russia or to stop today's threat of conflict between India and Pakistan.
If you had a message to send to the international investor community, about the potential for investment in Kosovo, about the great development that is taking place and the future that lays ahead, what would that be?
We have to be optimistic and tell the investor community that things are improving, they have already improved tremendously and will continue to improve in the next few years. As I told you Kosovo is part of Europe, so I am sure that investors that have the courage to come here today will surely be rewarded in a few years time.
Note: World Investment News Ltd cannot
be held responsible for the content of unedited
transcriptions. |
V.I.P. INTERVIEWS 
