Reiinvest was established in 1995 with the aid and funding of several international organizations amongst which are the World Bank, as well as Kosovo Foundation for and Open Society. Can you tell us about little bit of the history then, how it has established and how it has developed into what it is today?
RIMA Reiinvest is institute for development research. It's a private institute, non-profit organization. It was established in 1985 within Rima Company and later in 1999 turned into a private research organization. Mission of the Reiinvest is to promote the economic development of Kosova based on the development philosophy. We found out that the main capital for development that Kosova has, are Kosovar people and energy. We want to cultivate this, we want to support this with our research, and we want to support the creation of family business environment, with good economic policies. Also we want to promote education and to promote energy, that means to cultivate this energy every where here, to use it as an advantage in order to create new jobs for the coming generations, increase the economic sustainability, economically reliability of Kosova. In order to achieve this mission we do research, advocacy, business support services, and within this we do consulting services and also business education. We also do publications, which is inline with promotion of modern concepts of using development philosophy for building economy in future of Kosova. Reiinvest has now 22 researchers and support staff. Half of them are experienced staff with background in economy or public administration background; half of them are under 30 years, 35, 37, 36. Usually we have 3 or 4 of our people getting their PhDs and their Masters from western universities and we are also trying to promote modern business education.
How is the institute financed, I know this partly through the services you provide to the businesses, which you charge for?
Currently finance of the institute is based on our projects and contracts with different organizations, like USAID who is now our main contractor, UNDP, Open Society Institute, IFC for example and also some other organization like Open Society Institute for Kosova, Foundation for Civil Society. We have also finance from consulting services and our business services but it's presents about 20% of our income generation. Currently 80% is based on those contracts with different organizations and 20% maybe is directly from business organizations, because the market for consulting, for business support services still needs to be created and also our expertise needs to develop more and more higher. So by the end of the year 2004 we are intending to have 50% of our income coming from the services and 50% from the research.
The half of million euros you generate in turn over are this reinvested in order to generate more studies, more services?
As I said this is a nonprofit organization, when we cover our costs we invest in our in our people, in our maintenance(keepment) and in our support.
You are not in any way supporting any investment project in reconstruction?
It is not our objective to participate in investment projects. As I said our mission is to promote better concepts for economic development, to build and promote the business culture, and also to improve the information of the Kosovars and foreigners about the Kosova economy about the opportunities, the macro economy frame, about legal frame, about resources, and the possibilities for investing here.
You have several projects that you work on. I can mention several. The Early Warning Project is very interesting, can you tell us something about it, I was not very clear on what exactly are you looking for now?
Early Warning System is a project we had with UNDP. This project deals with analyzing potential sources of conflicts in the society, economic area, politic area, social aspects, and interethnic relations. So the object of the project is to worry that decision makers …, what are the issues that they should pay more attention in order to avoid problems.
So far what is your assessment in terms of causes of conflict here in Kosovo, are they mainly economic disparities between classes and ethnicities, and are there basically social tensions due to cultural differences. What are the tensions right the most important?
Most important is the dynamic of building democratic institutions, bringing to the decision making Kosovars, so the international community here is doing well. But still you have to know that power shape(shake), and still you have not very defined competencies and responsibilities and than that is solved by the government. The government is not defined very well, the responsibilities that produce not always very necessary efficient…Despite that we finished with past war reconstruction, if you compare it with other countries, Kosova…Over passing the emergencies faze of reconstruction for two or three years is really good done. But the Kosovars are ambitious people and want to do more. They want to solve their problems in social economic aspects, it would be lets say the unemployment rate of 50% or 45% …it self generates the conflict in the society. And then you have dynamics of creating budget, public utilities, destroyed pension system by Former Yugoslavia by the Serbian regime here, it would be to crate a new system, this new system could not respond to the former pensioners. So there will be another problem, how to solve many problems at once, how to manage those problems. It's not an easy task.
You have also worked for a regional project,…Which intents to tackle the main obstacles for trade and investments within the region. What are these obstacles?
…trade status in the region you have seen there fortunately political obstacles are last phase among seven or eight obstacles. First in the region is customer related problem, infrastructure, banking system and some other obstacles.
So those would be the obstacles, which are of course to be overcome with time. But what are the advantages; there must be advantages in investing in Kosova?
The main advantages of Kosova are first of all human capital, young population relatively well educated and under the reform of education will be more and more prepared to take the responsibility,…, the positive attitude of Kosovars to foreign economy, natural resources and geographic position Kosovo is a very interesting geographic position. Prishtina has the same distance to Tirana, Belgrade, Podgorica, Thessaloniki and Sofia. We could be a place from which the investors could reflect in the regional market. Then you have also the support of the international community for investors in Kosova, the international community is interested to build sustainable democratic society with rule of law and what is needed for the open market economy. International community's commitment to Kosovar economy is promising. These advantages they are still after the war period, the economic system is not yet in place, also those regional aspects of building infrastructure, easing tensions, these are things that the region should do more for, and Kosova also.
| Obviously Kosovo has many advantages and I was just made aware of Prishtinas excellent location for distribution of products What role do you think the foreign direct investment could have in the development of this infrastructure, because it is undeniable the fact that enterprises are driven by profit, and if they see opportunities they will go seek them and they would shape the environment so they can conduct their operation.
I think you are right. Because of the infrastructure many things happened here, ten years of no investment and mismanagement, very bad maintenance. After the war there were some rehabilitations in the energetic centers, of the roads, telecommunication. The situation is better than two years ago, but this infrastructure is not yet fully ready to accept new development objectives and to support these objectives, so the investment is needed there. I think there's an opportunity to invest in roads, telecommunication, invest in energy. There are resources here and I think the reform of utilities which is going to start now in Kosova will bring possibilities for levelizing in this area and also investment in this area I think would be attractive to foreigners.
Do you think that the attraction of foreign investments can propel the development of various sectors faster. If we bring investors here that are seeking to exploit the opportunities of Kosovo they will need the development of not just infrastructure but also the development of human capital and the development of institutional base and framework the development of legal structure etc. and they would be another force pushing for the developments to occur.
We would like to have more dynamics, but we are still young after the war situation. The government structure is still building up its capacities and taking off. We expect the foreign investment to have free room here and to contribute in building our society, our knowledge and I think the Kosovars have to offer them this position that would bring them the opportunities to reflect in regional market and we will bring the rule of law and legal frame which is going to be built in the western standards. We have to offer them very ambitious young population, which is attractive for foreign investors and also interesting natural resources.
How do you envision the recently released draft for privitization, do you agree with it, do you think there should be strict modifications made upon it and how would you resolve the issue of privatization and ownership of these enterprises, because it seems like a very delicate issue that no one seems to agree on and it's the number one priority in terms for this draft to move forward.
Regarding the draft were consulted as Reiinvest, because we did lot of advocacies, research and advocating more advanced models of privatization. The draft was basically compiled to attract the investors, this solution is made, I think is good. Because it is going for the solution of the same companies to local foreign private investor and if you have in mind most of the social owned companies belong to medium companies some large companies but I mean the best model for those companies is sale to the best private local Kosovar investors. This spin-off solution of creating a new company with the assets of the old one, selling those assets and with the amount of sale to take of creditors I think it is attractive for the investors. Of course, it remains now that UNMIK and Kosovars build the substantial bases, for social conscience, …in more effective way, not to freeze them, but to use them for improving utilities, and sometimes…possible creditors.. Creating conditions for full transparency. Regulation claims for full transparency and we believe in that but we would like that with the operational policies to see that is very well designed. Also you should support somehow social expectation with the privatization you cannot ignore that, but I see more readiness of UNMIK and our governmental institution to improve regulations, maybe certain regulations defects within the operational policies.
Reiinvest is deepply involved in building of institutions, and to promote a market economy and also the economic aspects that are related to the status of Kosovo. The status of Kosovo seems to be the real obstacle between Kosovo and proper economic development. Do you think there is ways to get in around this?
I think it is important, it is very clear that Kosovo is going its own way. So how this will be completed is not still very clear, but Kosovo is a state who building in a process and then you will have for sure with the presence of the international community, the countries here will have to ease down the tendencies for domination in Balkan. When those tensions are decreased, people will find the way to cooperate and will live as neighbors. It's an obstacle but it's more a psychological obstacle to many potential investors: we don't know what to be Kosovo. We have an independent economic system of Kosovo, we have quite good security conditions, and you cannot expect any war in Kosova. In the region there are problems that will be solved step by step. It's more psychological than factual obstacle.
You are considered one of the most privileged economic minds in Kosovo. You have written several books on economics, different theories on the issue of investment and reconstruction, as well as other numerous articles in journals and economic magazines, you've seen seminars and symposiums. Can you tell us about your most satisfactory achievement as one of the leading economists of Kosovo?
Reiinvest is for sure one of our successes, my success, and success of my colleagues because it is teamwork, team management. Also one of my achievements is when I see my students that they are very ambitious, optimistic and believing in future of Kosova that we can take the advantages as Kosovars for the future economy of progress of Kosova.
What would be your message to them as economist that knows about Kosovo, knows its limitations, its potential, its strength and weaknesses, what message would you send to all of them about the future of Kosovo about the potential for investment?
I will tell them that Kosova is future has optimistic people has resources and is ready for partnership.
Note: World Investment News Ltd cannot be
held responsible for the content of unedited transcriptions.
|
