H.E. IBRAHIM RUGOVA President of Kosovo

Interview with

President of Kosovo

April 18th 2002
Which are the prospects for Kosova's economy in light of the changing nature of the International market place? As we all know, the economies of the world are coming together, tell us some of the efforts that were made by your government to bring Kosovo closer to the world market arena?

During these two and a half years that have followed the war, the most urgent problem we have encountered was: to activate the public enterprises, to bring them up to the level that international markets demand and we are just now getting them prepared for privatization. The privatization law draft was recently released and I believe that very soon we will start applying it, of course taking into consideration the provisions of UNMIK (United Nations Mission in Kosovo). Privatization is the main priority of our government and along with it, is, of course, the attraction of foreign investment and investors. We want to create new employment opportunities and we want to do it while fueling the economy. First, we will focus on the privatization of small and medium sized enterprises, followed by the medium size industry and then we will move on to the heavy industry. There are many sectors of the economy that offer tremendous possibilities, like mining, electricity, represented by companies such as Agrokosova, one of the largest agricultural complexes. Ferronickel is an excellent example for it has big potential in the mining of ore, coal, etc. We also have a complex of mines including the areas around Prishtina, Mitrovica (Trepça), and Artana. This is our heavy industry and this is the challenge we have to be prepared for. Today, our economy is divided: fifty percent is the public economy and fifty percent is the private economy that includes small companies employing from 4 to 200 workers. These companies are mainly from the private sector. The public enterprises must be privatized since these companies make up thirty percent in regards to the total of the economy; naturally, we have to privatize them in order to enhance the engagement of foreign investments in the country, to increase the production and to create new sources of employment. As far as land ownership is concerned, 80 % of the land is already in private property. These are the priorities of the government and together we have to achieve all this for the economy of Kosovo and this is what the new privatization law will endorse with the help and experience of other countries and experts.

As the president of Kosovo, I am more concerned about the current situation with the employment standing at around 70 % of the population, which is young, with great potential, speaking many foreign languages and having wide expertise. These people represent a potential not only for Kosovo, but also for foreign investors. There will be a lot of competitive and strong companies coming here and even though Kosovo is a small country that undoubtedly has a lot to offer to global trade; one of our main interests is to expose it to the world market.

How close is Kosovo to Europe? Most state owned companies will soon be privatized and it's reasonable to assume that within five or six years time these companies would be ready to compete with their European counterparts. What potential do Kosovo companies have to be on the same performance level than European ones?

Kosovo today is closer to Europe than other countries in the region of South Eastern Europe. We have used the presence of UNMIK, as well as other European and American agencies to establish a legal framework compatible with the European Union and that is already an advantage. We have seen the positive effects of this and our parliament will continue to go this way. We have the EURO as a currency, which means a lot. It has not just stabilized the situation in Kosovo politically and economically, but also facilitated the direct contact that we have with Europe. However, we still have the problem of free travel and movement, since the Travel Documents issued by UNMIK as the substitute to passports, are not fully recognized yet by all countries. Once this problem is solved it will help us build closer ties with the international community. The solution of this issue is closely connected with the national status of Kosovo that we expect to be solved very soon. I want to emphasize the fact that the independence of Kosovo should and will be recognized. All the other barriers on the borders of the region, with the infrastructure will be fixed and Kosovo will be connected properly with Europe, the Balkans, and through Albania and the port of Durres with the Adriatic Sea and with the rest of the world. In our plans, we have the construction of a highway from Prshtina to Durres that would give a boost to the economy and facilitate the rapid movement of goods and products in our region. Another important initiative is the Pact of Stability that will help us solve a lot of pending political issues. As you see the political problems are closely connected with the economical problems. With the help of politics, we will open the way for the economy and this is why all these problems are included in the program of the newly elected government.

Would you agree with the argument that the privatization process will allow socially owned enterprises to function regardless of the course that the self-determination process will take for Kosovo?. In other words, privatization will allow these companies to be owned by international institutions or investors conducted by foreign interests which would be independent of Kosovo's political rule or future.

As far as privatization is concerned, we will follow the international norms, and all foreign companies have to comply with international standards. The issue with Yugoslavia, I don't know exactly how to call it now because I don't know what will happen to Montenegro, and without Montenegro there is no Yugoslavia, but only Serbia. So as far as Serbia is concerned, it does not have the right to influence the privatization or to claim any property, because Kosovo is a former member of the Federal Republic of Yugoslavia. So, the whole property of Kosovo belongs to the government of Kosovo and only we have the right to decide about its faith. There are speculations that Belgrade wants to have its share of the economy, but legally they don't have any rights. On the other hand if Serbia wants to enter the competition, to bid and participate in the privatization, we cannot and we will not prohibit that. But, we have to bear one thing in mind, they have been destroying our economy for ten years, they have taken over our factories and they have exploited it, not to mention the destruction of the war and the question of reparations.

Considering the fact that the privatization law has just been approved, has your government already prepared a package of incentives to attract foreign investors? Are you working on this and what sort of incentives do you plan to offer to those looking to invest in Kosovo?

Our government is ready to guarantee their investments for them, and then we will create tax incentives. We are interested in having all these things and with the privatization we also want to create more jobs and better conditions for the workers.

What do you think is needed for those investors to start thinking of Kosovo as an investment destination?

Offering an incentive package is one of the main priorities. Of course, on the first place, we need more promotion and "economical propaganda" if I can call it that way. We need to generate a positive energy and image for Kosova in order to achieve stability and offer guarantees for investors .We also need to emphasize the potential of our human resources, then our vast energetic resources, and of course agriculture. Kosovo is a small country but it also has a lot of riches that were granted to us by God. The different Ministries have to work more on the promotion of the country, to build Kosovo's public image. Concrete projects must be assembled, in order to activate our businessmen to have more contacts. We have to create a positive image about ourselves.

How do you envision the future of Kosovo in three to four years time?

My vision is to have an independent Kosovo, democratic, with a politically tolerant society and with a solid economy, integrated into the EU, the NATO and to continue with our good relations with the USA. This is my vision of Kosovo; we are still working on this and there is still a way to go. Now, at last, we have achieved our independence, but we also want to be officially recognized as independent. The issue of the future of Kosovo is the main barrier of the different sectors of the economy. The investors need to have guarantees of their ownership in the future. Most of the investors hesitate because of the status of Kosovo. The political plan was to calm down the situation in the region, in Albania, Montenegro and Serbia even though Belgrade still hesitates to calm down. My vision is that our country should be integrated in the EU, to transfer a part of our independence there. It is also our duty to do it, if we want to establish trade and a sound economy. This is the vision that I am working on and I will continue to work in the future.

Would you argue that once the prosperity and standard of living of the population of Kosovo is raised it would give way to the peaceful resolution of social tensions and the peaceful coexistence of all ethnicities?

I will tell you about the mentality of the Kosovars, they are hardworking people. Now they have the chance to work harder, we have a large unemployment but the largest part lives from the domestic economy and there is a big feeling of solidarity among the people. We, as a government, have to use this to ease the social tension and develop the economy. Till now we had the DM as a currency, now we have the EURO. It is a stable currency so people are more assured of themselves and even though, the salaries in the public sector are low, people know that the EURO is stable and it will remain stable. We are also trying to increase the incomes. These two and a half years after the war have been successful; we managed to collect 2/3 of our budget in taxes. We are going to decrease them so that everybody can pay them. We will implement a lot from our previous experience, when we lived in our parallel state, we are going to work on that to have less social tensions. The mentality of Kosovars, in a romantic sense, is very patriotic; they love their country, and they would sacrifice everything for their country. A part of the Kosovars that lives outside of Kosovo has helped us a lot, especially those that live in Germany, the Scandinavian countries, the USA. Some of them already started investing here, and they help their families a lot. We keep this in our minds and we will help them develop their business here at home.

Can you tell us about your personal profile and the successes that you have had?

I have entered politics around the 80-ies, not for a carrier but to defend the basic human values of my people. I was the president of the Society of Writers of Kosovo, later we formed the first political party, a massive popular party and we started establishing our parallel state. In the 90-ies, we published the Declaration of Independence, the Constitution of Kosovo, which still exists today. In 1991 we wanted our independence and in 1992 we had the first democratic elections, both presidential and parliamentary after that we continued the establishment of our state with our government. The government had to work outside Kosovo and it was working since 1992, when I was elected President of the State, and in 1998, when the military attack started. Serbia did not want to recognize our country in a peaceful way, so that is why they wanted to destroy us. All our efforts to find a peaceful solution were impossible. In order to save the people, NATO had to intervene. Belgrade did not accept the agreement, so for them it was a punishment. This was a great victory for us. Of course, after the war, we immediately started to establish the institutions, the economy. This was in the phase of emergency. We had a lot of international help especially from the EU and USA, which helped us to get out of this phase of emergency, to give some dynamism to Kosova. We did not expect from the international community to build our houses, but with a little help that people got from the international organizations they have built their house themselves. This was a great success for us because Kosovo is free today. We have our own institutions and now we have to work on the official recognition. For me the biggest success was when I started establishing our state in 1990. The second success was the defense provided by NATO. For two and a half years we have achieved a great development and the decision to go further towards the democracy of Kosovo was a success too. The challenges in the future are: the democratic development, to create a stable society, the development of the economy, privatization, and to be a competitive player in a stable and peaceful country.

What message of confidence would you address to the international community, and to the readers of the Far Eastern Economic Review in particular?

They are all welcome to come to Kosovo, the human resources, the natural resources and also we will guarantee for their investments; we will provide security and stability and we are ready for partnerships because we want their help. With their investments they will help us because Kosovo has entered into the phase of development.

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