[NYC-L] [Kcc-News] KOSOVO BRACED FOR ECONOMIC DOWNTURN

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   Kosova Crisis Center (KCC) News Network: http://www.alb-net.com
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 IWPR'S BALKAN CRISIS REPORT, No. 354, July 31, 2002

****************** VISIT IWPR ON-LINE: www.iwpr.net ****************

KOSOVO BRACED FOR ECONOMIC DOWNTURN

As the situation in Kosovo stabilises international organisations are going
elsewhere leaving unemployment in their wake

By Nehat Islami in Pristina

Edmond Syla, a 24-year-old Kosovo Albanian from Pristina, recently lost his
job with the United Nations Interim Administration Mission in Kosovo,
UNMIK, as a result of cost-cutting measures.

The Pristina resident, who had worked as a driver for the largest UN
mission in the world for two years, heard the news on July 16.

There is little hope that he will get a more work soon as he joins an
estimated four thousand local and foreign employees let go by such
international organisations.

One after the other, NGOs are shutting up shop in the province - the World
Food Programme, among the area's biggest donors, closed its Pristina office
in June.

Such groups are one of the primary sources of employment and consumer
spending in Kosovo and there are fears the closures and sackings will leave
the local economy in tatters.

The departure of Serb forces from Kosovo in June 1999 and its new status as
an international protectorate under UNMIK control saw more than one
thousand non-governmental organisations pouring in and providing employment
for 50,000 locals.

UN administrator in Kosovo Michael Steiner estimates that during this
period overseas donors have pumped over two billion euros into the province.

However, as the situation stabilises and attention turns to new conflicts
emerging around the world, some international organisations are leaving or
devolving work to local groups.  It's estimated that some 3,000 people in
the NGO sector will lose their jobs by the end of the year.

The new fiscal year, which begins in July, will see 61 million US dollars
slashed from UNMIK's annual budget, which last year stood at over five
times that amount, according to the institution's finance department.

The 40,000 KFOR soldiers from 38 countries who have proved a powerful
consumer force in Kosovo are also set to see their number substantially
reduced.  Commanders have spoken of rationalisations - and its already been
announced that the Bondsteel base in the south-east of protectorate is to
lose 8,000 servicemen.

UNMIK spokesperson Susan Manuel says the reduction in the administration's
workforce would affect all areas of Kosovo, with a 15 per cent cut by the
end of September.

Of the 900 OSCE employees present in 1999, spokesperson Svin Lindholm says
only slightly more than 400 now remain.  Further drastic lay-offs will
follow the province's local elections, expected in autumn, say informed
sources.

Probably one of the only sectors witnessing an increase in employment is
Kosovo's multi-ethnic police force, which currently numbers around 5000.
The force works alongside UNMIK's international police, and in exceptional
circumstances KFOR, but is gradually gaining more independence.

Otherwise, there is widespread gloom surrounding the departure of
foreigners with local experts claiming unemployment has already topped 57
per cent.

Economic giants during the time of former Yugoslavia such as the Trepca
metallurgic company and the local textile industry, which used to employ
around 30,000 people, are still not in operation.

Those employed in the state sector, meanwhile, receive an average monthly
salary of only 150 euros per month, forcing many to take on two jobs.

Directly hit by the NGO cutbacks are workers like interpreters, drivers,
security guards and the like, but they've also worried small business
owners such as restaurateurs, hotel operators, landlords and taxi drivers,
with many already feeling the consequences.

Gani Sopi has lived well for the last two years renting his Pristina house
to foreigners. But despite halving the monthly rent to 1500 euros, it now
lies empty like many others in cities throughout Kosovo.

Ramiz Muharremi from Prizren told IWPR that his salary as an interpreter
for an NGO allowed him to support his family and save something for the
repair of the family house damaged during the war.

However, things have changed drastically since his job was declared
"surplus to requirements" this spring and he is now a seller at a vegetable
market, flicking futilely through newspapers each day for jobs requiring
foreign language skills.

Urosevac, a town in southern Kosovo, which was at one time an attractive
business centre, saw its economy largely destroyed during the conflict. It
underwent something of a revival when around 5,000 of its residents were
employed at Bondsteel, but now many of them could lose their jobs.

Philosophical, the father of a worker at the base told IWPR, "It has fed
half the town in a direct and indirect way.  We will be grateful for it
until the end of our lives."

Gezim Murati, an economics graduate from Pec, says the rationalisation
hitting the protectorate was only to be expected once it began to
stabilise.  He believes there will be a tough period ahead, exacerbated by
the international administration's delay in introducing privatisation that
could stimulate growth.

As aid levels decrease, the question also remains whether Kosovo will
succeed in attracting foreign investment, with one of the major
preconditions being a stable political and security situation.  Some hope
that Albanians from the diaspora might start investing in the local economy.

Ismail Kastrati, president of Kosovo's chamber of commerce, warns that if
money doesn't start coming in soon there could be social unrest.  "The
world should give us its support by opening credits for small and middle
size businesses which would create additional income and generate new
jobs," he appealed.

Nehat Islami is IWPR's representative in Kosovo

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