Production businesses between barriers and relief measures

Reliefs for production businesses that have been warned by the Kosovo Government for 2018 by business representatives are considered necessary, but not enough to make products from Kosovo more competitive.

Production businesses in Kosovo on 1 January 2018 will be released from customs tax for raw materials, half product, production lines, and information technology equipment.

The Finance Ministry has announced businesses that in addition to these facilities, which will have local businesses in 2018, there will also be no new taxes, as well as no increases in existing taxes.

The chairman of the Kosovo Economic Ode, Safet Gerjaliu, in a proposal for Radio Free Europe says relief measures warned by the government will have to be in place of economic development.

It's a step of substance importance, but we shouldn't be content with these measures alone. I believe it's not a point, but it's a expectation that professional dialogue should continue and race in the creation of facilities and not barriers to doing business in Kosovo”, Gerjaliu says.

He also stresses that there cannot be economic development only with ease if there is no rule of order and law in the country.

Producers in Kosovo have repeatedly called on the country's institutions to create favourable fiscal policies to increase export.

The export-oriented strategy was stressed that it should be considered by competent authorities as a key factor in the country's economic development.

Kosovo Producers Club Executive Director Astrit Panja tells Radio Free Europe that the country's institutions would have to continue to take additional measures to improve production conditions, as only in this way will local production be affected.

The removal of customs tariffs for raw materials in the production process is an appropriate decision, since local producers have so far been uncompetitive, since they have paid the fee, which the countries of the region do not implement. Are these enough measures, they are not, but local producers still need to stimulate”, Panja says.

One of the problems facing producers businesses in Kosovo, which requires urgent address, Panja adds, is the supply of electricity.

The damages caused to producers by the energy sector, according to him, are about 300m euros annually. That obstacle, Panja says, made local products not competitive enough.

However, despite all difficulties, Panja shows that local products have managed to be present on the regional market and wider.

“On European Union markets, we have continued growth of Kosovo products. We believe that even in the future we will have improved trade balance. Kosovo's most barking products penetrate the European Union than in the countries of the region, because countries in the region are not implementing illegal trade policies and making it difficult to export Kosovo products”, Panja says.

Kosovo, according to data from the Statistics Agency, continues to face high trade deficit. Export contributions to commercial volume, according to 2016 data, were very low, at about $310m, while imports of nearly 3 billion euros.