Hamza: Workers' budget and salaries will be increased

Salaries of public sector workers will increase as of next year, Kosovo Finance Minister Bedri Hamza says in an interview for Radio Free Europe.

Radio Free Europe: Mr. Hamza, when is the budget review process expected for this year, and when can financial obligations to various companies and companies be adopted but also for organising local elections to be held on October 22nd?

Bedri Hamza: We've reviewed the budget in the government cabinet. The same is in the Kosovo Assembly, and we expect that within as short procedures as possible allowing the regulations of the Parliament, this bill will be put in order day and completed.

In the government cabinet, we have completed the budget review in a way that we have turned the budget into a real, stable budget, based on sustainable revenues and not on the basis of some hypothetical situations and some assumptions, but we have addressed the major problems that have been introduced during this time.

The issue of pension payment for war categories has been addressed, is an extremely large sum for this time, about 26m euros has had to be mobilised. The issue of local elections has been addressed, formal form judicial decisions and 50m euros have been provided for the Pristina highway Skopje.

And, we believe that at the end of the year we will mobilise additional means to be correct with the performers of the works and not to start the new year, with obligations this year.

It also means maintaining the reputation of the land that we are correct in paying for the work done.

There are several other internal adjustments, budget deficit has been maintained within the fiscal rule, and banking balance has been maintained under legislation in effect. Although we are not on the programme with the International Monetary Fund, we have discussed and harmonised this project. We will be co-operating with the IMF in the future, and I believe they will agree with our policies.

Radio Free Europe: But what will be the amount of Kosovo's budget for 2018?

Bedri Hamza: The budget value will be over 2 billion euros, based on sustainable resources. As far as projections are concerned, we will be careful to comply with the level of economic growth, and normally for some point of percentage will be higher. Because we know there is informality and we seek performance from agencies dealing with their administration, in this case the Customs and the Kosovo Tax Administration.

But, it will be a stable budget with real revenues, the budget deficit will be saved by less than 2 per cent, and the banking balance that allows for guaranteeing the state's liquidity and not risking the state's liquidity.

Of course, some corrections must be made in the budget structure, because in the past some miscretions have occurred within economic categories. These will also be discussed with the International Monetary Fund.

Radio Free Europe: With the amount of this budget, Mr. Hamza can pay raise for public sector workers?

Bedri Hamza: Yes, there will be salary increases. Raising salaries will be in line with economic growth, real budgetary opportunities and always respecting legislation in force. However, there will be salary increases.

Radio Free Europe: About a percentage?

Bedri Hamza: We're looking at all the possibilities, we're seeing what nominal economic growth is, because it's worth what the Kosovo Statistics Agency says, what are real budgetary opportunities, all legal infrastructure. But there will be salary increases, but acceptable growth and real growth so that we do not endanger macro-friendly stability.

Radio Free Europe: How much money is there for economic growth in the country next year?

Bedri Hamza: Economic growth in recent years has averaged about 3.5 percent. We have predictions, and we have the basic scenario, which is the scenario of the International Monetary Fund and the World Bank in the coming years, something about 4 percent of the forecasts.

But we have an economic plan that is very ambitious, which is based and we expect that, in sustainable assumptions, if certain events occur, economic growth in Kosovo exceeds 5 percent and the end of this Government's mandate may reach more than 6 percent.

I say this because besides the revenues, that's the basic scenario, through regular revenues into the Kosovo budget, we have a certain number of financial agreements, which are ratified. I expect them to be executed and to produce its effect.

We are interested in taking steps to improve the business environment and economic growth to transport to the private sector, and the private sector to be a host of economic growth and job generation.

Radio Free Europe: Mr. Hamza, we return to the Kosovo Government's reports with international financial institutions. The Kosovo government has lost a loan from the International Monetary Fund. Can this agreement be reactivated and any agreements with the World Bank are expected, and for what projects?

Bedri Hamza: I am in favour of increasing public debt, but to increase very carefully in order for future generations not to pay for the present luxury. If there are projects that have returns, they have feasibility, they have high reasonableness, I am to increase public debt and I am to negotiate with institutions that have the best conditions, even with the World Bank for Reconstruction and Development and other international financial institutions.

However, not only must public debt be taken and public debt increased and the effect not produced on the economy. Therefore, for public debt we will be careful, we will negotiate projects that have feasibility and projects that provide impacts on changing the situation to the economy. But I'm always a follower of what the public debt is to be distributed through generations, not a generation to borrow more, and then other generations to pay more.

Radio Free Europe: What about the deal with the International Monetary Fund?

Bedri Hamza: As far as the agreement is concerned with the International Monetary Fund, in the past we have had four agreements with the International Monetary Fund. Some have achieved a hundred percent success, some less success. We're very open to very close cooperation, whether we're on the program or we're on the program. Co-operation with the International Monetary Fund has been most effective in Kosovo as a result in drafting good and standard laws, developing structural reforms, and building human capacities.

We're open to talk and we'll see what the form of co-operation will be, but as regards the needs that we finance we're not forced and the current situation does not force us to be in any financial agreement with any institution in terms of maintaining macro-fiscal liquidity. Meanwhile, as far as project development is concerned, we are to see what those projects are identified by the ministries of the line, by the municipalities and we are here to support them.