Current political rhetoric repels foreign investors from Kosovo

Representatives of foreign investors and the business community in Kosovo give different estimates, how much the recent political rhetoric can affect the interest of potential investors.

Shpend Balija, executive director of the Council of European Investors in Kosovo, tells Radio Free Europe that daily political fluctuations have no long-term impact on discouraging foreign investors.

“Options, movements, comments, daily policies have no long-term impact on potential investors' plans. We should see the other indicators ruling in Kosovo. Kosovo is a stable country, in terms of political and security aspects. And that way I don't believe there is any movement or influence in the attitude of foreign investors, compared to the investment index in Kosovo”, Balija says.

But, instead, representatives of the business community think, according to which words used in recent days in Kosovo such as division, exchange of territories, autonomy for the north, correction of borders, greatly discourage potential investors.

Arian Zeka, executive director of the American Economic Ode in Kosovo, says the political situation is an important factor, considered by potential investors. For that, he says, the current political situation increases investor uncertainty.

Of course, any news or rhetoric spread around the world, which brings Kosovo back to media headlines, as far as its open issues are concerned, increases investor uncertainty and increases the uncertainty of doing business in general. And when we talk about increasing uncertainty, it should be noted that not only external investments are contained, but the impact can also be on domestic investments”, Zeka says.

Otherwise, the Agency for Investment and Support of Enterprises (KIESA), which functions under the Ministry of Trade and Industry, consistently accepts requests and interests from investors who are analyzing Kosovo for potential investments. In a response by officials from this agency, “during this period (January-August) has realised about 85 contacts with local and foreign investors, who have been reported on opportunities Kosovo offers for investment”.

“A number of these contacts have expressed interest and requested information on the benefit of strategic investor status and in this regard, K ISA is in constant contact with them by providing all necessary assistance”, a response to Radio Free Europe.

But, Zeka says that no increase or reduction in interest of foreign investors in Kosovo has been observed so far, compared to other years.

"Interestation is almost the same as in the past few years." In general, concern continues about those major projects that have been launched. But there is no increased interest than there have been in past years”, Zeka says.

Meanwhile, Shpend Balija says that Kosovo in recent years is creating a positive image in terms of creating conditions for foreign investors.

“The countries of the region, but also the European countries, have begun to see Kosovo as a real investment opportunity. But much remains to be done in terms of improving the business environment. When I say much remains to be done, this means fiscal reform, procurement reform, reform in justice are some of the key elements that have to move faster, with more accelerated dynamics, because changes are starting to take place, but that are no longer moving the right speed”, Balija says.

Although foreign investments are constantly valued as necessary for economic development, these investments have seen decline over the years in Kosovo.

Until 2008, foreign investment was 355m euros, last year, according to the Central Bank of Kosovo, foreign investment was about 290 million or 30 percent more than in 2016. And in January-May of this year, the value of investments realised is 76m euros, or 34 percent less, compared to the same period in 2017.