Insufficient economic growth for employment in Kosovo

While economic growth comes mainly from increasing capital investments and increasing consumption as a result of rising wages and stable remittances, it is not translated into jobs.

Kosovo's Oda of Afarism Chairman Skender Krasniqi says the situation is even more serious, since Kosovo has not only had no employment growth, but has marked a decline in the number of employees.

“These numbers, for us, are irrational of economic growth, taking into account that Kosovo not only has not increased employment, but there has been a reduction in the number of workers, meaning about 15 thousand less in 2018 than in 2017 and for the past 6 years, Kosovo has increased the number of employees for 7 thousand. About 30,000 people each year go to market. This is a very serious situation in Kosovo, and as a result of this, not only do we not have economic growth, but we also have increased import and reduced export”, he says.

Krasniqi also points to the reasons he puts the country's economy into such a state.

These are coming as a result of a lack of doing business offer, a practical offer, a lack of business laws, a lack of functioning of courts, because we actually had an economic court and we removed it, and that prevented it from doing business. The state's obligation to pay two jobs, and all of this has brought about this situation we are in -- not too much, or off doing business”, he says.

According to him, businesses must join more to pressure domestic institutions to improve the climate of doing business in practice.

That despite economic growth, the country has not scored a rise in the number of employees, says university professor Muhamet Mustafa.

Kosovo until an economic growth rate of 7 per cent and over 7 per cent, positive effects will not be investigated either in job creation or in significant reduction of unemployment or in the reduction of trade deficit. The bottom line is to enable us to produce more products and services in the market for the domestic market, but also for export, because it generates more investments and more jobs”, he says.

And the chairman of the American Economic Ode in Kosovo, Arian Zeka, positively values economic growth, but says it is unstable economic resources that cannot enable the creation of new jobs.

It is positive that we have had such a growth rate of 4.2 per cent last year. But this year is just like last year. This rate, given the resources affecting this economic growth, does not enable the creation of new jobs because resources are quite unstable. It's about remittances from the diaspora or remittances, which end up in consumption even from public sector investments”, Zeka says.

He tells of Kosova Prees what needs to be done in this situation, and the support of institutions for local producers, according to Zeka, must always happen.

What needs to happen is for institutions to further support local producers, whether in establishing quality or improving infrastructure, so that they can export their products to the EU and to other markets with which we have agreements for free trade... What needs to happen to see an increase in foreign direct investment and increased private sector investments in general, both domestic and external investments, which in the long term would affect the creation of new jobs and a overall and sustainable economic development”, he says.

As for the trade deficit on the other hand, Zeka says that last year's closure with a 2.7 billion-euro trade deficit, which is more than 40 per cent gross domestic product, is the reflection of the production base in general and the reflection of the wrong fiscal policies from 1999 onward.