Less money and investment from diaspora this year

Abidin Gavazaj had planned both this year and year to come to Kosovo to spend summer holidays.

He lives in Salzburg, Austria, and along with his family, he planned to continue his work on building a house in Prizren, his hometown.

But the showing of the new coronary pandemic has caused Abidin to suspend any investment he had planned to make this year in Kosovo.

I've started a long time ago to build a house and now the physical shortage in Kosovo is limiting us greatly, but building there as well. Most firms or entrepreneurs have no willingness without the householder being present to do the work. Our normal physical lack that cancels all of the investments and now we have to wait until a further term”, Gavazaj says.

Abidini works as a chief technician in one of the Salzburg hospitals while his wife works as a medical sister.

Even if borders are opened and the situation passes with pandemics, Abidini says many state organisations in Austria have cancelled vacations for an indefinite term.

The possibility of coming to Kosovo this year, I think, in 80 percent of the cases is impossible, for the fact that all institutions are on alert here, especially those of health that I work for myself. To come to Kosovo we have many barriers to reach there. The holidays we plan at the beginning of the year, and most of the institutions here have canceled the” holiday, Gavazaj says.

European countries have begun opening borders, but it still remains unclear when there may be free circulation of citizens.

According to authorities in Pristina, those who want to travel through land routes from European countries to Kosovo should be equipped with a special permit of passage from respective states.

This situation is expected to affect many exiles to cancel their arrival in Kosovo.

The inability to come them is envisioned to cause consequences for Kosovo's economy.

The longer the pandemic lasts the less diaspora money in Kosovo

Freedom Krasniqi from the organisation “Germin”, which deals mainly with diaspora issues, tells Radio Free Europe that the decline in the value of remittances is estimated to be 10 to 15 percent.

This, according to Krasniqi, is expected to happen because countries in which the Kosovo diaspora is concentrated are the most affected by the new coronary pandemic.

We've had about two billion revenues from the diaspora. This figure also includes financial remittances, but also the expenditures made by those who come to Kosovo, and that amount accounts for about 22 per cent to 25 per cent of Kosovo's GDP. If we estimate that there will be a drop of 10 to 15 percent of this amount, then Kosovo will eventually have 200m euros less coming in this year as a result of the crisis caused by COVID-19 [the disease that causes the new coronary], even as a result of reducing remittances on one side, but also the restrictions and decline of diaspora visits that we will see this”, Krasniqi says.

According to the Kosovo Central Bank, the value the Kosovo diaspora contributes to the Kosovo economy is 1.8 billion euros. That included sending money through banks and cash.

Remission shipments have been growing steadily since 2014.

In 2014 the value of remittances was 622m euros, and in 2019 it was 851.5 million.

Pandemia has also affected diaspora financially

The money that has come from the diaspora in Kosovo in the past 20 years has been important to Kosovo's economy.

The value of money the diaspora has sent to Kosovo in the first quarter of this year is 190m euros.

Besides remittances, Kosovo's economy has benefited millions of euros from additional diaspora during the summer season, especially due to investments in real estate and the expenses the diaspora has made for the family holiday organisation.

In Kosovo's Economic Ode, they forecast a decline in diaspora remittances and investments because of the coronary pandemic.

Kosovo Economic Ode Director Berat Rukiqi says the exiles themselves have been financially affected by the situation created by the pandemic.

The expectations are that this year there will be less remittances, whether in the form of money transfers, because part of the diaspora is affected by the pandemic or the drop of revenues as a result of the pandemic, and on the other hand another part that has usually visited here in the country, this year will not be present,” he says.

Rukiqi says the lack of exiles will have a direct impact on the decline of purchasing power.

The diaspora's direct effect is on purchasing power. This will affect the decline of consumption in the country on one side, but on the other side exiles have also been investors in real estate, so certainly this year in this part or component of the economy will have its own impact”, Rukiqi says.

According to the Government of Kosovo data, the people living outside Kosovo are around 0.7 million to 1.8 million people. They live mainly in Western European countries.

In addition to declining remittances and declining investments from the diaspora, the World Bank forecasts a major decline in Kosovo's economy.

As a result of the situation created by the new coronary pandemic, the World Bank predicts that Kosovo's economy will suffer a 4.5 percent decline in 2020, followed by increased return in 2021.

According to the World Bank, the outbreak of COVIED-19 [the defeat causing new coronary] and the necessary austerity measures are causing unprecedented pressure for investments, private consumption, but also for exports and remittances from the diaspora.