Government focus, recovery of businesses from pandemic

The private sector will be the focus of the mid-term spending framework for 2020-2023, which the Government of Kosovo is reviewing, so that it can help businesses, recover from losses they suffered during the COVID-19 pandemic, say finance ministry officials.

The medium-term framework of spending (KASH) is the main document on which the budget is drafted for next year.

Agim Krasniqi, deputy minister of finance, says the Government will undertake necessary assessments of the impact of the pandemic crisis on the economy and will take measures to restore businesses, which have been hit more by the government's restrictive measures in an effort to prevent the spread of corruption.

Our “Pokus is in two goals. The first part is public investments, investments that directly help the private sector through job giving. The next focus will be assistance to the private sector, and this assistance will go to the sectors that are hit the hardest, which can preserve the event, especially production sectors and intelligence technology”, Krasniqi says of Radio Free Europe.

Most businesses in Kosovo, nearly all sectors, have reported high financial losses and reduced production capacities from measures taken by the government on March 13th to prevent pandemics.

To help businesses, whether through lending, grants or subvention, Krasniqi says they are creating the second part of the Economic Resurface Fund, estimated to be around 150m euros.

To create this fund, Krasniqi said it was required by all budgetary agencies to be cautious in their spending and not create additional spending schemes.

There will also be direct financing through other forms, which jointly assess the ministries of the line, in this case the Ministry of Trade and Industry and the Ministry of Economy in relation to private companies. Of these ministries, it has been required to start preparing clear criteria and depending on the shocks the sectors have suffered, to guide funds”, Krasniqi suggests.

On the other hand, representatives of the business community claim that businesses are continuing to count losses, due to aggregate demand reduction. Even the chairman of the Kosovo Economic Ode, Berat Rukiqi, tells Radio Free Europe, that in the focus of the medium-term expenditure Framework, the government should have the support <x0-aggressive” of the private sector, as the greatest effects of pandemic are presented in these sectors.

“Credit implementation is important at this stage, because businesses lack access to finance. Then there are different fiscal and tax facilities and there are several instruments of growth that aggregate” demand.

However, normally we expect that in certain sectors, production and other sectors that may have potential for export, there will be subventions and direct grants, which may influence local companies to be present in international markets and at the same time promote new investments, especially new production lines”, Rukiqi says.

Kosovo has so far implemented the fiscal emergency package, worth about 180m euros. This package, meant to ease economic and social problems, was approved in March after confirming the first cases of coronary cases by the government led by former Prime Minister Albin Kurti.

However, some of its measures have been implemented following the arrival of Prime Minister Avdullah Hoti's government.

Meanwhile, the Kosovo government has also prepared Pakon for economic recovery, worth 365m euros. But this bill has failed to be voted into the last session, held on August 14th in the Kosovo Assembly.

The bill is designed to help businesses, through fiscal and monetary policies, after losses caused by the coronary pandemic.

In the medium-term expenditure Framework, economic development policies, which increase and protect production, purchasing power, expand market, fight corruption and crime, increase the number of jobs and competitiveness of the private sector, are generally targeted.

Also, the document says that the “government aims to address high unemployment rates among women, young people and young people, vulnerable groups, and will focus on improving workers' rights and ensuring minimum standards for safety and health at work.