The diaspora willing to lend government credit

The Kosovo government has begun offering treasury bonds to the diaspora, with the aim of orientation of diaspora funds in financing that enable economic development, especially after the economic downturn as a result of COVID-19.

Treasure bonds are letters of state-guaranted value and issued by the Kosovo Treasury.

The Central Bank of the Republic of Kosovo has signed the co-operation agreement with the Ministry of Finance and partner commercial banks for issuing Treasury bonds to the diaspora.

The total set aside for these bonds is 20m euros, with growth prospects of up to 50 percent, if there are requirements.

For those who buy three - year - old Treasury bonds, the interest they get will be 1.2 percent, whereas for money invested for five years, interest will be 2.2 percent.

Finance and Transfers Minister Iron Murati during a Kosovo Government meeting.

The first interest zone will be paid in February, and the second in August and will continue payments every six months until the agreement is concluded. All in all, when the maturity is over, the person who loaned the state gets all the money invested.

Yll Blakaj, chairman of the Albanian Diaspore Business Network in Austria, tells Radio Free Europe that the issue of Treasury bonds will be a more opportunity for the diaspora to help Kosovo develop.

However, he says Kosovo authorities have had to consult the diaspora before that initiative.

“I think that before they go out for sale, these Treasury vouchers have had to enable the acters from the diaspora, but also from the business associations and talk more about these bonds so that more people, businesses, about investment forms and the benefits they will receive”, Blackaj says.

The diaspora willing to invest in Treasury bonds

Individuals and businesses from the diaspora, Blakaj adds, are expected to be interested in Treasury bonds.

According to him, such a thing will help Kosovo invest in strategic development projects so that new jobs can be opened.

The period of selling these bonds will be from July 21st to August 18th, while the issue date is 20 August, 2021. The minimum amount for purchase is 10,000 euros, while the maximum per person in a bank is 500,000 euros.

The investment in bonds is a secure investment, guaranteed by the Law on Public Debt, where the interest set by the Ministry of Finance, Labour and Transfers is guaranteed for the entire duration of 3 and 5 years, and is completely free of taxes.

A short time for diaspora announcement

Sihana Beytullahu, from the organisation “Germin”, which deals mainly with diaspora issues, tells Radio Free Europe that more information will have to be discussed with the diaspora, so that the latter can have more information.

There should be inclusion, not only of relevant institutions, but also diaspora itself. Also, with as much information as we have information, the period to invest (Tearn bonds) is short (less than a month), given that there is not much time for the diaspora's announcement of details of the process”, says Bejtullahu, adding that the investment in bonds is one of many ways in promoting the diaspora for investment.

The chairman of the American Chamber of Economics Finance Committee, Milazim Abazi, tells Radio Free Europe that these Treasury bonds are also welcome for the diaspora.

“If they have previously saved the money in Kosovo banks, or kept it in Western banks with lower interest, the diaspora will now have the opportunity to invest and help Kosovo. I believe there will be interest, since the diaspora has constantly helped Kosovo without any benefit. He gave and took nothing. Now, they also invest, and they benefit”, says Abazi.

Value papers or Treasury bonds are issued by the Ministry of Finance and Transfers whenever Government needs more money. These letters are government debt. Papers valuable in Kosovo so far have been purchased mainly by commercial banks.

Close to 1 billion euros annually from the diaspora

Kosovo's economy continues to be dependent on the money the diaspora sends to Kosovo.

Recognitions accepted in Kosovo have reached the value of 980.1m euros in 2020, representing an annual increase of 15.1 percent.

According to the Central Bank of Kosovo, by the end of 2021, remittances are expected to mark annual growth of about 11.8 percent.

Businesses Lack Remissions

The number of Kosovo citizens living abroad, according to data from the Kosovo Statistics Agency, by the end of 2018 has been over 850,000.

Kosovo citizens live in greater numbers in Germany and Switzerland and remittances, according to BQC data, are sent mainly from these countries. / REL