Economists repeat price definition is damaging the economy

Kosovo Business Alliance Chairman Agim Sahini said the free market in Kosovo is guaranteed with the Constitutions in Article 10.

According to him, Kosovo would have to deal more with state reserves, as according to him, the reserves the country owns citizens cannot afford in three days.

He said Kosovo has the law on reserves, but from the past it is seen that those reserves are insufficient.

The government has not even one right on constitutional basis to determine any price ceiling or to have control over the free market because it is guaranteed with Article 10. In extraordinary cases then it could influence, but Government would be much better off taking action when it thinks prices are artificially fanned to release products that would stabilise the price, but Kosovo reserves are limited and they are not in three days for consumption in Kosovo”.

Kosovo, although having the law for reservations, has also seen in the pandemic that that law and products that have been in the time of pandemic are not enough and have been almost scattered and dangerous to gather, the government of the country will have to have strict oversight of reserve products, regardless of whether they are kept in private warehouses or state they should be sufficient for at least one month while Kosovo has only three days. And it has some of the products that are essential, and all governments in the Balkans have made decisions earlier this year to increase state reserves and up to 40 percent in every country in us have remained the same, and Kosovo may have reserves for citizens in extraordinary state of crisis, and the Government is incapable of confronting citizens in the face of demand, but takes decisions to limit business margins, while from itself it does not remove as much as”, he said.

Sahin added that at this time of crisis, the Government would have to act as other countries, removing the excise for oil and thus benefiting both the state and the citizens.

He said that as prices rise, the consequences are enormous, like in producers like in businesses, according to him, the Government is not subsidising local producers.

Kosovo's “government is not making decisions once, based on poor economic analysis, if the Kosovo government would remove the excise on oil derivatives that have removed many states even at the time of pandemic in the time of crisis. The country's budget will not be affected in either form and in neither one way because the basic price has been increased and about 30m euros more have been increased by the increase in the total price of derivatives, and this had been an estimated measure of about 3 to 6 months, and that the country's citizens would buy cheaper derivatives of about 35 cents and that the amount of sale of derivatives would increase, and the government would benefit from this growth would benefit<1>.

“The consequences are great on producers and local businesses because we have expensive power derivatives, we don't have government subsidies for local producers on the contrary, local producers are being very attractive to markets and in Kosovo even outside”, he said.

The Dean of the Economics School at AAB College, Meday Hashan, said that with the price set-up of ceilings some of the businesses cannot afford it, and according to him, the government should not deal with price definitions, but it would have to deal with the subsidy.

“We are a free market economy, the ceiling prices can be placed, but for part of the deployment that is defined I can't afford, even in the prices of oil derivatives that are set for ceiling prices, that means they're going towards bankruptcy because there are quite large crises”.

The ceiling prices in large prices hurt the majority, but even this minority also hurts because they are not equal in the market. The government in this case would determine, not at ceiling prices, but with the subvention part, for example. Free from the excise of oil derivatives”, he said.

Hashan said the year 2023 will be a particularly challenging year for the production sector, adding that there is no information about what the Government is doing about reserves, EO reports.

“We are entering a year of crisis, I see that 2023 will be a very challenging year especially for the production sector and that of construction companies. The government must set economic priorities with the current governance it is doing is not showing that it is willing to deal with the economy, this is dealing with popular actions that have greatly influenced Kosovo citizens”.

We still have no information about what the Government is doing. It hasn't happened in government history to have such a transparent government, the main challenge is to get information. We as professionals are trying to do that through the sources of the Kosovo Statistics Agency to do tests which are mandatory to report”, he said.