Kosovo - Unlocking Growth Potential : Strategies, Policies, Actions -
A Country Economic Memorandum

Kosovo - Unlocking Growth Potential : Strategies, Policies, Actions - A Country Economic Memorandum

Kosovo's economic growth in the past decade has been solid, yet, with a gross domestic product (GDP) per capita of 1,760, the country remains one of the poorest in Europe. The end of the conflict, output was growing at double-digit rates, dri...

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Bibliographic Details
Main Author:	World Bank
Format:	Country Economic Memorandum
Language:	English
Published:	World Bank 2012
Subjects:	ACCESS TO INFORMATION ACCOUNTING ADMINISTRATIVE PROCEDURES AGRICULTURE ALTERNATIVE ENERGY ARABLE LAND BALANCE OF PAYMENTS BANKING SECTOR BENEFIT ANALYSIS BUDGET SURPLUS BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS INVESTMENT BUSINESS REGULATIONS CADASTRE CAPITAL BASE CAPITAL FORMATION CAPITAL INVESTMENT CAPITAL INVESTMENTS CLIMATIC CONDITIONS COMMODITY COMMODITY PRICES COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPETITIVE ADVANTAGE COMPETITIVE ADVANTAGES CONSUMERS CONTINGENT LIABILITIES CONTRACT ENFORCEMENT CPI CREDITORS CURRENCY CURRENT ACCOUNT DEFICITS DEBT DEBT SERVICE DEBT SERVICE PAYMENTS DECENTRALIZATION DEFICITS DEPOSIT DEPOSITS DEVELOPMENT INVESTMENT DOMESTIC DEBT ECONOMIC ACTIVITY ECONOMIC BOOM ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC IMPACT ECONOMIC IMPLICATIONS ECONOMIC INTEGRATION ECONOMIC PERFORMANCE ECONOMIC PROGRESS ELECTRICITY GENERATION ENTERPRISE PERFORMANCE ENVIRONMENTAL EQUIPMENT EXCHANGE RATE EXPENDITURE EXPENDITURES EXPLOITATION EXPORT COMPETITIVENESS EXPORT GROWTH EXPORT PERFORMANCE EXPORT SHARE EXPORTERS EXPORTS EXTERNAL BORROWING EXTERNAL FINANCE EXTERNAL TRADE FARMS FINANCIAL CRISIS FINANCIAL RESOURCES FINANCIAL SECTOR FINANCIAL SUPPORT FISCAL POLICIES FISCAL POLICY FISHING FIXED CAPITAL FOREIGN CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN FIRMS FOREIGN INVESTMENT FOREIGN INVESTOR FOREIGN INVESTORS FOREIGN MARKETS FORESTRY FREE TRADE FREE TRADE AGREEMENT GDP GDP PER CAPITA GINI COEFFICIENT GLOBAL TRADE GOVERNMENT BUDGET GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GROSS DOMESTIC PRODUCT GROSS FIXED CAPITAL FORMATION GROWTH POTENTIAL GROWTH RATE HIGH UNEMPLOYMENT HOME COUNTRY HUMAN CAPITAL HUMAN RESOURCES INCOME GROUPS INCOME LEVEL INCOME LEVELS INCOME TAX INDEBTEDNESS INDUSTRIALIZATION INEFFICIENCY INFLATION INFLATION RATE INFORMATION SYSTEM INFORMATION TECHNOLOGY INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INSTITUTIONAL CAPACITY INSTRUMENT INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL STANDARDS INVESTING INVESTMENT CLIMATE INVESTMENT OPPORTUNITIES INVESTMENT RATE INVESTMENT RATES LABOR COSTS LABOR FORCE LABOR MARKET LAND OWNERSHIP LAND PARCELS LAND POLICIES LAND PRIVATIZATION LAND USE LANDOWNERS LENDER LENDER OF LAST RESORT LOAN LOCAL BANK LONG-TERM DEBT MACROECONOMIC ENVIRONMENT MACROECONOMIC STABILITY MARKET ACCESS MARKET DEMAND MARKET INFORMATION MARKET PERFORMANCE METALS MINES MINIMUM CAPITAL REQUIREMENTS MONETARY FUND MONETARY INSTRUMENTS NATURAL RESOURCES NONPAYMENT NONPERFORMING LOANS OIL OIL PRICES PENSION PERSONAL INCOME POLICY MAKERS POLITICAL RISK POLITICAL RISKS POLITICAL STABILITY PORTFOLIO PORTFOLIO INVESTMENT POTENTIAL INVESTORS POWER OUTAGES PRIVATE CONSUMPTION PRIVATE CONSUMPTION DEMAND PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PRIVATE SECTOR GROWTH PRODUCTION OUTPUT PRODUCTIVE INVESTMENT PRODUCTIVITY PROPERTY RIGHTS PUBLIC DEBT PUBLIC DEBT STOCK PUBLIC FUNDS PUBLIC GOOD PUBLIC INVESTMENT PUBLIC POLICIES PUBLIC SAVINGS PUBLIC SPENDING PUBLIC-PRIVATE PARTNERSHIPS RAPID ECONOMIC GROWTH REAL ESTATE REGULATORY BARRIERS REGULATORY ENVIRONMENT REGULATORY REGIME REMITTANCE REMITTANCES RETURN RETURNS RISK MANAGEMENT RISK MANAGEMENT SYSTEM RULE OF LAW SAFETY NET SUSTAINABLE GROWTH TAX TAX COLLECTION TAX RATES TAX REVENUE TAX SYSTEM TELECOMMUNICATIONS TOTAL OUTPUT TOTAL REVENUE TRACK RECORD TRADE CREDITS TRADE DEFICIT TRADE NEGOTIATIONS TRADE SECTOR TRADING TRANSITION COUNTRIES TRANSPARENCY UNEMPLOYMENT UNEMPLOYMENT RATE VALUATION VALUE ADDED VOLATILITY WAGES WORLD TRADE WORLD TRADE ORGANIZATION WTO
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000333038_20100527043201 http://hdl.handle.net/10986/2859

Description
Summary:	Kosovo's economic growth in the past decade has been solid, yet, with a gross domestic product (GDP) per capita of 1,760, the country remains one of the poorest in Europe. The end of the conflict, output was growing at double-digit rates, driven by the donor-funded reconstruction efforts. Since 2005, annual growth has decelerated to below 5 percent. However, the other countries in Southeast Europe have been growing faster, so the income gap has widened. Kosovo's economy would need to more than double its growth rate to 10 percent per annum over the next decade to reach Albania's income level (assuming Albania's economy continues to grow at 5.5 percent annually over this period). To reach Montenegro's current GDP per capita level of about 5,700, the economy would have to grow at 12 percent per annum for an entire decade. At the same time, Kosovo has the weakest employment track record in Europe: the unemployment rate has reached 48 percent and the employment rate is extremely low (26 percent). Consequently, poverty remains persistent and widespread (though shallow) with 45 percent of the population estimated to consume less than the national poverty line, while 17 percent are extremely poor. Much of the economic progress in the recent period has been based on donor aid and remittances, which cannot be the foundation of a sustainable economic strategy. Kosovo has the potential to shift toward faster, private sector led growth. Kosovo's products have free market access to the European Union (EU) and Central European Free Trade Agreement (CEFTA) countries, so exports could become an important pillar of growth. Unleashing that potential will involve bringing on line three production factors that are now sitting partially idle: labor, land, and energy and minerals. The encouraging news is that unleashing this potential is within the country's own grasp, because most of the current obstacles are of a policy nature. However, simultaneous action will be required on several policy fronts.