Kosovo: Natural resources key to the future, say experts

Belgrade, Pristina, 18 Dec. (AKI) - As Serbia’s breakaway Kosovo province moves towards independence with the support of Western powers, economists agreed its best hope of survival lies in its rich but virtually unexploited mineral reserves.

Besides its mineral reserves, economists agree that the province's main potential lies in its power industry and its agriculture sector, neither of which have been functioning properly - along with the rest of Kosovo's stagnant economy.

Kosovo has two thermal power plants which should be able to meet the country's domestic power needs. But obsolete technology and a lack professional staff have led to frequent breakdowns and power shortages.

Veselin Kocanovic, the head of economic department in Serbia’s ministry for Kosovo, said 8,000 Serbs have been laid off or have left in the local power industry since 1999 and have not been replaced by qualified staff.

“If the situation was normal, Kosovo could actually export electric energy,” Kocanovic told Adnkronos International (AKI). Instead, the province currently imports electricity.

The province has been under UN administration since 1999, and has a thriving black economy, growing organised crime, and high unemployment - symptoms of its economic weaknesses.

The United Nations mission (UNMIK) staff and the 16,000 NATO soldiers stationed there, on whose maintenance 2.6 billion euros has been spent, have been the province's main source of revenue in the past seven years, Kosovo officials said.

Kosovo has huge and almost unexploited reserves of coal, lead and zinc, lignite, bauxite and nickel. The giant Trepca lead and zinc mine near the northern town of Kosovska is the province's largest and currently operates in two sections, one controlled by the province's majority ethnic Albanians and the other by its Serb minority.

Kacanovic said Kosovo has fifteen million tones of brown coal reserves, less that one percent of which have been mined. Agriculture, which accounted for one third of gross domestic product before 1999 (when statistics were last available), has been held back by the traditional divison of land into small plots, mostly for individual family production.

As a result if its struggling economy, Kosovo is a net importer of goods, mainly from Serbia and Macedonia. Electricity is also imported from Serbia - via Serbian pipelines - and also from central European countries.

Over 40,000 private companies have been founded in Kosovo since 1999, mostly small firms with low turnovers. Most economic experts do not believe these can ensure economic survival for Kosovo - despite the province's wealth of mineral resources.

Serbia has threatened to impose a trade embargo on Kosovo if the province declares independence early next year against Belgrade’s will. But the Kosovo government spokesman Avni Arifi said this will hurt Serbia more than Kosovo.

In the event of such an embargo, the landlocked province will concentrate on opening new trade channels through Albania and Macedonia, he said.

With an area of 10,900 square kilometers, equaling one third of Belgium, and a population of two million, Kosovo is one of the poorest regions in Europe. It also has the highest birth rate on the continent.

The average age of the population among ethnic Albanians is 28 years and unemployment among young people is over sixty per cent.

Although officially still a part of Serbia, Kosovo broke away from the Serbian economic system in 1999 after it was placed under UN control.

Since then, Kosovo's economy has ground to a virtual standill and per capita income has dropped to just above 1,000 euros. Foreign assistance in 2006 made up 34 per cent of the gross domestic product, and remittances from ethnic Albanians living abroad, a further 13 percent.


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