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Kosovo

Situation and cooperation


Visit of Federal Minister Müller to Kosovo and Serbia: Arrival at Pristina Airport
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Visit of Federal Minister Müller to Kosovo and Serbia: Arrival at Pristina Airport

A coal power station in Pristina. One of the priority areas of German-Kosovar cooperation is the modernisation of the energy supply infrastructure.

Federal Minister for Development Gerd Müller in a meeting with the Prime Minister of Kosovo, Isa Mustafa

New houses on the outskirts of Pristina. Germany supports a programme for migrants returning to Kosovo.

Federal Minister Müller at a press conference with the Kosovar Minister of Finance, Avdullah Hoti

Sign in the vocational school Shtjefen Gjecovi in Pristina. Improving vocational training and creating employment are important issues in German-Kosovar cooperation.

In the vocational school Shtjefen Gjecovi future car mechanics are being trained with German support.

The BMZ supports small and medium-sized enterprises and practical vocational training to improve the chances of young people facing high rates of youth unemployment.

Minister Müller at a reception at the German embassy

A visit to KFOR in Pristina: Minister Müller in discussions with Lt Gen Hans-Werner Fritz, commander of the operations command of the German army.

Together with the Kosovar Minister of Labour, Arban Abrashi, Minister Müller opens a centre for migration and information in Pristina.

A member of staff of the German Information Centre on Migration, Vocational Training and Careers is giving advice to a young Kosovar in the newly opened centre in Pristina.

Federal Minister Gerd Müller is greeted by the German Ambassador to Serbia at his arrival in Belgrade.

Federal Minister Müller is welcomed by students of the vocational school in Pecinci, Serbia in the local branch of the Bosch Company.

Minister Müller visits a Roma camp in Belgrad and is shocked by the situation. "A slum settlement in the middle of Europe - circumstances worse than in an African refugee camp, that is not acceptable."

During a visit to a childrens' and youth centre Federal Minister Müller is briefed on the situation of the Roma in Serbia.

Together with the Serbian Prime Minister Aleksandar Vučić Federal Minister Müller opens a conference on 15 years of German-Serbian development cooperation.

Minister for Development Gerd Müller speaking at a conference on 15 years of German-Serbian development cooperation and the initiative for sustainable growth and employment

At the end of his visit to Belgrade, Minister Müller meets Ružica Djindjić and alumni of the Zoran Djindjić Internship Programme of German Business in the West Balkans.

In 1999, the United Nations Interim Administration Mission in Kosovo (UNMIK) took over the administration of Kosovo. The province was thus granted the status of an autonomous territory within the Republic of Yugoslavia (from 2006, within the Republic of Serbia). This development followed a civil war between the majority ethnic Albanian population in Kosovo and the government in Belgrade. Military intervention by NATO troops ended the war in 1999.

In November 2005, the UN Security Council decided to begin negotiations with Kosovo. The talks were to clarify the status of the province under international law. However, several rounds of talks failed to produce an agreement.

On 17 February 2008, the Assembly of Kosovo in Pristina passed a resolution, in the face of Serbian resistance, declaring the independence of the state of Kosovo. On 15 June 2008, the first constitution entered into force. A month later, Kosovo applied to become a member of the International Monetary Fund (IMF) and World Bank, and was accepted as a new member by both organisations in the middle of 2009.

Nevertheless, the international community is still divided on Kosovo’s status. Serbia and Russia, for instance, as well as five EU member states, believe that its declaration of independence violates international law. Important state responsibilities are, therefore, still under the control of the international community. For example, since late 2008, it has been the task of the European Union Rule of Law Mission, EULEX, set up under the auspices of the United Nations, to help the Kosovar authorities set up a multi-ethnic judicial system, police force and customs authority and introduce rule-of-law standards. The most recent phase of what is referred to as "monitored sovereignty" officially ended on 10 September 2012, however, some of the core tasks of the state with regard to the judicial process, policing and customs matters continue to be carried out by EULEX.

Governance and international integration

Employees in a district heating plant in Pristina

Since the declaration of independence in 2008, a parliamentary democracy has been established in the Republic of Kosovo, which has slowly become stronger.

On 8 June 2014, parliamentary elections were held for the second time since independence was declared. For the first time, these elections were held countrywide – including in the North, which is inhabited mostly by Serbs. The EU regarded the elections as transparent, fair and free. Nevertheless, a coalition agreement was reached only after heavy wrangling over domestic policy and a political logjam had been resolved. Moreover, there is still scope for improvement in the judicial system. Some areas of the public administration are not yet fully functional; corruption is wide-spread.

The Serbian minority is participating in political life only to a limited extent. Especially in the north of the country the Serbian population does not recognise Kosovo's independence.

According to the Kosovar government, the focus of its policies is on economic development and the creation of jobs; on the rule of law, education and health; on administrative reform and on the transformation of the Kosovo Security Force, KSF, into regular defensive troops. On the foreign policy front, the government first and foremost is seeking recognition of Kosovo by further states, as well as the country’s integration in Euro-Atlantic structures and its accession to the European Union.


Reconstruction

Old stone bridge in Prizren

Even before the outbreak of conflicts within Yugoslavia, Kosovo was a structurally weak region, with a high illiteracy rate, a lack of infrastructure and a strong dependence on agricultural production. When war broke out, it affected the province, as it then was, particularly severely, with large parts being destroyed. Even today, the traumatised population is barely able to cope, given these difficult conditions.

The country's declaration of independence was linked to the hope of economic and labour market revitalisation. So far, this hope has not been realised, and Kosovo remains one of the poorest countries in Europe. More than a decade after the end of the war, massive social and economic problems are still hampering reconstruction. According to the World Bank, nearly one third of the population of Kosovo was living below the national poverty line in 2011. The high rate of unemployment of around 40 per cent of the total population and more than 70 per cent of the under 25s, low productivity and the country's dependence on remittances from abroad are further challenges this young nation is facing.

Important elements of the infrastructure in Kosovo have in the meantime been restored or rebuilt. However, an adequate energy supply, for example, is still one of the country’s most pressing needs. Although economic growth rates of between 3 and 5 per cent were achieved in recent years, sustainable economic recovery has not yet set in.


Development potential

Seamstress in Pristina who received a loan from a German microfinance programme for micro-enterprises and SMEs

Kosovo is an attractive location for doing business: The country's favourable geographical situation in the middle of the Balkan peninsula means it has good prospects of joining the EU and the Central European Free Trade Agreement (CEFTA). Kosovo has a young and motivated labour force as well as raw materials (including lignite, lead, zinc and iron nickel).

The aim of the government's economic development initiative is to achieve stable growth of between 7 and 8 per cent in the medium term. Some 30,000 new jobs are to be created as a result. By constructing modern power stations Kosovo could, in the future, become an important energy supplier for the entire Balkan region.

Small family-run subsistence farms are characteristic for Kosovo's agricultural sector. Productivity could be significantly increased given the country's fertile soils. This would help both to improve the country's food production and to create more jobs. Local agriculture currently only meets around 30 per cent of the country's food requirements.


Priority areas of German cooperation with Kosovo

Cooperation with Kosovo began immediately after the end of NATO's military intervention in 1999. At that time, work focused on emergency aid, especially the supply of water and electricity for the population in general. For a few years now, cooperation has focused on sustainable development, i.e. on projects with a lasting impact. The main goal is helping Kosovo to achieve convergence with EU standards and structures.

In 2014, the German government committed 32.6 million euros in new funding for development cooperation with its Kosovar partner, of which 8.4 million euros are earmarked for Technical Cooperation and 24.2 million euros for Financial Cooperation.

Germany provides additional financial support via the EU's funding programmes. Since 1999, Germany has been the second largest bilateral donor to Kosovo behind the United States.

Cooperation between Germany and Kosovo focuses on the following priority areas:

  • Development and expansion of the public utility infrastructure (energy and water)
  • Economic development and employment promotion
  • Public administration reform and decentralisation
  • Basic education and non-formal education.

Development and expansion of the public utility infrastructure (energy and water)

Transformer station of a power plant in Kosovo

A steady and reliable electricity and water supply, the responsible use of natural resources and the proper disposal of waste will all contribute a great deal to the economic reconstruction and sustainable development of Kosovo.

Improving living conditions also helps to increase public acceptance of democracy and the market economy in Kosovo. That is why Germany's involvement in Kosovo originally began with an extensive programme to repair and modernise the energy supply system. These measures helped to improve the electricity supply for private households, industry and commerce. They could, in future, help Kosovo to develop its capacity to export electricity, for the country has the world’s fifth largest lignite deposits.

Therefore, it would make a huge contribution towards providing a more steady power supply throughout the region if Kosovo were better integrated in the South Eastern European electricity market. Germany is working closely with the EU to achieve this.


Pump station Burnallek 2 for water supply in Prizren

The second focus of cooperation in this priority area is the country's system of water supply and sewage disposal. Germany's support is aimed at helping to set up a sustainable drinking water supply and an environmentally sound wastewater management system. It is also helping to ensure that the management of Kosovo's public utilities is commercially sound. Here the emphasis is on municipalities in the south-west of the country and the region around the capital Pristina.

Eleven municipalities and 500 villages currently benefit from the municipal water supply programme being implemented there. And more than 400,000 people now have access to a considerably improved water supply.


Economic development and employment promotion

Vocational school Shtjefen Gjecovi in Pristina

A microfinance bank targeted at SMEs was established with the involvement of KfW Entwicklungsbank immediately following the start of development cooperation between Germany and Kosovo. In the first years of its existence, ProCredit Bank was the only functioning bank in Kosovo. It was the only institution that dealt with foreign remittances, on which the people of Kosovo so urgently depend. Since then, ProCredit Bank has developed into Kosovo’s largest bank.

The BMZ plays an important role not only in promoting the SME sector but also in improving the general environment for foreign investment and the general development of the financial sector. Sustainable structural changes – such as the privatisation of the economy, entrepreneurial initiative and the development of medium-sized enterprises – will be of key importance for Kosovo’s further development.

Establishing vocational schools and providing assistance to chambers, associations and local authorities are other areas that are receiving attention. For example, national centres of excellence for vocational training are being set up in cooperation with the Kosovar Ministry of Education. The establishment of such centres is a key step towards modernising the labour market.


Public administration reform and decentralisation

According to Kosovo's constitution, it is the government's task to establish a sustainable, social market system and to pursue stable monetary and tax policies. However, a start has only recently been made on the reforms needed to achieve these aims. The same applies to efforts to coordinate the activities needed to converge with EU standards and decentralise the country's administration.

Therefore Germany, through its development cooperation programme, is supporting measures to establish a transparent, well-performing administration that is responsive to citizens' needs.

Around half of the population of Kosovo is below the age of 25. At 70 per cent, the unemployment rate among the under 25s is extremely high. This is why Germany is actively involved in youth work, so as to help young people participate to a greater extent in political and social life.

And by providing training for youth officers in the municipalities, Germany aims to ensure that qualified professionals are available in future to work on youth issues. One special initiative in this context is the youth centre in the town of Mitrovica. It is a place where young people from both parts of the city can meet, and was established with the aim of fostering mutual understanding between the Kosovar and Serbian communities.


Basic education and non-formal education

The education sector has been a further priority area of bilateral cooperation between Germany and Kosovo since 2007. The aim is to increase the number of children and young people who have completed basic education and vocational training, and to reduce the number of unemployed young people. In addition, the separation between the Albanian and Serbian education system needs to be overcome and account taken of minorities such as the Roma population.

To that end, Germany is providing support for Kosovo's education system. Measures in this sector include the decentralisation of the education system, the modernisation of curricula, training measures for teachers, and closer alignment of vocational training with local labour market requirements and EU standards.


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