Here Comes Kosovo !

Europe will get a new state, Kosovo, on Sunday and the long, bloody unraveling of Yugoslavia will be concluded 17 years after the first war of its dissolution broke out in Slovenia. That is cause for celebration.

Roger Cohen

I say celebration although Serbia will rail against what its prime minister calls “this fictitious state on Serbian territory,” and the Russian bear will growl, and Balkan tensions will flare for a while, and lawyers will fret over precedent.

The fact is the independence of Kosovo is justified, unique and unavoidable. There is no other way. Serbia lost a nationalist gamble on Kosovo a long time ago; the differences stemming from it are unbridgeable. Further delay of the inescapable can only damage the region.

So, come Sunday, I am reliably told, Kosovo will proclaim independence and early next week major powers — including the United States, France, Britain and Germany — will recognize the new state.

European Union foreign ministers meet Monday and may agree on a “platform” statement saying conditions for recognition have been met. A clear majority of the 27 European Union members — certainly no less than 20 — are expected to recognize Kosovo rapidly.

Cyprus, with its Turkish-occupied northern third, will lead the holdouts. Other European Union states that are recognition-reluctant, some out of concern over separatist minorities, include Spain, Romania, Slovakia, Greece and Bulgaria.

Unanimity would be nice, but broad consensus is sufficient. Thanks largely to the work of Wolfgang Ischinger, the German ambassador to Britain, the European Union will be united enough. More important, the United States and Europe will march in step, not a frequent occurrence of late.

“This has been a common endeavor illustrating the way we and Europe ought to work together,” said Frank Wisner, the former U.S. ambassador to India who labored fruitlessly with Ischinger last year to bring Kosovo and Serbia closer. Wisner’s view: “There was never an attempt by anyone in Belgrade to reach out to a Kosovar Albanian.”

Reaching out to Kosovo had scarcely been the Serbian thing in recent decades. Slobodan Milosevic, the late dictator, set Serbia’s murderous nationalist tide in motion on April 24, 1987, when he went to Kosovo to declare that Serbian “ancestors would be defiled” if ethnic Albanians had their way.

Milosevic’s quashing of Kosovo’s autonomy was central to his conversion of Yugoslavia into “Serboslavia.” The revolt against his bullying brought independence to former Yugoslav republics from Croatia to Macedonia. Serbs will kick and scream, but Kosovo is just the last piece of a dead state to go its inevitable way.

Albanians accounting for about 95 percent of a Kosovo population of 2.1 million cannot be reconciled with a Serbia that suppressed, beat up, evicted and killed them until NATO’s 1999 intervention. Belgrade is no Berne: a Pristina inside Serbia would always be Pariahville.

But, Serbs protest in their blind pursuit of an untenable moral equivalency, the Kosovo Liberation Army were no kittens. Nor, once the Serbian genocide against Bosnian Muslims of April to September 1992 was completed, was the emergent Bosnian army. That’s right: persecute a people with enough savagery and they will in the end unite, rise up, fight and go their own way.

What will Serbia do now? Vojislav Kostunica, the nationalist prime minister, says he won’t allow “such a creation to exist for a minute.”

That’s been the nihilistic Serbian drumbeat ever since United Nations Resolution 1244 of 1999 made clear that a U.N.-overseen and NATO-protected autonomy in Kosovo would extend only until “a final settlement.” Belgrade never wanted to settle.

I expect Serbia to make modest trouble but stop short of violence and cutting off Kosovo’s electricity. Some of the 120,000 Serbs in Kosovo may hit the road. Serbs in the pocket north of Mitrovica may be encouraged to go for partition.

But the recent election of a pro-western Serbian president, Boris Tadic, will be a force for restraint. So will U.S. and European pressure on Albanians. Kosovo’s prime minister, Hashim Thaci, has been making gestures to Serbs: that’s positive.

Russia will call an emergency United Nations Security Council meeting. It will scream. But it’s backed the wrong horse. Europe is right to demonstrate that it will not cave to Moscow’s pressure. Ultimately, Serbia will want to move toward European Union membership.

Kosovo is not Transdniestria or Abkhazia or South Ossetia. It is an anachronistic remnant of a now defunct country, Yugoslavia, a province that has been under U.N. administration for eight years pending a final settlement impossible within Serbia. Milosevic rolled the dice of genocidal nationalism and lost.

In the long run, I believe this outcome will be positive for Serbia. Instead of dwelling on medieval battles, victory-in-defeat symbolism, shrinking borders and a poisonous culture of victimization, Serbia will begin to see what it wrought and look forward — to the West rather than the East.

1) Central location in the region
Being located in the heart of the Balkans, Kosovo’s capital Prishtina is in one hour driving distance to any neighbouring country (Albania, Montenegro, Macedonia, and Serbia), connecting this way all countries in the region. Ongoing infrastructure projects include modern highway connections to Albania, Serbia and Macedonia, this way reducing the driving distance to the Albanian Port of Durres to 3 hours. In addition, Kosovo has railway connections with Serbia, Macedonia and further to the Greek Port of Thessaloniki. Prishtina International Airport offers air connections to main European capitals and it is the only airport in the region to offer direct flight connection to New York (USA). With its one million passengers annually, Prishtina Airport is one of the most frequented ones in the region.


2) Young, educated, multilingual, dynamic population with high entrepreneurial spirit
With 70% of its population being under 35 years of age, Kosovo has the youngest population in Europe. Albanian and Serbian are both official languages in Kosovo, while due to the high international presence English has been established as the third official language. Accordingly, the number of English-speaking Kosovars is far above the regional average. About 25% of Kosovars live in the European Union, mostly in the German-speaking countries. Their connections to Kosovo, including business, are permanent. The result is by far the most multilingual society in the Balkans. The school-system and the higher education have been reformed in the recent years giving a great importance to the quality of the education, and thus creating the basic preconditions for the development of knowledge based society out of the young population. App. 15,000 students at two state universities, even more students at the 19 private universities and colleges and many Kosovars who have lived and studied abroad are currently guarantying a sufficient stream of highly educated labour. Any foreigner who has visited Kosovo will confirm the exceptional dynamic and entrepreneurial spirit of Kosovars.


3) Cheap, flexible and well skilled labour force
Average gross wage in Kosovo is less than 220 EUR. Furthermore, wages in Kosovo are unburdened by costly social contributions, unlike those in the countries of the region. The only mandatory contributions are those for individual pension savings accounts, financed by employer (5%) and employee contributions on total gross wages paid (also 5%). Having to survive the ruined economy of the 90-ties, many Kosovars have engaged in smaller workshops and private businesses across different sectors. In addition, the Kosovo Government and the international community in Kosovo have established vocational training programs, which benefit workers and employers, offering this way a very well skilled labour force to potential investors.


4) Modern Telecommunications
Kosovo offers modern telecommunication systems, just like you are used to in the developed EU countries. There are 3 fixed telephony operators and 2 mobile telephony operators, offering the latest and most modern technologies, including VoIP, GPRS, etc. Three main internet service providers offer stable and broadband Internet, including DSL, Wireless, and Cable, with lower prices than in any other European Country. With 15.3% of the population using Internet at least once a week, Kosovo has one of the highest Internet use rates in the region (Cullen International Country Comparative report).


5) Modern, EU-compatible legislation and IAS, including “National Treatment” for foreign Investors
Kosovo’s legal system was built on completely new basics since 1999. While other countries in the region have to undergo the difficult and complicated procedure of making more than 80,000 laws compatible to European Union regulations, Kosovo’s legislation is already EU-compatible. In terms of Good Corporate Governance the Standards for Financial Reporting Regulation has been instated and is entirely compatible with the internationally accepted accounting and auditing standards issued by the International Accounting Standards Committee (IASC) and the International Auditing Practices Committee (IAPC) of the International Federation of Accountants.

In order to put in place certain legal guarantees that are necessary to encourage foreign investment, the government in Kosovo has promulgated a Law on Foreign Investment in April 2006. According to this regulation foreign investors are to be governed by the principle of national treatment, meaning that foreign enterprises will under no condition be treated less favourably than similar domestic enterprises. The constant protection and security, compensation in case of nationalization and expropriation, freely transferable and otherwise in an unrestricted manner used income and protection against retroactive application are further rights assuring the highest protection for foreign investor.


6) Sound banking system
Over the recent years Kosovo's financial sector has been built on completely new foundations. The Banking and Payments Authority of Kosovo (BPK), established in November 1999, is an independent body which acts as a Central Bank of Kosovo and successfully regulates the banking and insurance sectors. There are six registered banks, ten Savings and Credit Associations, twelve micro-finance institutions, four other non-banking financial institutions and nine insurance companies in Kosovo, including the Austrian Uniqa and Wiener Städtische. Three out of six Banks in Kosovo are foreign banks, including the Pro Credit Bank, established upon the initiative of several leading International Financial Institutions, Raiffeisen Bank of Austria and Kassabank (local bank acquired by Ljubljanska Banka of Slovenia). All banks and insurance companies are private.


7) Currency: EURO
The EURO became the official currency used in Kosovo from January 1st 2002, eliminating this way the currency and exchange rate risk. In particular, the euro gave Kosovo a considerable advantage over its competitors in the region by making it more attractive to foreign investment and by bringing financial and macroeconomic stability that many countries in the region lack. In addition, it enabled Kosovo to offer the lowest transaction costs in the region.


8) Free access to EU-market and CEFTA members market
Kosovo has a liberal trade regime and derives from the trade liberalisation three major benefits, namely improved export possibilities, better investment environment and stable relations with its neighbours. Beside the bilateral free trade agreements (FTAs) signed with Albania, Bosnia and Herzegovina, Croatia and FYR Macedonia, Kosovo has signed the Central European Free Trade Agreement (CEFTA) in December 2006. As part of CEFTA Kosovar exporters enjoy a duty free access to the regional market comprising over 25 million costumers. In addition, Kosovo benefits from non-reciprocal, customs-free access to the EU market based on the EU Autonomous Trade Preference (ATP) Regime (EU Council Resolution 2007/2000). Quantitative and qualitative restrictions remain in force only for a very limited number of goods.


9) Great investment opportunities
Kosovo, well endowed with natural resources and agricultural land, offers numerous investment opportunities across different economic sectors, including direct investments and investment within the privatization process. Sectors of agriculture, food processing, construction, textile, IT, automotive components and energy and mining offer the most opportunities for foreign potential investors. An additional and very interesting possibility, having in mind the young, multilingual and educated population, is outsourcing. Some companies have already outsourced their IT departments or support centres to Kosovo.


10) Low tax burden on enterprises and modern business support institutions
Kosovo has a simple and straightforward tax system. The tax burden is very low, as the following data shows:

- Personal Income Tax 0-20 %
- VAT 15 %
- Corporate income tax 20%
- Mandatory contributions for employees only 5% of gross salaries

The clause of non-discriminatory treatment of foreign investors applies also to the procedures needed to start up a business. Thereby no other country of the SEE can outperform Kosovo in its ability to allow the businesses to enter the market. Registering a business in Kosovo is both simple and inexpensive. Depending on business type it takes 1-3 days to register a business and the cost of registration is app. 20 EUR. The Investment Promotion Agency of Kosovo – IPAK offers a whole range of free-of-charge services for foreign investors, including after investment care. In addition, through its Office in Vienna, IPAK offers to potential investors from German speaking region more services than any other country. For more information, please visit www.invest-ks.org and www.ipak-vienna.org

Vad kan Kosovo bidra med till Europa eller EU?

Det är ju "synd" att dem inte har Al-Qaida sympatisörer...