Structure and Dynamics of Investments in Kosovo

• Author: Merita Shabani
• Position: University AAB, Republic of Kosovo
• Pages: 125-138

Vol. 3 No. 3

November 2017

ISSN 2410-3918

Acces online at www.iipccl.org

125

Academic Journal of Business, Administration, Law and Social Sciences

IIPCCL Publishing, Graz-Austria

Structure and Dynamics of Investments in Kosovo

PhD (C.) Merita Shabani

University AAB, Republic of Kosovo

Abstract

This paper examines the dynamics of investments in Kosovo. The paper fi rst provides an

overview of economic development context in areas such as the rate of economic growth,

rate of unemployment, crucial areas of investments in construction and health care sector.

Moreover, the paper analysis the sources of investments in private sector by banks, microfi nance

institutions, Foreign Direct Investments, remi ances, and public money.

Keywords: Investments, Economic Development, construction and health sector, FDI, Public

money and remi ances.

Introduction

The economic development of Kosovo is continuing to develop at slow pace. The

development of the economy of Kosovo is the most crucial aspect a er the declaration

of independence. It is considered to be the simple reason because economic

development is the driving force of state’s functionality and well being.

The facts show that Kosovo is one of the poorest countries in the region and

among others su ers high rate of unemployment, as high as up to 30%. It is largely

depended on imports, while its exports mark very low scale. Problems with economic

development of the Republic of Kosovo vary but most visible problems that challenges

the economic development include but not limited to energy shortages, poor

utilization and management of country’s enormous mineral base, lack of political

will to fi ght corruptions, high infl uence of politics in judicial system, slow solving

economic disputes, and unsafe environment of extracting foreign direct investments.

A crucial aspect that a ects hugely development context of Kosovo is the lack of the

enhanced human capital to meet the needs of the market in various sectors. Practically,

the education systems of Kosovo has so far failed to “address the pedagogical and

skills training needs of Europe’s youngest population, resulting in vast numbers of

unemployed youth without the skills or training required of a growing economy”

(USAID/Kosovo Country Development Cooperation Strategy 2014-2018, n.d.). This is

to say that pre-university is of poor quality as shown in latest result of the Program

for International Student Assessment (PISA), where Kosovo was ranked almost with

worst results, expect Algeria and Dominican Republic that were ranked worse than

Kosovo (The Economist, 2016). Indeed this is a clear signal that market demands

are not met with current curriculum at pre and university level. This has signifi cant

impact on the economic development, simply because even though there are many

fresh graduates that enter in labor market annually, yet they lack required skills

precisely in the area of the degree they hold.

To increase economic growth, the Government of Kosovo has done signifi cant job