Regional development strategy - RDA South

22.4REGIONAL PROFILEEconomy: Production and Service SectorsREGIONAL DEVELOPMENT STRATEGY FOR THE ECONOMIC REGION SOUTHCHART 3: Distribution of registered businesses inthe Southern Region by sectors● Wholesale and retailtrade, repair of motorvehicles● Processing Industry● Hotels and Restaurants● Transport, depots andcommunication● Construction● Other social andpersonal activities● Real estate, renting andbusiness activities● Health● Agriculture, Huntingand Forestry● Education● Other12%49%11%9%5%5%1% 1%2%2% 3%equate disaggregation of the national economicstatistics is not readily available.However, many of the observations related tocertain aspects of regional economics appearto be symptomatic and valid enough to be presentedhere.The sectoral distribution of registered businessesin Region South shows heavy dependenceof the economy on the service sector. Almosthalf of registered businesses (49%) are inthe wholesale and the retail commerce combinedwith the automobile trade and auto servicesector. Some 11% of businesses are in thetourism and hospitality services (hotels, restaurantsetc.) followed by transport (9%). Only12% of businesses are involved in processing(including food industry) and further 5% inconstruction. Only 5% of registered businessesare active in the agricultural sector.Industrial SectorThe privatization of Kosovo’s socially-ownedenterprises (SOE’s) conducted with the internationalassistance, has generated around€385.5 million since the year 2004. Accordingto the Privatization Agency of Kosovo, duringthis period, over 9,000 local and foreign investorshave at least at one point in time expressedinterest in the privatization process.While Kosovo has been laying the foundationsof a market-oriented economy for the pastnine years it is still struggling to develop viableand productive domestic industries. Kosovohas one of the lowest export/import ratesin the Balkan region. In 2008, Kosovo import-ed €1.8 billion in goods and services and exportedonly €186 million, resulting in a tradedeficit of approximately 45% of Kosovo’s GDP.This deficit is largely financed through foreignassistance and remittances from Kosovo’sDiaspora. Kosovo’s leading industries aremining, energy, and telecommunications.None of these industries have any significantfacilities located in the Region South.However, over the past several years the industrialsector of the regional economy showsmoderate progress. A number of new companieshave been established and started operatingin a variety of sectors including food processing,metal processing and plastic (PVC)products. New industrial companies are basedon local initiative or a foreign investment.One such company, the Zinkunie Company,established by the Dutch is a prime exampleof a joint venturing between a Diaspora entrepreneurand a foreign investor. Zinkunie is acompany specialised in processing of zinc,copper and lead. This company is also in a processof setting up an industrial park on theoutskirts of Prizren for foreign investors. Municipalplans in creating other municipal/regionalindustrial/business parks are largelybehind the schedule.Other examples include:• Abi & Elif 19 - a Prizren based company, alsoknown by its brand name Progress. Abi &Elif 19 is a processor of fruits and vegetableproducts i.e. marmalade, jams and jellies,ketchup, peppers, cucumbers, green beansand other products.• Sillosi Company in Xrëxë – Rahovec/OrahovacMunicipality produces baking flour andpasta. It has one of the biggest productionlines in Kosovo.• Companies Clirimi and Pista-Ekoplast havea wide-range of PVC products. The plasticprocessing industry is located in Rahovec/Orahovac MunicipalityAgricultureSouthern Region is the main producer of highquality agricultural products in Kosovo. Vegetablesgrown in this part of the country are alsowell known and exported to surrounding countries,i.e. peppers from Krusha area, tomatoesfrom Mamusha/Mamuša etc. Other vegetables,like cabbage, cucumbers and carrots arecultivated successfully in this region as well.Krusha area is also known for growing watermelons.Dragash/Dragaš region is rich with18