Kosovo Human Development Report 2010 - UNDP Kosovo - United ...

CHAPTER 2
Economic and labour market exclusion
2.1
Uneven economic
development since
1990
The 1990s were a deeply challenging
decade for Kosovo’s economy. During
the build-up to the 1999 conflict,
the economy deteriorated with the
loss of export markets and collapse of
many socially-owned enterprises. Massive
disinvestment, poor economic
policies, international sanctions and
neglect of enterprises caused substantial
deindustrialization. Mineral extraction,
energy and agriculture - formerly
key pillars of the Kosovo economy -
significantly declined.
After 1999, Kosovo made considerable
progress towards economic
recovery, with rapid growth typically
found in the early years of post-conflict
recovery and reconstruction. Economic
policy reform and institution building
helped the necessary adjustments
towards a market economy. The international
donor community played a
positive role by successfully mobilizing
and spending a total of 1.96 billion EUR
for Kosovo between 1999 and 2003. 32
Kosovo’s significant international presence
has also reconfigured itself to support
an EU accession process – both
financially and with a high volume of
mentoring and technical assistance.
The EU alone provided over 1.0 billion
EUR to Kosovo between 2000 and
2006 through the CARDS programme
(Community Assistance for Reconstruction,
Development and Stabilisation)
and over 426 million EUR under
the Instrument for Pre-Accession Assistance
(IPA) between 2007 and 2010.
High volumes of remittances were
also transferred during the same period,
becoming a surprisingly significant
factor in recovery process. Remittances
together with international
aid paid for reconstruction of houses
as well as for physical and social infrastructure
(such as roads, schools and
health centers). Remittance-related
support was so widespread as to be
almost universal. Out of those with
family members abroad, 82 percent of
Kosovo-Albanians received financial
support – compared to only 14 percent
of Kosovo-Serbs (see Table 2.1).
Table
2.1
My family member(s) that live abroad support me
financially
Remittances and donor funding
together contributed to a doubledigit
annual growth rate in Gross Do-
K-Albanian % K-Serb % Others %
on a regular basis 30.4 1.3 14.9
occasionally 51.5 12.3 41.8
never 16.2 85.1 40.3
DK/NA 1.9 1.3 3.0
Total 100.0 100.0 100.0
Source: UNDP, Early Warning Reports, January 2009
ECONOMIC AND LABOUR MARKET EXCLUSION | 33