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

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lower access to services than urban<br />

families. Regional variations also apply<br />

(see figures 2.13 and 2.14).<br />

2.4<br />

Promoting inclusive<br />

economic growth -<br />

policy recommendations<br />

FIGURe<br />

<strong>Kosovo</strong>’s economic weaknesses<br />

2.14<br />

have policy and structural roots,<br />

many of which <strong>Kosovo</strong> shares with<br />

other early transitional contexts. For<br />

example, a modern education system<br />

for an educated workforce cannot be<br />

built overnight. In addition, <strong>Kosovo</strong> still<br />

continues to suffer from some poststatus<br />

political barriers hindering both<br />

exports and investments.<br />

However, analysis of the complex<br />

linkages between factor market exclusion<br />

(limited economic participation)<br />

and exclusion from basic goods and<br />

services (equated with poverty) suggests<br />

that <strong>Kosovo</strong>’s current economic<br />

trajectory needs a change in course.<br />

Economic exclusion – of which poverty<br />

is merely a subset – affects a surprisingly<br />

large proportion of Kosovans and<br />

deeply undermines their human development<br />

potential. <strong>Kosovo</strong>’s broader<br />

economic outlook is similarly affected.<br />

A macro-economy dependent on aid,<br />

remittances and imports cannot open<br />

factor markets to those currently excluded<br />

– irrespective of the impact on<br />

GDP. Translating economic growth into<br />

higher employment levels and wider<br />

economic participation requires sensitive<br />

economic and social policies, and<br />

a sincere collective effort to integrate<br />

Exclusion from utility services across different settlement sites<br />

40%<br />

35%<br />

30%<br />

25%<br />

20%<br />

15%<br />

10%<br />

5%<br />

0%<br />

Village<br />

City/Town<br />

Source: Calculated from <strong>UNDP</strong>s <strong>Kosovo</strong> Mosaic Survey<br />

13.6%<br />

6.9%<br />

31.4%<br />

11.7%<br />

2.1%<br />

7.8%<br />

Prishtinë/Priština<br />

the excluded into a stronger society.<br />

1.9%<br />

Critical policy recommendations towards<br />

this goal are:<br />

(i) Re-orient economic growth towards<br />

sustainable strengthening of<br />

the labour market<br />

• Reforming the energy and mining<br />

sectors is essential to expanding a<br />

sustainable labour market: in particular,<br />

the mining sector needs urgent<br />

reform, including privatization,<br />

and the establishment of sound and<br />

transparent legal and institutional<br />

frameworks to encourage private<br />

sector investment. A reliable energy<br />

supply is a fundamental precursor<br />

to major industrial operation.<br />

• Investment climate reform must<br />

accelerate: although considerable<br />

work has been undertaken at the<br />

central level in <strong>Kosovo</strong> to establish<br />

0.0%<br />

0.0%<br />

No sanitation<br />

No tapped water<br />

Neither tapped water<br />

nor sanitation<br />

ECONOMIC AND LABOUR MARKET EXCLUSION | 47

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