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

a supportive investment climate,
there are still many structural weaknesses
in the system. The recently
completed Business Environment
and Enterprise Performance Survey
(BEEPS) highlights corruption as well
as crime and disorder as the second
and third most common constraints
for businesses following the unreliable
energy supply. 58 Many firms –
particularly rural businesses 59 - also
point to the difficulty of accessing
finance and its costs as a major constraint
on their ability to invest and
create new jobs. Where access to
credit is improved, entrant firms can
almost double their employment
in their first four years. 60 Other critical
investment climate priorities include
improving registration of land
and apartments within the Kosovo
Cadastre Agency and supporting
leasing arrangements, lowering the
high-risk premiums and high transaction
costs for banks and borrowers
and exploring external financing
options from multilateral development
banks or venture and angel
capital.
(ii) Boost inclusive growth and productivity
in rural areas
• Opportunities for inclusive rural
employment – particularly
for rural woman – must be more
creatively explored: a dynamic
non-farm sector could provide
opportunities for many of the currently
excluded to move beyond
subsistence living. Higher public
investment in irrigation, land consolidation,
infrastructure and education
and training in rural areas
could lead to expansion of the rural
non-farm sector. Coordination failures
and externalities in agriculture
and rural non-farm sectors must
also be addressed. For example,
48 | KOSOVO HUMAN DEVELOPMENT REPORT 2010
rural tourism needs an adequate
system of rural roads, and fruit and
vegetables export sector requires
complex phyto-sanitary standards.
The institutional capacity of relevant
ministries to identify and act
on these issues must be strengthened.
• Agricultural reforms must become
more targeted to the productivity
of smallholder farming
and animal husbandry: 61 as farm
sizes decline and the rural population
grows, there are clear economic
benefits in shifting to high
value products, and developing
the rural non-farm economy and
animal husbandry. Potential activities
include support for smallholder
farmers by producer associations
and cooperatives that would allow
them to benefit from economies
of scale in production and marketing.
Kosovo-wide agriculture advisory
and extension services 62 could
support farming families and could
also provide better access to market
intelligence and financial products
such as leasing options and
insurance services. 63 These kinds of
support from the Ministry of Agriculture,
Forestry and Rural Development
could help upgrade farmers’
technical capacities and facilitate
adoption of new techniques
that would lead to development
of high value horticulture, poultry
and dairy products.
• A well-functioning land market,
particularly rental markets,
is needed to raise agricultural
productivity: action in this area
will promote market mechanisms,
eventually leading to the transfer
of land to the most productive users.
Improving the registration of
land within the Kosovo Cadastre
Agency (KCA) as well as enhancing