The Weakest Link of Kosovo's Democracy - KFOS

therefore, they also deserve more noble treatment than burrowing issues.
Selling for debt and in haste is confirmed also in the agreement with the IMF. On 7
July 2010, the Government of the Republic signed the first Memorandum with the
IMF. The Memorandum was highly appreciated by Kosovans. Article 5, in page four of
this document, says “...moreover we will proceed with the PTK privatization in order
to ensure deficit funding”. Article 11, on page 7, reads “...it is important that in order
to cover the deficit, privatization should take place quickly...”. The same page, Article
12, reads “if revenues from the PTK privatization are less than 300 million, then the
Government will take measures to increase other budget revenues”. Page 15, Table 1,
row 13, provides the final value of the PTK and goes “privatization revenues are 300
million euro”. Unfortunately, the Memorandum with the IMF is not the only one determining
revenues of 300 million and with this the PTK value. There is a whole range
of other public documents that have done the same thing. Medium Term Expenditure
Framework, published in June 2010, provides accurately and clearly the same
amount. Page 9 of the document reads “...with inclusion of the highway project, great
financing gap is generated. This is why PTK is expected to be privatized by the end of
2010”. Page 19, Table 6, row 11, determined the expected amount “...revenues from
privatization: 300 million”. The first draft budget of 2010 makes the same valuation.
Now, if we have signed an agreement where we publically say in three articles that
(one) we are selling to cover the deficit, (two) we are selling in haste and (three) we
expect 300 million or maybe even less then we have done nothing else but the selfdevaluation
of the asset.
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This brings us to the other non-optimal feature of this kind of privatization: failure
of the market to determine its value. When selling hastily, ideas of setting the price
by the market powers are unreal. Setting of the value of an asset by the market implies
“ceteris-paribus” or keeping the influence of other factors zero. Market absorbs
whatever you give to it. If you give to the market a well managed enterprise, without
political interference, risk and haste free, then you get the best from the market, the
realistic price. But, our country is not going through a period of par excellence image.
Having said this, if you give to the market a badly managed enterprise, a risky
market, an economy occupying the same level such as the one of Iran and Venezuela,
a level of corruption similar to Djibouti and the Solomon Islands, a terrible image, a
debt and an urgent need to cover the debt, then you have not been able to keep other
factors at zero impact but you have produced serious barriers to achieving real market
price; let us not say that you have done your utmost not to get it.
If selling of the PTK is a necessity of some philosophical orientation, which we doubt
it is, since at the end of the day government policies carry out nationalization of assets
instead of property through combination Telecom-Highway; then it is right for
the selling to take place without haste, not only for the sake of covering the debt,
and at a more convenient time. Moreover, in order to avoid the damage of asset selfdevaluation,
Kosovo should follow the example of Serbia in determining value minimal
threshold, which is expected to be much higher than the planned 300 million.
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The Weakest Link of Kosovo’s Democracy
forum 2015