Creation of new industries and development of existing ones in a fully open competition represents a challenge, especially for developing countries. in the case of Kosovo, after the collapse of industries of the Communist era, the country is indeed going through a reindustrialization period, led by the private sector. in this regard, attracting foreign direct investments or generating domestic business requires not only capable labour and rule of law, but also an active role of the state in addressing market distortions and in providing facilitating and fostering services, especially in strategic sectors. Kosovo’s interest is in stimulating the orientation of economy towards added value activities and marketable products because, only, this qualitative step may generate further revenues in the economy.
Considering the nature of challenges and problems faced by enterprises in Kosovo, institutional support is rather necessary. interest rates, despite a decreasing trend in the recent years, remain high, and are related to the estimated risk by banks, while investments are perceived to be highly risky by foreign businesses and the diaspora entrepreneurs. many enterprises do have the potential of growth, but may lack the know-how and finance to reach the standards of quality required for export markets. State-held and strategic enterprises, including trepça, require special attention in their recovery or their performance improvement, as other specific sectors do, including agriculture and agro-industry, where for example, land fragmentation is a huge hindrance to economies of scale.
For this reason, the NdS aims to expand state support to the reindustrialization process of Kosovo, so that the private and the public enterprises grow and engage in activities of added value, and produce marketable items or services of export. this means, amongst others, to create facilities and to offer incentives for strategic investors and for projects and initiatives fostering competitiveness of enterprises, especially in reaching quality standards required for export.
MEASURES TO BE TAKEN IN THIS PILLAR ARE:
DEVELOPMENT IMPACT: improvement of performance of enterprises held in state ownership, namely growth of their share into economic growth, added value of enterprises, and increased revenues for the state budget by their dividends.
DEVELOPMENT IMPACT: the utilization of funds from the privatization fund will generate fiscal room for capital investment; and, as a result, will enable the economic growth to be less dependent on debt. the utilization of such funds will also assist in preserving strong macroeconomic foundations.
DEVELOPMENT IMPACT: assuming an income increase of 20% in five years, the nominal value of annual revenues would reach 39 million euros, which should allow trepça for investment in production to reach a maximal value of production. revitalization of trepça will reduce the trading imbalance in Kosovo, generate revenues for the state budget, and have a positive impact on many other industries in Kosovo; thereby, giving another boost to the country’s economic growth.
DEVELOPMENT IMPACT: exploration and exploitation of mineral resources in Kosovo should promote greater productivity and revenues in the economy by generating new industries and new jobs. expanding investment in the mining sector and additional revenues in the industrial sector can only contribute further to a higher economic growth rate and a more sustainable economic and social development.
DEVELOPMENT IMPACT: expanding average farm sizes and plot surfaces into an increased agricultural productivity, improving competitiveness, developing land markets which is an important prerequisite to a market economy, generating possibilities for a long-term investment in such properties, implementing of municipal development Plans; and distributing fairly investment projects in rural development and state subsidies for owners and the use of such properties.
DEVELOPMENT IMPACT: expansion of Fdis in productive sectors should help Kosovo’s economy cover its financing gaps and ensure technology and know-how transfer. on the other hand, this should also contribute to the revitalization of industrial sectors in Kosovo and in coping with trade imbalance. Fostering diaspora investment will turn it into an engine of export-oriented growth, a promoter of increased labour skills, and ties with global chain values.
DEVELOPMENT IMPACT: increased competitiveness of Kosovo Smes and their move towards added value activities, leading thus to a reduced trade imbalance, increased revenues for the economy, ultimately generating sustainable economic growth.
DEVELOPMENT IMPACT: improved clustering between the enterprises of the same value chain and a higher participation of the industrial sector into the gdP.
DEVELOPMENT IMPACT: the Concept Note on the Credit guarantee Scheme has estimated that expanded credit opportunities should generate new incremental turnover of 1 billion euros in its first six years of activity. the major portion of such turnover should come from domestic manufacturing; thereby, improving the trade balance. these sales or turnovers would result into a figure of around 10 million euros in tax revenue or corporate taxes. New working positions would generate around 12 million euros in pension contributions. the guarantee Fund shall support 4,150 new loans for Smes in the amount of around 360 million euros, generating 20,000 new jobs. the credit rates from the banking sector to the private sector, as a percentage of the gdP, should increase to at least 40% from the current average of 33.5%) by 2021. the interest rate distribution should be lowered to the regional average rate.