ECONOMIC GROWTH

Kosovo, with the support of USAID, has made significant progress in building key ministries and government bodies that now have well-established and strong foundations.  However, in spite of the advances, Kosovo still remains the poorest economy in the region and struggles with high levels of poverty, massive unemployment, and an overdependence on imports.

USAID is helping Kosovo address these issues by working on programs that promote diversification of the economy and increase the private sector's contribution to growth. Kosovo decision-makers increasingly understand that “governments don’t create growth; they create the environment for growth” and that a diversified economy in tandem with a changing equation of private to public sector contribution will enable faster and more sustainable economic growth.  This provides an opportunity for USAID to promote and support programs that increase the capacity for sound governance across the economic landscape, not only through better implementation of reforms but also by improving public financial management, increasing access to credit, attracting foreign investment, and increasing private sector participation in building public infrastructure and providing public services.

USAID’s direct support to the private sector will target key sectors that have the greatest potential for job creation and increased sales and exports.  Since Kosovo’s population is mainly farm-based (60%), USAID will continue its engagement in the agriculture sector, focusing on increasing the volume and the productivity of high-value crops.

RULE OF LAW AND GOVERNANCE

In 1999 Kosovo was a war-torn country with no institutions.  In the last 17 years the country has achieved many successes on its path to statehood.  It has developed institutions, undertaken necessary institutional reform, and gone through the process of decentralization.  Despite all of these achievements, judicial independence and the rule of law remain weak.  Continuing inefficiencies in the system prevent the judicial branch from effectively playing its role as a counterbalance to the powerful executive branch.  Members of the national legislature (Assembly of Kosovo) have limited autonomy, and the political landscape remains dominated by the executive branch and political party leaders.

The Government of Kosovo is committed to leading and implementing reforms that will lead toward an efficient, transparent, independent, and accountable judicial system.  This has provided USAID with an opening to engage in policy dialogue around key reform issues and to focus the welcomed assistance on strengthening the implementation of laws, oversight, management, and increased professional skills.  Such opportunities exist within the Kosovo Judicial Council (KJS), the Kosovo Prosecutor’s Council (KPC), the Kosovo Judicial Institute (KJI), and with the courts themselves.  While several legal reform opportunities exist, commercial law, property rights, and alternative dispute resolution (ADR) mechanisms receive USAID’s particular attention as they underpin the reforms needed to spur economic development.

At the same time there is an existing opportunity to strengthen key units within the National Assembly and Municipal Assemblies that are currently weak, particularly in terms of oversight.  Keys areas of assistance focus on enhancing the ability of these bodies to communicate with and respond to citizens’ concerns.  In addition, the Central Government’s stated support for decentralization is the foundation for USAID’s assistance to strengthen municipal administrations to advance to a higher level of accountability, especially in the areas of financial management and the development of own-source revenue.

EDUCATION

USAID has been engaged in Kosovo’s education system throughout its 14 years of assistance.  Initial assistance focused on increasing access to education by providing infrastructure improvements (construction and renovation) in schools throughout Kosovo.  This was followed by concentrated reform efforts at the primary (grades 1- 5) and lower secondary (grades 6-9) levels.  In alignment with the Government’s decentralization policies, support focused on building the capacities of the Municipal Education Departments to manage the education system at the local level.  Areas of concentration include improving early grade reading and providing quality courses in math, science and technology.  Critical need areas remain, including addressing the lower-to-secondary dropout rate and further enhancing school management and teaching skills.

At the tertiary level, current university curricula – specifically at the University of Prishtina which is the major body of higher education in the country – has not been modernized and is of poor quality, leaving many graduates ill equipped to meet today’s workforce requirements.  In order to partially meet the demand for a more skilled workforce, USAID has provided scholarships, mostly at the Master’s Degree level, in targeted sectors that are aligned with USAID’s development objectives.