26 July 2006

M. Bozinovich's Economic Assessment of KOSOVO Independence

The UNMIK stands for United Nations Mission In KOSOVO

Kosovo’s perpetuating economic dependency
The European Union Pillar that sets economic guidelines in Kosovo has just issued a report on UNMIK’s Impact on the Kosovo Economy that tracks spending effects from 1999 when they got into Kosovo, to the present and examines potential consequences of UNMIK leaving the province or drastically downsizing its presence.
The report concludes that in case of an all out pullout from the province, Kosovo GDP would immediately fall 7% and additional 5% per year for next two years. Moreover, a pullout of UNMIK employees that comprise only 1% of total Kosovo employment would cause Kosovo unemployment to skyrocket to 50%.
According to Andreas Wittkowsky, the Head of the European Union Pillar’s Economic Policy Office and a person responsible for the report, Kosovo income will decrease by 31% immediately following UNMIKs withdrawal.

The size of the share in UNMIK’s contribution to Kosovo’s per capita income is perhaps the best illustration of the economic dependency of the province on handouts from external sources. With the decrease in UNMIK’s share in financial injections, Kosovo’s income per person has correspondingly also decreased while GDP growth has been, described at best, erratic.
According to the Pillar, UNMIK has spent 2.6 billion Euros in the 1999-2006 period and it blames Kosovo’s dismal GDP growth record on absence of financial handouts to the Kosovo Albanian government.
“One of the reasons for the disappointing growth rates has been the gradual withdrawal of donor assistance after the successful completion of the humanitarian relief and reconstruction phase,” asserts the Pillar.

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