AmCham urges the Government to address immediately economic growth challenges

Pristina, July 28, 2023 – The American Chamber of Commerce in Kosovo understands the vast potential of Kosovo as a prime investment destination. Yet, one cannot ignore the troubling conclusions drawn in the recently published U.S. Department of State Investment Climate Statements for Kosovo. These findings, highlighting substantial political interference in the economy and a lack of functional, systemic public-private dialogue, cast a significant shadow over the country’s ability to attract the foreign direct investment (FDI) crucial for economic development.

It’s concerning to see that such issues are not only impacting the international image but are also fostering dissatisfaction among Kosovo’s citizens. The recent Kosovo Public Pulse survey by the UNDP has revealed that only 17.7% of the citizens are satisfied with the economic direction of Kosovo. This sobering statistic signals an urgent need for systemic change and improvement in economic governance and underscores the magnitude of the task ahead.

The issue of increasing political interference in the economy and judiciary directly undermines investor confidence, hampers market dynamics, and poses substantial risk for potential investors. This interference casts doubt on Kosovo’s reputation as a stable and predictable environment for investment. Without addressing this, the country risks further eroding the trust of investors and its own citizens.

Similarly, the lack of a functional and systemic public-private dialogue, despite regulations mandating public consultation, is a matter of grave concern. The passage of new rules often without substantial stakeholder discussion creates an unpredictable regulatory environment that can deter investors.

Beyond these issues, the country should also address other significant challenges, such as limited regional and global economic integration, unreliable energy supply, and difficulties in establishing property rights. The large informal sector and rampant corruption continue to be deterrents for investors, and the heavy reliance on international financial support and remittances raises questions about the long-term sustainability of Kosovo’s economy.

The government must act promptly and decisively to mitigate these concerns. Reducing political interference, establishing an effective public-private dialogue, and implementing strategies to combat corruption and enhance Kosovo’s infrastructure should be at the forefront of the Government’s agenda. By fostering a climate of transparency, predictability, and open dialogue, the country will necessarily improve its image among foreign investors.