The position of the American Chamber regarding the Sovereign Fund Bill

The American Chamber of Commerce in Kosovo recognizes the efforts to accelerate the economic development of Kosovo, as well as overcoming the challenges faced by the Republic of Kosovo. While the initiative of the Government of Kosovo to establish a Sovereign Fund can be evaluated as positive, especially in the context of building an investment portfolio and diversifying financial resources, AmCham believes that there are alternative strategies that may be more appropriate. In particular, the privatization of publicly-owned enterprises and socially-owned enterprises can bring rapid and sustainable growth to the economy.

Kosovo, as a country with economic challenges, has limited financial resources for strategic investments. The Sovereign Fund would require a large allocation of these resources, neglecting other priority areas. Such a step could lead to an increase in the fiscal burden and inhibition of economic growth. Therefore, AmCham strongly believes that the state’s limited budget should be invested in critical areas, which include education, health, infrastructure, agriculture, tourism, local production, entrepreneurship and increasing professional skills. Direct investments in these sectors can help the government address the current needs of the economy more quickly and effectively, bringing long-term, sustainable growth and quality employment. In particular, when focusing on productive sectors, the country can reduce import dependence and promote economic self-sufficiency.

While sovereign wealth funds can offer good returns on investment, they also carry a level of risk. Moreover, incorporating the assets of poorly performing public enterprises into the Sovereign Fund does not seem like a wise step to guarantee sustainability and adequate yield.

Efficient management of a sovereign wealth fund requires a team of financial experts with deep experience and knowledge. Kosovo may face challenges to build this type of expertise, knowing that a number of state organizations have not resolved the issue of leadership and management. Without proper management and supervision, the Sovereign Wealth Fund may face difficulties in achieving its financial objectives. Beyond the technical aspects, fund management requires a high level of transparency and accountability. With the allocation of sovereign funds from the government budget, there is a risk of losing this transparency, due to possible political influence.

Although the establishment of a Sovereign Wealth Fund may seem like a way to support the economy, discrimination against private enterprises is evident. All enterprises, regardless of their structure, have an important role in the economy of Kosovo and should be treated equally. This principle, among others, is embedded in the country’s highest legal act, as the basis of economic regulation. Similarly, AmCham believes that the criteria for the selection of champion enterprises are not sufficiently clarified and therefore leave room for subjective decisions. In order to avoid subjectivity, a detailed specification of these criteria is needed in the primary legal act.

Analyzing the provisions of the draft law specifically, the American Chamber of Commerce has noticed that a more accurate language in some provisions is needed, to avoid ambigous interpretations. At the same time, AmCham concludes that certain provisions are in conflict with the provisions of other legal acts, which may again lead to legal ambiguity.

In conclusion, the American Chamber of Commerce in Kosovo considers that all options should be carefully considered before making major financial decisions such as the establishment of a Sovereign Fund, emphasizing the importance of strategies that bring the most benefits to the economy and citizens of Kosovo.