Donor dependency and the making of a quasi state and economy

The other day I was staying overnight at hotel Afa in Prishtina, Kosovo. In the morning I enjoyed an elaborate breakfast in the hotel’s new wing. There was everything from corn flakes to ham and eggs on offer, freshly baked bread and cappuccino. There must have been at least 50 persons in the breakfast room that morning. At the table next to me two Italians were discussing their “work plan”, the Germans were focusing in on their “target groups” and the Swedes were set to ’empower” a group of local women agricultural producers. What was striking was the complete lack of businessmen, there was no business talk, no talk of cost-cutting, price reduction and quality improvements. In Prishtina, that very morning, there was probably another 200 consultants staying at other hotels, getting ready to go to work in support of the Government, ministries, agencies and public administration. Add to them another 300 who are on long-term contracts and rent apartments, and you have a formidable force of human resource capacity, enough to keep the new state of Kosovo running. No wonder the locals feel limited ownership and responsibility for their own affairs. Why should they, the foreigners are there doing their job! For 10 years now! The other day, the EU announced they will spend another 65 million euro in assistance to Kosovo. Is this a positive sign or a confirmation that without external financing and human resource the Kosovo state will not be able to service its citizens? There was a time when the Government of Estonia asked the UNDP to leave the country because its presence in Tallinn was placing Estonia, a country in rapid transition and with big ambitions for Foreign Direct Investment, in the same category as countries in Sub-Saharan Africa. Before Kosovo goes the way of many Banana-Republics before them, eroding their own competitiveness by relying too heavily on remittances and donor support, its is time for Kosovo to make full use of its only real asset, its young population. But this will require massive investment in education, driven by the needs of economic sectors with export potential. At the moment, why should a Kosovo youth take the risk and costs of starting up a company, when s/he can go work as a driver on a donor project making €500 per month? Or why work at all if relatives abroad are sending money regularly, enough to drink coffee all day and pay my mobile phone bill? Well, the problem is that one day the donors will grow tired of carrying Kosovo forward (hopefully in that direction) and the Diaspora will send back less money as they get increasingly integrated in the new home countries. With falling income and lack of human resource, an economy that cannot pay for its imports, the state and public administration in Kosovo will find it increasingly difficult to function. What to do? Simple. Kick out most of the international consultants. Let the Kosovo authorities take the wheel of their own destiny, let them make the mistakes themselves and learn from them, rather than blaming the foreigners. Stop putting the carriage before the horse, and start building a viable economy in Kosovo. Stop spoiling the young generation and equip them with skills to fulfill job obligations in companies that are active on the world market, not in the aquarium market of Kosovo, at salary levels which are comparable to other countries in the region. That done, we can start to think about foreign direct investment. At today’s salary levels, who would set up shop in Kosovo? Time for a re-think among all Western donor countries.

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About Jakob Modéer

22 years of corporate and international investor experience as well as private sector development project management, consultancy in private sector policy and business advisory services, and direct consultancy to companies in South East Europe (and now a blogger on socio-economic issues)
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