With a growing population of young, working age people, Kosovo’s potential for economic development is evident. In spite of this, it continues to be ranked one of the poorest countries in Europe, the poverty rate in 2023 standing at 21.7%. By understanding how poverty and troubles with fragility and the rule of law in Kosovo are interconnected, the roots of underdevelopment in this new nation can be illuminated.

Where: The Origins of Fragility

The present difficulties with fragility and the rule of law in Kosovo have deep ties to its historically tumultuous path to sovereignty. Kosovo originally existed as a province in the former Yugoslavia, however, demands for Kosovan self-determination increased after the final breakup of Yugoslavia in 1992. Kosovo gained independence in 2008, though this process proved to be difficult. The Kosovo War exemplifies this troubled journey, a context in which the ethnic cleansing of Kosovar Albanians sparked international outrage.

Demographically, Kosovo is predominantly ethnic Albanian (93%), although there is a minority of Kosovar Serbs that reside in the country, particularly in the North where Serbia maintains de facto rule. Kosovo, then, is still an area of significant political and cultural importance to Serbia. While the civil conflict between ethnic Serbs and ethnic Albanians peaked during the Kosovo War, the legacy of this ethnic tension post-1999 remains, continuing to threaten stability in Kosovo.

What: The Present Manifestations of Fragility

In 2022, violent protests began to emerge as the national government cracked down on ethnic Serbs who failed to adopt Kosovo license plates. Following this civil unrest, there was a mass withdrawal of ethnic Serbs from national institutions as a second form of protest, according to the 2024 Research Briefing from the House of Commons.

The events of April 2023 are a similar case: ethnic Serbs boycotted the local elections in the Northern municipalities. These events are related to the demand that ethnic Serbs were not represented sufficiently in government, which the poll data further reflects, showing that the majority of Kosovans recognise that the nation is governed in the interest of some groups, but not all.

In a similar way to many post-conflict countries, political and social fragility also manifests itself in an undermined rule of law. In post-conflict and fragile states, there tends to be a significant state “capacity gap” making the enforcement of law difficult. This capacity gap occurs at the judicial level in Kosovo, with U.N. military peacekeepers having to establish Civilian-Military Centres to deal with crime reports, according to USAID.

Government corruption and organized crime continue to plague the nation, taking advantage of these gaps in institutional and judicial capacity. The prevalence of bribery is an exemplary case of how the rule of law in Kosovo is weak at the state level, along with the proliferation of the drug trafficking and human smuggling industry.

Hindering Development

Generally, evidence shows that fragility causes poverty to become more deeply entrenched. As Carolina Sánchez-Páramo, Global Director for the World Bank’s Poverty and Equity Global Practice, states: “Unless we tackle the drivers of fragility and conflict, we won’t be able to win the fight against extreme poverty.” In line with this rhetoric, then, the potential for increasingly heightened ethnic conflict in Kosovo puts poverty alleviation initiatives at risk of failure or stagnation.

Furthermore, whilst organized crime has proliferated, other industries have failed, according to Per Concordiam Magazine. The 2023 polls show that the lack of jobs in Kosovo is a major concern, second only to the cost of living and this unemployment is exacerbated amongst the Kosovan youth leaving much of their younger, working-age population little to no sustainable income, according to the Center for Insights in Survey Research.

In turn, reliance on organized crime for income makes little room for sustainable industry development or legal employment opportunities, whilst also significantly reducing fiscal tax revenues. On average, countries in the Balkans lose between 20% and 30% of their annual revenues to this sort of activity, Per Concordiam Magazine. These revenues could be useful for the development of public infrastructure, health care and education services and other public spending projects.

Long-Term Solutions

Despite the evident difficulties with fragility and the rule of law in Kosovo, there is certainly a possibility for sustainable development, guided by international initiatives looking to support private industry development and regional integration.

The European Bank for Reconstruction and Development (EBRD) recognizes the complexities of Kosovo’s situation, acknowledging the intricacies of its relationship with Serbia, its multi-ethnic population and the flaws in the state’s institutional capabilities. Through a five-year investment and policy strategy that promotes deeper regional integration, The EBRD aims to stimulate the domestic private sector by opening up the Kosovan industry to new markets.

The EBRD’s previous 2016-2021 strategy was successful in a multitude of fields by financing the country’s first two large-scale renewable energy projects, Baigora wind farm and KITKA wind; rehabilitating Kosovo’s Rail Route 10, helping to improve connectivity with North Macedonia and Serbia; and setting up Women in Business specific lending schemes.

The road to sustainable economic development in Kosovo has, so far, been difficult, hindered notably by a fragile socio-political context, underdeveloped state institutions and extensive crime networks. But the untapped potential of Kosovo’s youthful population remains, and so does the international initiatives looking to support Kosovo economically.

– Tilly Phillips

Tilly is based in Surrey, UK and focuses on Good News and Politics for The Borgen Project.

Photo: Flickr