USAID promotes economic growth in Kosovo through a comprehensive strategy that concentrates on stimulating private sector growth, strengthening the economic institutions that ensure fiscal sustainability, and establishing a reliable energy supply. While past USAID strategies emphasized capacity building in Kosovo’s economic institutions, the new strategy is heavily focused on private sector development and improving the business enabling environment.
Approximately 40% of Kosovo citizens are unemployed (youth unemployment is estimated to be 50% to 75%), while 45% live below the poverty line. 30,000 new workers enter the labor market every year and compete for an estimated 3000 new jobs. It would take economic growth in the range of 7% over a 15 year period to cut the unemployment rate in half; actual GDP growth was 4-5% in 2009 and 2010.
Kosovo is still largely isolated from the world economy and remains heavily dependent on foreign aid and remittances, with the World Bank estimating that remittances have ranged from 13-15% of GDP in recent years.
Kosovo suffers from an unreliable energy supply, an unfriendly business enabling environment, poor infrastructure, and an inexperienced workforce. Kosovo is also highly dependent on imports, estimated at 44% of GDP in 2009, with exports of only 4% of GDP. Historically, Kosovo had significant agricultural output, however a significant amount of arable land is in meadows, pastures, or lies fallow.
Democracy and Governance
The goal is to empower Kosovo’s Citizenry and to consolidate a functioning Democracy. USAID promotes strong democracy and good governance in Kosovo through a comprehensive strategy that encourages;
- more effective governance at the national and municipal level;
- improved delivery of justice through Rule of Law;
- increased participation of minorities;
- strengthened mechanisms of citizens to represent their interests and hold government accountable.
Decentralization activities have evolved from a targeted municipal capacity building program to supporting the legal and institutional framework for local governance; and a broader effort at improving municipal service delivery, revenue collection and public participation. USAID is also supporting the stand-up of six new/expanded Ahtisaari-mandated Kosovo Serb-majority municipalities.
USAID programs have sought to address problems in all these realms, including rule of law, local governance, and civil society/media. Justice sector support is helping to strengthen judicial and legal institutions; improve the professionalism of judges, lawyers and prosecutors, and the performance of courts; and to enhance minority access to justice.
Youth and Education
The goal is to provide youth with opportunities to become better educated, productive, and engaged members of a stable Kosovo. To achieve this, USAID has increased overall funding in education and youth programming under the 2010-2015 Strategic Plan. Education and entrepreneur development programming is closely interlinked with broader goals in economic growth and democratic consolidation. Kosovo has the youngest population in Europe with 50% under the age of 25. The growing youth population that is unemployed (estimates range from 50%-75), disengaged, and disconnected is emerging as an urgent issue for the newly independent state.
Kosovo's education system is hampered by inequitable access, poor teacher professional development, overcrowded schools and an urgent need for learning materials and equipment. Students are not provided with relevant workforce-related skills. Differences in drop-out rates for girls and boys, and for students from ethnic minorities or with disabilities grow wider.
Last updated: May 10, 2013