AIM: start

SUN, 10 MAR 2002 00:54:19 GMT

Killing Two Birds with One Stone

A part of the effort of the international community to help the Balkan is the attempt to economically connect Macedonia and Kosovo in order to re-establish the once successful cooperation. Entrepreneurs welcomed the step made by the Americans and at the first meeting held in Pristina stated all their problems.

AIM Skopje, February 25, 2002

After a year of absence Macedonian entrepreneurs are returning to Kosovo. Slowly, because on the road to cooperation there are numerous obstacles for them - political and administrative and security problems, but surely, they say at the Macedonian business centre, association financed by the American agency for assistance to the under-developed, USAID, which has a branch office in Pristina. There is interest, capability and good will and that is what is promising and what was emphasized at the first postwar meeting of about hundred odd managers, mostly owners of small and middle-sized enterprises, held last week in Grand Hotel in Pristina.

The Americans, this time in the role of economic facilitators, are trying to pave the road for legal cooperation between Macedonia and Kosovo which has long tradition ever since the time of SFRY. Their economies are complementary in many ways, a big advantage is their vicinity, and they have connected power systems. The cooperation was especially intensive after Macedonia had become independent and it proceeded according to international agreements signed with Belgrade. Kosovo is formally and legally still a part of FRY. Unfortunately, at that time black economy infiltrated Macedonia and as of 1993 mountain corridors for illegal transportation of cigarettes, narcotics and arms were worked out. Moreover, after NATO intervention in 1999 and, as stressed after "liberation of Kosovo", illegal business groups connected with the political oligarchy took over the business. They did business in private, illegally, without any norms or criteria, to enormous satisfaction of Macedonian "businessmen" and all smugglers of various calibre. It is worth reminding that at that time Macedonian government announced with euphoria the opening of diplomatic and business offices in Pristina, that Prime Minister Ljubco Georgievski welcomed Hashim Thaci, leader of KLA, in Skoplje with honours, red carpet and bottles of champagne. During the business idyll in 2000, 400 to 500 overloaded trucks crossed Blace border crossing every day. Kosovo, demolished and hungry, bought practically everything in Macedonia: food, drugs, artificial fertilizers, oil, petrol, construction material... Nobody bothered to count bags full of foreign currency cash. Publicly, of course. The establishment of firm administration by the international community and the war in Macedonia at the very moment when preparations were completed for the introduction of legal payment operations among banks, ended this episode which according to analysts, lasted a very short time.

Last year (2001) commodity exchange between Macedonia and Kosovo officially amounted to about 110 million euros. Unofficially it amounts to twice that sum, because smuggling is still very much alive. But even that is a few times lower than in the golden times after the crisis in Kosovo.

According to what the heads of its office in Skoplje admit, American USAID is motivated and entrusted by the international community to reconstruct Kosovo and Macedonia and intensify legal economic cooperation on new foundations in accordance with European and international norms. As people say, two birds will be killed with one stone in this way. They are convinced that this will not just narrow down the space for smuggling and crime and pave the road for easier regional cooperation, but also be a significant stabilization factor on both sides. This will with no doubt accelerate the restoration of peace in the Balkan. USAID, therefore, spares neither effort nor money measured in millions of dollars and hopes that the results will soon be visible. Last week’s meeting of 40 Macedonian and 60 businessmen from Kosovo is very encouraging. It is at the same time a good indication what specifically Macedonian Government and OUN – UNMIK Civilian Administration should do in order to use the offered chances and create conditions for longterm and stable commodity exchange of the economies of Macedonia and Kosovo.

The list of what they should do that the entrepreneurs delivered to the politicians is quite long. The political instability and insecurity was marked as the biggest problem. When shooting in Macedonia stops and Kosovo gets its own government, it was stressed, things can proceed much faster and with less difficulties. The second problem is that there is still no banking system in Kosovo, so that delayed payments, with guarantees or letters of credit are practically impossible. Payments in cash which are still the only possibility are both illegal and highly risky, many businessmen claim, illustrating their experience. The third problem that Macedonian and Kosovo administration should take care of is customs. Macedonia has a signed agreement on free trade with FRY that is not recognized in Kosovo. That is the reason why the commodities imported from that Yugoslav province are treated here as products of unknown origin and the customs duty paid for it is 60 per cent which makes it less competitive in the market, or rather, practically unprofitable. The goods from FRY are imported into Macedonia at customs duties of one per cent. Kosovo entrepreneurs demand that a similar provision be applied for their products, but after a bilateral agreement on free customs zone is signed by Kosovo and Macedonia. However, Skoplje is reluctant to do it because that would indirectly mean recognition of the statehood of Kosovo. And that belongs in the sphere of high politics!

Macedonian and Kosovar entrepreneurs interested in intensifying cooperation and increase of profit have told each other a lot of interesting and useful things during their first exchange of opinions and experience. This resulted in restoration of the old and the establishment of new business connections.

After return from Kosovo Macedonian businessmen declared that they were surprised with the changes they have seen over there. Some of them were pleasantly surprised and some were not. Those engaged in construction are delighted because Kosovo has become, they say, an enormous construction ground they can easily enter along with manufacturers of textiles and computer technology traders. The hunger for products of this kind in the Province is enormous and they believe that there is place for them in the market of Kosovo. Producers of early spring vegetables have similar hopes, although they are slightly disappointed, too. During their one-year absence, their place was taken by their rivals from Croatia, Bulgaria, Montenegro and Slovenia. (Slovenian) Fructal has even reconstructed its fruit juice manufacturing facility in Lipljan. They believe in Macedonia that their advantage is in the vicinity that significantly reduces transportation expenses, but also in the quality of what they have to offer. Among the satisfied are the managers of Teteks textile combine from Tetovo who started negotiations on the production and delivery of uniforms for all the employees of Kosovo electric company. Private Urban Invest from Kavadarci has an agreement for a delivery of granulated marble which is very popular. Respectable Skopje PKB and Tetovo NASTO, producers of milk and milk products, re-established contacts with their old business partners hoping that cooperation will be mutually useful. Some, like Dukas construction company, are present in Kosovo for almost three years already. They are working for OSCE, UNMIK and KFOR, they acquired an enviable reputation, so other investors are also interested in working with them.

The businessmen in Kosovo say that they are mostly satisfied with the quality of goods they purchase in Macedonia and they primarily demand continuous delivery from their Macedonian colleagues. They are not too satisfied with the efficiency of some of them. They are glad, they underline, that at last week’s meeting in Pristina – which they hope will become a frequent practice – they discovered that in Macedonia there are other good firms they can work with except the traditional and known OHIS, MZT, Vitaminka, Agroplod, Alkaloid. They like what they learnt about certain businesses they heard about from the experience of Macedonian small private enterprises and they are convinced that they can apply them. They do not say exactly what it is.

Both Macedonian and Kosovar entrepreneurs thank the organizer of USAID for the effort expressing hope that it will yield results soon. The heads of this American agency in Skoplje and Pristina have promised that this first meeting will not be the last. Until conditions become stable and obvious fears on both sides disappear similar gatherings will be organized at least once a month.

If it is true, as the saying goes, that a good beginning makes a good ending, independent economic analysts estimate that these first swallows in Macedonia and Kosovo may soon bring summer after all – at least when business is concerned. Hopefully they are right!