Kosovo’s Daily Bread Gets Expensive

Alma Gjekaj, a 28-year-old woman from Pristina, is just back from shopping and sorting out the goods she bought. This time she had to leave a lot of items off her usual shopping list, because bread and flour prices have recently doubled in Kosovo. Many other prices have also gone through the roof.

"I just don't know how I will manage", she says despairing.

Only two months ago, a loaf of bread, weighing 600 grams, cost €0.25. Today it's €0.50, and many in Kosovo predict the price may go up to €0.70 within another few months.

"I receive a monthly salary of €150. We can't cope with these prices", says Gjekaj, a mother with a three-old-year son, whose husband is unemployed.

According to recent statistics from the World Bank, 15 per cent of Kosovo's population live in extreme poverty while 37 per cent are considered to be poor.

Bread is the staple food of most Kosovars, and many of them are now afraid that they themselves will soon be approaching these two categories of poverty. Most of them are finding it hard to make ends meet on average incomes of €240 a month.

Insufficient production at home and the high cost of imports are behind the steep rise in flour prices in Kosovo.

Although grain price rises on the world market have affected the whole region, Kosovo has suffered the most, partly because of its lack of reserves, and partly because the delays to defining Kosovo's long-term

political status mean the government has few control mechanisms to cope with such crises.

Bujar Dugolli, the Minister of Trade and Industry, says that the lack of grain warehouses prevents the authorities from being able to deal with the problem.

"We are renting even the ministry's premises" Dugolli complained to reporters last week, making it clear that the government was unable to secure any kind of storage for key commodities.

"The government should do something about it", says Gjekaj while preparing some food for her son.

Economists fear that Kosovo is still very much dependent on foreign produce, as it imports about €450 million worth of groceries each year.

Muhamet Sadiku, deputy head of RIINVEST institute says that "any destabilization in prices on the foreign markets will be reflected on the local market."

According to him, money available for consumption is declining, and any increase in the prices of farm produce is hitting family budgets directly.

"The government should take measures to overcome problems in the development of agriculture and production", Sadiku told Balkan Insight.

But Dugolli said that the government could not do anything in this matter - not even if a state of emergency were declared.

"Only about €3 million are currently available in the [government's emergency] fund", he said and explained that this would not be enough to deal with the situation.

In the meantime, due to an uncontrolled, and now unstable, market, traders have been able quite easily to raise the prices of other items as well.

"Not only bread, but other products are also too expensive for my family", says Gjekaj.

According to government officials, flour producers and bakers are to blame for not putting enough effort into sourcing their flour from the regional market.

Two months ago Serbia imposed a ban on grain deliveries to Kosovo. Meanwhile, bakers claim that they are throwing away thousands of loaves of bread a day, as the market for their product is shrinking day by day.

"Since the price rise people have been buying less bread, it is unbelievable but each day we waste a lot of bread", said Agron who works in a bakery in Pristina.

Shekqet, who owns a food store in Pristina, is worried that the rapid fall in living standards could mean a social crisis is just one step away. "With the steep rise in prices, people can't afford to pay for the goods they buy, and I am forced to let them buy things on credit, so they can pay me later", he says.

Avni Arifi, adviser to Kosovo's Prime Minster Agim Ceku, says that one of the reasons for the price increase is that the Serbian government has asked companies in Serbia to stop trading with Kosovo.

"This has, of course had an immediate impact, which will remain until new suppliers have been attracted from other countries", Arifi told Balkan Insight.

"The increase in wheat prices for a society like Kosovo affects immediately other products as well, so basically this price change has had a huge impact", says Arifi.

Arifi adds that Kosovo cannot have a proper state emergency fund because it is not a state yet.

"This sounds like an ordinary excuse, but unfortunately this is very true. The government will not regulate prices as it simply cannot do so", said Arifi, and added that the government is now "removing customs duties and is reviewing the possibilities of abolishing or reducing the current 15 per cent rate of value added tax" in order to boost supply in Kosovo.

Gjekaj says she does not know where to turn for help. "I don't trust anybody anymore, the government keeps lying all the time, and I am tired of living like this", she says while feed her son.

According to the statistics of Kosovo's Chamber of Commerce, Kosovo spends €80 million on bread per annum, a sum that dwarfs the government's emergency fund of €3 million.

Critics say the government shares some of the blame. Avni Zogiani, head of the anti-corruption organization, Cohu, says part of the problem is that Kosovo is being governed without any properly-drafted programme.

"There was no effort whatsoever from the side of the government to revive farming which used to be one of the most important sectors of the economy", Zogiani told Balkan Insight.

"With extreme poverty reaching 18 per cent and unemployment 46 per cent on the one hand, and with the government's total indifference toward economic issues, the increase in the prices of essential goods might lead to social turmoil in Kosovo", he adds.

Arifi admits the government is at least partly to blame. "We haven't subsidized agriculture, and we haven't put in place any customs barriers for products that come from abroad", he says.

Gjekaj, who has just finished feeding her son with food that is now more precious than ever, has little hope for a better future.

"If today I can't fulfil my son's basic needs, what am I going to do in the near future", she asks. Gjekaj is still looking for someone who can answer her question.

Arbana Xharra is a journalist with Koha Ditore daily and Balkan Insight contributor. Balkan Insight is BIRN's online publication.

http://www.birn.eu.com/en/111/10/5726/?tpl=30&ST1=Text&ST_T1=Article&ST_AS1=1&ST_max=1

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