IMF: Kosovo cannot finance itself
The economic situation in Kosovo is not conducive to sustainable development and the province cannot finance itself due to low industrial output and the shortage of direct foreign investments, the International Monetary Fund said.
(KosovoCompromise Staff) Tuesday, October 23, 2007
The Kosovo economy is characterized by unclear revenue structure, enormous foreign trade deficit and nearly inexistent industry. The province imports over 80 percent of its consumption and its main tax revenue comes from customs and excise collected at administrative points, the organization said in a report.
Kosovo is also unable to secure the servicing of its 1.206 billion dollar foreign debt, the IMF added.
Serbia is allocating more than 100,000 dollars every day for the purpose Kosovo's debt each day.
Six years ago, the foreign debt of Kosovo amounted to 1.7 billion dollars and was reduced after the write-off of 500 million dollars of the claims of the Paris and London Clubs of Creditors and payment of 130 million dollars from the Serbian budget.
Since 2002, Serbia has regularly settled the Kosovo debt, although it has had no revenues from this part of its territory.
According to the official data, by the end of 2006, Serbia settled the principal and interest of Kosovo banks and companies at the total amount of 217.69 million dollars.
The Kosovo debt was created between early 1970s and late 1990s and the funds from foreign loans were invested in electric power, railway and metal-working industry projects, mining equipment, automotive industry, telecommunications, water resources management, textile industry and other industrial sectors.
Serbian Deputy Prime Minister Bozidar Djelic said on Sunday that the Serbian delegation in Washington had presented a draft solution for the issue of Kosovo debt, under which Serbia should either be repaid 215 million dollars, or an equal amount should be deducted from Serbia's remaining debt to the World Bank.
