ISSN 2410-3918 Academic Journal of Business, Administration, Law and Social Sciences Vol 1 No 2 Acces online at www.iipccl.org IIPCCL Publishing, - July 2015

The Importance of the geographical position of in increasing the Trade, Transit and International in the

Dr.sc. Ramadan Mazrekaj Kosovo Ministry of Infrastructure

Abstract

This paper analyzes the effect of the main highways in Kosovo (Roads 6 and 7) in the development of trade and transport of goods. In this sense, another objective of this paper is the effect of the Kosovo highways (Kosovo Roads 6 and 7) in developing the Albanian Sea Ports (Port of Durres, Vlora and Shengjin). Many Balkan countries are working in the improvement of roads and rail capacity in order to develop multimodal transport, aiming always at strengthening a dominant position in the Balkans, to serve as a connection bridge for the transportation of goods between Asia and . Parts of this paper are also the movement of goods, trade exchange between Kosovo and other European countries, and a short analysis of the Trans CAD software program consisting of calculations of the quantity of goods that can be traded in Kosovo or through its territory (transit).

Keywords: Kosovo, transport, highways, geographical position, trade exchange.

Introduction

The essence of the determination and integration process of Kosovo Road Network into the Pan European networks is without doubt the definition of international and transit traffic that will be able to build Kosovo’s main Road Network such as: Road 6, 6a, 6b and 7. It is necessary to calculate the matrix of origin, in order to solve this problem through modeling and stimulation of Kosovo’s Road Network (KRN) and the Trans European Road Network (TERN), - Destination (OD) of the movement of goods and passengers between states belonging to Kosovo Road Network and Trans European Road Networks. The territory of Kosovo shows interest in the development of trade, because it is the shortest route for the transportation of goods from the Black Sea (Sea Port of Varna and Burgas) and the Adriatic Sea (Sea Port of Durres and Shengjin), compared to other ports in the Western Balkans.

Trade on Origin-Destination Relation (OD Goods Matrix)

With the aim of obtaining practical results we have exploited the Trans CAD software program, in order to analyze the movement of flow of goods in relation to origin - destination as a mathematical model. This model assumes that traveling produced in origin and attracted to a destination are in proportion to the total production of trips in origin and destination.

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(1) where: Tij - trips produced in i and attracted in j Pi - total production of trips in i Aj - total attraction of trips in j Fij - calibration factor for interchange ij; (F ij = C / Tijn) C - calibration factor Kij - socio-economic factor adjustment for interchange of i and j i - area of origin n - number of zones The determination of goods OD matrix (in tons) will be based on the data of international trade of Kosovo, Albania and other countries of the region. Because international trade data are given in tons (1000 kg) the trade between states will be provided in (Euros), in a proportion value (Euro)/ weight (Tons) in international trade. After calculating the matrix of total transport (road, rail, air and sea) in tons, OD Matrix Road Transport in Tons will be calculated. In this form (in tons) OD matrix of international transport and transit road will be converted into the format of Trans CAD in order to be ready for simulation process and determination of the potential flow of goods that will circulate in Kosovo’s road network. Table 1. Reports the Value (Euro) / Weight (tons) in International Trade Value ratio € / Ton goods Member states Code Import Export Import + Export Croatia HR 799.31 1,696.56 1,240.93 Iceland IS 1,945.83 1,633.09 1,805.67 Norway NO 562.64 2,193.06 746.23 Switzerland CH 7,328.13 3,216.54 4,268.90 Albania AL 833.91 1,009.62 946.24 Kosovo KS 2,394.37 1,436.21 1,533.66 Belarus BY 423.66 2,589.75 899.02 Bosnia and Herzegovina BA 737.22 1,320.70 1,001.70 ME 1,395.00 1,573.98 1,558.58 Macedonia MK 1,955.51 1,338.81 1,522.27 Moldova MD 1,348.38 1,826.86 1,519.54 RS 1,237.24 1,903.09 1,607.94 Russia RU 547.97 4,205.88 803.74 TR 2,155.80 1,659.21 1,822.61 Ukraine UA 281.51 2,440.19 623.52

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Source: by Author

Table 2. OD Matrix of International Trade in Goods Value (Euro) 2012

OD Matrix CIS+EFTA+EUC Total Croatia Iceland Norway Switzerland Albania Kosovo Belarus and Bosnia Herzegovina Montenegro Macedonia Moldova Serbia Russia Turkey Ukraine HR IS NO CH AL KS BY BA ME MK MD RS RU TR UA Croatia HR 0 1,987 81,247 442,435 62,354 66,857 39,545 1,793,207 193,660 183,683 4,663 727,294 1,559,419 319,196 73,233 5,548,780 Iceland IS 1,987 0 0 - 0 51,151 14 439 223 0 0 0 0 0 53,815 Norway NO 81,247 0 0 0 1,803 0 251,700 8,969 537 3,097 8,734 22,950 2,100,160 1,063,321 56,368 3,598,887 Switzerland CH 442,435 0 0 0 124,629 39,805 259,761 83,215 26,148 141,014 32,212 233,408 10,494,282 5,009,072 0 16,885,981 Albania AL 62,354 0 1,803 124,629 - 160,535 1,551 27,487 21,562 89,404 108 337,154 96,481 313,142 41,078 1,277,288 Kosovo KS 66,857 0 0 39,805 160,535 0 0 80,447 19,220 396,910 0 262,115 0 192,283 6,434 1,224,606 Belarus BY 39,545 51,151 251,700 259,761 1,551 0 0 3,294 617 2,319 263,162 115,807 33,769,125 379,764 6,111,207 41,249,001 Bosnia and Herzegovina BA 1,793,207 14 8,969 83,215 27,487 80,447 3,294 0 155,505 135,143 4,718 1,093,054 791,827 319,380 10,037 4,506,296 Montenegro ME 193,660 439 537 26,148 21,562 19,220 617 155,505 0 26,536 143 615,041 28,920 40,130 6,594 1,135,052 Macedonia MK 183,683 223 3,097 141,014 89,404 396,910 2,319 135,143 26,536 0 993 931,500 305,975 303,839 81,429 2,602,065 Moldova MD 4,663 0 8,734 32,212 108 0 263,162 4,718 143 993 0 12,700 1,144,570 345,424 557,267 2,374,694 Serbia RS 727,294 0 22,950 233,408 337,154 262,115 115,807 1,093,054 615,041 931,500 12,700 0 2,290,431 661,556 237,274 7,540,286 Russia RU 1,559,419 0 2,100,160 10,494,282 96,481 0 33,769,125 791,827 21,124 305,975 1,144,570 2,290,431 0 25,898,782 25,481,391 103,953,567 Turkey TR 319,196 0 1,063,321 5,009,072 313,142 192,283 379,764 319,380 40,130 303,839 345,424 661,556 25,898,782 0 1,423,273 36,269,162 Ukraine UA 73,233 0 56,368 0 41,078 6,434 6,111,207 10,037 6,594 81,429 557,267 237,274 25,481,391 1,423,273 0 34,085,586 Total 5,548,780 53,815 3,598,887 16,885,981 1,277,288 1,224,606 41,249,001 4,506,296 1,127,256 2,602,065 2,374,694 7,540,286 103,961,363 36,269,162 34,085,586 262,305,066 Source: by Author

Table 3. OD Matrix of Goods in International Trade by Weight (tons) 2012

Matrica OD and e mallrave, ne ton Total Shtete EFTA CIS Croatia Iceland Norway Switzerland Albania Kosovo Belarus Bosnia Herzegovina Montenegro Macedonia Moldova Serbia Russia Turkey Ukraine Shtete Kodi HR IS NO CH AL KS BY BA ME MK MD RS RU TR UA EFTA CIS Croatia HR 0 1,602 65,472 356,534 74,772 53,876 31,867 1,445,046 156,060 148,020 3,758 586,086 1,256,649 257,222 59,015 4,495,979 Iceland IS 1,602 0 - - - - 28,328 8 243 124 - - - - - 30,304 Norway NO 65,472 - 0 - 2,161 - 337,298 12,019 720 4,150 11,705 30,755 2,814,375 1,424,932 75,537 4,779,125 Switzerland CH 356,534 - - 0 149,451 9,324 60,850 19,493 6,125 33,033 7,546 54,676 2,458,310 1,173,387 - 4,328,730 Albania AL 74,772 - 2,161 149,451 - 192,508 1,860 32,961 25,857 107,210 130 404,303 115,697 375,509 49,260 1,531,678 Kosovo KS 53,876 - - 9,324 192,508 0 - 52,454 12,532 258,799 - 170,908 - 125,375 4,195 879,972 Belarus BY 31,867 28,328 337,298 60,850 1,860 - 0 3,664 686 2,579 292,720 128,814 37,562,012 422,418 6,797,606 45,670,702 Bosnia and Herzegovina BA 1,445,046 8 12,019 19,493 32,961 52,454 3,664 0 155,241 134,913 4,710 1,091,198 790,482 318,838 10,020 4,071,047 Montenegro ME 156,060 243 720 6,125 25,857 12,532 686 155,241 0 17,026 92 394,616 13,553 25,748 4,231 812,729 Macedonia MK 148,020 124 4,150 33,033 107,210 258,799 2,579 134,913 17,026 0 652 613,016 190,290 378,030 44,677 1,932,519 Moldova MD 3,758 - 11,705 7,546 130 - 292,720 4,710 92 652 0 1,507,322 435,367 156,149 4,962,226 7,382,376 Serbia RS 586,086 - 30,755 54,676 404,303 170,908 128,814 1,091,198 394,616 613,016 1,507,322 0 1,424,453 411,431 147,564 6,965,143 Russia RU 1,256,649 - 2,814,375 2,458,310 115,697 - 37,562,012 790,482 13,553 190,290 435,367 1,424,453 0 32,222,645 31,703,337 110,987,171 Turkey TR 257,222 - 1,424,932 1,173,387 375,509 125,375 422,418 318,838 25,748 378,030 156,149 411,431 32,222,645 0 780,898 38,072,583 Ukraine UA 59,015 - 75,537 - 49,260 4,195 6,797,606 10,020 4,231 44,677 4,962,226 147,564 31,703,337 780,898 0 44,638,567 Total 4,495,979 30,304 4,779,125 4,328,730 1,531,678 879,972 45,670,702 4,071,047 812,729 1,932,519 7,382,376 6,965,143 110,987,171 38,072,583 44,638,567 276,578,624 Source: by Author

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Table 4. Modal Split of International , the Base Weight, in Tons Value/weight Import + Export Euro/ton Modal split proportion Euro Ton Sea 1,011 207,503 205 0.02% Road 2,692 2,146,456,723 797,346 68.48% Rail 472 122,804,220 260,345 22.36% Air 52,294 46,391,433 887 0.08% Water 400 134,087 335 0.03% Combined 472 29,213,361 61,893 5.32% Fixed equipment 1,011 43,890,329 43,413 3.73% Total 2,389,097,656 1,164,425 100.00% Source: by Author

Table 5. Modal Split of International , Based on the Euro Value Albanian national transport by type of transport (2013)

Maritime Air Road Transport Rail transport Total transport Transport

Transport volume in tons 1,107,410 140,300 3,984,000 2,290 5,234,000 M o d a l Split (%) 21.16% 2.68% 76.12% 0.04% 100.00%

Source: by Author On the basis of mathematical calculations made with Trans CAD Software program, it turns out that the road network through Kosovo is a transit or destination that can provide the passage of around 10 million tons of goods per year.

Identifying the Framework of International Agreements as One of the Obstacles in International Traffic and Trade

The complexity of operations for the delivery of goods from the point of origin to the point of destination includes an extremely large number of different agents (public and private), and various types of transactions, in order to implement contracts, controls and procedures or services offered. These complex interactions may negatively impact on results in the system of performance transit of goods and passengers. Actors and policies that facilitate trade and transport refer to transit regime, that is, a set of policies and procedures that govern the movement of goods, and market regulations affecting vehicles, drivers and contractual procedures of goods and road services. Since the movement of

150 ISSN 2410-3918 Academic Journal of Business, Administration, Law and Social Sciences Vol 1 No 2 Acces online at www.iipccl.org IIPCCL Publishing, Tirana-Albania July 2015 goods is supervised by customs and the Regulation of truck operators implemented by transportation and roads agencies, there is a significant synergy between the agencies.

International Agreements on Road Transport and Transit

The movement of goods from their origin to their destination is possible and is regulated by the transit, which represents a public-private partnership between logistics operators and the authorities of the country of transit. Regimes governing principles of transit are universal, and transit documents and procedures include a guarantee scheme to prevent multiple taxation of goods in transit, and also to prevent losses in fiscal revenues associated with flows of goods in the transit country. Some legal instruments aimed at facilitating transit have been developed in the past decades. A list of these instruments, including some of the relevant international agreements governing road transport in general, are presented in Table 6. As can be seen from the table, regional participants SEETO, which include Kosovo, are signatories of almost all relevant international agreements to facilitate road transport and trade.

Table 6. International Agreements on Relevant Transit and Road Transport

Name of FYR of Agreements Bosnia & Monte- Albania Croatia Mace- Serbia Kosova in English negro Herzegovina donia Language

European Agreement on Main √ √ √ √ √ √ International Traffic Arteries (AGR) Convention on the Contract for the Carriage of √ √ √ √ √ √ Goods by Road (CMR) Additional Protocol to CMR Concerning X X X X X X the Electronic Consignment Note Conventions on Road Traffic and √ √ √ √ √ √ Road Signs and Signals 151 ISSN 2410-3918 Academic Journal of Business, Administration, Law and Social Sciences Vol 1 No 2 Acces online at www.iipccl.org IIPCCL Publishing, Tirana-Albania July 2015

Agreement on Minimum Requirements for the Issue X √ √ X √ √ and Validity of Driving Permits (APC) Conventions on the Taxation of Road Vehicles Engaged in International √ √ X X √ √ Goods Transport and International Passenger Transport European Agreement Concerning the Work of Crews of Vehicles √ √ √ √ √ √ Engaged in International Road Transport (AETR) Convention on the Contract for the International Carriage of X √ √ X √ √ Passengers and Luggage by Road (CVR) Customs Convention on International Transport of √ √ √ √ √ √ Goods under cover of TIR Carnets (TIR Convention)

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Agreement on the International Occasional Carriage of √ √ √ √ √ X Passengers by Coach and (Interbus Agreement) General Agreement on √ X √ √ X X Tariffs and Trade (GATT) International Convention on the Simplification and Harmonization X X √ √ √ √ of Customs Procedures (WCO Revised Kyoto Convention) International Convention on Harmonization of Frontier √ √ √ √ √ √ Controls of Goods (Geneva Convention)

These conventions establish broad objectives and principles that are the underlying notion of freedom of transit (Article V of the GATT), which is of particular importance for regional participants SEETO starting from the position of the Western Balkans region as a transit region linking Turkey, Caucasus and the Middle East to the EU. They are intended to facilitate the international movement of goods by reducing the requirements for completing formalities and the number and length of controls as well as to promote joint border processing and to facilitate controls by simplifying customs procedures (Article 7 of the International Convention on the Harmonization of Border controls of Goods).

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Conclusions

Based on the analysis, after determining the OD matrices of goods and passengers in the Kosovo Road Network with Trans CAD program the flow of international and transit goods through the territory of the Republic of Kosovo, was calculated to about 9,908,801 tons of goods per year, or about 1,270,359 heavy trucks (HGV) a year, needed for transportation of goods. Annual Average Daily Traffic (AADT) was 3,480 trucks/ day or about 10,440 equivalent cars (PCU). With construction of the highway 6 and 7 (Durres-Prishtina-Nis, and Prishtina-Montenegro-) the route distances between the countries in Southeast Europe, from Black Sea to the Adriatic Sea will be heavily reduced. The Port of Durres represents the shortest path between countries (in Southeast Europe, from Black Sea to Adriatic Sea), but this advantage is not exploited so far, due to the lack of roads and other links (rail). The shortest distance is a determining factor for transit, directing the flow of goods, because that directly affects the cost of goods (road cuts, reduction of transport costs in relation to the origin or destination of goods), and other factors. Flow of goods in the nearest road of transit is a direct economic interest of countries. In order to orientate the return of transport flow in the territory of Kosovo, through the Albanian ports, especially port of Durres, significant improvements should be made not only in infrastructure (road, rail and sea ports), but also in the modernization of services, eliminating long waits at the ports, customs and security. As soon as this operation will be completed, there will be better opportunities to attract and transit goods in the above- destinations, making port of Durres among the most frequented of Adriatic Sea in the Western Balkans.

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References

Mazrekaj, R. (2010). PhD thesis, Study of Integration of Kosovo’s road network in Pan European Network Aimed at Sustainable Development of Transport in the Balkans region, Polytechnic University of Tirana. SEETO. (2012). Network Comprehensive Development Plan, “Multiannual Plan 2012-2016”. Multi-Modal Transport Strategy of Kosovo (2009). The Kosovo Statistics Agency. (2014). Trade Exchanges of Kosovo. WB study (2007). Study to Assess the Viability and Options for PPP in the Highway Sector in Kosovo. WB Report. (2010). Kosovo Unlocking Growth Potential, Strategies, Policies, Actions.

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