CONT Delegation visit 14-17 June 2011 Kosovo Former Yugoslav Republic of Macedonia KOSOVO This document aims to provide background information to the Committee on Budgetary Control Delegation to Kosovo and FYROM, due to take place on 14-17 June 2011. The factual information below deals with various subjects related to Kosovo as regards basic data, political structure overview, an overview of the economy and relations with the European Union. 2. BACKGROUND INFORMATION ON KOSOVO 2.1 Basic data on Kosovo1 General topographic map2 Total land area: 10,887 sq km Population: 2 126 708 (estimate 2010) People: Albanians (88%), Serbs (6%), Bosniaks (3%), Roma (2%), Turks (1%) Capital: Pristina (600 000) Main languages: Albanian, Serbian, Bosniak and Turkish Religions: Islam, Serbian Orthodoxy, Roman Catholicism Currency: Euro Natural resources: coal, lead, zinc, chromium, silver, nickel, magnesium, kaolin, chrome 1 http://rks-gov.net/en-US/Republika/Kosova/Pages/default.aspx; http://www.fco.gov.uk/en/travel-and-living-abroad/travel- advice-by-country/country-profile/europe/kosovo; 2 http://pl.wikipedia.org/w/index.php?title=Plik:Kosovo_kart.jpg&filetimestamp=20060910213128 1 2.2 Political structure - overview3 Official name Republic of Kosovo Independent democratic republic since 17 February 2008. Kosovo is supervised by the international community following the conclusion Form of state: of the political process to determine Kosovo’s final status envisaged in UN Security Council Resolution 1244. Constitution adopted by the Kosovo Assembly on 9 April 2008. It Legal system: came into force on June 15, 2008. The Assembly of Kosovo has 120 members elected for a four-year National legislature: term. The Assembly includes 20 reserved seats: ten for Kosovar Serbs and ten for non-Serb minorities Electoral system: universal suffrage over the age of 18 years National elections: Last parliamentary elections were held on December 12, 2010 Ms Atifete Jahjaga is elected Kosovo's first female president by Head of state: parliament on April 7, 2011 for a five-year term National government: was formed on February 22, 2011 Democratic Party of Kosovo (PDK-34 seats) led by Kosovo Prime Minister Hashim Thaci; Democratic League of Kosovo (LDK- 27 seats) led by Pristina Mayor Isa Mustafa; Movement for Self-Determination (VV- 14 seats) led by Albin Main political parties: Kkurti; Alliance for the Future of Kosovo (AAK-12 seats) led by Ramush Haradinaj; Alliance for a New Kosovo (AKR- 9 seats), led by Behgjet Pacolli; Independent Liberal Party (SLS- 8 seats) led by Slobadan Petrovic; Democratic League of Dardania (LDD), led by Nexhat Daci; Mr Hashim Thaci (PDK), began his second term of office as Prime Prime Minister: Minister on February 22, 2011 Speaker of the Assembly: Mr Jakup Krasniqi (PDK) 3 http://www.kryeministri-ks.net/?page=2,1; http://www.assembly-kosova.org/?cid=2,1; http://news.bbc.co.uk/2/hi/europe/country_profiles/3524092.stm; http://www.president-ksgov.net/?page=2,1; http://rks- gov.net/en-US/Pages/Fillimi.aspx; http://rks-gov.net/en-US/Pages/InstitucioneteKosoves.aspx; 2 Deputy Prime Minister and Minister of Justice - Hajredin Kuçi, Deputy Prime Minister and Minister of Local Government Administration - Slobodan Petrovic Deputy Prime Minister and Minister of Trade and Industry-Mimoza Kusari-Lila Deputy Prime Minister - Edita Tahiri Deputy Prime Minister--Bujar Bukoshi Minister of European Integration--Vlora Citaku Minister of Public Administration - Mahir Yagcilar Minister of Education, Science and Technology - Ramë Buja Minister of Economic Development - Besim Beqaj Key ministers: Minister of Finance - Bedri Hamza Minister for the Kosovo Security Force - Agim Çeku Minister of Environment and Spatial Planning - Dardan Gashi Minister of Internal Affairs - Bajram Rexhepi Minister of Foreign Affairs - Enver Hoxhaj Minister of Labour and Social Welfare- Nenad Rasič Minister of Health - Prof. Dr. Ferid Agani Minister of Infrastructure - Fehmi Mujota Minister of Agriculture - Blerand Stavileci Minister of Culture, Youth and Sport – Memli Krasnigi Minister of Trade and Industry - Mimoza Kusari-Lila Minister of Community and Return - Radojica Tomiq Subdivisions: 38 municipalities Key events:4 1999 NATO bombing campaign against Yugoslav military and security targets in March- June Kosovo and Yugoslavia proper 1999 May The EU proposes the new Stabilisation and Association Process United Nations Security Council Resolution 1244 establishes the United Nations 1999 June Interim Administration Mission in Kosovo (UNMIK) 1999 June NATO-led KFOR enters Kosovo 2001 November Kosovo holds general elections 2002 February The Provisional Institutions for Self-government are established 2008 February Kosovo declares its independence. Serbia says declaration illegal. 2008 April Parliament adopts new constitution. European Union mission (Eulex) takes over police, justice and customs services 2008 December from UN. 2010 December the Democratic Party of Kosovo (PDK) wins parliamentary election. 2011 February Mr. Hashim Thaci is re-appointed as a Prime Minister. 2011April Atifete Jahjaga was elected Kosovo's first female president 4 http://ec.europa.eu/enlargement/potential-candidates/kosovo/relation/index_en.htm; http://news.bbc.co.uk/2/hi/europe/country_profiles/3550401.stm; 3 2.3. Economy overview5 Kosovo's economy has shown significant progress since the conflict of the 1990s; it is, however, still dependent on the international community and its financial and technical assistance. 2005 2006 2007 2008 2009 2010 Real GDP growth 3.8 3.9 4.0 5.4 4.0 4.6 (ann. % ch) Unemployment (%) 41.4 44.9 43.6 47.5 45.4 45 Inflation (ann. % ch) - 3.6 9.1 16.7 -4.4 4.8 Current account balance (% of GDP) -7.4 -6.7 -8.8 -16.0 -18.6 -18.5 Government balance (% of GDP) -3.1 2.5 7.1 -0.2 -0.8 _ Direct investment (% of GDP) 2.6 9.1 12.6 8.9 7.8 _ Export of goods and services (% of GDP) 7.0 8.9 10.4 14.1 15.6 _ Import of goods and services (% of GDP) 42.5 45.5 50.3 55.1 55.4 _ Major industries: agriculture, mining and micro-enterprises GDP composition agriculture 13%, industry 22%, services 65% by sector (2009): Agriculture fruits and vegetables (potatoes, berries), wheat, corn, wine, beef products: mineral mining, energy, telecommunications, forestry, agriculture, Industry: metal processing, construction materials, base metals, leather, machinery, appliances wood products, charcoal, and dried fruits; mineral products, base Exports products: metals, leather products, machinery Export partners: Italy, Albania, the former Yugoslav Republic of Macedonia, and Greece live animals and animal products, fruits and vegetables and related products, minerals, base materials, machinery, appliances and electrical Imports products: equipment, textiles and related products, wood and wood products, stone, ceramic and glass products, and chemical products the EU- 47%, Albania- 27%, the former Yugoslav Republic of Import partners: Macedonia- 10%, Serbia, Turkey Kosovo's citizens are the poorest in Europe. 30% of them live below the poverty line, and 13% live in extreme poverty. Most of Kosovo's population lives in rural towns outside of the capital, Pristina. 5 http://www.state.gov/r/pa/ei/bgn/100931.htm, http://www.state.gov/r/pa/ei/bgn/100931.htm, http://www.fco.gov.uk/en/travel- and-living-abroad/travel-advice-by-country/country-profile/europe/kosovo?profile=all; Kosovo2010 Progress Report, Commission Staff Working Document, Brussels, 9 November 2010, Com(2010)660, Progress towards meeting the economic criteria for accession: the assessment of the 2010 Progress Report and the Opinion, DG for Economic and Financial Affairs, December 2010; 4 Agriculture Agricultural land comprises 53% of Kosovo's total land area and forests 41%. According to data from the Food and Agriculture Organization, 741,316 acres of land are under cultivation and 444,789 acres are upland pasture. The majority of agricultural land is privately owned (80%), providing subsistence farming for individual households. Although Kosovo's agricultural sector is generally characterized by small farms, low productivity, and the absence of advisory services, agriculture contributes around 19% of Kosovo's overall GDP. Agriculture is the largest employment sector in Kosovo, providing jobs for approximately 16.5% of the population, primarily on an informal basis. The agricultural sector also accounts for 16% of total export value and remains an important creator of national wealth, although Kosovo is still an importer of many agricultural products, which accounted for 24.4% of overall imports in 2007. Forestry in Kosovo is minimal; wood-processing and wood products (flooring and furniture) are industry contributors, although not yet in significant numbers. Trade and Industry Kosovo has one of the lowest export/import rates in the region. In 2009, Kosovo imported EUR 1,993 million in goods and services and exported only EUR 165.3 million, resulting in a trade deficit of approximately 42% of Kosovo's GDP. This deficit is largely financed through foreign assistance. Main economic trends:6 6 EU Candidate and Pre-Accession Countries Economic Quarterly- DG Economic and Financial Affairs, ECFIN Unit D-1, 12 January 2011 5 2.4 The European Union - Kosovo relations7 Since 10 June 1999, Kosovo has been under United Nations administration when the United Nations Interim Administration Mission in Kosovo (UNMIK) was set up under UN Security Council Resolution 1244. The European Union has been an integral part of the international effort to build a new future for Kosovo since then. Both its Member States and its institutions, plays a prominent role in the reconstruction and development of Kosovo. Indeed the European Union is by far the single largest donor providing assistance to Kosovo and the South Eastern European region as a whole and is at the forefront of the reconstruction effort. The EU helps ensure the stability of Kosovo through:8 . EULEX rule of law mission in Kosovo ( Mr Xavier Bout de Marnhiac) . European Commission Liaison Office (Mr Khaldoun Sinno) .