Kosovo is fortunate to have a large diaspora compared to the number of inhabitants, diverse and with a lot of economic, intellectual, cultural, artistic and sports potential. But, the engagement of the diaspora, apart from the political aspect, is irrelevant if it does not contribute to the economic development of the country.
The current approach of the institutions of the Albanian states for the engagement of the diaspora is mainly focused on two issues: the preservation and strengthening of the cultural / national identity and the advancement of political rights and communication with the members of the diaspora. The economic engagement of the diaspora is a topic that is talked about superficially and which mainly considers financial remittances. Not because the first two issues are less important, but that the potential of the diaspora is multidimensional and needs to be channeled more efficiently.
Why is diaspora engagement important for Kosovo's economic development?
First of all, Kosovo does not have the internal capacity to generate sustainable economic development. Kosovo faces a high level of unemployment (about 35%) and a large trade deficit, where imports dominate to a large extent. The young population has turned into negative statistics of unemployment figures, as women are very little involved in economic activities (about 18%). According to the report Fuqia Punëtore from the Kosovo Agency of Statistics (KAS), the young population in Kosovo has a very high unemployment rate of 55.0%. Kosovo's economy is many years away from approaching the average development of EU countries. Gross Domestic Product (GDP / GDP) is ten times lower than the European average, while the economic growth rate (between 3-4%) is slightly ahead development rate of 28 EU countries together (2%).
Investments, including foreign ones, are also a declining indicator. In this regard, the government (public sector) is the largest investor and employer, while industry is at the lowest level of development, compared to countries in the region. Other active sectors are sensitive to unfair competition, informality, and lack of necessary infrastructure, elements that call into question the viability of businesses. Meanwhile, corruption, poor governance and the justice system are strong reasons for failing to attract foreign investors. Problems like these are sufficient indicators to understand the inadequacy of the domestic economy and the need for outside assistance, which can best come through the direct economic engagement of the diaspora.
The engagement of the diaspora in the economy of Kosovo
Brain Gain & Training
Poor education system, the trend of leaving the skilled and high unemployment among young people are some of the biggest problems for developing countries, including Kosovo. In addition to escaping poverty, recent trends show that skilled people also express a desire to emigrate for greater opportunities in foreign markets. This poses a twofold challenge to the country's economic development, as despite the rise they receive here, their departure undermines any investment made and leaves a huge professional vacuum in the local economy, which is also one of the main problems they have identify businesses.
No matter how big the investment in education, this investment is worthless if the most qualified leave and do not consider returning to their country of origin. This phenomenon is seen as a symptom of a declining economy, so many countries have taken action to engage and return these professionals, even for short periods of time. P. sh. Taiwan has set up a database of diaspora professionals to connect and familiarize them with market opportunities within the country; Lithuania has set up a global network of scientists, researchers and academics of Lithuanian origin, with the aim of engaging them in the country's education system. Other countries, such as Ethiopia, Greece, etc., have established exchange programs (fellowships) for students and researchers from the diaspora with the aim of approaching and exploiting their potential for state institutions. All this in order to fill the deficit capacity in the country, so necessary for a sustainable development. Many institutions and organizations but also young people in Kosovo can benefit from the knowledge of professionals from the diaspora who can come to Kosovo in different periods of time through exchange programs.
Direct Investments from the Diaspora
Diaspora Direct Investment (DDI) has been hardly addressed in Kosovo, both as a concept and as a potential. IDDs include many aspects of diaspora engagement but most importantly in our case: investing financial capital in Kosovo's economy. The altruistic and patriotic sense is an additional motivation for members of the diaspora to invest, while becoming first movers towards investing in the homeland. Information on economic, social, societal and market circumstances favors diaspora businessmen. While, for the country, their investments are more fruitful for the fact that in addition to finances they also bring the knowledge (know-how) which due to the above mentioned motives, they want to share with the human potential in the country, without being afraid of growth of competition, as is the case with other foreign investors. Investments from the diaspora can come in various forms, such as p. sh. through agreements with local businesses, partnerships with public institutions in capital projects, but also through investment in financial instruments such as bonds or shares, which can be offered by financial institutions.
Beyond direct economic engagement, the diaspora plays a very important role in creating bridges of long-term cooperation between host and countries of origin. Its members represent a new window into the global economy for host countries - they can also serve as investment intermediaries for non-diaspora-led companies; as well as a driving force for local businesses in their countries of origin - they can adopt best free market economy practices through the connections and mentoring they can get from diaspora professionals. Establishing institutional mechanisms to strengthen ties first between members of the diaspora and then between them and the networks, institutions, local economic forums of the home country is a very important process. These networks increase pressure to remove institutional barriers and improve the rule of law and the efficiency of the state administration. Countries such as Ireland, Israel or Armenia have managed to strengthen ties with the diaspora through the establishment of various networks of businesses and professionals, the organization of conferences and forums which have laid the foundations for sustainable communication. As a result, the diaspora's ties with the country of origin have been strengthened, investment funds have been raised, and other mechanisms for the circulation and exchange of people, goods and services have been established.
Kosovo is fortunate to have a large diaspora compared to the number of inhabitants, diverse and with a lot of economic, intellectual, cultural, artistic and sports potential. The engagement of the diaspora, apart from the political aspect, is irrelevant if it does not contribute to the economic development of the country. Various examples show how important the approach of the diaspora is to the development of the economy. However, the economic engagement of the diaspora is a process that requires will, trust and serious planning by state institutions. They should create a free and favorable business environment, which also means responsible governance, rule of law and legal certainty. The diaspora should also be provided with detailed information on the economic potential. We must not forget that the diaspora not only brings financial capital to the homeland, it can also bring with it the skills and spirit of entrepreneurship so necessary for our circumstances. On the other hand, civil society organizations are the ones that can become the catalyst of this process through advocacy of policies, association of connections aimed at engaging the diaspora. They should put pressure on decision makers in order to facilitate this commitment.
Author – Lirim Krasniqi
Lirim Krasniqi is a Political Analyst and Project Manager at the non-governmental organization GERMIN, an organization that supports its principles and ideals in the belief that the diaspora plays a broad and proactive role in the positive development of the Western Balkans, where Albanians live.