For decades, Kosovars have left the Balkans to prosper abroad. Now the homeland is eyeing them for capital
It's been 27 years since Agim Kalanderi, then barely out of his teens, left his hometown of Prizren in southern Kosovo for a better life in Belgium. And by nearly any measure of the emigrant experience, he's made it.
Today, the 47-year-old is the owner of New Fruit Co. Boasting a staff of 10 and an annual turnover of around 50 million euros, the Brussels-based company is one of the largest retail and wholesale fruit and vegetable distributors in Belgium.
Among the approximately 400,000 Kosovars who started leaving their homeland in the 1960s for low-skilled jobs in countries like Germany and Switzerland—and who left in even greater numbers during the wars in the Balkans in the 1990s—Kalanderi's success story is perhaps rare. Many Kosovar émigrés describe life abroad as a constant battle to support their families.
Where the businessman is not unique among this diaspora, however, is in his complicated, even reluctant relationship with Kosovo—especially when it comes to investing in the new country's crippled economy.
"I am a Kosovar Albanian. I would love to invest in my country," Kalanderi said. "But the climate for investment has to be there as well. The fact is that we don't have security for our capital."
Like Kalanderi, many potential investors remain hesitant, due to a pervading perception of abandonment by their homeland as well as the very real concerns of entering an economy enervated by 40 percent unemployment, rampant poverty, a lopsided trade imbalance, and myriad other maladies, according to a study released by the Pristina think tank Forum 2015 at the end of 2007.
A PIVOTAL MOMENT
Reliable statistics on diaspora investment in Kosovo are not available. Yet, much like what happened in Ireland or Armenia, those who have gone abroad could contribute significantly to foreign investment in Kosovo, as members of a diaspora are typically more willing than other investors to hazard involvement in the shaky economy of their homeland. Indeed, Kosovar émigrés were mentioned as a potentially significant target investor group during a recent business and investment conference held 25-26 June at the Grand Hotel in Pristina.
To tap this potential, Kosovo's leadership must quickly confront the starkly different issues of strengthening ties to the diaspora and stabilizing the economy. This will take committed political will and meaningful reform, but now that Kosovo's break with Serbia in February has resolved the pivotal matter of its independence, the government—perhaps aided by private concerns such as the business conferences co-organizer, Prague-based investment bank Crimson Capital—will have to tackle both to reassure Kosovar investors abroad, according to Forum 2015's research, investment and migration experts, and members of the diaspora.
Gunter Piening, the city of Berlin's commissioner for integration and migration, called this a pivotal moment in relations between Kosovo and its diaspora, adding that émigré investors such as Kalanderi will take their queues from developments at home.
Until now, "Every discussion, every challenge [has depended] on the question of the future of Kosovo," Piening said. "This question is solved. In the second step, relations between the emigration country and the immigration country will increase. That's often the case. The key challenge is, what is the future of Kosovo? What's the future of the economy?"
The latter will be key to enticing investors, but building a relationship with the diaspora could prove paramount. In Germany, which has more Kosovar émigrés than any other country, the diaspora is less organized than other immigrant groups. For instance, Berlin lacks a single significant organization exclusively representing the city's approximately 4,000 Kosovars.
The "looseness" of Germany's Kosovar community is not unique. Kosovars throughout the diaspora feel alienated and say leaders at home have failed to bolster their organization and intercommunication, according to Forum 2015's study. Furthermore, business people cite a lack of information on investment opportunities at home.
Crimson Capital managing director Michael Gold, who came to Central and Eastern Europe in the early 1990s to work on the Czechoslovak government's privatization initiative and has been here ever since, confirmed this information vacuum. Leadership remains largely unengaged with foreign money in the diaspora, he said. To light the pilot, Gold's company plans to spend the next year reaching out to émigrés through road shows and Web bulletins highlighting Kosovo's attributes: an available, inexpensive work force, ease of starting a business, and a friendly tax regime.
"Were going to start going around, shaking people, telling people about Kosovo. And if they're interested in coming, we're going to help them," Gold said, adding that Crimson Capital has already started working with an IT company from the diaspora in Germany that wants to produce software and hardware in Kosovo. He would not name the company.
Forum 2015 has endorsed a similar, though governmental, policy agenda of reconnection. It includes using Kosovo's Investment Promotion Agency to communicate directly with the diaspora on investment opportunities through the Web, conferences, and fairs, and creating special funds to channel and organize money from emigrants.
Efforts such as these would certainly help build good will and information channels, but they won't be enough to win over the many skeptical investors who believe Kosovo isn't business friendly. New Fruit Co.s Kalanderi said he was concerned about poor infrastructure and the immature economy.
His concern is legitimate. Kosovo is among the poorest countries in Europe. Its infrastructure is abysmal. Corruption is endemic, with Transparency International ranking Kosovo the world's fourth most corrupt economy. The health and education systems are poor, unemployment is off the charts, and imports exceed exports by around a factor of 10.
Clearly, there's much room for improvement. Where to begin? Reducing poverty, unemployment, and corruption will come slowly, with enough political will and aid. International leaders are expected to pledge more than $1 billion at a European Union donors' conference this week.
The immediate priority—the one that could make the most difference to foreign investors now—is improving infrastructure, particularly for electricity. Blackouts are common throughout Kosovo, and more than 75 percent of businesses say poor electricity supply hinders operations, according to the World Bank. Fixing this problem will require both money and policy and regulatory reforms.
For its part, the government has committed to upgrading the current electricity infrastructure, and Economy and Finance Minister Ahmet Shala has said he's hoping for significant progress by the end of summer. Furthermore, four international energy giants, including Germany's RWE and CEZ of the Czech Republic, are bidding in a 3-billion-euro project to build a 2,000-megawatt facility (the current infrastructure's capacity is 800 megawatts) that could start generating by 2014.
Though to a lesser degree, leaders also seem interested in connecting with Kosovars abroad. A new office promoting diaspora investment in Kosovo has been established, and the Investment Promotion Agency has organized several relevant conferences, according to Alban Zogaj, research director at the Riinvest Institute, which conducted Forum 2015's study.
Zogaj described overall progress at strengthening ties with the diaspora as "little" at the moment. Nevertheless, however nascent, the government appears aware that its role in the courtship is pivotal, and private concerns such as Crimson Capital are trying to nudge things along.
Here's hoping the diaspora is paying attention.