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Kosovo Chooses New Parliament as Economy and Serbia Weigh

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June 6 (Bloomberg) -- Kosovo will hold a general election June 8 as the former Serbian province tries to lift an economy dependent on foreign aid and mend ties with its northern neighbor so both can accelerate European Union accession.

Serbs in Kosovo’s north will vote for the first time since the mostly ethnic-Albanian state declared independence in 2008 after violence marred a ballot last year. Opposition to the creation of a national army by ethnic Serbs triggered the May dissolution of the previous parliament, which also suffered from disputes over the sale of state-owned telecommunications company Posta dhe Telekomunikacioni i Kosoves Sh.A.

With unemployment at 35 percent and output per capita at about a 10th of the EU average, according to Eurostat, Kosovo must attract foreign investment so it can wean itself off foreign aid. The biggest parties, including Prime Minister Hashim Thaci’s Democratic Party of Kosovo, have pledged to invest to create 200,000 new jobs for the state of 1.8 million.

“Kosovo needs to improve its economy substantially in order to stand on its own feet,” Zijad Becirovic, director of the International Institute for Middle East and Balkan Studies, a Ljubljana, Slovenia-based think-tank, said in a phone interview yesterday. “Otherwise, its independence may come into question as it relies mostly in the international community to stay afloat.”

Serb Participation

The International Monetary Fund, which concluded a $141 million aid package in December, expects Kosovo to grow 4 percent this year, less than the 20 percent that Becirovic said was needed to meet the pledge to create 200,000 jobs.

There are no reliable political polls before the election, which pits Thaci against the opposition Democratic League of Kosovo led by former Pristina Mayor Isa Mustafa, the Self-Determination Movement led by Albin Kurti and the Alliance for Future of Kosovo, led by Ramush Haradinaj.

Serbia, which doesn’t recognize Kosovo’s independence, has been under EU pressure to convince Kosovo Serbs to participate in the elections, in line with a 2013 accord with its breakaway province. The implementation of the pact is key for Serbia to advance in its EU accession drive, which it started this year.

North Atlantic Treaty Organization troops went to war with Serbia in 1999, intervening in Slobodan Milosevic’s repression of the ethnic-Albanian population, the final military conflict in the disintegration of Yugoslavia. Animosity and violence has marred relations between the two communities as recently as November local elections and has remained an obstacle to both states’ EU accession aspirations.

Normalizing Ties

Since the secession of Kosovo, ranked by the World Bank as Europe’s second-poorest country, it has wrangled with Serbia over property rights, power supply and trade issues, while Serbia has accused Kosovo of trying to oppress its compatriots in what many in the Balkan state consider to be the cradle of Serbian heritage.

Serbia’s government urged all Serb voters in Kosovo to take part in the ballot. Serbs should strive to win as many seats as possible “for the sake of survival” of the embattled Serb community, Serbia’s government said in an e-mail after a cabinet meeting in Belgrade yesterday.

Gradjanska Inicijativa Srpska, the biggest Serbian political group in Kosovo, urged its supporters to vote and win seats in parliament to prevent the government in Pristina from forming an ethnic-Albanian dominated army.

Along with a weak economy, Kosovo suffers from one of the highest levels of perceived corruption in Europe, according to 2013 rankings from anti-graft advocate Transparency International. It placed 111th out of 177 countries and territories, alongside Ethiopia and Tanzania. By comparison, Serbia was 72nd and Albania was 116th.

“The population expects the new government to create a more robust rule of law to better tackle corruption and crime and lay the foundations for a more prosperous Kosovo,” Becirovic said. “They will also need to improve relations with neighbors to become more attractive to foreign investors.”

To contact the reporters on this story: Boris Cerni in Ljubljana at bcerni@bloomberg.net; Misha Savic in Belgrade at msavic2@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net Michael Winfrey, Andrew Langley

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