From the Ashes, Entrepreneurs

By Arie Farnam

Seventeen-year-old Behar Shefiki and his father spotted their first McDonald's in Turkey a few years ago while picking up a shipment for the family's clothing store. Soon thereafter, in 1999, their shop back home in Kosovo was burned in the war with Serbia, and they had to start over with $175 borrowed from a friend. Behar and his dad rebuilt their tiny shop as a restaurant, painted a pirated version of the golden arches on the window, and reopened as Kosovo's unofficial McDonald's, serving sausages rather than hamburgers. "I know we don't cook like a real McDonald's," Behar calls out as he hitches up his apron and scrubs at the window above the grill, "but we're trying."

So is everyone else in Kosovo's economic revival--one marked by fast deals, chaotic reconstruction, and a vigorous black market. "There are new enterprises sprouting up everywhere--not always well-planned, but always with energy and hope," says Wojtek Mlodziejewski, a locally based U.N. trade and development official. "The question is: Are they sustainable?"

Most of the province's larger, state-controlled companies were destroyed in the war, leaving the economy hungry for goods and services. But entrepreneurs face huge logistical problems. Of the six routes over the borders, two lead to Serbia and are off limits to Kosovar Albanians for political reasons; one, infested with bandits, leads to Albania; one to Montenegro traverses rugged mountains to the remote Croatian coast; and two to crisis-torn Macedonia, once Kosovo's main link to Europe. All roads need repair. Kosovo still has unreliable power and phones, trains aren't running, and the airport isn't up to commercial standards. The embryonic banking system can't handle international money transfers, so cash must be carried abroad to pay for materials.

For all their challenges, Kosovo's entrepreneurs have an excellent record. The Micro Enterprise Bank of Kosovo, the only private bank in the province, reports only two defaults among 1,400 small loans. "These people are good at business," says Koen Wasmus, the bank's general manager. "Ten years ago, when the autonomy of Kosovo was rescinded by the Serb regime, a lot of Kosovar Albanians were thrown out of formal-sector jobs. They had no choice but to become entrepreneurial to survive."

The 1999 NATO bombing forced the economy to start from scratch. It's bolstered by international donations and diaspora savings, "but that won't last," says Ron Ashkin, head of a business-support program run by the U.S. Agency for International Development. "Finding an export here is like finding a needle in a haystack."

One of Ashkin's productive entrepreneurs is Nexhdet Kondiroli, who rebuilt his small, bombed-out plant. Six employees have resumed mixing recipes for cough syrup, eye drops, and lotions. Last year, sales hit $220,000 and this year may reach $350,000, if all goes well.

But misfortune is already mounting. The machines in the workshop and lab sit idle while Kondiroli is away in Turkey to escort a shipment of plastic bottles. His plant has been without supplies for months. "When Macedonia is closed off, we are trapped," his wife, Aferdita, says as she labels the last few bottles by hand, since there are no printers in Kosovo. "We can be brought to our knees by a war in Macedonia or the power going out," Aferdita groans, sinking her face into her hands. Here, as anywhere else, entrepreneurial zeal and hard work don't always win the day.

Farnam, a writer based in Prague, frequently reports on the Balkans.

Edited by Tim Belknap

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