THE IMPORTANCE OF FOREIGN DIRECT INVESTMENTS ON ECONOMIC DEVELOPMENT OF KOSOVA
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Authors:
• Myrvete Badivuku Pantina, email: unknown, Afiliation: University of Prishtina-Faculty of Economics
• Mihane Berisha Namani, email: unknown, Afiliation: University of Prishtina-Faculty of Economics -
Keywords: Foreign direct investment, economic development, unemployment, imports, trade deficit
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Abstract:
Kosova, in the period of nine years, has gone from a post-conflict environment into a state which is considered to be under transition. It has passed the reconstruction period by orienting itself toward the economic development and European Integrations. Yet, an economic development is not enough to be able to address the challenges Kosova is facing, such as high unemployment and high trade deficit rate. The unemployment rate in Kosova is one the highest economic concerns. The unemployment rates fluctuate from around 30% (FMN 2004) up to 40% (ESK, 2006). The high deficit of the current account of balance of payments is also a concern for the Kosova’s economy; which is estimated up to 17.3% of the GDP after the foreign intervention. The high deficit of current account is being considered one of the highest ones in the region, whereas the main source of this deficit remains the high level of imports. Therefore, in order to overcome such problems, higher levels of investments are needed. Countries that invest higher proportion of their GDP tend to grow faster. However, as lack of the domestic capital and financial investments, i.e. Kosova, foreign investments represent the most effective way to create new jobs and to create the preconditions for a sustainable economic growth in the future. The aim of this paper is to offer information about the overall investment path including the foreign ones in Kosova in the war aftermath, as well as to analyze the opportunities and priorities for possible future investments.