By: Genc Namani
Yesterday, the Government of Kosovo organized a meeting with various organizations and institutions to discuss the Economic Recovery Package, which was attended by the Prime Minister of Kosovo, Mr Avdullah Hoti.
The meeting was also attended by the representative of the Association of Kosovo Municipalities, Executive Director Mr. Sazan Ibrahimi, where they discussed the ways and opportunities of economic recovery after the pandemic Covid-19.
Prime Minister Hoti presented the orientations and goals of the Government with the Economic Recovery Package and presented nine measures in this regard.
Speaking at the meeting, AKM Executive Director Mr. Sazan Ibrahimi initially informed the participants that “The Association of Kosovo Municipalities will analyze the situation on the emergency needs of municipalities during the period of Covid-19 and we believe that a final assessment will be made on the damages caused at the local level in Kosovo by Pandemic Covid-19.The Association of Kosovo Municipalities, through this study, aims to understand the current socio-economic impact of Covid-19 in the municipalities of Kosovo, as well as to identify the emergency needs of the respective municipalities. This analysis will be presented on a closing conference with donors, municipalities and central institutions. In addition to that, another challenge will be the decline of own source revenues (due to the emergency situation, but also some “mini” packages that municipalities have designed to help businesses) so as a result, there may be problems in the execution of planned projects and thus Municipalities need additional funding. Moreover, non-involvement of farmers in the emergency fiscal package. According to the Municipalities, farmers should be included in the first and in the second package.
Another challenge for Municipalities at this stage is the Procurement Law and its procedures. Most municipalities, due to Covid-19 pandemics, have not been able to initiate procurement procedures for many projects. If some procedures are not shortened, the municipalities will not be able to make a lot of capital investments and spend the funds and thus affect the performance of local institutions.
On the other hand, the possibility of finding donors to support the service sector, because when it comes to convincing the local government, this represents a good chance for the country due to existing development factors, such as the young population and the rapid development of the information technology sector in recent years. Kosovo can experience a revival if the energy if directed towards digitalization.
Another point could be the increase of subsidies in the sectors of economic development which will directly affect the protection of the workplace and the mitigation of unemployment, as well as the possibility of a faster reimbursement of value added tax (VAT) and mitigation of fines by Tax Administration of Kosovo (TAK).
And finally, the continued support of businesses (mainly small and medium-sized businesses) including farmers and stockbreeders to secure the market after the situation we are facing, should be one of the priorities of state programs in the process of economic recovery” – said among others Director Ibrahimi.
The economic recovery package presented at this meeting contains nine (9) measures.
1. Facilitate access to finance
a) loan guarantee fund
b) cost of reprogramming
2. Reduction of tax burden
a) postponement of tax payment
b) coverage of 5% of the pension contribution
3. The measure of employment support
a) work from home
b) digitalization of trade and services
a) doubling the budget for agriculture
b) increase of the storage capacities of agricultural products
5. Aggregate demand
a) amendment of the Law on Pension Trust
6. Assistance to Public Enterprises (POEs) to cover the minimum cost of expenditure
a) the possibility of obtaining loans from POEs
7. Budget Review
8. Central Bank – Insurance Fund
9. Mobilization of funds intended to reach up to 1.2 billion euros.
Comprehensive Government Working Groups will be set up to implement these measures, and a special law will be developed, specifically for the implementation of these measures.