NY Times
Commerce reviving in Kosovo

July 13, 2000

MALISEVO, Yugoslavia (AP) -- More than a year ago, Ali Mazreku was hiding in the woods from the Serbs. Now, he and his brother sell peaches from Macedonia, bananas from Ecuador and sweets from Croatia in a clean, well-stocked grocery they built with their own hands.

The economy isn't exactly booming in this farming town of 60,000 people about 25 miles southwest of Pristina. Ali's older brother and business partner, Avni, said they often sell food on credit to their less well-off neighbors in the interest of good community relations.

Nevertheless, the contrast between Malisevo now and the end of 18-month conflict with the Serbs is striking. After the Yugoslav army overran the town in the summer of 1998, most of the inhabitants fled to Albania.

For months, the only signs of life in the devastated town center were a few Serb policemen, stray dogs and a mentally disturbed man who used to direct traffic in the main intersection, beating offenders' cars with a stick.

Now, the streets of Malisevo are jammed with cars, townspeople and the occasional Russian peacekeeper. Stalls selling shoes, foodstuffs, trinkets and garments have sprung up on sidewalks. Workmen are reconstructing homes and building new cafes and stores.

It is a pattern that can be seen throughout Kosovo, except in the economically destitute parts where Serbs remain. Slowly, tenuously, small-scale commerce is reviving after the destruction and dislocation of the ethnic conflict and last year's NATO bombing campaign.

Municipal official Jakup Zulfaj said 140 new businesses have registered in Malisevo since April and he expects the total number to reach 1,000 by late August. Construction and groceries are the main businesses, he said.

"The private sector is developing at a fast pace, with 70 percent of businesses and private enterprises operating once again," the European Union said in a recent report. "Although unemployment is still a serious problem, businesses and enterprises are employing more than in 1998 and are more productive than ever."

International officials credit much of the commercial revival to the entrepreneurial spirit of Kosovo Albanians, which is rare in the Balkans, where state domination of the economy was the rule under communism.

After the Belgrade government began cracking down on restive Kosovo Albanians in the 1980s, many of them lost state jobs and had to turn to private trading -- or smuggling -- to survive. Seed money for businesses often came from family members working in Switzerland, Germany and other Western countries.

Traditional trade links with neighboring countries have resumed, although not all of it legal since the NATO-led peacekeeping command has been unable to stop smuggling.

What is still lacking, however, are major industries which can jump-start the economy. Outsiders have refrained from any significant investment until the sticky question of sovereignty is settled, waiting until Kosovo's political status is decided.

To encourage major foreign investment, Kosovo also needs massive infrastructure improvements. The poor state of roads, sewers and utilities would discourage even the bravest investor.

As the poorest and most backward area of the Balkans, Kosovo's economy traditionally relied on mining, agriculture and power plants, which sent electricity to the rest of Serbia.

Most mines are not operating now because ownership is in dispute between the United Nations, the Yugoslav government and the ethnic Albanians. Farming has declined because farmers cannot get loans for seed and are often at risk because of unexploded ordnance left over from the conflict. Kosovo's antiquated power stations cannot supply the province's own needs.

All this means that many Kosovo Albanians lack the cash to revive the economy through consumer spending. Besim Mazreku, who is no relation to the grocer, sees the effects of the cash crunch every day.

The former Kosovo Liberation Army fighter supports 24 members of his extended family by selling sports shoes from an outdoor stall, and worries that the business boom won't last.

"We are not in good shape," Mazreku said. "I've taken a loan but now I have to repay. Demand for shoes is very low. June and July, these two months have been horrible. Maybe people don't have money."

Original article