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US-Albanian Diaspora Bridges Investment Gap in Kosovo

09 07 2007  While few businesses seem willing to invest in ‘risky’ Kosovo, some wealthy New York Albanians hope to combine their patriotic instincts with their wish to make a profit.

By Andi Balla in New York

With its nondescript offices in Brooklyn, Triangle General Contractors could be a typical small American business aspiring to expand its niche market - roofing and construction in New York City.

But its owner, Florin Krasniqi, has other plans. Against the advice of many, he bets that Triangle can flourish by investing in his native Kosovo.

When the company won an international bid to reconstruct an 8.3 megawatt hydro-electric power plant in western Kosovo two years ago, Triangle became one of the first American investors in the UN-administered territory.

“My objective is to make a difference,” Krasniqi said. “Money is great. But for me, it is a vehicle for making a difference.”

Krasniqi gained fame during the Kosovo war in 1998 and 1999 after raising $30 million in the Albanian American community to help buy weapons for the Kosovo Liberation Army. In the process, he nearly bankrupted his business.

Now he is part of a small a group of Albanian businessmen in New York who want to combine helping Kosovo’s economy to grow with making a profit.

Krasniqi is unusual as many potential Albanian American investors are taking a wait-and-see attitude towards Kosovo, according to Mimoza Kusari-Lila, the executive director of the American Chamber of Commerce in Kosovo.

“Many are waiting for the final status of Kosovo to be decided and those who have invested are encountering some basic problems with fiscal policy and the rule of law,” she said. “That makes them and a lot of other investors reconsider their involvement in Kosovo.”

Krasniqi insists there is money to be made in Kosovo. He said state-owned companies are being privatized there for “next to nothing” because local businesses fear to make investments.

However, some other Albanian Americans have also spotted the potential. The Bronx-based Bajraktari Realty Corporation, for example, privatized Kosovo’s renowned Rahovec Winery for $6.5 million and is looking to expand in the wood processing business in the southern city of Peje.

Krasniqi, working with partners in the United States and Kosovo, also privatized the Zastava Ramiz Sadiku auto parts plant, renaming it Kosova Steel. The company was sold for the equivalent of $3.5 million and is now in full production, exporting parts to the European Union.

But several factors continue to deter investors, starting with Kosovo’s political uncertainty. Albanians in America see independence as the first step in turning Kosovo into a normal economic entity.

Kosovo’s independence can’t come soon enough for people like Avni Mustafaj, a leading Albanian American lobbyist, who for eight years has been working to win support for an independent Kosovo in Washington.

Mustafaj, executive director of the National Albanian American Council, says only independence, as well as proper leadership and hard work, can significantly change the quality of life for the people of Kosovo.

The current reality on the ground is tough and unwelcoming for new investors. In addition to the issue of final status, bureaucracy, corruption and the poor infrastructure choke the desire of businessmen to invest money. “All we hear is invest and invest,” Mustafaj said. “But you need the infrastructure to do that.”


It’s a message that hasn’t been lost in Pristina. Kusari-Lila of the American Chamber of Commerce said: “A very significant obstacle is weak infrastructure - energy, roads, rail ways, lack of proper urban planning, and lack of capital.”

The territory’s uncertain international status has made it impossible for the government to borrow from international institutions like the World Bank.

Commercial banks will lend money, but only at a very high interest rates because they see Kosovo as a risky area.

Triangle’s investment at the Kozhner power plant, for example, was possible only because it used a $5.5 million loan from the Overseas Private Investment Corporation, a US government programme that helps American businesses invest in high risk developing markets.

Little or no lending means very few investments take place in Kosovo. The territory produces almost nothing. Only 4 per cent of imports are covered by exports, according to the EU Economic Policy Office in Kosovo.

Though Kosovo suffers from a lack of reliable statistics, the European Union, which has effectively run Kosovo’s economy for the past seven years, believes unemployment is between 40 and 60 per cent.

Matters are made more acute by the fact that Kosovo has Europe’s highest birth rate and half the 2.4 million population is under 27, which means 30,000 people enter the job market each year.

A large proportion of the population depends on money sent home by family members abroad for their survival. Remittances make up about 13 per cent of Kosovo’s GDP, while donor assistance fills another 34 per cent, according to a European Union economic profile of the region.

The EU Commission keeps tabs on Kosovo because the territory could be a candidate for EU membership one day. The commission sees foreign economic assistance as “rapidly declining” as final status approaches.

This means things could get much worse for the population before they get any better, and the Kosovo government says investments are desperately needed now, as the economy is growing by only 3 per cent a year.

Albanian Americans, who number more than 200,000 in the New York alone and have substantial wealth, can help plug the gap, according to Krasniqi.

But for the time being Kosovo is still, on paper, part of Serbia and Belgrade says it will never let go of Kosovo willingly. Moreover it has used economic arguments to make its point in the past.

The Serbian President, Boris Tadic, argues that a tiny independent Kosovo, one-third the size of Belgium, can never survive alone economically and will need Serbia’s larger markets to sell goods and employ people.

The northern tip of Kosovo, a mineral-rich region attractive to foreign investors, is also controlled by local Serbs who have vowed never to be separated from Belgrade.

The future of the northern tip and the other Serbian enclaves, which are economically separated from the rest of Albanian Kosovo, remain the hottest points of contention in the argument over independence.

Ironically, the one thing Albanian and Serbs have in common is that both peoples want to join the European Union and see it as the ultimate solution to the region’s political and economic disputes.

For its part, the European Union sees all the region’s countries as potential candidates but hasn’t given Serbs or Albanians specific target dates for membership.

Krasniqi, who admits to many headaches in dealing with bureaucratic procedures while investing in Kosovo, says what concerns him most is that Serbia will try to retake Kosovo by force. “Another war is the answer to that,” he said. “No one gives you independence. You take it.”

Andi Balla is a Balkan Insight contributor. Balkan Insight is BIRN’s online publication.