UNDP Launches Analyses of Priority Trade Policies and Human Development Topics

12 Aug 2014

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The Analysis of three policy assessments for priority trade and human development topics was launched on 12 August in the presence of the Minister of Trade and Industry, Bernard Nikaj, Vesa Kotilainen, First Secretary and Deputy Head of Mission of the Embassy of Finland in Kosovo, Andrew Russell, UN Development Coordinator , and representatives of the government, private sector, and other stakeholders.

The policy assessments provide information on selected trade and human development topics relevant for Kosovo’s future economic performance. Findings confirm the existence of positive relationships between exporting, productivity levels and human capital, indicating the importance of addressing them jointly in all relevant dimensions. Further, the report highlights the challenges faced by SMEs in Kosovo and provides policy recommendations in supporting them to further increase their competitiveness and expand their exporting capacities.  

The analyses was prepared in the framework of the Aid for Trade project which is funded by the Ministry for Foreign Affairs of Finland and is implemented by the United Nations Development Programme in Kosovo with the Ministry of Trade and Industry as main partner.

Highlights

The current situation in the export activities of Kosovo and the high trade deficit reflect the low level of competitiveness of the domestic market and its lack of diversification. This is a result of various constraints that the exporting sector in Kosovo has been facing since early 2000.

They are domestic in nature – primarily institutional – and also barriers specifically related to international transactions – both economic and political. Furthermore, firm specific constraints exist – technology and human resources – that equally affect firm competitiveness levels in foreign markets.

The purpose of this study is to identify the constraints facing current and potential exporters in Kosovo, while providing valuable information on key obstacles related to exporting and concise, practical recommendations on how to tackle them.

An understanding of the barriers to export is essential in understanding and determining why exporters are not able to make use of their full potential and why many firms do not succeed or even incur losses (financially) in their international attempts.  Understanding the barriers to export and their impact at a national level helps policymakers to develop key strategic guidelines and provide important insights for preparing national export policies.

 Furthermore, understanding the barriers to export could lead to minimizing their effect and result in higher export propensity and performance, for both individual firms and countries alike. As the main instrument to identify these barriers, a survey was conducted with Kosovar businesses and, in particular, with businesses engaging in export activities. In addition to the survey results, an intensive desk research was conducted to identify the particularities of the Kosovar economic environment in order to combine these with the most relevant scientific literature on this topic.