Trading with the enemy in Mitrovica, Kosovo. - RUhosting

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Euro's a month with this in 2006. This is lower than Serbia, where the average monthly wage was 334 Euro's. So, although the yearly grow rates seem optimistic Kosovo is still a very poor country with a huge unemployment rate and even bigger trade deficit. Many Albanians believed that after the independence everything would get better, and for many the lack of progress since the declaration has been an unexpected disappointment. It remains to be seen how this will develop in the near future. 4.2.6. Trade, Taxes and Laws Under pressure of the IC and hoping to improve the economy Kosovo is currently establishing the foundations of a modern market-led economy. The IMF calculated the real economic growth to be over 3.5 percent in 2007, slightly higher than the 3.1 percent growth of 2006. The small and medium enterprise (SME) sector, appears to be of great influence in this rise 15 . A small enterprise is defined by the EU as having less than 50 employees and a medium one as having less than 250 employees. In 2008 there were 87,960 SME in Kosovo, of which 3.400 in Mitrovica. It is unclear how many of these are still active. Kosovo has a liberal trade policy and is making efforts to develop into a market based economy. It enjoys free trade with other central European states trough the Central European Free Trade Agreement (CEFTA) and based on the EU Autonomous Trade Preference (ATP) Regime it has a customs-free access to the EU market - although some restrictions remain – and a Free Trade Agreement with the United States (ECIKS, 2008). Kosovo's tax system has a VAT of 16%, a Corporate Profit TAX of 10% and a progressive Wage Tax with a maximum of 10%. Its Tariff duties are as follows: there are no duties and taxes on exports, and there is a 10% duty on imports, with taxes exercised on fuel, tobacco, alcohol and luxury goods (ECIKS, 2008). Of all tax revenue almost 75% is collected at the border (UN, 2008). In February 2008, after the declaration of independence by Kosovo the two border posts in northern Kosovo were destroyed and since then smuggling activities have increased there, leading to substantial losses in revenue for both Kosovo and Serbia (UN,2008). Discussion about these border posts flared up recently again as Serbs protested against new regulations, saying that they refuse to pay taxes to the Kosovar government 16 . The UNMIK – Kosovo Trade Regime overview explicitly states that “Trade with Serbia and Montenegro is not subject to any customs duties” (UNMIK, 2004). This lack of customs duties (although not for all products) plus the proximity, the overlapping ethnic groups – Albanians living in Serbia and Serbs living in Kosovo - and the large shared border may all be explanations why Serbia is still one of Kosovo's largest trading partners despite their political conflict. Other important trading partners are Albania and Macedonia (where 1/3 of the population is Albanian), and Italy. 15 European Commission. Visited on 07-08-2009 http://ec.europa.eu/enterprise/enterprise_policy/sme_definition/index_en.htm. 16 SETimes. `Kosovo Serbs protest new customs regulation` 10/06/2009. Visited on 07-08-2009 http://www.setimes.com/cocoon/setimes/xhtml/en_GB/features/setimes/features/2009/06/10/feature-02 41
Country % of Export % of Import Albania 10,6 3,1 Serbia 10,1 18 Macedonia 5 10,8 Greece 5,5 4,2 Italy 12,8 3,9 Total 100 100 Table 1. Largest Trading partners of Kosovo in 2008. From SOK, External Trade, 2008. In June 2008 there were approximately 86,000 registered businesses in Kosovo, a large share of these are not active however (UN, 2008). In the first half of 2009 4006 new enterprises were opened in Kosovo, with 1527 (38,1%) of these being trade enterprises these proved to be the most popular followed by hotels and restaurants with 461 (11,5%) newly opened (SOK, 2009). 4.3. Mitrovica “Mitrovica is wedged into a corner of north Kosovo, bounded by the Shala hills extending northward from its east flank, and the Ibar River, which flows into the city from the west and turns north into a narrow valley leading to what was the heart of the medieval Serbian kingdom. South of Mitrovica, the Sitnica River's valley widens out into central Kosovo, making the city the natural gateway between Kosovo and Serbia. The remains of the fortress of Zvecan, which guarded Mitrovica's mines during Byzantine rule, perch on a high promontory just north of the town centre....When not divided, the city has served as a natural regional crossroads: with Montenegro to the west, Sandzak to the north west, and Belgrade to the north.” (ICG, 2005). This thesis focuses on Mitrovica because this city plays an important part in Kosovo's current social political landscape and inter-ethnic relations. The bridge on the river Ibar right in Mitrovica marks the spot where Albanian majority lands end and Serbian majority areas begin, and with this the political authority of Pristina ends as well as Belgrade's begins. Events that happen in Mitrovica are known to have an effect all over Kosovo, the most notable example of this would be the drowning of Albanian kids in the Ibar which sparked the mass riots of 2004. What happens in Mitrovica's two square kilometres causes ripples all over Kosovo's near 11.000 square kilometres, according to the ICG (ICG, 2005). This is why Mitrovica is an important factor in Kosovo's stability, or lack thereof. Some people believe that Mitrovica is too extreme for any reconciliation or improvement of relations to happen, others believe it is Kosovo's only hope of stabilising: “These measures presuppose existence of the will to tackle the issue of Mitrovica. Without such will, the international community will put at risk all its efforts to build stability in Kosovo.” (ICG, 2002). If the situation in Mitrovica would be improved, the ICG believes it may even become an example of multiethnicity and have a positive impact on inter-ethnic relations throughout entire Kosovo, as well as being a service centre for Kosovo's entire Serbian population (ICG, 2005). 42
Page 1 and 2: Nijmegen School of Management, Radb
Page 3 and 4: TABLE OF CONTENTS ACKNOWLEDGEMENTS.
Page 5 and 6: CHAPTER 1: INTRODUCTION “Sixteen
Page 7 and 8: Governmental Organisations (IGO's)
Page 9 and 10: 1.4. Thesis organisation - Short ou
Page 11 and 12: I learned a lot from it, as I found
Page 13 and 14: Of the seventeen people interviewed
Page 15 and 16: interesting experience was organisi
Page 17 and 18: Mitrovica Serb admitted that when h
Page 19 and 20: CHAPTER 3: THEORETICAL FRAMEWORK "P
Page 21 and 22: 4. Trade encourages the broader exp
Page 23 and 24: Miljacka River, separating the Serb
Page 25 and 26: This part of inter-ethnic trade can
Page 27 and 28: For the largest part of the past 60
Page 29 and 30: “Because of such dissatisfactions
Page 31 and 32: sent all colonists back to Kosovo.
Page 33 and 34: Conditions have improved and the de
Page 35 and 36: Albanians reacted to these new poli
Page 37 and 38: same: First an Albanian village whi
Page 39 and 40: Data from the SOK is sometimes used
Page 41: the highest aid per capita ever giv
Page 45 and 46: which were in turn disbanded in fav
Page 47 and 48: Another similarity between both com
Page 49 and 50: situation developed in favour of th
Page 51 and 52: its economic situation. Mitrovica u
Page 53 and 54: CHAPTER 5: RESULTS Placing inter-et
Page 55 and 56: Albanian” and by Serbs associated
Page 57 and 58: “But I will never accept the inde
Page 59 and 60: Another important reason why reconc
Page 61 and 62: “Everything that happens in Mitro
Page 63 and 64: August 2009 with violent protests a
Page 65 and 66: nationalists” because he believes
Page 67 and 68: (respondent #4). A Serb working in
Page 69 and 70: CHAPTER 6: RESULTS Views on the eff
Page 71 and 72: elieves inter-ethnic trade will imp
Page 73 and 74: Trader 3. Respondent #7, an Albania
Page 75 and 76: daughter of his sister who went to
Page 77 and 78: issues. On top of that you have to
Page 79 and 80: towards their colleagues of the oth
Page 81 and 82: that even if the legal or the grey
Page 83 and 84: 2004. Second, Blanton argues that "
Page 85 and 86: REFERENCES Andreas, P. (2004). The
Page 87 and 88: Lagazio, M., & Russett, B. (2004).

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