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The Economic Sustainability of Post-conflict Kosovo

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  • James Korovilas

Abstract

Kosovo is currently operating as an independent economic state, having severed the majority of economic links with the former Yugoslavia. This article explains why the Yugoslav dinar was replaced by the DM (in turn replaced by the Euro) as the new national currency of post-conflict Kosovo. Use of the DM, coupled with a relatively open trade policy, has resulted in a severe visible trade deficit. The stock of DM is continuously being replenished by the inflow of money both from the various international agencies operating in Kosovo and from remittances from Kosovars working abroad. The article argues that, even with the current low level of export earnings, the economy of Kosovo is economically sustainable, since the international presence in Kosovo is partly responsible for the high demand for imports. However, in the absence of a competitive export sector, the economy is still highly reliant upon the inflow of remittances, without which Kosovo would be unable to meet the costs of vital imports.

Suggested Citation

  • James Korovilas, 2002. "The Economic Sustainability of Post-conflict Kosovo," Post-Communist Economies, Taylor & Francis Journals, vol. 14(1), pages 109-121.
    • Handle: RePEc:taf:pocoec:v:14:y:2002:i:1:p:109-121
    DOI: 10.1080/14631370120116716
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    References listed on IDEAS

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    1. World Bank, 2001. "Kosovo : Economic and Social Reforms for Peace and Reconciliation," World Bank Publications - Books, The World Bank Group, number 13991, December.
    2. Milica Uvalic, 2001. "Regional Cooperation in Southeastern Europe," One Europe or Several? Working Papers 17, One-Europe Programme.
    3. James Korovilas, 1999. "The Albanian Economy in Transition: The Role of Remittances and Pyramid Investment Schemes," Post-Communist Economies, Taylor & Francis Journals, vol. 11(3), pages 399-415.
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    Cited by:

    1. Nicolas Lemay-Hébert & Syed Mansoob Murshed, 2016. "Rentier Statebuilding in a Post-Conflict Economy: The Case of Kosovo," Development and Change, International Institute of Social Studies, vol. 47(3), pages 517-541, May.
    2. Teuta ISMAILI-MUHARREMI, 2015. "Factors Affecting Current Account in the Balance of Payments of Selected Western Balkan Countries," The Journal of Accounting and Management, Danubius University of Galati, issue 3, pages 61-68, December.
    3. Teuta Ismaili-Muharremi, 2015. "Approaches Affecting Current Account in the Balance of Payments," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 4, December.

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