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UNMIK/PR/610 IAC: More Phones and Plans for Pensions: The Interim Administrative Council learned of UNMIK's broad principles for eventual pension contributions and payments, set to begin in the year 2002, as well as the plans for Post and Telecommunications Kosovo to increase the number of mobile phone subscribers to 400,000 by the end of the month. The presentation on pensions by Tony Preston-Stanley, co-head of the Central Fiscal Authority, was brief, and will be repeated at the Kosovo Transitional Council. He outlined the principles for UNMIK's policy planning on the pensions subject as the following: to avoid an old fashioned socialist pension system, as too expensive with too little coverage; to address the needs of all population groups; to be a comprehensive solution-not only for the short-term problem of unpaid pensioners, but also for the long-term set up of a pension fund for Kosovo; and to treat people from all ethnicities equally. Kosovo's Albanian pensioners have long confronted UNMIK on the fact their pensions have been unpaid for at least two years: this is because they paid into a fund in Belgrade to which UNMIK has no access, Acting SRSG Tom Koenigs told media after the meeting. There are various groups who must be considered in a pensions policy, Mr. Preston-Stanley said: for example the elderly who paid into a pension plan but have no compensation; elderly who never paid contributions; older workers nearing retirement and younger workers who should start now paying into a plan. Kosovo has 77,000 people over 70 years of age; 200,000 over 60. However families are growing smaller, so that within 15 years, the percentage of 'pensioners' will be similar to that of other western European countries. Mr. Preston-Stanley described various options in terms serving each group and options in the timing for introducing various components of the policy. Whatever UNMIK does to begin paying pensions, it will be expensive, he said: The cheapest introduction to a pension plan would be DM 12 million more than the current Department of Health and Social Welfare budget and could reach DM 40 million. Pensions will figure into the Kosovo Consolidated Budget for the year 2002, but discussions on the budget have yet to begin, Mr. Preston Stanley said. The World Bank has been assisting the Department of Health and Social Welfare in pension planning. By the end of the month, the CFA should have the first draft of a pension administration regulation, which will be published for consultation with political parties and interested organizations. Pension contributions may begin in the year 2002, tied to a wage tax. Regarding the PTK, Zef Morina and Rainier Lesar, co-heads of the Department of Post and Telecommunications, along with the PTK Director Leme Xhema, briefed the IAC on the accomplishments in repair, expansion and modernization of the Kosovo telecommunications network, and of the transformation from fixed to mobile telephone coverage. Most of the telecommunications infrastructure had been destroyed by air strikes before the new PTK was established in summer 1999. Only 100 lines were operating and the central post office was also ruined. Kosovo Albanian staff had been out of work for 10 years. PTK concentrated on building a new mobile phone system, since repairing the fixed telephone system would have been more expensive and time-consuming and less flexible for the future, The VALA 900 GSM system now has 100,000 subscribers in Kosovo and will soon have 400,000. Roaming agreements have been signed with 14 countries. To a question on why Kosovo was expanding its mobile, rather than fixed telephone system, Mr. Lesar said that although PTK would not abandon the fixed line system, the future was in mobile phones: "Fixed networks aren't important for the future. The profitability is too low; it takes longer to install; and a mobile system is easier to maintain." To a question from the IAC on high phone tariffs, PTK representatives said that 80 percent of all revenues go into purchasing new equipment to upgrade the network, and that the SIM cards were actually priced lower than the street prices. Among current projects, which PTK has embarked on, are: the Dardania project with established an extension of the digital switch to 10,000 lines. The Iliria project, which aspires to construct a new digital switch with 23,000 lines, to be in service by the end of the year. This EU-financed service will give Pristina the latest digital technology, and a digital network will cover all of Kosovo. By September, international access and connections should be re-routed to the European Fiber Optic Cable. DPT and PTK officials told IAC members that the department was concerned with minority coverage and had had "some success" in serving minority communities, which was such a priority that they had designated one officer to deal with that exclusively. The VALA 900 recorded messages will soon be in Serbian as well as Albanian and English. IAC member Hashim Thaci raised the issue of unpaid bills of subscribers in northern Kosovo. Ms. Xhema said that non-payment is very high and that UNMIK in Mitrovica is working on ensuring that bills are paid. By the end of the year, an Internet service will be widely available through PTK. Regarding the postal service, one million letters have be distributed
in and out of Kosovo from 103 post offices.
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