Kosovo’s 2005 Budget

By Gëzim Kasapolli

Hello and welcome. From the studios of UN radio in Kosovo I am…

In late January, after more than 6 weeks of debates, UNMIK and Kosovo’s Interim government finally approved the 2005 Consolidated Budget.

According to government sources, clarifying the objectives of the upcoming fiscal year proved to be the biggest obstacle for the Ministry of Finance and Economy. Budget Director Agim Krasniqi, says this year, the most important thing was balancing overall fiscal needs with the specific needs of individual institutions.

Krasniqi

“The first objective is to maintain the budget and fiscal stability and more importantly to fulfill the 3^rd standard related to economy and to have control of expenditures. Our 2^nd objective was not to allow space for extra expenditures through a regular budget process.”

The International Monetary Fund served in an advisory role in drafting the current budget. The IMF provided technical assistance in money management techniques particularly related to setting spending limits and in evaluating the high priority investment needs for Kosovo. Mark Auboin is the IMF’s representative in Kosovo.

Auboin

“At the moment it’s true that the expansion of the government has been rapid. If it were the expansion of the government for the public investment, which is to replace the money which donors are no longer giving or to build the infrastructure, for education or health then it would be fine with us. But the problem is that a lot of the budget or essentially 80% is spent to feed the government, its workers and for subsidies.”

One of Kosovo’s new agencies entrusted to ensure the proper usage of Kosovo taxpayer dollars is the Office of the Auditor General. The OAG will theoretically recommend to Kosovo’s various institutions where they are to be cautious with their budgetary spending habits, this according to Inge Britt Ahlenius director in the Office of Auditor General.

Ahlenius

“It will have an impact of increasing transparency, accountability and integrity in the handling of Kosovar people’s money, cause always there is a question of being aware of the fact that the budget is nothing more then the tax money for Kosovar people. I think that our presence will mean that people who are responsible in different organizations will be careful in how they handle their money.”

But spending Kosovo’s Consolidated Budget is not as easy as it may appear says Mark Auboin of the IMF. Auboin says the consequences of misspending can be grave, and economic analysts contend the current government is dealing with the fiscal irresponsibility of the previous government. Mark Auboin:

Auboin

“What we are telling the government or what we are advising the government is to curve the level of spending in order to be prudent otherwise Kosovo will run out of money.’

The Kosovo government has stated publicly that they incorporated IMF suggestions into the current budget scheme. But, Agim Krasniqi, Kosovo Budget Director says the interim government was already aware of the spending faults of the previous government and has taken the necessary precautions to correct them.

Krasniqi

“After the recommendations that we got from IMF that are related to restoring the budget situation and not only as a result of IMF suggestions but also because of the budget stability we found it necessary to review the expenditure for year 2005.”

Reducing budgetary expenditures will have a direct impact on the overall economic situation in Kosovo, and the interim government is optimistic that a limited number of Kosovars will be affected by these changes. Critics of the policy assert those social service sectors will the hardest hit.

This is all for this edition of UN Radio in Kosovo. Thanks for listening and stay tuned for more.