UNMIK ON AIR

May20^th ,2003.

LAND REGULATION

(Andrea Saulo – Hysni Recica)

Hello and welcome to UNMIK on AIR with Sputnik Kilambi and Martin Redi

Economic development is a key indicator of concrete progress in Kosovo – and privatization, stress international officials, is a major part of this process. Since its creation, one of UNMIK’s top priorities has been to effect a fair and legal transition from a centralized to a decentralized economy. The focus has been on private ownership of business and economic growth in the private sector.

A critical part of this task was the promulgation last week by UNMIK chief Michael Steiner of a regulation addressing the problems of land ownership by socially owned enterprises, SOEs.

The Land Use Regulation is described as critical to Kosovo’s economic and political future, providing a legal framework for the process of privatizing socially owned enterprises.

Juergen Voss, Associate head for Economic Reconstruction explains that the regulation converts land use rights held by socially owned enterprises (SOEs) into 99 year lease holds which can be freely transferred and used as a guarantee for securing credits.

Juergen Voss: First of all the regulation does nothing with redefining land use right of social owned enterprises. It converts such rights in the context of privatization program into lease which can be freely transferred and which can be used as collaterals to secure credits, so it can be mortgaged.

And Voss stresses, that’s all that Regulation does. But Serbian authorities were unhappy with the adoption of the Land Use Regulation. In the words of Vice Prime Minister Nebojsa Covic, it amounted to nothing short of “robbery of land and socially-owned companies”. UNMIK denies these accusations – Belgrade it says was fully consulted regarding privatization and all legitimate stakeholders are guaranteed recourse to law. Moreover, all key international players were consulted, as were legal experts and donors. Juergen Voss, again.

Juergen Voss: It doesn’t transfer itself anything. It does especially, not attach at all the question of ownership right. This is exactly the point why the use rights are converted into leases, but not into ownership rights, in order to avoid, in any way to prejudge the question who maybe the real titleholder, the owner of land which is subject to these land use rights.

Covic seems to have changed his tune somewhat since – he is now quoted as encouraging Serb businessmen, especially those from Kosovo to present tenders for future privatization bids. This he reportedly said would protect Serb national interests.

Kosovo Albanian leaders feel the Land Use Regulation will to an extent correct the balance. Kosovo’s Albanian majority, says Tome Hajdaraj, head of the Assembly Commission for agriculture, forestry and rural development, was badly hit by nationalization. The new regulation he hopes will bring the land back to legal owners.

Tome Hajdaraj: With the colonization of Kosovo, in 1948, not to mention 1937, 1912, 1953, 1963, 1989, unfortunately the land was grabbed by the majority population through nationalization under the pretext that they were not loyal to the authority, or that they did not have enough family members to till the land, so the land was given to colonizers, 5 hectares each, those who had a boy over 16 got 2 extra hectares.

But for UNMIK, the key is protecting the interests of all of Kosovo’s people regardless of ethnic background – strong protections are included for workers who feel they have been discriminated against and the Kosovo Trust Agency itself is subject to strict rules under the Land Use Regulation. The point is, adds Voss; privatization cannot succeed without addressing the land use rights issue.

Juergen Voss: The privatization polices, not the land use right itself, which are closely connected to use rights regulations have been adopted by the KTA board and Serbian community is represented in KTA board with person of minister (Goran) Bogdanovic. And minister Bogdanovic, as all the other members of board shared and vote in favor of the privatization policies.

The Land Use Regulation also clearly defines the entitlement of employees – a 20 percent fee of tender proceeds will be distributed to all eligible workers of an SOE. The eligibility of a worker is also clearly defined – they must be currently employed and they must have worked for at least 3 years. All lists of eligible employees must be published in Albanian and Serbian. UNMIK is confident that all possible precautions have been taken. For Ali Jakupi, Minister of Trade and Industry, the regulation paves the way for the long waited privatization.

Ali Jakupi: Today is a big day, this is a historical date, because from today on we will be more and more familiar with the market economy, with countries that have embraced the concept of market economy earlier. Kosovo from today continues to distance itself from the former socialist system, and the social and public property for over 50 years will have new owners and will be transformed, and will be competitive with development countries.

Tender invitations for the first six enterprises earmarked for privatization by the KTA Board have been already published. The stage is set for the investors, both domestic and foreign. The land use regulation should provide the necessary kickstart for a modern and efficient Kosovar economy.

And that’s all for this edition of UNMIK on Air. Thanks for listening and stay tuned for more.