Risk and Resilience Assessment Kosovo

2017

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Date:

June 2017

Team Composition:

This document was prepared by Bledi Celiku (Young Professional, TTL) and Agon Maliqi

(Consultant) under the guidance of Radhika Srinivasan (Lead Operations Officer) and Marco

Mantovanelli (Country Manager, Kosovo). The team is grateful to Gloria La Cava (Senior

Social Scientist), Ifeta Smajic (Social Development Specialist), Lindita Lepaja (Operations

Officer), Maria Davalos (Senior Economist), Milena Stefanova (Senior Operations Officer),

and Rhedon Begolli (Senior Energy Specialist) for helpful feedback. Consultations with

partners, academia, regional organizations, and civil society organizations were instrumental

in formulating the report. The report was edited by Lauri Scherer.

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Table of Contents

ACRONYMS AND ABBREVIATIONS ..................................................................................................... 3

EXECUTIVE SUMMARY ............................................................................................................................. 4

CONTEXT ......................................................................................................................................................... 6 HISTORICAL TRAJECTORY .......................................................................................................................................... 6 KEY RECENT DEVELOPMENTS ................................................................................................................................... 9

DRIVERS OF FRAGILTY AND THEIR ROOT CAUSES ................................................................ 10 CONTESTED STATEHOOD AND UNRESOLVED ISSUES WITH SERBIA ............................................................ 11 HIGH LEVELS OF ECONOMIC AND POLITICAL DISENFRANCHISEMENT, PARTICULARLY AMONG

YOUTH ............................................................................................................................................................................ 14 ACTORS THAT PROMOTE ALTERNATIVE POLITICAL ORDERS ........................................................................ 23

RESILIENCE FACTORS ............................................................................................................................ 25

KEY SHORT TO MEDIUM TERM RISKS ........................................................................................... 27

RECOMMENDATIONS .............................................................................................................................. 28

VISUAL ILLUSTRATION OF KEY DRIVERS OF FRAGILITY .................................................. 33

REFERENCES ................................................................................................................................................ 34

SOURCES ........................................................................................................................................................ 37

ANNEX 1. ETHNIC MAP OF KOSOVO ................................................................................................ 38

ANNEX 2. MAP OF RELIGIOUS RADICALIZATION ..................................................................... 39

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ACRONYMS AND ABBREVIATIONS

AFK Alliance for the Future of Kosovo

CPF Country Partnership Framework

CSO civil society organization

DLK Democratic League of Kosovo

DPK Democratic Party of Kosovo

ECD early childhood development

ECE early childhood education

EE & RE energy efficiency and renewable energy

EU European Union

FCV fragility, conflict, and violence

FDI foreign direct investment

FYROM former Yugoslav Republic of Macedonia

IMF International Monetary Fund

KFOR Kosovo Force

KLA Kosovo Liberation Army

KSF Kosovo Security Force

MENA Middle East and North Africa

NATO North Atlantic Treaty Organization

NEET not in education, employment, or training

OECD Organisation for Economic Co-operation and Development

PAR public administration reform

PFM public financial management

PISA Programme for International Student Assessment

UN United Nations

UNDP United Nations Development Programme

UNESCO United Nations Educational, Scientific, and Cultural Organization

USAID United States Agency for International Development

USIP United States Institute of Peace

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EXECUTIVE SUMMARY

1. Kosovo is a post-conflict society that for almost 17 years has undergone parallel

and complex processes of state building, democratization, and development, as well as

transitions in its economic model and social values. Its demographic structure is marked by

its youthful population and high density, which makes it vibrant and energetic. However, these

same qualities create many short-term liabilities that stem from the challenge of meeting

political and economic demands. A history marked by ethnic conflict, coupled with a lack of

democratic tradition, has created considerable path dependencies in shaping the key structural

factors of conflict and violence.

2. Events in recent years have shown that Kosovo, while largely stable, retains a

degree of fragility and potential for violence. This report, prepared as an input to the Kosovo

Country Partnership Framework (CPF), identifies three main fragility risks: (1) economic and

political disenfranchisement, especially of youth; (2) the unresolved issues with Serbia and

interethnic relations; and (3) the motives and actions of various political actors capitalizing on

structural drivers of fragility.

3. Economic and political disenfranchisement, especially of youth, is arguably one of

the greatest and most relevant risks for Kosovo in the near to medium term; it has

considerable potential to impact the country’s stability. High youth unemployment and

especially inactivity are caused by a wide range of supply factors, such as a youth bulge, poor

workforce skills, and weak matchmaking platforms. On the demand side, a weak private sector

is unable to create enough jobs, which over the past decade has put pressure on the public sector

to be the main provider of employment. This situation has fed a culture of political clientelism,

led to high rates of exclusion, adversely impacted the state’s capacity for service delivery, and

also fueled mistrust in and dissatisfaction with institutions. Youth disenfranchisement was

already an important driver of migration, political violence, and violent extremism in recent

years (albeit not at a very threatening level). However, failure to address some of the structural

root causes of this problem has further reduced trust in institutions and, in a context of no legal

freedom of movement within the European Union (EU), provided fertile ground for

radicalization and conflict.

4. Statehood remains not fully recognized in the international arena, even though

Kosovo declared its independence from Serbia in 2008. The EU-facilitated dialogue

between Kosovo and Serbia, which culminated with the Brussels Agreement, has managed to

somewhat normalize interethnic relations within Kosovo. However, its implementation

remains a challenge, and public trust in the merits of the dialogue in Kosovo is shaky at best.

Moving forward, the creation of the Association of Serb-Majority Municipalities, a key

demand from Serbia, remains a point of contention. The association is highly unpopular in

Kosovo and has been a source of political violence in the past. A further deepening of the EU

crisis (Brexit, migration influx, political tensions between some members) also creates an

unfavorable external environment for dialogue and could risk reviving the regions’ past

demons.

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5. Accumulated frustrations from economic and political disenfranchisement, as well

as the unresolved issues with Serbia, have fueled antiestablishment sentiments. This poses

a threat to the current institutional order and creates uncertainty. Religiously motivated

extremist groups and organized crime are also taking advantage of the situation on the ground,

further perpetuating the cycle that weakens the state. This report finds that there are other

ethnic, regional, and political dimensions of risk that interplay with one another; however, by

themselves they represent low- to medium-level risks. Only when they are mixed with the

structural causes of youth disenfranchisement do they have a more disruptive security impact

and potential for violence.

6. Regardless of the challenges mentioned above, Kosovo continues to have strong

resilience factors. The international community plays an active role, including through its

military presence on the ground, and thus remains a powerful guarantor of stability and

reconciliation between Kosovo and Serbia. Some domestic institutions, particularly security

sector ones, have higher rates of trust and have managed to confront significant domestic

political crisis and the challenge of violent extremism, which creates an important pillar of

stability. Kosovo is consolidating its democracy; therefore, elections and a relatively active

civil society serve as an important buffer to feelings of political disenfranchisement. On the

economic front, diaspora remittances and a widespread culture of family solidarity provide a

key safety net with which to mitigate the effects of economic disenfranchisement. While

violent extremism poses many security threats, a long and embedded tradition of moderate

Islam and increasing public awareness of threats reduce the risk of violent extremism spreading

in Kosovo.

7. In the upcoming CPF period, the World Bank Group (WBG) can address the

fragility, conflict, and violence (FCV) risks facing Kosovo through several of its

programs. The issues of political and economic disenfranchisement present programming

overlaps, which creates opportunities for the WBG to engage in risk mitigation and prevention.

This particularly relates to the issue of increasing opportunities for youth, such as by reducing

labor market barriers, promoting entrepreneurship and apprenticeships, addressing skill gaps

where relevant, and facilitating links between the education sector and the labor market. The

WBG could also serve as a reliable mediator for ethnic relations by facilitating, where

programmatically possible, economic integration. Similarly, on the governance side, the WBG

could pay special attention to accountability mechanisms across its portfolio—especially in

public financial management (PFM) and public administration reform (PAR) initiatives, and

ensure that public resources and employment opportunities are equitably distributed to

vulnerable or disenfranchised groups or geographical areas.