At a time when Kosovo economy is declining as a result of the COVID-19 pandemic, the role of diaspora in Kosovo economy continues to be significant.
In addition to remittances, which have increased during the pandemic, there has been a visible decline in diaspora investments in real estate in Kosovo, the purchase of household items, and what is most influential for our economy, diaspora spending during visits to Kosovo has dropped significantly. Prior to the pandemic, diaspora expenditures during their visits were estimated at over 328 million Euros or 4.6% of GDP per year. While this year, based on the drastic decline of diaspora visits to Kosovo by over 62.5% compared to 2019, the benefits of Kosovos economy are expected to be small, about 0.55 to 1.83% of GDP. In addition to the fear of the coronavirus, another obstacle for the arrival of diaspora during summer included measures taken by Kosovo and other countries for visiting Kosovo. The drastic increase in the number of infections before the summer season made many countries in Europe qualify Kosovo as one of the countries with a high risk of spreading the infection.
The shortening of diaspora stays has obvious consequences on the economy of Kosovo and is expected to negatively affect various sectors of economy, starting from the hotel, retail, fuel, gastronomy sectors etc.
However, knowing that remittance revenues may not be stable in the years to come due to global economic shocks and other elements, Kosovo should: develop policies that encourage reallocating remittances towards investments and savings, either by creating investment platforms or issuing government bonds to the diaspora; by reducing the cost of transferring remittances; and, by increasing programs on financial education of remittance-receiving families; finalize the diaspora registry, in order to use the human capital of diaspora, which should contain information on their fields of expertise, professional experience, readiness for temporary relocation, etc; establish professional networks and plans with specific goals for the inclusion of diaspora in the economy; improve the doing-business environment with an emphasis on strengthening the rule of law, intellectual property rights and transparency.
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