I agree with Prime Minister Kurti that Kosovo needs a Sovereign Fund. But this is where my agreement with Albin Kurti and LVV's proposals on this issue ends. This proposal, like many others, shows their disrespect for the Constitution of Kosovo and the principles of a free economy. In fact, the current Sovereign Fund proposal is already in the Constitutional Court, as it is considered against the principles of a free economy.
Kosovo’s subterranean resources should be at the service of its people, that is beyond doubt. But the LVV’s Sovereign Wealth Fund proposal falls short of that goal. Instead, it seeks to hide the LVV’s communist approaches and restore state control over Kosovo’s economy, a practice that history has shown to be a failure.
Examples
We can learn a lot about such funds from global examples. Successful sovereign wealth funds like those of Norway and the United Arab Emirates show how a country can effectively manage its natural resources for the benefit of its people. But there are also examples of failures like those in Libya, Venezuela, Nigeria, Russia, Malaysia, and Kazakhstan, where mismanagement, lack of transparency, and political influence have ruined these funds.
What do the successful cases have in common? They come from countries with strong institutions and developed economies. Unfortunately, Kosovo is not yet at that level. Even international recommendations for Kosovo in this regard have been conditional on building capacities and institutions that can manage a Sovereign Wealth Fund.
The four main problems with the LVV proposal are:
1. Bureaucratic Efforts and Political Influence
Sovereign wealth funds require a high level of professionalism and independence from politics. The current LVV proposal for a Sovereign Wealth Fund, however, risks turning into a bureaucratic structure that will be overloaded with political influences. History has shown that public enterprises in Kosovo, such as KEK, Telecom and Post, have often been influenced by political interests, which has caused mismanagement and financial losses. Nothing ensures the success of these enterprises if they are in a sovereign wealth fund.
2. Investment in Local Economies and Market Distortion
The example of Norway clearly shows that profits from natural resources should be invested in international markets, not in domestic companies. The LVV, on the other hand, plans to invest these funds for the economic development of Kosovo. A Sovereign Fund that directly affects the local economy could create a situation where the state becomes a disproportionate player in the market, distorting free competition and hindering the development of the private sector.
3. The Ideological Roots of the Proposal
The LVV presents the Sovereign Fund as a tool for & economic development" and the foundation for a capital market, but in reality this is an attempt to re-centralize the economy and promote its ideological agenda. If the Sovereign Fund becomes the main buyer of shares in Kosovo's private companies, this would hinder the creation of a free and independent capital market. This approach is neither in the interest of the people, nor in the interest of the long-term development of the country.
4. Lack of Transparency and Efficiency
The public enterprises that will be transferred to the Sovereign Fund, such as KEK, Telecom and Post, have traditionally been burdened with financial and managerial problems. Adding a new entity like the Sovereign Fund without reforming these enterprises will only create more chaos and mismanagement.
I propose that if Kosovo wants a genuine and successful Sovereign Fund, it should follow a model that is based on professional management and global investment:
First, the Fund’s capital should come from Kosovo’s natural resources, such as profits from the extraction and processing of mineral resources, and not from companies that are in the Privatization Agency. The second point is that the fund should focus on investments in a global portfolio, ensuring sustainable returns for the Kosovo budget. Finally, the fund should be completely independent of political influences, with a professional board and supervised by international institutions for transparency.
But instead of focusing and spending money on such a risky project and instead of interfering in the economy with an unclear Sovereign Fund, we should focus on activating human potential and building local capacities.
Finally, I want to say that the Sovereign Fund could be a great opportunity for Kosovo, but not in the form that is being proposed by the LVV. This proposal does not aim at the genuine development of the country, but hides attempts to implement an economic model that history has proven to be a failure. Instead of ideological experiments, Kosovo needs strong institutions, transparent management and a clear vision for the future. Albin
Kurti and other members of the LVV have often shown us their communist ideology. They have been fighting against the privatization agency for many years. We should not think that his moderation, since he took the post of prime minister, is a change of principles, but see his moderation as a mask that he put on.
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