Business

Kosovo's entrepreneurs hope for brighter future

Frutomania juices and smoothies
Image caption The Frutomania brand is popular with Kosovans

It is only just past nine in the morning - the staff are still taking the chairs off the tables at the pub in the centre of Kosovo's capital Pristina - and Alban Ibrahimi is keen to start drinking.

But the shots the Kosovan entrepreneur has in mind are strictly non-alcoholic.

With a subtle flourish, the 36-year-old lines up a series of small, squat bottles of assorted fruit juices and smoothies, along with glasses of palate-cleansing water.

"Try the sour cherry," he suggests, pulling forward a bottle full of thick burgundy-coloured juice.

Mr Ibrahimi rattles through the health-giving benefits of the drink - noting that it is high in antioxidants, helps to reduce cholesterol, and contains no sugar, or indeed any other additives.

But perhaps most importantly of all, it tastes delicious.

Kosovans have been quick to catch on to the delights of Mr Ibrahimi's products. Since his Frutomania brand launched in 2010 it has found a place in hundreds of supermarkets, as well as countless bars, cafes and restaurants.

"It costs a little more than juices from concentrates," says Alban. "But as soon as people tried it they recognised the difference."

'Corruption problem'

But it is not just the taste - or the quality - of Frutomania's drinks that stands out. The company is a business rarity too - a successful start-up from Kosovo.

Since its unilateral declaration of independence from Serbia in 2008, things have not gone entirely to plan for Kosovo. Making the split just as economic turmoil engulfed Europe was perhaps the epitome of bad timing.

Image caption Alban Ibrahimi is now also exporting his range of fruit drinks

This hard-luck story is reflected in the statistics. The official unemployment rate runs at around 40%, and one third of the population lives below the poverty line.

The World Bank notes that Kosovo has managed to maintain GDP growth since the onset of the crisis.

But it says that that is due in large part to remittances, or money transfers, from Kosovans working abroad - and that two thirds of the population at home are classified as "economically inactive".

With the thrill of independence long since gone, people have started to ask what their government is doing to improve matters.

The answers are generally depressing.

The latest annual Index of Economic Freedom - a joint project between the Wall Street Journal and the conservative US think tank, the Heritage Foundation - does not even give Kosovo a ranking due to insufficient data.

But it makes a few unflattering points about Kosovo's business environment.

"Continued progress is hindered by weak institutional capacity, and the government has yet to show a sustained commitment to economic freedom," says the Index.

"Corruption is still prevalent and undermines the already restricted business environment. Political interference in the judiciary is troubling.

Image caption There have been a number of protests this year against the government's running of the economy

"Remnants of the centrally planned economy still linger in a government bureaucracy that makes business formation costly and onerous."

None of this comes as news to Alban Ibrahimi.

"Legally, it's not hard to set up a business in Kosovo - but practically, it's very difficult," he says.

"The government creates the environment for business development. They need to prepare legislation and security for people to invest.

"Their role is crucial - they should also be injecting funds so that people can start their own businesses."

'Necessary reforms'

The current Kosovan government has been in office since December - though it is largely made up of familiar faces in slightly different roles.

And the recent exodus of tens of thousands of people in response to economic woes has heightened awareness that Kosovo has to improve business and employment opportunities, or else risk losing more of its most talented people.

Image caption Bekim Collaku says that the Kosovan government is making good progress

"We are aware that we need more serious reforms," says Kosovo's European Integration Minister, Bekim Collaku.

"The number one priority is economic development - the creation of jobs. We are expecting great results in the private sector - that should be the focus of this government - looking at small and medium scale companies, helping them to open new businesses and increase existing businesses."


Kosovan independence

  • Kosovo declared independence from Serbia in 2008, but the move remains contentious
  • Serbia does not recognise the decision, which is also opposed by Kosovo's minority Serbian population
  • Even within the European Union, Kosovo's independence is not universally accepted, with Spain and Greece being the main objectors
  • Globally, 108 out of 193 United Nations member states recognise Kosovo as an independent nation - the remainder still consider it to be a part of Serbia

Mr Collaku mentions €50m ($55m; £37m) of funding that the government has made available for agricultural businesses.

But like many people in Kosovo, he is still counting on international aid - from the US and, in particular, the European Union.

A new deal with the EU, called a stabilisation and association agreement (SAA), comes into effect later this year, which will give Kosovo increased access to European markets and funds. The Kosovan government hopes that this will be transformational.

Image caption The EU's Tom Gnocchi says that the Kosovan government still has much to do

But the EU - which has its largest foreign mission in Pristina - warns that expecting Brussels to do all the work is unrealistic.

"The SAA is an important step, but it requires Kosovo to carry out reforms," says Tom Gnocchi, the head of the economic section at the EU delegation in Pristina.

"It's not a question of Europe making it quicker; Kosovo has to do its homework and tackle difficult issues like rule of law, organised crime and corruption," he says.

If it does, then people will feel more confident in starting much-needed businesses here, and foreign investors may be attracted to take advantage of a young, well-educated potential workforce.

Companies like Frutomania are showing that a Kosovo-based business can be successful - it has started exporting its drinks to neighbouring countries and even the US.

But it will take more than soft drinks - however nutritious and delicious - to put Kosovo's economy on the right track.