Overview website for Kosovo


Provides an overview, basic facts and key events for this territory which unilaterally declared independence from Serbia in 2008.


Kosovo lies in the western Balkans to the south of Serbia proper and Montenegro and to the north of Macedonia and Albania. The landlocked territory features …


Overview. Kosovo Brief 2005. Overview. Kosovo is one of the poorest economies in Europe , with per capita income an estimated €964 per annum. Located in …


NATO’s objectives in relation to the conflict in Kosovo were set out in the Statement issued at the Extraordinary Meeting of the North Atlantic …


Nestled in the mountains of southern Yugoslavia is the impoverished Kosovo province, whose historical significance lies at the heart of a conflict that has …

Kosovo is one of the poorest economies in Europe, with per capita income an estimated €964 per annum. Located in the heart of the Balkans, Kosovo is landlocked and was adversely affected in the 1990s by civil conflict related to the disintegration of the Socialist Federal Republic of Yugoslavia. Over the course of the 1990s, poor economic policies, international sanctions, weak access to external trade and finance, and ethnic conflict severely damaged the economy, leading to a halving of output in the early 1990s and a fall of another 20 percent due to the 1998-99 conflict. Kosovo is estimated to have a population of around 2 million people, of which 90 percent are ethnic Albanian, 5 percent Serbian and 5 percent other minority groups, although no census has recently been conducted.

In accordance with UN Security Council Resolution 1244, Kosovo is under United Nations interim administration (United Nations Mission in Kosovo – UNMIK). Following elections in November 2001, the Provisional Institutions of Self-Government (PISG) – including the President, the Assembly, and the Government of Kosovo – have been established. Elections were also held in October 2004. The launching of discussions on final status is dependent on the government’s commitment to democracy, good governance and the protection of human rights, as encapsulated in the “Standards for Kosovo”[1]. Progress towards these Standards is expected to be reviewed in mid-2005.

Developments since 1999. Since the end of the conflict in June 1999, Kosovo’s reconstruction has proceeded well, owing to local efforts as well as generous donor support of around €2 billion. Basic infrastructure destroyed in the conflict has largely been reconstructed. Over 50,000 houses have been rebuilt, providing homes to about 300,000 people. Agricultural production has increased significantly, with wheat, beef and milk production now exceeding pre-conflict levels and 1,400 km of roads have been rehabilitated. Furthermore, the construction of health clinics and schools throughout Kosovo has helped to ensure that the basic infrastructure for health and education services are largely in place. However, key challenges still remain for Kosovo, particularly in the economic and social spheres. Also protection of minorities remains a key concern. There remains little integration between Albanian and Serb communities. Empowerment is particularly problematic for minorities. Both income and non-income forms of poverty (such as access to health and education) are highest among non-Serb minorities. However, some efforts on reconciliation have been made. Following the March 2004 riots, the PISG spent €6.6 million on rebuilding Serb houses. A pilot project on decentralizing more authority to the sub-municipal level in Gracanica is being planned – a process intended to strengthen the ownership and participation of minorities in decision-making in Kosovo.

Economic environment. After an initial post-conflict bounce in 2000, economic growth has slowed (21.2 percent in 2000; 5.4 percent in 2004). The industrial sector of the economy remains weak and the electric power supply remains unreliable, acting as a key constraint. Unemployment continues to be pervasive, and remains particularly problematic among young people. However, progress has been made in implementation of liberal market policies. Kosovo is one of the most liberal trading regimes in the world with a zero and 10 percent tariff rate and no quantitative barriers. Use of foreign exchange has been legalized for all domestic transactions, establishing the euro as the de facto local currency. This has provided a stable exchange rate and low inflation.

Social environment. Poverty is widespread, but shallow. 37 percent of population live in poverty (below €1.42 per adult equivalent per day); and 15 percent in extreme poverty (€0.93 per day). However, most of the poor are close to the thresholds that classify them as such. Children, the elderly, female-headed households, the disabled, the unemployed, precarious job holders, residents of secondary cities, and non-Serb ethnic minorities (such as Roma and Slav Muslims) are the groups most at risk in terms of income poverty. In non-income dimensions of poverty, education outcomes are low, but there are signs of improvement. Half of the adult population has only completed primary education, and 6 percent are illiterate. However, progress has been made. Primary school enrolment rates were 95.4 percent in 2003, and the illiteracy rate has been reduced to less than 0.5 percent among children and youth. But the quality of education still remains a problem. With insufficient space and classrooms, children do not have a full-day’s education. Instead, schools operate on 3-4 shifts per day. Health outcomes are among the worse in South East Europe. Infant mortality rates (18-44 per 1,000) are the highest in the region, with inadequate nutrition a persistent problem. Tuberculosis, disability and mental health problems are major issues.

Challenges Ahead

Preventing an upsurge in violence. Continuing ethnic tensions were evident in the events of March 2004 and further efforts to encourage reconciliation among all communities is required urgently. Against a potential backdrop of final status negotiations, a significant international presence remains important to ensure stability.

Building, not backtracking on economic advantages. The authorities should ensure that there is no backtracking on economic achievements (including their liberal trading regime), either by major fiscal relaxation or an increase in protectionist policies. Instead these advantages should be built upon to improve the investment climate in Kosovo.

Raising Kosovo’s export potential. The mining and energy sectors hold substantial potential to be a key source of future growth in Kosovo. Kosovo has abundant resources of lignite, lead and zinc, ferrolnickel, magnesite and crushed stone, and relatively low transport costs to Western European markets. In particular, utilization of lignite resources (by attracting in private investment) holds potential for the energy sector to become an engine of growth rather than a drain on public resources. With fertile land and a temperate climate, agriculture is another potential source of growth.

More effective targeting to reduce poverty and unemployment. Improving employment opportunities (particularly for youth), improving health and education outcomes, increasing the efficiency and equity of social service delivery, and reducing a sense of vulnerability among many members of the population (particularly ethnic minorities).

World Bank Assistance

The World Bank has committed over $80 million to Kosovo since the end of the conflict. All assistance has been provided as grants. Reflecting Kosovo’s post-conflict situation, Bank assistance to date has been heavily focused on directly providing opportunities for the poor and those most affected by conflict, and improving critical social services and the ability of poor people to gain access to those services. Bank assistance has focused strongly on providing opportunities for all communities in Kosovo, including the minority ethnic Serbian population and other minority groups. Assistance has also been directed towards building up the capacity of local institutions, increasingly important as they assume more responsibilities from the international community.

As Kosovo moves from needing post-conflict reconstruction to longer-term economic development, Bank assistance will need to respond to this shift. Under the current Transitional Support Strategy $15 million is being provided to support three key objectives:

· Promoting broad-based economic growth and employment. Through a business environment technical assistance grant, helping address some of the key institutional and operational constraints that continue to confront firms

· Helping restructure the energy and mining sectors. Through the Bank’s third technical assistance grant to these sectors, helping the authorities meet their obligations under the Athens Memorandum Framework (allowing participation in the Southeast Europe Regional Electricity Market), and supporting the development of a mining strategy and policy

· Building capacity to strengthen economic and public expenditure management. Assist in further institution building to help address cross-cutting problems in budget formulation, budget execution and procurement.

A new strategy is anticipated in mid-2005. As Kosovo moves from reconstruction to longer-term economic development, it is anticipated that the new strategy may focus more strategically on growth and poverty reduction initiatives, particularly in the energy and mining sectors.

World Bank Financing

In total, the World Bank has committed US$80.4 million to Kosovo since 1999. Of this, approximately US$60 million had been disbursed as of June 30, 2005. All funding has been on grant terms. Financing has come from a variety of sources. Immediately after the conflict, grants were provided from the Bank’s Post-Conflict Fund. In 2000, a Trust Fund for Kosovo was established with financing from the Bank’s net income. With the introduction of post-conflict grants in IDA-13, recent funding has come from this source. Under IDA-14, grants to Kosovo will continue until there is any change in status.

In addition to financing from these sources, the International Finance Corporation, the private sector arm of the Bank Group, has been active in Kosovo, especially in providing equity investments in the Pro-Credit Bank to support small and micro-credit to Kosovo businesses.

NATO’s objectives in relation to the conflict in Kosovo were set out in the Statement issued at the Extraordinary Meeting of the North Atlantic Council held at NATO on 12 April 1999 and were reaffirmed by Heads of State and Government in Washington on 23 April 1999:

a verifiable stop to all military action and the immediate ending of violence and repression;

the withdrawal from Kosovo of the military, police and paramilitary forces;

the stationing in Kosovo of an international military presence;

the unconditional and safe return of all refugees and displaced persons and unhindered access to them by humanitarian aid organisations;

the establishment of a political framework agreement for Kosovo on the basis of the Rambouillet Accords, in conformity with international law and the Charter of the United Nations.

Throughout the conflict, the achievement of these objectives, accompanied by measures to ensure their full implementation, has been regarded by the Alliance as the prerequisite for bringing to an end the violence and human suffering in Kosovo.

Background to the conflict

Kosovo lies in southern Serbia and has a mixed population of which the majority are ethnic Albanians. Until 1989, the region enjoyed a high degree of autonomy within the former Yugoslavia, when Serbian leader Slobodan Milosevic altered the status of the region, removing its autonomy and bringing it under the direct control of Belgrade, the Serbian capital. The Kosovar Albanians strenuously opposed the move.

During 1998, open conflict between Serbian military and police forces and Kosovar Albanian forces resulted in the deaths of over 1,500 Kosovar Albanians and forced 400,000 people from their homes. The international community became gravely concerned about the escalating conflict, its humanitarian consequences, and the risk of it spreading to other countries. President Milosevic’s disregard for diplomatic efforts aimed at peacefully resolving the crisis and the destabilising role of militant Kosovar Albanian forces was also of concern.

On 28 May 1998, the North Atlantic Council, meeting at Foreign Minister level, set out NATO’s two major objectives with respect to the crisis in Kosovo, namely:

to help to achieve a peaceful resolution of the crisis by contributing to the response of the international community;

to promote stability and security in neighbouring countries with particular emphasis on Albania and the former Yugoslav Republic of Macedonia (1).

On 12 June 1998 the North Atlantic Council, meeting at Defence Minister level, asked for an assessment of possible further measures that NATO might take with regard to the developing Kosovo Crisis. This led to consideration of a large number of possible military options.

On 13 October 1998, following a deterioration of the situation, the NATO Council authorised Activation Orders for air strikes. This move was designed to support diplomatic efforts to make the Milosevic regime withdraw forces from Kosovo, cooperate in bringing an end to the violence and facilitate the return of refugees to their homes. At the last moment, following further diplomatic initiatives including visits to Belgrade by NATO’s Secretary General Solana, US Envoys Holbrooke and Hill, the Chairman of NATO’s Military Committee, General Naumann, and the Supreme Allied Commander Europe, General Clark, President Milosevic agreed to comply and the air strikes were called off.

UN Security Council Resolution (UNSCR) 1199, among other things, expressed deep concern about the excessive use of force by Serbian security forces and the Yugoslav army, and called for a cease-fire by both parties to the conflict. In the spirit of the UNSCR, limits were set on the number of Serbian forces in Kosovo, and on the scope of their operations, following a separate agreement with Generals Naumann and Clark.

It was agreed, in addition, that the Organisation for Security and Cooperation in Europe (OSCE) would establish a Kosovo Verification Mission (KVM) to observe compliance on the ground and that NATO would establish an aerial surveillance mission. The establishment of the two missions was endorsed by UN Security Council Resolution 1203. Several non-NATO nations that participate in Partnership for Peace (PfP) agreed to contribute to the surveillance mission organised by NATO.

In support of the OSCE, the Alliance established a special military task force to assist with the emergency evacuation of members of the KVM, if renewed conflict should put them at risk. This task force was deployed in the former Yugoslav Republic of Macedonia (1) under the overall direction of NATO’s Supreme Allied Commander Europe.

Despite these steps, the situation in Kosovo flared up again at the beginning of 1999, following a number of acts of provocation on both sides and the use of excessive and disproportionate force by the Serbian Army and Special Police. Some of these incidents were defused through the mediation efforts of the OSCE verifiers but in mid-January, the situation deteriorated further after escalation of the Serbian offensive against Kosovar Albanians.

Renewed international efforts were made to give new political impetus to finding a peaceful solution to the conflict. The six-nation Contact Group (2) established by the 1992 London Conference on the Former Yugoslavia met on 29 January. It was agreed to convene urgent negotiations between the parties to the conflict, under international mediation.

OSCE vehicles pull out of Yugoslavia on 20 March 1999. (Belga photo)

NATO supported and reinforced the Contact Group efforts by agreeing on 30 January to the use of air strikes if required, and by issuing a warning to both sides in the conflict. These concerted initiatives culminated in initial negotiations in Rambouillet near Paris, from 6 to 23 February, followed by a second round in Paris, from 15 to 18 March. At the end of the second round of talks, the Kosovar Albanian delegation signed the proposed peace agreement, but the talks broke up without a signature from the Serbian delegation.

Immediately afterwards, Serbian military and police forces stepped up the intensity of their operations against the ethnic Albanians in Kosovo, moving extra troops and modern tanks into the region, in a clear breach of compliance with the October agreement. Tens of thousands of people began to flee their homes in the face of this systematic offensive.

On 20 March, the OSCE Kosovo Verification Mission was withdrawn from the region, having faced obstruction from Serbian forces to the extent that they could no longer continue to fulfil their task. US Ambassador Holbrooke then flew to Belgrade, in a final attempt to persuade President Milosevic to stop attacks on the Kosovar Albanians or face imminent NATO air strikes.

A US F-15E Strike Eagle takes off.

Milosevic refused to comply, and on 23 March the order was given to commence air strikes (Operation Allied Force).

On 10 June 1999, after an air campaign lasting seventy-seven days, NATO Secretary General Javier Solana announced that he had instructed General Wesley Clark, Supreme Allied Commander Europe, temporarily to suspend NATO’s air operations against Yugoslavia. This decision was taken after consultations with the North Atlantic Council and confirmation from General Clark that the full withdrawal of Yugoslav forces from Kosovo had begun.

The withdrawal was in accordance with a Military-Technical Agreement concluded between NATO and the Federal Republic of Yugoslavia on the evening of 9 June. The agreement was signed by Lt. General Sir Michael Jackson, on behalf of NATO, and by Colonel General Svetozar Marjanovic of the Yugoslav Army and Lieutenant General Obrad Stevanovic of the Ministry of Internal Affairs, on behalf of the Governments of the Federal Republic of Yugoslavia and Republic of Serbia. The withdrawal was also consistent with the agreement between the Federal Republic of Yugoslavia and the European Union and Russian special envoys, President Ahtisaari of Finland and Mr. Victor Chernomyrdin, former Prime Minister of Russia, reached on 3 June.

The NATO Secretary General announced that he had written to the Secretary-General of the United Nations, Mr. Kofi Annan, and to the President of the United Nations Security Council, informing them of these developments. The Secretary General of NATO urged all parties to the conflict to seize the opportunity for peace and called on them to comply with their obligations under the agreements which had now been concluded and under all relevant UN Security Council resolutions.

Paying tribute to General Clark and to the forces which had contributed to Operation Allied Force, and to the cohesion and determination of all the Allies, the Secretary General stated that NATO was ready to undertake its new mission to bring the people back to their homes and to build a lasting and just peace in Kosovo.

On 10 June the UN Security Council passed a resolution (UNSCR 1244) welcoming the acceptance by the Federal Republic of Yugoslavia of the principles on a political solution to the Kosovo crisis, including an immediate end to violence and a rapid withdrawal of its military, police and paramilitary forces. The Resolution, adopted by a vote of 14 in favour and none against, with one abstention (China), announced the Security Council’s decision to deploy international civil and security presences in Kosovo, under United Nations auspices.

Russian envoy Viktor Chernomyrdin (right) and his EU counterpart, Finnish President Martti Ahtisaari (left) talk to the media at Belgrade airport on 2 June 1999, prior to talks with Yugoslav President Slobodan Milosevic. (Belga photo)

Acting under Chapter VII of the UN Charter, the Security Council also decided that the political solution to the crisis would be based on the general principles adopted on 6 May by the Foreign Ministers of the Group of Seven industrialised countries and the Russian Federation – the Group of 8 – and the principles contained in the paper presented in Belgrade by the President of Finland and the Special Representative of the Russian Federation which was accepted by the Government of the Federal Republic on 3 June. Both documents were included as annexes to the Resolution.

The principles included, among others, an immediate and verifiable end to violence and repression in Kosovo; the withdrawal of the military, police and paramilitary forces of the Federal Republic; deployment of effective international and security presences, with substantial NATO participation in the security presence and unified command and control; establishment of an interim administration; the safe and free return of all refugees; a political process providing for substantial self-government, as well as the demilitarisation of the Kosovo Liberation Army (KLA); and a comprehensive approach to the economic development of the crisis region.

The Security Council authorised Member States and relevant international organisations to establish the international security presence, and decided that its responsibilities would include deterring renewed hostilities, demilitarising the KLA and establishing a secure environment for the return of refugees and in which the international civil presence could operate. The Security Council also authorised the UN Secretary-General to establish the international civil presence and requested him to appoint a Special Representative to control its implementation.

Following the adoption of UNSCR 1244, General Jackson, acting on the instructions of the North Atlantic Council, made immediate preparations for the rapid deployment of the security force (Operation Joint Guardian), mandated by the United Nations Security Council.

The first elements entered Kosovo on 12 June. As agreed in the Military Technical Agreement, the deployment of the security force – KFOR – was synchronised with the departure of Serb security forces from Kosovo. By 20 June, the Serb withdrawal was complete and KFOR was well established in Kosovo.

At its full strength KFOR will comprise some 50,000 personnel. It is a multinational force under unified command and control with substantial NATO participation. Agreement has been reached on the arrangements for participation by the Russian Federation. More than twelve other non-NATO nations have also indicated their intention to contribute to KFOR.

Also on 20 June, following confirmation by the Supreme Allied Commander Europe (SACEUR) that Serb security forces had vacated Kosovo, the Secretary General of NATO announced that, in accordance with the Military Technical Agreement, he had formally terminated the air campaign.

A British Lynx helicopter delivers aid on 5 April 1999 to the UNHCR refugee facility in Brazda, which was constructed with the assistance of NATO forces in FYROM (1).

(Belga Photo)

NATO forces have been at the forefront of the humanitarian efforts to relieve the suffering of the many thousands of refugees forced to flee Kosovo by the Serbian ethnic cleansing campaign. In the former Yugoslav Republic of Macedonia (1) NATO troops built refugee camps, refugee reception centres and emergency feeding stations, as well as moving many hundreds of tons of humanitarian aid to those in need. In Albania, NATO deployed substantial forces to provide similar forms of assistance. NATO has also assisted the UNHCR with co-ordination of humanitarian aid flights as well as supplementing these flights by using aircraft from member countries. The Euro-Atlantic Disaster Response Coordination Centre (EADRCC) established at NATO in May 1998 has also played an important role in the coordination of support to UNHCR relief operations.

Of particular concern to NATO countries and to the international community as a whole, from the outset of the crisis, has been the situation of the Kosovar Albanians remaining in Kosovo, whose plight has been described by refugees leaving the province. All indications pointed to organised persecution involving mass executions; exploitation as human shields; rape; mass expulsions; burning and looting of homes and villages; destruction of crops and livestock; suppression of identity, origins and property ownership by confiscation of documents; hunger, starvation and exhaustion; and many other abuses of human rights and international norms of civilised behaviour.

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