In the lead up to the last election, Hashim Thaci was promising wage rises for votes. As he travelled the country buying votes with false promises. He promised that all the employees of KEDS would get a pay rise and was throwing money around as if it were his to give. Promises, promises, promises.
On the 25th January the International Monetary Fund published its review on the Kosovo economy and all the workers that have been promised a pay rise from Thaci are in for a shock, as the IMF are saying that the economy is growing too fast and wages have to be cut.
IMF Survey: Can you tell us about the reform of the public wage bill? Why is it needed?
Miniane: Since independence in 2008, election cycles have coincided with very large increases in public sector wages, the government being by far the main source of employment in Kosovo. As a result, public sector wages have almost tripled in nominal terms; they have grown three times faster than nominal GDP; and they have significantly outpaced public wages in neighbouring countries, private sector wages in Kosovo, as well as productivity growth. This is not sustainable. The widening gap between public and private sector wages has made it difficult for the private sector to attract and retain talent, while rising labor costs have eroded Kosovo’s competitiveness.
For an economy like Kosovo to regain its competitiveness and create jobs, it is critical to reduce real labor costs. The program aims to achieve that objective through nominal public sector wage freezes over a few years, and the introduction of a public wage bill rule that will cap growth in the wage bill at nominal GDP growth going forward. The Assembly has adopted this rule, and it will come into effect in 2018. We are encouraged by the strong ownership of these measures by the authorities and we expect that they will stabilise the wage bill at about 9 percent of GDP, which is a reasonable level.
The harm was done when Thaci hiked public sector wages, pensions and welfare by 25 percent two months before the vote, Thaci has promised to do the same every year for the next four of his new term and to create 200,000 jobs.
Isa Mustafa was not going to give up his corrupt, nepotism ways when he became Prime Minister in a deal with Thaci. Making sure his family members will be well looked after, one of the first things he did, once in power was to award a contract to Makcar, a company owned by Besnik and Arben Mustafa, the PM’s sons, to service their father’s official vehicle. The Prime Minister’s office signed the contract with Makcar on July 27th, offering 2,900 euro to service the armoured BMW.
Mustafa has since claimed that he has now cancelled the contract after an outcry against the corruption, but this remains to be seen.
How many election promises have been kept and where are these new 200,000 jobs?