2018年-IMF国际货币组织全球_Republic_of_Kosovo_Selected_Issues_59页_2mb

Summary of the Selected Issues Paper on the Republic of Kosovo

Core Content

This document provides an in-depth analysis of key issues facing the Republic of Kosovo, focusing on public infrastructure development, social benefit effectiveness, and financial deepening. The paper is prepared by the International Monetary Fund (IMF) as part of a periodic consultation with Kosovo and highlights the challenges and opportunities in these areas, particularly in the context of EU accession and regional convergence.

Main Views and Key Information

A. Public Investment in the Western Balkans

• Economic Convergence: Accelerating economic convergence with the EU is a key objective. The Stabilization and Association Agreement (SAA) was a first step in this process.
• Infrastructure Deficit: Public capital is a major constraint to economic progress and income convergence in the Western Balkans, including Kosovo.
• Regional Initiatives: Several regional initiatives, including the Stability Pact, the Western Balkans Investment Framework (WBIF), and the Berlin Process, have been instrumental in promoting infrastructure development.
• Challenges: The lack of coordination among donors, fragmented financial instruments, and limited capacity/ownership of recipient countries have hindered progress.

B. Kosovo's Infrastructure Gap

• Transport Infrastructure: Kosovo has insufficient transport infrastructure, particularly in terms of railway and motorway density, which is well below EU and regional peers.
• Energy Supply: The power generation capacity is inadequate and unreliable, with existing plants operating at low efficiency. A new power plant is expected to be operational by 2023.
• Air Transport: Air transport utilization is in line with regional peers, but energy supply remains a major constraint.
• Infrastructure Index Gaps: Kosovo's infrastructure gap is close to 60% compared to the EU, which is slightly above the regional average of 40%.
• Quality Concerns: The quality of existing infrastructure is poor, as indicated by the World Economic Forum survey-based indicators.

C. Kosovo's Development in Investment and Capital Stock

• Capital Budget: Since independence in 2008, Kosovo's capital budget has been relatively large, accounting for 9% of GDP on average.
• Infrastructure Spending: Infrastructure capital spending has accounted for about 35% of total public spending, with a high rate of implementation (around 90%).
• Priority Projects: The National Development Strategy (NDS) 2016-2021 outlines key projects, including the rehabilitation of railway 10, regional roads, and the construction of new highways.
• Fiscal Space: The completion of Route 6 will consume much of the available fiscal space until 2019, with costs estimated at 10-12% of GDP.
• Capital Stock: The public capital stock remains below the EU average and regional peers, at 20% and 60% respectively.

D. National Investment Frameworks

• Priority Project List: Kosovo has established a National Investment Committee (NIC) to manage and update the priority project list.
• Project Focus: The focus is primarily on transport (roads and railways) and energy infrastructure.
• Fiscal Rule: The revised fiscal rule allows donor/IFI-financed projects to not count toward deficit limits, providing budgetary flexibility.
• Slow Implementation: Despite available funding, actual implementation of projects has been slow, with limited disbursements even under favorable fiscal conditions.

E. Financing Options

• Debt Sustainability: Maintaining debt sustainability is crucial, and Kosovo's current debt is low at around 20% of GDP.
• Domestic Savings: Limited domestic savings and a shallow financial system constrain large-scale infrastructure financing.
• Tax and Expenditure Management: Increasing tax revenues and reducing current expenditures could create more fiscal space, but the potential is limited.
• External Borrowing: External commercial borrowing could help finance large projects if Kosovo achieves a reasonable credit rating, but it comes with risks like refinancing and exchange rate fluctuations.
• IFI Financing: Official financing from IFIs and bilateral donors remains the most suitable option due to favorable interest rates and longer maturities.
• Diaspora Bonds: These could be a useful tool for mobilizing diaspora wealth, but they are challenging to design and manage.
• PPP Framework: Public-Private Partnership (PPP) initiatives are an attractive option if a sound framework is in place to limit fiscal risks. However, they are underdeveloped in Kosovo due to weak legal and institutional frameworks and perceived political risks.

Policy Implications

• Infrastructure Investment: A sustained and efficient increase in public capital spending is essential to bridge the infrastructure gap and support economic growth.
• Strengthening Investment Frameworks: Improving the efficiency and coordination of public investment management is critical for maximizing the impact of infrastructure spending.
• Enhancing Social Benefit Effectiveness: Reforms are needed to improve the targeting and performance of social benefit programs, which are essential for reducing inequality and improving welfare.
• Financial Deepening: Financial deepening through IFI and donor financing, along with potential diaspora bonds, can help support infrastructure development without crowding out private investment.
• PPP Development: Establishing a robust PPP framework is necessary to attract private capital and ensure efficient project execution.

Key Figures and Tables

• Figure 1: Illustrates the public infrastructure gaps in Kosovo, showing the distance from the EU average in various sectors.
• Figure 2: Shows the evolution of public investment and capital stock in Kosovo, highlighting the dominance of road and rail projects.
• Table 1: Lists the priority projects, their estimated costs, and execution periods, emphasizing the scale and focus of infrastructure development.

Conclusion

Kosovo faces significant challenges in public infrastructure development, particularly in transport and energy sectors, which hinder economic growth and convergence with the EU. While international support and regional initiatives have played a role, the effectiveness of public investment depends on improved management frameworks and coordination. The country needs to leverage IFI and donor financing, enhance tax revenue mobilization, and develop a more robust PPP system to ensure sustainable and efficient infrastructure development.