22/04/2022 – High-quality education, social cohesion and a green recovery were identified as the most important dimensions to create new opportunities and improve the quality of life of people in the Western Balkans region and in Kosovo, according to the second edition of the Multi-dimensional Review (MDR) of the Western Balkans presented today in Pristina.

 Kosovo is a at an important crossroads in its development trajectory. With an average rate of 4.9%, Kosovo’s economic growth has been the highest in the Western Balkans in the four years before the onset of the Covid pandemic. Kosovo has also made important steps towards institution building. As a result, living standards have improved. Progress has been made in fostering more competency-oriented learning through the introduction of competency-based curricula. To advance environmental sustainability, several strategic documents outline its energy and climate policies, including the Kosovo’s Economic Reform Programme 2021-2023 and a Climate Change Strategy 2019-2028. To promote the use of renewable energies, Kosovo has already set up several renewable support mechanisms, including a net-metering scheme for renewables self-consumers (prosumer) and feed-in tariffs. 

However, social and environmental challenges in the economy remain pressing. Performance of students in Kosovo on the OECD Programme for International Student Assessment (PISA) in 2018 was among the lowest in Europe. Employer surveys continuously point to significant difficulties in hiring due to skills gaps ranging from technical to meta-cognitive skills. Unemployment remains high, and most (69.1%) unemployed persons find themselves in this state for one year or longer. Weak labour market outcomes especially affect youth and women. When it comes to energy, Kosovo has the highest share of coal in electricity generation in the Western Balkans and the highest energy transformation losses, at 36% of primary energy consumption. Carbon-intensity in combination with low levels of energy efficiency generates considerable air pollution in Kosovo. 

The Multi-Dimensional Review of the Western Balkans proposes priorities for enhancing the development prospects of Kosovo. 

Building key competencies of student and adults is a key to create opportunities for citizens. Given its large young population and low labour market participation, boosting domestic competencies can create more job opportunities and strengthen civic participation. Kosovo has solid strategic documents, bylaws and action plans for quality assurance in education. The focus must now be on implementation, which includes strengthening capacities at the local level, increasing the number of quality assurance co-ordinators in schools, and strengthening mechanisms to work with companies, including through work-based learning. Improving teacher training, by improving initial teacher education and providing opportunities for continuous professional development, should be another priority. 

To foster social cohesion, Kosovo should prioritise strengthening links between the skills formation system and labour market needs. To further increase labour market participation, especially among women and vulnerable groups, it is important to also address the existing weakness in maternity leave and provide options for paternity leave, as well as taking action against discrimination. Kosovo has a unique social protection system, with universal social pensions and last-resort income support compensating for missing social insurance mechanisms. While this has benefits in terms of coverage, the absence of financed employment linked entitlements tends to limit worker protection and to generate adverse labour market incentives.

 Finally, cleaner air and more access to sustainable energy is key for improving the quality of life in Kosovo and to make it and an attractive place to live, work and invest in. Kosovo can achieve important gains on emissions reduction and energy access by making energy efficiency a policy priority, by strengthening financing for energy efficiency in buildings, and by incentivising more energy efficient heating systems. Kosovo is starting to exploit its significant potential for intermittent renewables, such as solar and wind. To build on this initial progress, it needs to improve the enabling environment and introduce market-based support mechanisms for renewables, eliminate remaining subsidies for coal, and render its electricity system more flexible. It would also be important to reduce its high transmission and distribution losses. 

The Multi-dimensional Review (MDR) of the Western Balkans combines the assessments of five economies: Albania, Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia.

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For more information, journalists are invited to contact the OECD Development Centre’s Press office: Bochra Kriout ([email protected] ; Tel.: +33 145 24 82 96).