Despite Kosovo’s impressive economic growth and improvements in the business enabling environment, the structural challenges remain significant.  High unemployment rates, inactive employment, widespread informality, heavy reliance on remittances, and a large trade deficit continue to impede the expansion of democratic and economic opportunities for Kosovo’s citizens. For Kosovo to strengthen its economic competitiveness, it is critical to building a strong workforce and close the persisting skills gap between workforce capabilities and the needs of the private sector to meet market demand. 

When citizens are well informed and actively participate in democracies and the economy, countries flourish economically and socially.  Thus, USAID is engaging all citizens, especially youth, to reduce unemployment by enhancing the alignment of youth skills with market needs and creating space for youth to actively participate in democratic processes and contribute to social cohesion.  USAID also engages the private sector as a partner and a catalyst for creative solutions by building market linkages and increasing the quantity and quality of high-demand goods and services.  As local businesses grow and generate greater profits, they become better able to plan, finance, and create more jobs that contribute to Kosovo’s development.

USAID’s economic growth programming has achieved a number of successes over the years.  Kosovo has an improved ranking in the World Bank Doing Business report.  The Kosovo Credit Guarantee Fund, established by USAID, enables borrowers with insufficient collateral to obtain financing and improves access to finance.  As a result of USAID’s support to public financial management, Kosovo saw an increase in revenue mobilization.  The USAID-supported process of legalization of unpermitted buildings enables citizens to have a clear title of their ownership.  Strengthened production is increasing sales and employment and making Kosovo businesses more competitive in the international market.  In the last five years, USAID’s assistance created the equivalent of more than 10,000 full-time jobs in Kosovo.  Together, this strengthened capacity at the firm level and improved business environment are contributing to increased investment and private sector employment in Kosovo.  

In addition, USAID has supported Kosovo in meeting the technical requirements for signing international agreements and for better integration into the EU and helped Kosovo finalize legal and regulatory preparations for regional integration through electricity market coupling with Albania.  USAID has also facilitated the development of renewable energy projects while increasing investments and promoted women in the energy sector.