Millennium Challenge Corporation considers support for Kosovo in December

INTERVIEW FOR DAILY ZERI • 17 November 2016 •

One of the largest funds for economic development that is expected to engage in Kosovo is the Millennium Challenge Corporation. This fund is a US federal agency that operates in some 30 countries that meet the requirements of human rights and good governance. Kosovo needs every year to pass these standards to ensure massive investment in key areas of economic development, and this year Kosovo is expected to fail the index of control of corruption.

The leader of this project in Kosovo, former Deputy Foreign Minister Petrit Selimi, speaking to Zeri (Voice) on the consequences of failing to control corruption and says “looks forward to the decision of the board of MCC investments in Kosovo”.

Mr Selimi, it has lately been reported that the lack of progress in fighting corruption can delay US investment fund that you lead in Kosovo. Will there be consequences due to lack of progress in fighting corruption for these American donations?

Selimi: Let me first tell you that Kosovo should ensure carefully each year to “graduate” in more than half of the indicators measured annually by the Millennium Challenge Corporation. These measurements are not made by the Kosovo Government but by independent organizations such as the World Bank, Freedom House or Heritage Foundation. This year again we have managed to receive positive marks in most categories as in those evaluating free economy, human rights and the various indicators of good governance. However, this year we also had a worsening of control of corruption indicator. This indicator is measured by measuring nine sub-parameters. 8 of them have been steady but one sub-indicator based on the Gallup poll on perception of corruption, has suffered deterioration during 2015 and in this year’s report has reflected badly. Although the perception is a subjective parameter, the result nevertheless is that in the official MCC scorecard, we’ve failed this year the control of corruption indicator.

What are the consequences of this, as you say, failure to control corruption?

The US-based Board of MCC defines the consequences. In the meantime, supplemental reports are also sent by UN agencies, Kosovo government and possibly other international organizations, etc. before the final decision. We hope that we will continue the planning of projects because otherwise any delay in the development of MCC in Kosovo will bring negative consequences.

Has the “Pronto2” scandal of recordings influence the failure of this indicator?

First I must explain that this year the indicator uses measured data of the previous year, ie before the publication of the tapes which you refer. Those tapes refer to 2011. But it is clear that the work of civil society and media various scandals publishing the suspected cases of wrongdoing have many positive consequences and one somewhat negative consequence. They are positive that more attention and care to combat the phenomena of bad governance, nepotism or corruption, better the control will be. But an unfortunate consequence is that the public perception of corruption deteriorates because the theme is dominating media landscape. This being said, I believe that international reports, including a part of the Progress Report of the EU this year, clearly show that this year there has been significant improvement in the fight against corruption compared with previous years. We have yet to achieve the political will to ensure this improvement is long-term and irreversible.

If the Board of MCC in America decides to continue its commitment to Kosovo, when it’s expected project to be realized how will you prevent Kosovo’s government not to misuse these budgetary resources?

MCC tools are not controlled by the Government nor are they sent to the central budget. The MCC’s Board in Washington will dedicate a budget based on the priorities that Kosovo institutions have developed in collaboration with civil society and businesses, to allocate funds for no more than 3 or 4 major projects. Key obstacles in Kosovo have already been identified and they are supplied with power, environmental services and the rule of law. As a major drawback also is the low participation of women in the labor market. Projects will be drafted next year based on the needs identified in Kosovo and hopefully eventual grants have transformative effect. However, pending the Board in December, we shall see if we will go to fast forward or slow down towards these possible investments

You mentioned energy sector, where there has been an American support for the project “Kosova e Re” but there were also many environmental concerns that this project is not healthy and good for the Kosovars. How will you balance between coal projects and environmental projects?

During this period as consultations are conducted and initial project concepts drafted, our team is looking beyond the concrete project “Kosova e Re”. This project already involved the World Bank, other development banks, the private sector. MCK is looking more in the field of renewable energy and efficiency. Kosovo’s own development strategy needs a variety of energy sources but there are real obstacles that have prevented the entry of private operators in various forms of alternative energy. We hope that will address some of these obstacles to achieve up to a rapid development of economy. I have said time previously that without electricity, without water and without the rule of law, it is difficult to talk about major investments in Kosovo, so these bottlenecks are some of these possible areas of investment by MCC.

Is there a risk that funds allocated for Kosovo will go for investments to our neighbors, if we fail to qualify for the MCC?

No, that situation does not exist. Kosovo has qualified last year for MCC grant type “Compact”. No other Balkan state is qualified for this type of contract, nor is scheduled to qualify due to specific conditions, including the level of gross domestic product. Kosovo is the only country in the Balkans that can count on MCC support due to this specific conditions, so if Kosovo does not receive funds, they will simply go to Africa or Asia or other “Compact” contries. However, I hope that in one form or another, MCC will be present in Kosovo for the next 5 years, bringing valuable tools in addressing key challenges for Kosovo economy.