Donnerstag, 28. Juni 2012

Balkan Real Estage and the Kosovo Privatisation

Kosovo privatisation without a privatisation law

The death of the head of the privatisation agency, Dino Asanaj, raised questions about the agency's effectiveness.
By Linda Karadaku and Safet Kabashaj for Southeast European Times in Pristina -- 28/06/12
Privatisation Agency head Dino Asanaj's death has sparked concerns about the selling process. [Laura Hasani/SETimes]
The unusual death of Dino Asanaj, the head of Kosovo's Privatisation Agency, who purportedly stabbed himself while under the cloud of suspicion from a corruption investigation, raises new questions about the effectiveness of a state office that is designed to create jobs through private development.
The privatisation agency signs contracts with investors to take over state-owned businesses and socially-owned businesses – companies that are managed by their workers. The contracts require many, but not all, investors to contribute a minimum sum into the business and sets quotas for the number of people to be employed. If the investors fail to meet the contract, the privatisation office can retake the business.
Asanaj, a former adviser to Prime Minister Hashim Thaci, became chairman of the board for the agency in 2008. Since then, the organisation has helped break up and convert 300 state-owned businesses into more than 900 private enterprises. About 650 of those contracts include provisions that would allow the state to reclaim the businesses if the contract is not honoured.
The process has raised about 600m euros for Kosovo, according to Ylli Kaloshi, spokesman for the privatisation agency, with 55m euros going to workers of those companies.
The agency considers the privatisation process a success, but Professor Musa Limani, the dean of the Economic Faculty in the University for Business and Technology in Pristina, said it has contributed to the deterioration of Kosovo's economy.
"The socially-owned enterprises that made 90% of Kosovo industry and economy were sold very cheaply, and we also lost markets," Limani told SETimes. "Selling socially-owned enterprises in Kosovo [has raised] only 600m euros … the tobacco factory in Nis, Serbia, was sold for over 500m euros."
Limani said that the privatisation process has been riddled with corruption and abuses, and the lack of a law on privatisation is a critical shortcoming. "Privatisation in Kosovo was done without a judicial infrastructure and that is showing problems now with the property and ownership."
Allegations of corruption in privatisation have been an all-too-common theme throughout the region.Balkan Insight reported in November last year that Serbia had cancelled almost 30% of all privatisation deals because of corruption or mismanagement. In Montenegro, the parliament approved a call this year to probe allegations of corruption regarding the privatisation of its state-owned telecommunications provider.
When he died, Asanaj was under investigation for allegedly seeking a bribe of 4m euros from an owner of a Kosovo hotel that had been privatised. Under Kosovo laws, companies can be "blocked" by the state after they are sold if the owners default on the terms of their contract with the government. Remzi Ejupi, a 20% shareholder in the Grand Hotel in Pristina, said that Asanaj demanded the bribe to unblock the hotel.

Real estate industry at risk in the Balkans

The cost of real estate in Southeast Europe has taken a sharp dip.
By Jonilda Koci for Southeast European Times in Tirana -- 28/06/12
Construction in Albania, for either industrial or tourist projects, has stopped or been postponed. [Jonilda Koci/SETimes]
The economic crisis in the Balkans is placing the real estate industry at a serious risk, a sector that has seen its share of difficulties since late 2008. The cost of real estate has fallen by 30% to 50% across the region.
From Greece to Romania, plans for developing industrial or tourist projects have stopped or have been postponed. If the trend continues, future prospects in the industry seem bleak across the region, experts warn.
"Economic and financial crises kept away initiatives for expansion of a number of companies that expressed their investment interest," Ilda Bicoku, a Century 21 real estate broker from Tirana said. "Investors are waiting for a better day."
As recently as five years ago, Montenegro was the regional investment hub in real estate construction. With Montenegro's independence in 2006, a rush of Russian buyers purchased real estate, pushing the average price to 1,000 euros per square meter in Podgorica and to 2,500 euros on the coast. Today, real estate prices in coastal cities like Bar and Ulcinj have plummeted by 80%....

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