Pristina’s former leader, Shpend Ahmeti, has criticised the government’s economic policies, saying that, although wage hikes, additions for children and pensions are welcome, citizens are facing continued price increases and increasingly affordable costs of living.
Ahmeti has stressed that Kosovo is facing an inflation among the highest in Europe, while blaming state politics, lack of capital investments and not developing local production.
He has directly criticised the prime minister, saying his economic advisers either lack sufficient knowledge, or are leading him towards a wrong course, which endangers Kosovo as well.
We’re subsidizing imports and raising prices. We are not creating new capital and assets within the state, Ahmeti wrote.
Full Posting:
The rise in wages, additions for children and pensions is hard to criticise. Few people do not enjoy this news. But at the same time, prices are growing and coping with the cost of life every day is becoming more difficult. We need to understand why we have the third largest inflation in Europe even though we use the euro as currency. Even more importantly, we need to understand why these policies and this economy will eat themselves.
So, only Turkey with its freedom and instability, and Ukraine with war over five years, have higher price increases than Kosovo today. We face two euro oils, hundreds of euros’ food per month, unaffordable electricity bills, up to 1.5 euros expressor.
These are not good decisions of goods and services providers. Part of it is definitely imported worldwide inflation. But a big part is definitely the wrong state politics.
The first, high inflation when there are no measures for the private sector and no capital investment in production becomes a boss tax that transfers money from citizens’ savings to the state. Prices increase, and with them the taxes ( VAT. When the pay doesn’t come out to spend the month, people get their savings. The ones that citizens have saved slowly pass directly into the state budget. That’s already happened.
Second, the government is sending all this additional money to aid, additional salaries in the public sector. This money is naturally spent on imports: supermarkets, foreign products and electricity that we are not producing ourselves. The money comes out of the country, and because of its production, our workers in the private sector require salary increases simply to cope with prices. This increase in productivity costs without increasing makes our exports even more expensive and incompatible, deepening our balance of payments deficit. More and more money comes out. This happened and it’s happening.
Third, the introduction of cash to consumption (requisite) without increasing local production (the offer) does exactly what we are seeing: more money following foreign goods, without offering local products, maintaining price increases inflation. Because we use the euro, we have no income policy available. This makes lack of investment in local production even more dangerous because infrastructure and production are the only means. Prices are rising and opportunities are decreasing. That’s what happened and it’s gonna happen more.
In short and Albanian terms, this budget and these policies are buying short-term social calm. We are subsidising imports and raising prices. We’re not creating new capital and assets within the state. This cycle has an end and once it explodes because it is the cycle that eats itself. There was a time when it would have been more likely to distribute growth because the contraction of local production and the flight of money out of São to face the inflation bill.
Prime Minister, whoever’s advising you for your economy, either you don’t know, or you’re digging it. But together, it’s making us a whole Kosovo. These policies are very short term and may look good on the surface. But they are economically deeply fatal in the long term.
It is not enough to introduce projects into the budget, even though they are of insufficient value. It also needs implementation. Consult any books, left or right. It’s not about redistribution, it’s about creating value for future what I’m going to do.
The signal where the truth speaks before the news!
Source Layer: Signal
