Kosovo report lifts lid on officials' lavish lifestyle

Kosovo report lifts lid on officials' lavish lifestyle

Kosovo is run on an annual budget of less than 700 million euro, which has to cover every aspect of the administration of about 2 million people.

Balkan Insight has obtained access to sections of the government report, which shows officials and members of the assembly spent millions of euro in the first six months of the year alone on mobile phone calls, vehicle fuel and services for cars that were brand new and official dinners.

Civil servants spent their way through more than 8.3 million euro on car fuel in the first half of 2006, and more than 2.5 million on their mobile phones. The bill for food and drinks came to more than 4.5 million euro.

Car maintenance cost the country 2 million euro, although most of these official vehicles were almost new, having been purchased in 2003 and 2004.

Millions of euro disappeared on the foreign trips taken by government officials, eaten up by their "per diem" rates.

While government officials are clearly entitled to run up legitimate expenses, most analysts believe the current ones are far too high for a government that has so little money.

They say the relatively luxurious lifestyle demanded by the officials is draining away money from other priorities, such as economic development.

Kosovo has had an independent budget since 1999, when NATO forced the Serbian authorities to withdraw from the territory and an international administration was set up.

Initially, the finances consisted almost entirely of international aid.

But since 2002, the Provisional Institutions of Self Government, PISG, have consolidated their own revenues, drawing 70 per cent of their 700 million euro budget from customs and a VAT of 15 per cent.

But greater financial independence has also created greater opportunities for financial mismanagement - and increased the temptation to run up a deficit.

From 2000 to 2004, the government ran a budget surplus of about 150 million euro annually.

But there was a budget deficit in 2005 in several segments, drawing criticism from international monetary organizations.

Marc Auboin, representative in Kosovo of the IMF, criticized the bills run up by Kosovo's officials and told Balkan Insight that the government was in danger of incurring bigger and bigger deficits.

"I must warn that there will be heavy budgetary burdens next year," Auboin predicted. "So far, capital investment has not been a priority for government officials."

Auboin went on to say that foreign countries would not continue to subsidize Kosovo indefinitely, if its own officials were seen to be wasting money.

"The international community has agreed to fund the budgetary deficit in 2007," he said, "but what will happen in the future depends on the policies that the government has to set by itself."

The warnings and complaints have ruffled feathers at the highest echelons of government.

Officials put part of the blame for the high expenses run up by their predecessors.

Avni Arifi, adviser to the prime minister, Agim Ceku, said the government was battling "high expenses inherited from the former government".

Haki Shatri, the finance minister, denied that officials were throwing away their resources on pointless fripperies.

"Kosovo's budget is being spent according to plan and will cover all the foreseen expenses," he said.

Sherif Konjufca, spokesperson for the Kosovo assembly, added that official expenses were now falling, "All I can say is that expenses have decreased, compared to last year."

But some local analysts say the IMF's warnings are entirely appropriate.

Muhamet Sadiku, an economics analyst, said he was concerned by the government's use of its money and by a perceived failure to direct its resources towards capital investments.

"Only 20 per cent of the budget has been spent on capital investments," said Sadiku. "The government should immediately establish its priorities on expenses."

Besim Beqaj, head of the Kosova Chamber of Commerce, also expressed worries over the apparent lack of investment in capital fields.

Opposition parties have been predictably harsh on the issue of official expense accounts.

Bajrush Xhemajli, an assembly member from the largest opposition party, the Democratic Party of Kosovo, PDK, said someone needed to be held accountable.

"It is illogical to allow millions to be spent on luxuries," he said. "This misuse of taxpayers' money is unacceptable."

Genc Gorani, from the smaller opposition party ORA, described the latest expenses as "scandalous". "Those people who are abusing the Kosovo budget must be identified and brought to justice," he said.

Arbana Xharra is a journalist with Koha Ditore and a regular contributor to Balkan Insight. Balkan Insight is BIRN's online publication.