How Organized Crime Inhibits Development in Kosovo

Benno Zogg – Happy Birthday! Kosovo celebrated ten years of independence last week. However, some of its problems like economic stagnation, political impasse, and corruption give little cause for joy. Many of them are linked to organized crime. Development aid, including aid from Switzerland, must not ignore this connection, and can act against it.

On February 17th 2008, Kosovo declared independence despite weak state structures, domestic ethnic tensions, poverty, and a large dependence on international missions, aid, and remittances. Rampant corruption and a high level of organized crime remain problems neither international actors like the EU’s Rule of Law Mission nor local security forces and courts have been able to solve.

Criminal activities

Organized crime groups in Kosovo engage in the smuggling of petrol, cigarettes, Afghan heroin and Albanian marijuana across the country’s porous borders, as well as in extortion and money laundering. These activities inhibit development in several ways. While levels of petty crime are low, there are occasional armed attacks. Particularly in northern Kosovo, which is overwhelmingly ethnic Serbian, mafia groups exert much influence in the absence of the state. Just last month, Oliver Ivanović, a politician who had spoken out against the mafia, was assassinated.

In terms of economics, legitimate companies cannot compete with businesses the mafia is using for money laundering, like hotels, restaurants, petrol stations, or casinos. Criminal groups further inhibit legal business through loan sharking or extortion. This has two devastating consequences: Investments are unattractive, discouraging also the large diaspora from investing in their country of origin, and entrepreneurs and educated young people emigrate for lack of perspective.

Corrupting politics

Criminal rents can translate into substantial political power. Through bribery and intimidation, the mafia influences legislation and the execution of laws. Criminal groups are said to have deeply rooted connections to all levels of politics. Both the incumbent prime minister and president allegedly have ties to organized crime. Some institutions of the Kosovar state have a decent reputation, for example, the well-trained police. The more heavily politicized judiciary or the over-sized public administration are considered more corrupt and cumbersome however. Neither Kosovar institutions nor international missions have yet managed to prosecute the kingpins of organized crime.

Development actors’ response

Kosovo still receives a high level of international development aid, also from Switzerland. Development actors need to make sure their work does not unintentionally strengthen criminal groups or structures. The Swiss Agency for Development Cooperation (SDC) for example safeguards its work through rigorous analysis and assessments. Development aid can even help mitigate crime. Switzerland may not be a major donor, and focuses on niches. It is, however, also affected in its work by criminal actors and an ineffective government, and thus has to recognize the threat. The SDC supports an anti-corruption platform in Kosovo and has funded training courses for the judiciary against corruption. These programs were not explicitly framed as measures against organized crime, but contribute to mitigating the influence of informal deals and dirty money in the government’s work.

Efforts at the national political level would yield most effect. Development donors and governments across Europe, who have invested billions in Kosovo over the past decades, have long favored stability over fighting the extent of corruption and nepotism. They should increasingly use their leverage and push for more transparency in public services, campaign financing, and the judiciary.

Civil society like media, business associations, or victims’ groups should be strengthened to speak out against crime. After all, experience shows that change can be encouraged yet not imposed externally. Only local actors can eventually bring about lasting change, and the Kosovar public is increasingly fed up with corruption and criminals preventing growth and development.

Image: David Bailey

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Benno Zogg

is co-head of foraus’ Peace & Security Program. He works as a researcher at the think tank of the Center for Security Studies (CSS) at ETH Zurich.

benno.zogg@foraus.ch