Allocation of 1.5 billion Euros Employment Fund is not achievable

Allocation of 1.5 billion Euros Employment Fund is not achievable

IBNA Special Report

Pristina, May 8, 2014/Independent Balkan News Agency

By Elton Tota

Prime minister of Kosovo, Hashim Thaci continues his meetings with business owners in the country, by inviting them to apply in order to benefit from the 1,5 billion Euros Employment Fund.

He aims to assist small and medium sized enterprises with money from the Fund of Pension Savings of Kosovo (TRUST).

These funds have been collected from pension savings and millions of Euros that have been collected by the privatization of state enterprises. The prime minister says that the fund will be supported by a part of financial means that Kosovo has in foreign banks and which will be transferred to Kosovo. Thus, it has been thought to also bring back the TRUST funds which have been invested in financial markets and which amount to 703.9 million Euros.

But, the Trust of Pension Savings of Kosovo is not planning to withdraw money invested in foreign markets to bring them back to Kosovo for the needs of the government.

In the annual report of 2013, TRUST has made it clear that the Board has decided to withdraw 219 million Euros from open funds which means that the rest will continue to remain invested in the markets.

Even the withdrawal of 219 million Euros from the open funds will not be made with the aim to bring it back to Kosovo, because according to TRUST, investment in current markets is not that lucrative.

The decisions taken by TRUST are: Full withdrawal of the money from the “State Street Emerging Markets Equity Index Fund” amounting to 32 million Euros, because expectations from this class of assets in the short term and long term were low; to withdraw 75 million Euros from the Vanguard indexed fund, in order to be in line with the new investing framework which calls for the diversification in shares through indexed funds and the ones actively managed; to withdraw 60 million Euros from AXA because all indicators showed that  low inflation would last more than it was thought before, by making this product less attractive for the moment; to withdraw 52 million Euros from “Aquila” because the sum resulted to have a high risk.

By withdrawing this money, TRUST makes net profits of 9.4 million Euros, but on the other hand, these funds led to the balance sheet of the Central Bank of Kosovo at the end of the year to be 209.65 million Euros”, says the TRUST report.

On the other hand, experts of economy say that the pension money must not be used for other purposes besides the maximization of their value, because shareholders are the contributors.

Professor of economy, Abdulla Prebreza told IBNA that the government must be more transparent when it comes to  contributors’ money. Prebreza says that when it comes to the TRUST fund, there must be more caution in order not to create insecurities among the citizens of Kosovo who pay financial contributions.

Dr. Prebreza says that the law for the management of public finances doesn’t allow the creation of funds outside the budget.

Voices against even within the government

First deputy prime minister, Behgjet Pacolli is against the idea of his chief, Hashim Thaci for the allocation of the 1 billion Euros employment fund. He has considered this decision as an arbitrary one from the government.

“It’s impossible for the government to use the budget for economic activities. The government builds roads, but it cannot invite people to apply for the employment fund”, says Pacolli.

He says that the government cannot use the TRUST money for this fund.

“I can guarantee you that the Pension TRUST money will not be used as the instrument of the employment fund, because that money neither belongs to the government, nor to parliament, but to private individuals”, declared Pacolli.

According to him, the private sector can be helped by creating the necessary conditions through better laws.