Economy of Gjakova

Gjakova built an economy based on farming and agriculture, lower trade and some types of manufacturing workshops which mainly produce for the needs of city-based products as imported cases. After World War II, Gjakova has built an economy based on industry and agriculture but also in the service sector. Nowadays, these subsequent shifts in transitional societies are escorted with shifts in the economic structure of the city. Therefore, Gjakova has an economic structure that is based on two pillars: in the private business sector and social business sector which is currently being privatized. Private business sector is in expansion and the main indicators qualify it as the main component of Gjakova’s economy.

History

According to official sources identified by the Ministry of Trade and Industry,Serbia,by the end of 2005 there were about 3,200 registered businesses that exercise activity in different areas of Gjakova, such as enterprise manufacturing, construction, service, trade, catering, craft, transportation, information technology, etc. Social economy in 1989 has counted 45 companies that have employed 18,640 workers. In non-economic activities (education, health, culture, government institutions, banks, etc.) there were employed 4000 workers. Furthermore, they also developed the private economy – where in 2010 approximately 920 employees were registered in the business entities. The economy of the municipality of Gjakova suffered mostly during the economic sanctions and the mass violence done by Serbian forces during the war. The situation further during NATO’s intervention as a result of the destructive actions of multiple military and police forces, which have stood and operated in the economic enterprise facilities. This meant that during their withdrawal, these Serbian forces robbed, looted and destroyed most of the assets, inventories, transportation machines, etc. The losses that were done in the social economy as a result of the war were approximately 190 million DEM, whereas in the private economy around 100 million DEM.

Damages during the wartime

According to the report “Damages of the War in the Economy of Gjakova”, written by the Provisional Government of Gjakova (Department of Economy, Finance and Inspection jobs), it is explained how on August 1999 on the financial damages reached the amount of DEM 170,252,772. This seems to be specified directly to the sector of social economy.

Past war economy

According to official data, in 2006, there were 581 registered small and medium enterprises, in 2008 there were 3120 such registered businesses, while in 2012 their number had reached 4120. Gjakova has 12,000 people employed, on both the public and private sector, but most work in the private sector. Even though this number is still small, it has seen a gradual increase over the years. In 2009 there were a total of 8,000 people employed in Gjakova. According to data from the Kosovo Ministry of Work and Social Wellbeing, this municipality has seen a decrease in the number of the unemployed. According to statistics from this ministry, in 2010, 40,000 people were registered as unemployed, while in 2011 this number decreased to 30,000 and in 2012, this number fell to 15,000. Thirty thousand people in Gjakova receive social assistance. This category includes poor families, people with disabilities, families of war veterans/victims and retirees.

Industries

Potential industry sectors in the municipality of Gjakova are:

- Metal industry which produces metal ropes, nails, galvanized pipes, profiles of metal adhesive bandages. The existing industry also the production of electro motors for washing machines, engines for industrial applications, motors for hermetic compressors, finger jointed and Teflon containers, chimneys, elbows, enameled pots, technical gases, and chrome concentrate.

- The textile industry which produced cotton spinning, cotton fabrics, artificial leather, underwear, lingerie costume for men, and different types of fabric (specifically jeans), etc.

- Chemical industry involves production of the shampoo for domestic and industrial use and other chemical products which are used for household hygiene.

- Food industry is mainly known with the production of flour, bread, eggs, pasta, chocolate, high quality wines, and fresh meat.

- Gjakova is also known for its construction materials industry, which involves the production of bricks, blocks, tiles, doors and windows, briquette, wooden cottages in the global level (log Houses ) and also the production of asphalt, fresh concrete, concrete slabs, and concrete pipes.

Capital investments

The municipal budget of Gjakova was subsided by donations from USAID, CDF, Austrian Office in Kosovo, the European Commission and others, which over the past four years have done capital investments to the amount of 25 Million euro.

2010: 5,400,000 EURO

2011: 6,300,000 EURO

2012: 6,700,000 EURO

2013: 6,600,000 EURO

The capital investments in the municipality of Gjakova are mainly focused on the regulation of roads including the rehabilitation, pavement and partially their lighting. However, investments for the expansion of the sewage system and the regulation of the canalization remain insufficient. The total amount of funds that are available to the municipality of Gjakova during a year for capital investments lies somewhere over 6 million euros.

Private Sector

Dominated by small family businesses, retail stores, cafeterias and providers of basic services, the private sector of Gjakova remains weak. It makes up only 5.5 percent of all businesses registered in Kosovo. According to the Tax Administration Office in Gjakova, 88 to 93 percent of active businesses are businesses with a single owner, five to ten percent are businesses with limited liability and the remaining two percent are large businesses.

As in any other place in Kosovo, more than 90 percent of the sector consists of small family businesses which cannot create growth with added value. Only 2 out of 53 studied businesses in the centre of Gjakova declared not having employed any relative.

Gjakova’s private sector, as in other places of Kosovo, is dominated by small businesses which hire 1-5 employees in activities with small added value, such as wholesale and retail, or other service activities such as restaurants and hotels.

Wholesale and retail represent 50.5 percent of registered businesses. Other sectors include hotels and restaurants (10.2 percent), production (9.7 percent), transport and communication (7.8 percent), construction (4.2 percent) and agriculture (1.7 percent) among others.

Outside of the city’s centre, Gjakova’s private sector is characterized by ex-social ventures. Only one of the 15 privatized social ventures and one of the two ventures with common shares are completely functional. Both ventures have to do with construction.

One of them is "Dukagjini" with 109 employees, which is one of the biggest private employers in Gjakova today. The other venture is "NIKI-S" which at present has 279 employees and is considered the biggest company in Gjakova’s municipality.

Free Economic Zone

In March 2014, Gjakova along with Mitrovica were declared a free economic zone.