Located in the heart of the Balkans, Kosovo[1] is landlocked and is one of the poorest economies in Europe. It was adversely affected in the 1990s by civil conflict following the disintegration of the Socialist Federal Republic of Yugoslavia. Over the course of the 1990s, poor economic policies, international sanctions, weak access to external trade and finance, and ethnic conflict severely damaged the economy. These occurrences led to a reduction of output by half in the early 1990s, and by another 20 percent following the 1998-99 conflict.
The location of Kosovo in east-Europe
Since the end of the conflict in June 1999, Kosovo’s reconstruction has progressed, due to local efforts as well as generous donor support of around €2 billion ($2.57 billion). Much of Kosovo’s basic infrastructure, which was destroyed in the conflict, has been restored. Over 50,000 houses have been rebuilt, providing homes to about 300,000 people, and 1,400 km of roads have been rehabilitated. The construction of health clinics and schools throughout Kosovo has ensured that the basic infrastructure for health and education services is largely in place. In addition, agricultural production has increased significantly, with wheat, beef and milk production now exceeding pre-conflict levels.[2]
Re-opened shop next door to gutted building in Kosovo (Source: World Bank Website)
As one of the most active role in the economical and social sector of many countries, what has the World Bank done in the reconstruction of Kosovo? This paper will focus on the World Bank’s work in Kosovo to answer this question. And then I will focus on the challenges ahead and try to find some solutions.

[1] Kosovo is a region within the Federal Republic of Yugoslavia (FR of Yugoslavia) which comprises the republics of Serbia and Montenegro. FR of Yugoslavia is not a member of the IMF or the World Bank(World Bank membership ceased in 1993).

[2] See Kosovo End-Year Economic Briefing, the World Bank Group, Jan 2007.

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