Building Kosovo's Future, One Job at a Time

Kosovo's trajectory over the past 25 years shows what sustainable partnerships, sound institutions, and prudent policies can achieve. But the path to European Union-level living standards remains long and the constraints are evident: a small internal market, underutilized human capital, and a private sector in need of better conditions and greater access to capital.

Kosovo is a young country — young in the age of its population, one of the youngest in an aging Europe, and young in its history as a state. Since the end of the war, the World Bank Group has stood alongside Kosovo, first supporting reconstruction with a focus on rebuilding fiscal and financial institutions, restoring basic services such as education, health, roads, supporting private sector and community-level development. Over the past 25 years, the World Bank Group has engaged across nearly every sector of the economy, with a consistent focus on building strong institutions.

And the results are encouraging. Over the past decade, Kosovo's per capita GDP has followed a significant increase, from around $3,500 in 2015 and now exceeding $6,000. The country moved up to upper-middle-income status in 2018, and it exited the World Bank Group's list of "fragile" countries last year. Kosovo has also earned a reputation for prudent macro-fiscal management, sustained growth, and low deficit and debt levels.

Yet the story is not finished. Kosovo's per capita income remains only about 15 percent of the EU average, and at current growth rates, closing that gap would take decades. While on a firm downward path, the poverty level remains one of the highest in the Western Balkans region. There is still a great deal of work ahead, and the World Bank Group is committed to continuing that journey with Kosovo.

Why Jobs Must Be at the Center

At the World Bank Group, we put jobs at the heart of everything the institution does, as our “North Star”. Because jobs give people purpose and dignity, lift families out of poverty, drive economic growth, and act as the glue that holds societies together — the most direct route to stability.

Crucially, most of these jobs will come from the private sector, not governments. Recognizing this, the World Bank Group has built its Jobs Strategy around three interconnected pillars: (i) laying the -physical and human- foundations that allow businesses to operate and grow, (ii) creating a stable environment that encourages investment, and (iii) mobilizing the private capital needed to reach a scale public resources alone cannot achieve.  

The World Bank Group engagement in Kosovo maps closely onto all three, in order to create better-quality jobs through a transition from a consumption-based economic model toward one driven by exports and competitiveness. Continued investment in infrastructure, human capital, private sector development, and efficient public administration will be essential.

Pillar 1 – Building Foundations: Physical Infrastructure and Human Capital

Over the past decades, the World Bank Group has supported major physical infrastructure across Kosovo — building most of its dams, rehabilitating the water canal systems, and expanding fiber-optic broadband to more than 200 rural villages, so that every village and school now has fast internet access. These investments have boosted water security and irrigation for agribusinesses, while connectivity has helped businesses cut costs and reach new customers, opening pathways for young people into ICT jobs and remote work.

The recently approved Transport and Trade Facilitation Project will further upgrade transport infrastructure, improve safety, and cut border-crossing times, deepening Kosovo's integration into larger markets.

Hard infrastructure alone, however, is not enough; nurturing the most valuable asset for Kosovo, its people, is equally critical. The Bank's long-standing engagement in education and health now includes support for early childhood education and care, helping the next generation build needed skills while freeing up mothers to pursue paid work. In health, the Bank is helping Kosovo move toward a digitally enabled system that improves patient care and strengthens data tools for doctors and policymakers.

Pillar 2 – Creating an Enabling Environment for Job creation

Through its Development Policy Loans, the World Bank Group has supported the ambitious reform agenda to make the economy more competitive and attractive: it has helped simplify land ownership rules — long a bottleneck for investors — supported digital business and e-commerce, improved trade systems, and helped attract new investors while supporting local firms' growth.

Through the newly adopted Financial Sector Development project, it will also help unleash the potential for small businesses, start-ups, and women-led firms through an enhanced access to credit and digital payments.

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Pillar 3 - Mobilizing Private Capital

The third pillar of the Job Strategy - capital mobilization- is where the World Bank Group builds on its different entities: the World Bank, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). While the World Bank creates favorable conditions for businesses to enter and grow, IFC finances companies directly, alongside advisory services and MIGA provides political risk insurance and credit enhancement guarantees to help investors navigate political and credit risks in emerging economies.

IFC recently signed a €35 million debt package for a domestic joint-stock company, mobilizing €75 million in total financing — its largest commitment in Kosovo to date — and plays a central role in mobilizing private capital for renewable energy. While MIGA has also issued guarantees for capital optimization to banks operating in Kosovo, which have allowed them to accelerate loans for local SMEs and climate-related initiatives. Deepening this collaboration, with the Bank tackling policy and foundational barriers and IFC providing financing, remains central to unlocking Kosovo's private sector potential.

Knowledge as a Form of Capital

People may think of the World Bank Group mainly in terms of financing. But the institution is equally a Knowledge Bank as knowledge and financing are mutually reinforcing: knowledge shapes the design of the operations the Bank finances, while those operations in turn generate new evidence and lessons that inform future investments. Because knowledge accumulates as a form of institutional capital built over decades, it enables the Bank to optimize how its financial resources are deployed and increases the likelihood that investments translate into real development results.  

The World Bank Group also generates global knowledge that shapes global policy debates, and through convening platforms that facilitate cross-country learning among practitioners and policymakers. It also makes this knowledge a public good via open-access resources and promotes exchange of successful development experiences, ensuring the entire global community—not just Bank clients—benefits from its research and expertise.

A Shared Path Forward

Kosovo's trajectory over the past 25 years demonstrates what sustained partnership, sound institutions, and prudent policy can achieve. But the road to EU-level living standards remains long, and the constraints are well understood: a small domestic market, underused human capital, and a private sector that needs both better conditions and greater access to capital.  

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The World Bank Group remains committed to supporting Kosovo through this transition by offering knowledge, funding, and expertise to help create quality jobs and build a better future for its people. The Jobs Strategy and its three pillars offer a framework that matches closely to these realities, and its application in Kosovo reflects a genuine alignment of global strategy with local need. With sustained reforms, strategic investments, and determination, Kosovo is well positioned to overcome remaining challenges, seize development opportunities, and advance toward a more prosperous future.

The author is World Bank Group Country Manager for Kosovo and North Macedonia.