Page last updated at 23:06 GMT, Tuesday, 15 April 2008 00:06 UK

Kosovo to scrap its main exports

By Dominic Laurie
BBC News, Pristina, Kosovo

Scrap exports the list of Kosovo's trade
Scrap tops the list of Kosovo's exports

Kosovo's 2.2bn euro ($3.5bn, 1.8bn) economy throws up some pretty surprising statistics. It imports ten times as much as it exports.

The UN Development Programme (UNDP) estimates that 1.2bn euros worth of goods came into Kosovo in 2007, while just 100m euros worth went out.

Cash sent from abroad was worth a sixth of the total value of the economy, and this year that's due to rise.

These remittances often prop up whole rural communities where unemployment can reach 80%.

In short, the embryonic territory, which declared itself independent from Serbia in February, faces some significant challenges, and its new leaders have been struggling to unite it and find a way to revive its sagging economy.

Old cars

Perhaps the most striking figure is that Kosovo's largest export over the last few years has been scrap metal.

map

Microscopic compared with most countries' calculations, the trade in crushed up vehicles accounts for some half of Kosovo's export value, according to the UNDP.

Rusting hulks of cars and trucks lie in yards at roadsides everywhere, waiting to be scrapped.

Until recently, there was plenty of material for the crushers.

Unable to afford new cars, Kosovans used to bring in vehicles that owners in Western Europe had grown tired of, judging them too old for their tastes.

Germany, which has a large Kosovan community, was the most common source.

EU threat

The days are now numbered for Kosovo's most lucrative export, all because of legislation brought in to protect driver safety.

Scrapping cars in Pristina, Kosovo
Abandoned cars litter the streets

In January 2006, the United Nations Mission in Kosovo made it illegal to import cars that were more than 8 years old.

Consequently, the supply of 15-to-20-year-old vehicles that the scrap metal business relies upon has started to dry up, and will soon be totally extinct.

The UN authorities judged the safety of Kosovans to be a higher priority than its main export.

The industry faced ruin - with thousands of badly needed jobs at risk.

It required a change of direction to survive.

Recycling

Riciklimi is a scrap metal firm a few miles south of Pristina on the road to the city's airport.

The size of half a football pitch, it's one of the bigger ones.

Riciklimi owner Berat Morina says the 2006 law means he is having to change the way he does business.

Scrap metal dealers in Kosovo export across Europe
Recycling has become the latest growth area for scrap merchants

His firm's name means simply "recycling", and gives a clue to how the industry is changing.

Walking into his yard, you are faced with the piles of rusting cars you see elsewhere.

At the other side of the plot, groups of workers are separating out different types of metal that have never been near a car.

Aluminium pipes, copper wire, chunks of steel are all painstakingly placed in heaps ready to be loaded into a truck bound for Macedonia.

Mr Morina says he needs to transform his company into a recycling business, that can take as its raw materials not just cars, but anything that can be reused.

But this, he says, will not be easy.

"It's going to be a huge challenge to change our operation to bring it into line with EU recycling standards" he says.

New markets

The biggest market for his transformed export business will be European Union countries.

Old cars make up the bulk of scrap exports
The scrap is made up of everything from old cars to old cans

Slovenia is already a big customer, as is EU hopeful Croatia.

They are willing recipients and will pay good money, though they demand a high degree of separation in the consignments of materials they receive.

Developed countries would be doing this work with sophisticated and expensive magnetic and water filtration systems.

Mr Morina does not have that luxury.

What he does have, though, is one of Europe's lowest wage costs.

Unskilled labour in Kosovo can be bought at 150 to 200 euros a month.

With some estimates putting unemployment at 50%, there is a large untapped resource.

So until he can afford new equipment, he will have to run his business the old fashioned way.


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