Kosovo's population is one of Europe's youngest
International donors have pledged a total of 1.2bn euros ($1.9bn; £0.95bn) to help rebuild Kosovo at an international conference in Brussels.
The European Union offered 800m euros ($1271m; £639m) and the US 250m euros ($400m; £200m) to boost development.
Kosovo declared its independence from Serbia in February after nine years as a UN protectorate.
The EU enlargement commissioner said the donation was a tangible commitment to stability in Kosovo.
"Kosovo is a profoundly European matter," Olli Rehn said.
"The EU is ready to use all instruments to help Kosovo realise its European perspective."
A substantial portion of the total sum is expected to meet Kosovo's share of the Yugoslav debt it inherited from Serbia on declaring independence.
World bank bid
Over the last 10 years, some $5bn has been pumped into Kosovo and there are expectations that it may take another decade to transform it into a viable state, says the BBC's Oana Lungescu in Brussels.
Kosovo's Finance Minister Ahmet Shala said it was working hard to combat corruption.
"We, as a new state, we will ensure you that any penny, any cent will be handled properly... Kosovo is moving in the right direction to fight corruption as well as to improve its capacities for financial management," he said.
More than 40 countries now recognise Kosovo - but Serbia, backed by Russia, seeks to keep it out of international bodies that could offer more funding.
Prime Minister Hashim Thaci said on Friday that Kosovo had applied for membership of the the World Bank and the International Monetary Fund.
If its bid is successful it would both boost Kosovo's recognition as an independent state and provide a source of much-needed funds and development loans.