Has Kosovo's first year of independence truly been "totally successful," as Prime Minister Hasim Thaci asserts?

Nearly half of all Kosovars live in poverty, and there are only enough jobs for one out every two people.

Kosovo's economy is heavily dependent on remittances from abroad and foreign aid, two income sources expected to decline given the global financial crisis. And the foreign investment promised by the government has yet to materialize.

There remains untapped potential in the mining industry. Geologists recently discovered vast amounts of high-quality lignite coal (up to 15 billion tons) and considerable nickel, lead, zinc and bauxite deposits, and traces of gold.

But you have to wonder who would want to invest in any industry in a country ranked in the top fifth of the world’s most corrupt countries by Transparency International. Then there's the the threat of the mob. The UN mission in Kosovo estimates organized crime to account for some 15-20 percent of Kosovo's economy.

"For 10 years we linked every problem to status," said Shpend Ahmeti, director of the Institute for Advanced Studies in Pristina, referring to Kosovo's struggle to separate from Serbia. "We thought independence was going to simplify things. It has not. Independence has removed a mental block among Kosovars. Now, in every poll, the priority is not status, but jobs. We've moved from survival, to development and prosperity as a great need we don't yet have."

Photo: Chris Hondros for Mercy Corps

Like it or not, Kosovo is independent. Yet its survival depends on whether or not it will be able to build a functioning and sustainable economy, a goal that remains far from certain. Post-independence Kosovo faces daunting economic challenges, including weak infrastructure, unemployment rates of nearly 50 percent, and economic corruption that has been ranked as fourth worst in the world by Transparency International.

Although some in Kosovo are confident about prospects for economic growth and development, many estimate that it will be another ten to fifteen years before Kosovo can support itself economically. Commentary from the World Politics Review argues that independence may actually exacerbate Kosovo's economic problems:

While Kosovo may be able to get loans now from the IMF and World Bank, the last nine years have shown that aid alone is not going to do it. Kosovo has already received 25 times per capita the amount of aid given to Afghanistan, and the economy is still in shambles. Furthermore, it is a safe bet that Serbia will obstruct investment in Kosovo, first by shutting down the commercial border between the countries, and then by challenging privatization plans in the World Court and other international bodies. Late last week, Serbia indicated that it will continue to pay Kosovo's debts to the international community, which will amount to $70 million this March alone. Serbia's only reason for doing this is to preserve its legal claim to the territory and its right to tax any development projects. The legal wrangling likely to result will tie up proposed projects for years, and chase away the few investors Kosovo might be able to attract.