Rising prices are widening the gap between people’s basic needs and their ability to meet them – and those in extreme poverty and on social assistance are getting desperate.
One bottle of oil in Kosovo currently costs 1.54 euros. That’s a little more than the 1.50 euros that one person in extreme poverty in Kosovo spends a day on average. Such economic misery means that the poorest class in the country often can’t even cook and fill their stomachs.
Most other essential products exceed the same price, a scan of current prices in supermarkets by BIRN shows.
Asked why prices have risen so fast in Kosovo while there is a high level of poverty, Prime Minister Albin Kurti said in a Facebook post on October 26, that, like the rest of the world, Kosovo has been exposed to inflation as a result of a breakdown in the supply chain due to the pandemic.
Considering that Kosovo largely imports products from other countries, along with the products it has also imported global inflation.
Kosovo’s annual inflation rate in October 2021 has increased by 5.7 per cent compared to October 2020, according to the Kosovo Agency of Statistics KAS.
Prices of bread and cereals have gone up by 5.7 per cent; meat by 2.4 per cent; milk, cheese and eggs by 6.2 per cent; edible oils and fats by a whopping 27.9 per cent; vegetables by 8.8 per cent; gas by 16.2 per cent, and fuels and lubricants for personal transport equipment by 35.5 per cent.
Recent World Bank data say that almost one fourth of the Kosovo population live in poverty and 5 per cent live in “extreme poverty”, defined as less than 1.50 euros a day.
Taking into account food prices in Kosovo, where most takeaway meals in fast food restaurants cost at least 1.5 euros, it means that some poor people probably eat only once a day.
A mother of a family of three children, D.Sh., from Podujeva, lives on 150 euros of social assistance a month, hardly enough to support three children. She tries to sell art works for 20 euros each, or less, to buy wood for the winter.
She doesn’t know how they will cover their daily expenses for the rest of the month; her husband’s work as a builder stops in winter.
“We worry how we will manage this winter when our girl turns five and social assistance stops. We have thought about how we would manage now that prices have increased,” she said.
Musa Demiri, from the Ministry of Labour and Social Welfare, told BIRN that the government is trying to help. After the recent price increase, it has decided to double payments for families on social assistance for the last two months of the year.
The last time that social assistance was increased, by 20 per cent, was in 2018. Since then, the minimum welfare payment for a single person had been 60 euros a month and the maximum, for a family of 15, 180 euros per month.
Under the government’s Economic Revival Package, of April 2021, until the economy recovers, the minimum amount for a single person has risen to 78 euros per month and the maximum for 15-member families is now 234 euros.
A monthly basket of goods costs on average 125 euros.
A choice between bread and detergent
Rising prices of basic products worry almost all citizens, not just the poor. Many social categories will now have difficulty closing the month without debt, including students and minimum wage workers.
M.Sh, a student who works as a journalist, says it is difficult “absorbing” the price rises on a monthly salary of 250 euros. Rising prices have already added to the worries of how to cover expenses, living alone in an apartment in Pristina.
“This situation is aggravated even more by the pandemic, where most people, including me, ‘work today for tomorrow,’” she told BIRN.
Although the minimum wage in Kosovo, according to the Labour Law, should be redefined each year, since 2011 it has stayed at 130 euros for employees under 35 and 170 euros for those over 35.
The Director of the Union of Independent Trade Unions of Kosovo, Atdhe Hykolli, is seeking urgent state intervention. He told BIRN that the government should take action before the situation worsens.
Xh. M, a woman from Vushtrri, earns 150 euros per month. She spends almost all her salary on food for her family of four. After the latest price rises, she is in a dilemma over how to divide her salary to cover both hygienic essentials and food.
“My soul hurts when I enter the supermarket. Should I buy bread or detergent?” she told BIRN, hoping that her salary will soon increase.
“We should better be without bread than without detergent,” she added, explaining that her old house in Vushtrri does not meet even the most basic hygienic standards.
Fiscal policy needs to change
About 13,000 families in very difficult economic situations in Kosovo are eligible to receive basic assistance from the Red Cross in Kosovo.
Antigona Sopjani, from the Red Cross, says that any difficulty in the supply of basic items directly increases the poverty level.
In these circumstances, the high price of products can violate the human right to food. Kosovo’s Council for the Protection of Human Rights and Freedoms considers that following the increase of prices, incomes need to increase, especially among those with below-average monthly incomes.
The Council told BIRN of its indignation that, with the increase in prices, the number of poor is increasing every day, while the state has neither the capacity nor the programs in place to maintain the social balance by subsidizing at least essential items.
Data from the statistics agency KAS show that the poverty rate has been rising for some years. It dropped to 3.9 in 2014-2015, decreased by another 0.8 percentage points between 2015 and 2016 and increased by 1.2 percentage points between 2016 and 2017.
Visar Vokrri, an economist and Program Director at Riinvest Institute, says fiscal policies need to be adjusted. He calls for a correction of welfare payments in line with the inflation rate, and lowering income tax rate for low-income groups.
According to the International Monetary Fund, IMF, the global economy is projected to grow by 5.9 per cent in 2021 and 4.9 per cent in 2022.
KAS data on trade in goods show a higher trade deficit in August of 352.6 million euros, compared to the same period in 2020, when it was 228.9 million euros.
Vokrri said that with the re-opening of the economy, industrial production – because of disruptions in the global supply chains – has had difficulty finding the raw material it needs, and is not yet able to cope with rising demand.
He said the latest rise in prices due to the pandemic is a typical example of transitional inflation, but with the passage of the economic shock, price stabilization is to be expected. Vokrri and many other world economists expect prices to stabilize in the second half of 2022.
However, Selatin Kacaniku, from the local organization “Consumer”, accuses the government of hiding behind excuses that inflation has affected the rise in prices in order to delay taking timely measures.
17 November 2021 - 16:48