Privatization Process in Kosovo

Abstract

Privatization is considered an initial step toward market economy, restructuring financial and economic sector that enables competition in the economy. Privatization is the most painful process in economy where beside legal establishment and political will, it includes also the aspect of fairness and honesty. Analysis of this process is based on the models and comparisons between Kosovo and countries of central and Eastern Europe, in order to give a clearer picture on the overall process of privatization in Kosovo

Methodology that is used to analyze this issue is based on empirical results and also qualitative interpretation of the models and also on studying particular asset privatization process. A widely discussed case of privatization in Kosovo is that of Post and Telecom of Kosovo (PTK). Since each company has its own value, I have focused my appraising analysis on the financial statements with a special observation on Cash Flow from Operation, as the most significant indicator on showing how company is using her physical and human recourses to generate money. I have based my research on using methodology of discounted cash flow from operation analysis, even though the company valuation was done using net cash flow from operation analysis. Cash Flow valuation then was discounted by the T-bonds interest rate.

This paper tries to bring a conclusion that privatization process in Kosovo have not brought the results excepted, firstly by setting an inappropriate price of assets and lastly by restructuring overall privatization sector and the overall industry. Kosovo, consequently, lost a big opportunity to create a competitive environment of financial industry: starting from the banking industry followed the pension trust which remained at their initial steps of development