Date: 30.09.2021

Why are we doing what we are doing?

A blog based on the editorial by the MFK CEO, Petrit Selimi, for the 14th issue of the MFK’s quarterly newsletter ‘The Challenger’, published in October 2021.


Millennium Foundation Kosovo is implementing the activities financed by Millennium Challenge Corporation, based on a $49million grant called the Threshold Agreement. This grant has been signed and ratified between the two countries back in 2017. MFK is supposed to implement all its activities by September 2022. There are two groups of activities that are the focal points of this Threshold Agreement: Transparent and Accountable Governance Project (TAG) and Reliable Energy Landscape Project (REL). Furthermore, MFK also has invested extensively in cross-cutting issue of Gender and Social Inclusion (GSI), especially through Women in Energy activities, which provided grants, internships and scholarships for greater inclusion of Kosovan women in energy landscape


But, how did we decide to invest in these projects? Actually the approach we have taken together with Kosovan institutions and other stakeholders has been very systemic and rooted in a process called Kosovo Constrain Analysis. MFK and MCC’s evidence-based approach to investments in Kosovo began with a mutual understanding of a country’s main growth challenges. During the first phase of the initial Threshold (and Compact) development, I led a team of Kosovan experts that worked with MCC to jointly conduct a constraints-to-growth analysis (CA). This analysis identified the constraints to private investment and entrepreneurship that are most binding to economic growth in Kosovo. The results of this analysis enabled the Government of Kosovo, together with MCC, to select activities most likely to contribute to sustainable, poverty-reducing growth.


As MCC explains in its website “CA approach builds on the pioneering work of economists Ricardo Hausmann, Dani Rodrik and Andrès Velasco (HRV). As HRV points out, all developing countries face significant economic and development challenges, but these challenges do not all equally restrict growth. Prioritizing constraints is important since a country’s implementation capacity, political space, and financial resources to address these challenges are scarce and valuable.”


Further work was done in root-cause analysis to constraints until projects and activities were identified to best address these root-cases. This is how we prioritized the two projects, while for our partners in donor community, academia and institutional stakeholders, please check MFK and MCC websites where the entire Kosovo Constraints Analysis can be found. 


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