The issuance of government debt instruments has started for the first time in 2012 in Kosovo, coinciding with a period of tremendous debt problems being faced by many European Union countries. The first instruments issued in form of debt were short-term Kosovo government treasury bills which were traded in the primary market where dealers purchased the instruments in an organized auction. The auction, respectively the electronic market, is maintained at the Central Bank of Kosovo. A year later, Kosovo started issuing longer term Government Bonds and its debt levels rose from 5.8% (2011) to 9.1% (2013). Though, far below from an EU average of debt to GDP ratio of 85.4% (2013), still Kosovo has doubled its debt levels within two years and the trend and expectations are showing that it will continue upwards.
Recently, Kosovo has started issuing 5-year government bonds increasing the debt to gdp ratio further up to 12%. With this trend in two years experts anticipate an increase in Kosovo's government debt to 30%. This important issue will be the main focus for students to analyse, as we know that debt unsustainability may seriosuly harm the economic sustainabillity. Given that the importance of public debt is unquestionable for sustainable development, these learning materials will be designed to study this role from a comparative perspective of Kosovo and other European countries that recently dealt with debt problems. Doing so, students will be organized in small groups and will be assigned to analyse the debt timeline of one the EU countries, Greece, Italy or Portugal. Thereafter, students will take part in observing the technicalities surrounding the debt issuance such as auctions, issuance calendars and plans at the Central Bank of Kosovo where the issuance of debt is organized.
How Kosovo finances its economic growth through debt will be a signifiant part of this research resource. The aim of these learning instructions will be to produce assessments for Kosovo’s debt strategy and evaluate if such a strategy is based on sustainable debt planning and management. Finally, students will conduct a series of interviews with officials working at the Ministry of Finance who work at the debt and treasury units. The interviews should focus on the basis of debt planning where the questions tackle issues such as: financial forecasts of liquidity and their role on debt planning, the demand for Kosovo’s debt instruments and the liquidity of Kosovo’s government debt market.
At the end of the field study at the Central Bank and the Ministry of Finance, students will provide comprehensive reports on government debt planning, issuance and trading in Kosovo. The report should also focus in comparing and analysing government debt practices of a small country such as Kosovo, and the comparative benchmark countries such as Greece, Italy and Portugal. The report should emphasise the fact that small counties should learn from countries with bad debt management so as to avoid collapse or default in the future. A debt insolvent county is unsustainable and poses serious risks for the overall national welfare.