Published by Global Banking & Finance Review®
Posted on February 28, 2025
3 min readLast updated: January 25, 2026
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Kosovo's economy faces challenges as Trump's USAID funding freeze halts critical aid projects, impacting growth and job creation.
By Fatos Bytyci
PRISTINA (Reuters) - Kenan Gashi saws the limbs off old mannequins in his shop in Kosovo and throws them into machines donated by the U.S. government that shred and clean the plastic so it can be sold for reuse.
Gashi's recycling business in Fushe Kosova was transformed when it received the equipment from the U.S. international aid agency (USAID) two years ago, prompting him to draw up plans to hire more workers.
But Gashi is worried now. More than a third of the $130,000 worth of promised equipment has still not arrived. And now the administration of President Donald Trump has frozen USAID funding and sought to drastically scale down the aid agency and all U.S. foreign aid under his "America First" agenda.
Last week, in a video statement to the press, Trump mentioned the Kosovo recycling donation as an example of the kind of government spending he wants to cut.
"We are waiting for other machines to arrive, and we planned to increase the workforce from five to 20, but everything is uncertain now," Gashi said as he threw plastic parts into a USAID grinder with a sticker that read "Recycling Matters".
The U.S. has been one of Kosovo's biggest supporters since the small landlocked Balkan country broke away from Serbia, supplying $1.1 billion in aid since 2001, according to U.S. government figures.
Pristina-based think tank GAP said that USAID was currently managing 17 projects worth more than $156 million, but it is unclear how much of that has actually been disbursed.
Kosovo is one of the poorest countries in Europe and remains in dire need of aid, politicians and residents say.
It is blighted by continued ethnic tensions between the Albanian majority and the Serb minority in the north. Reuters found that more than a dozen aid projects worth at least 150 million euros have been cancelled by the European Union as a result of Kosovo authorities' role in that strife.
"People will not die because of USAID frozen funds," said Burim Ejupi from Pristina-based Indep think tank. "However..., every single dollar or euro received is important for a country that desperately needs them."
At risk are funds that are designed to strengthen Kosovo's democratic institutions, speed up the switch from high-polluting coal to renewable energy, and protect marginalised groups.
Those who have received the funding say it makes a difference to them and their community.
Another recycler, Qazim Grashtica, 38, scours rubbish bins daily around the capital Pristina in search of plastic. USAID provided him with his small tractor and a machine that crushes plastic. The help has increased his income from five euros a day up to 20 euros a day.
"Before the Americans' help there were times when 10 other family members would sleep without dinner. We had nothing to eat," Grashtica said in his workshop surrounded by plastic ready to be sold.
"I will tell Trump, 'You are a good man, you should help people, especially those in Kosovo.'"
(Reporting by Fatos Bytyci; editing by Edwsard McAllister and Mark Heinrich)
The uncertainty for Kosovo businesses is primarily due to the Trump administration's freeze on USAID funding, which has delayed the arrival of promised equipment and support.
The U.S. has supplied approximately $1.1 billion in aid to Kosovo since 2001, making it one of the country's biggest supporters.
Projects aimed at strengthening Kosovo's democratic institutions, transitioning to renewable energy, and protecting marginalized groups are at risk due to the funding freeze.
Local recyclers like Qazim Grashtica have benefited significantly from USAID support, receiving equipment that has improved their operations and livelihoods.
Kosovo is one of the poorest countries in Europe and is in dire need of aid, with ongoing ethnic tensions exacerbating the economic challenges faced by its residents.
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