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OPINION

Real help for the Balkans

Jeffrey Gedmin and Craig Kennedy
"The world's most expensive photo of 40 some world leaders."

That's the way one senior US official describes the summit held in Sarajevo this summer where Western leaders announced their latest plan to bring peace to the Balkans. Since the end of the Kosova conflict, the mood in the region vacillates between fresh hope and cynical jokes about how grand rhetoric will dissolve into empty promises and more turmoil in south-eastern Europe.
     Is there a clear solution to Balkan instability? Certainly not. The Stability Pact unveiled this summer, with its promise of aid, trade, and investment, is a serious and noble gesture, to be sure. Working groups are now busy trying to coordinate the effort. But this, like all other efforts, is sure to fall short of the mark if Western leaders don't listen more carefully to what people of the region themselves have to say about their problems and future.
     The first thing one hears is that nothing can be accomplished on the cheap. And atop the list are the removal of dictator Slobodan Milosevic and the democratisation of Serbia. The region is searching for ways to assist the weak and fragmented Serb opposition.
     Even in the presidential castle in faraway Prague, Czech leader Vaclav Havel has designated one of his assistants to organize a project aimed at cultivating ties and lending support to Serb democrats, however few in number they may be. But everyone also knows nothing will be accomplished without clear, resolute US leadership.
     In Bosnia, segments of the Serb population will always be trouble so long as malign nationalism emanates from Belgrade. Drive through Bosnia's Serb territory, "Republika Srpska", and see the flags of Mr. Milosevic's regime hanging from apartment balconies - even after the Serb defeat in Kosova - and you'll get a sense of the problem.
     In Sofia, Bulgaria's President Petr Stoyanov thinks a lot about how Serbia's dictatorship hinders his country's growth beyond being a "democracy of poverty," as he puts it. "Don't expect us to start a new war, though, when you didn't finish the last one," he says.
     Montenegrins must be particularly perplexed. The US tells the pro-West, independence-inclined government of Milo Djukanovic it opposes a change in borders, while expecting him and his countrymen to accept the same dictatorial rule that Slovenia, Bosnia, Croatia, and Kosova all sought to escape.
     From Sofia to Shkup, no one wants more fragmentation. New borders mean new  conflicts, not to mention microstates that have little chance of becoming economically viable. But the future of Montenegro, and for that matter of Kosova, and even Vojvodina, the Yugoslav province populated by ethnic Hungarians, becomes much easier to resolve when democrats are finally in charge in Belgrade.
     Will Washington finally accept the fact that the "de-Slobo-fication" of Serbia is not merely desirable, but remains the central prerequisite to stability and prosperity in the Balkans?
     The Senate is expected to ask President Clinton to sign the Serbia Democratisation Act of 1999, which promises $100 million to increase radio broadcasts to Serbia and the like. If the US alone has already spent more than $20 billion in damage control in the last decade, even this welcome step would seem exceedingly modest in attacking the root of the Balkan problem.
     Even if Slobo goes, though, regional leaders understand they have their own work to do. Everyone talks about regional solutions. But when the embargo against Serbia forces Bulgaria to use Romania as a trade route, for example, Bucharest responds by tripling tariffs, dragging its feet on building a new bridge over the Danube - only one exists - and permitting corrupt border officials to enrich themselves with bribes.
     Meanwhile, in Bulgaria, despite progress in economic reform, foreign land ownership is still prohibited, over regulation continues to make Bulgaria a difficult place to do business, and corruption, as in Romania, remains ubiquitous.
     In Bosnia, ethnicity and the legacy of war are important issues. But Bosnia, like its neighbours, still struggles with economic transition. And the political landscape, says Jacques Klein, the departing deputy high representative in Sarajevo, remains dominated by people who have "communist chips in their brain." No wonder Bosnia, 3-1/2 years after Dayton, has an economy that is 70 percent dependent on foreign aid and a business environment so dominated by severe taxes, regulation, and graft that even McDonald's has given up trying to open.
     A Stability Pact for the Balkans is important. But the real pact has to be for the US, its allies, and the region itself to tackle the most difficult and costly problems. Only then will there be a real chance to reverse the misery of the past.
     Jeffrey Gedmin, a resident scholar at the American Enterprise Institute, in Washington, is executive director of the New Atlantic Initiative, a network of American and European institutes, politicians, and executives. Craig Kennedy is president of the German Marshall Fund of the United States. They led a delegation of experts on a fact finding mission to the Balkans in August.

THURSDAY, September 23, 1999

 
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Economic News Briefs
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Kosovo official asks for urgent aid.
Jakup Krasniqi, reconstruction  minister in the so-called Kosovo Albanian transitional government,  urged on Sept. 20, emergency aid for Kosovo and promised tax reforms  and privatization after elections are held in the province next year.  Krasniqi was speaking in Washington at a conference on Balkan  reconstruction as a member of the Kosovo mini-government specified by  the Rambouillet, France, peace agreement. He read a long list of  priorities which included the reconstruction of homes for refugees  before winter and the reconstruction of infrastructure and the  education and health care systems. Krasniqi expressed the hope that  after elections, Kosovo would be allowed representation in the U.N.  and start receiving direct aid from the World Bank.

EU approves EUR92 million in aid for Kosovo.
On Sept. 16, the European  Parliament approved EU92 million from the EU budget as an aid package  for Kosovo intended to assist in the formation of a reconstruction  agency for the province. The EU Parliament also voted EUR30 million in  direct relief to Kosovo as well as EUR15 million in aid to the  Macedonian economy. At the same time, the EU's legislative body  decided to put-off until October a vote on formally backing the  foundation of a Kosovo reconstruction agency. This is seen as a result  of MPs' disappointment with a decision by the Council of Ministers to  split the agency's headquarters between Salonika, Greece, and Pristina  in Kosovo. European parliamentarians still believe they can convince  EU governments to review the decision on where the agency will be  based. The European Parliament also opposed plans to increase the aid  being sent to Kosovo to EUR500 million and at the same time reducing  the quantity of aid sent to other countries.

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British takeover of Kosovo power grid.
A team made up of 607 British  experts will in future control the production and distribution of  power at Kosovo's power plants and the mining of coal at its coal  mines, UNMIK said on Sept. 17. Kosovo's two largest coal  thermal-electric power plants, both of which are in very bad condition,  have been made operable nevertheless. Britain, Denmark, Norway,  Germany, Sweden, and the Netherlands have pledge US$50 million to  keeping the Kosovo power grid operational.

Montenegrin, regional power supply dependant on Kosovo says Serbia.
EPS, Serbia's state-run power company claims that Montenegro could  face power outages this winter and that countries of south-eastern  Europe could also face instability in their power grids unless power  production returns to normal in Kosovo. EPS sources were quoted as  saying by the Belgrade daily Glas Javnosti that only one of the seven  generators at Kosovo's power plants was working, forcing EPS to send  2-5 million kilowatts per day. Some of the missing power is provided  by Albania. The EPS sources added that the key to normal operation of  the power grid is normalizing mining operations at the Belacevac and  Dobro Selo coal mines.

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Kosovo factories moved to Albania claims Serbian press.
In addition to  property belonging to Kosovo's Serbs and Montenegrins, almost all of  the Serbian province's factories have been looted and their equipment  moved to Albania, the Belgrade Vecernje Novosti newspaper reported in  its Sept. 20 issue, citing Serbian officials. The paper gave a  detailed list that included everything from breweries and  preservatives factories to car battery factories.

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