Books on Serbia & Montenegro
% of GDP
Update No: 090 - (27/10/04)
Vital elections in Kosovo
Kosovo's general election on October 23rd was the first step in a tricky endgame
to settle the fate of the Serbian province, now a U.N. protectorate in the heart
of the Balkans. The Albanian Kosovars predictably voted for their moderate
president, Ibrahim Rugova. The new government and parliament will almost
certainly be in power as the United Nations begins negotiations sometime next
year on whether to grant independence to the 90-per cent Albanian majority or
keep Kosovo nominally part of Serbia.
The West says Kosovo's political leaders must make progress on the rule of law
and human rights before any talks can begin in mid-2005 -- a policy known as
"standards before status" which has been widely criticized locally and
in a stinging U.N. internal report. Western diplomats and observers, however,
say any further delay on tackling "final status" is unlikely after
devastating riots in March laid bare the extent of anger at Kosovo's political
limbo and shattered economy.
Some warn of an "explosion" within months and say the new government
will have to work hard to keep a lid on tensions. About 1.3 million people are
eligible to vote for the 120-seat parliament. Most backed parties led by Rugova
and former guerrilla leader, Hashim Thaci.
The ballot was marred by a boycott by Kosovo Serbs, who wanted greater
guarantees of security and representation than they received.
Serbia's pro-Western president, Boris Tadic, was strongly criticized for urging
them to vote, against the advice of Prime Minister Vojislav Kostunica, Serbian
nationalist parties and the politically vocal Serbian Orthodox Church.
The Serbian Question
It was only with the resolution of the German question in 1945 that peace came
to Central Europe. It is a reasonable supposition that so long as the Serbian
question festers, the Balkans will remain unstable.
The Balkans have been relatively quiet since violence flared in Kosovo last
March, but an old question haunts the continent: Where should the borders of
Serbia lie? In the 1990s, that question brought war to Europe on a scale not
seen since 1945. Slobodan Miloševic, the Serbian dictator now on trial in The
Hague, strove to draw the borders of his country around the homes of every last
Serb, from Kosovo through Bosnia to Croatia. That destructive vision has died.
But the issues behind the slaughter are not yet resolved.
Kosovo, still a province of Serbia, is restive. A United Nations special envoy,
Kai Eide, recently concluded an in-depth report that found 'growing
dissatisfaction and frustration' among the Albanian majority there. It quoted a
Kosovo Albanian student saying, 'You gave us freedom but not a future.' Building
a future, of course, requires a measure of stability, but Kosovo's status
Eide, a Norwegian diplomat, said talks on the status of Kosovo 'cannot be
postponed much longer.' Such talks, now likely to begin in the second half of
next year, will have to address this central issue: Should Kosovo Albanians be
granted their vehement wish for independence? United Nations Resolution 1244,
which ended the NATO bombings of Yugoslavia in 1999, said Kosovo was part of the
Federal Republic of Yugoslavia, whose successor state is Serbia and Montenegro.
That is how Serbia and the Serb minority in Kosovo would like things to remain.
But, as the Eide report made clear, the status quo in the United
Nations-administered province is untenable. Whether self-determination without
independence can ever satisfy the overwhelming Albanian majority in Kosovo is
unclear, but it seems unlikely. An adjustment of borders may have to come one
International diplomats will try to put off that day for as long as possible.
Changing borders in the Balkans remains a treacherous proposition because
Serbian territorial issues are far-flung. Just how treacherous was evident
during a recent exchange between a senior Bosnian Foreign Ministry official and
the country's ambassador to Germany. Both men were attending a Balkan conference
in Berlin organized by the Herbert-Quandt Foundation.
The Foreign Ministry man, Fuad Sabeta, said: 'Nobody wants to mention this, but
everyone in Republika Srpska is watching what will happen in Kosovo next year.
If Kosovo gets independence, you can be sure that the Serbs of Bosnia will press
for secession and integration into Serbia.'
The ambassador, Nedeljko Despotovic, shot back: 'I don't agree. There is no link
between Kosovo and Bosnia. Republika Srpska will continue to function with the
state of Bosnia-Herzegovina.'
Republika Srpska is one of the two Bosnian entities established by the Dayton
Peace Accords of 1995. The other is the Muslim-Croat Federation. The two exist
within a state with a weak, overarching government. The Serbs of Republika
Srpska have generally made little secret of their contempt for war-crimes
investigations or the Bosnian state that such investigations are intended to
That state is certainly stronger than it was nine years ago: Dayton had the
singular merit of stopping the killing. According to the World Bank, about one
million of the 2.5 million refugees and displaced people from the war have
returned home, many of them to areas where they are an ethnic minority. Bosnians
move freely between the different part of the country. National output has
tripled, reserves have accumulated, and 90 percent of what was destroyed has
been rebuilt. Agreement has even been reached on a single Defence Ministry: A
country with three armies is not a country with bright prospects. But despite
this progress, Bosnia remains fragile. The press and the plethora of governments
- national, cantonal and local - tend to undermine integration. Each community
has a different view of history. Entrenched elites fight to preserve their
fiefdoms. Dependence on billions of dollars in foreign aid remains extensive.
'What you still have are parallel societies and elites with a vested interest in
the parallelisms,' said Caroline Hornstein Tomic, who heads the Konrad Adenauer
Foundation in Sarajevo.
Richard Holbrooke, the chief architect of the Dayton accords, said the peace
agreement was imperfect but had, in many respects, produced extraordinary
results: an end to the fighting and 'interethnic boundary lines that are now no
different from those between New York and Connecticut.' But, he added, 'the most
important failure has been the failure to capture Karadžic and Mladic.'
Indeed, the apparent ease with which Radovan Karadžic, the Bosnian Serb leader
during the war, and General Ratko Mladic, the Serb commander, have evaded
capture points to a tendency of the international community in the Balkans to
seek all means to avoid confrontation. It is this sort of evasive policy that
now looks exhausted. Fundamental decisions will have to be made soon - about the
nature of Bosnian society, about Kosovo, and about the future of the truncated
federation of Serbia and Montenegro.
With the last 1,000 American troops about to leave Bosnia at the end of the
year, those decisions will fall increasingly to the European Union. The phrase
'Dayton to Brussels' is heard a lot these days in discussion of the Balkans. The
hope that lurks behind this formulation is that the lure of eventual membership
in the EU will temper hostility, reinforce sanity and, ultimately, finesse the
Serbian question by ushering all the countries of the region, whatever they may
be, into a borderless Europe.
The dream is an attractive one. It may even come true one day. Where empires -
Ottoman, Austro-Hungarian or communist - once ruled, the EU would step in, a
benign deflator of nationalist extremes. But before that happens, some tough
decisions will have to be made, not least whether Kosovo can be granted
independence without destabilizing the region.
An attempt to keep it within Serbia may in the end merely prolong the Serbian
FOREIGN ECONOMIC COOPERATION
Hryshchenko: quick renewal of Danube trade
After his meeting with Serbian President Boris Tadic on October 18th, Ukrainian
Foreign Minister, Kostyantyn Hryshchenko, said he was in favour of quickly
renewing Danube trade since it was in the interest of all the countries who use
the Danube for navigation, Beta News Agency reported.
Hryshchenko said that it was in Ukraine and Serbia-Montenegro's interest to be
open for all, but that their "key interest was to join Europe."
Tadic said that he had told the Ukrainian minister that "the independence
of Kosovo was absolutely unacceptable for Serbia" and that "a solution
has to be found which will contribute to political stability in the Balkans and
which satisfies both parties, Serbian as well as Albanian."
Apart from Kosovo, the other two "key issues" in their conversation
were relations between Serbia and Montenegro and cooperation with the Hague
Tribunal. Tadic reiterated that such cooperation was necessary and said that it
had to have "top priority."
The two officials discussed economic cooperation between the two countries,
which, in Tadic's words, has "great potential," especially due to
Ukraine's economic growth. Tadic said that he would take a business delegation
with him on his next visit to Ukraine and that the Serbian Chamber of Commerce
would soon open its office in Ukraine.
Serbia-Montenegro President, Svetozar Marovic, and Kostyantyn Hryshchenko said
that relations between Serbia-Montenegro and Ukraine were constantly improving,
which is important for establishing closer cooperation between countries in the
Kostunica stated that Serbia-Montenegro was determined to join the EU and that a
feasibility study could be completed next spring.
Ukrainian and Serbia-Montenegro foreign ministers, Kostyantyn Hryshchenko and
Vuk Draskovic, signed a bilateral agreement on abolishing visas for diplomatic
and official passports and said that talks on total abolition of the visa regime
Draskovic said that they had agreed to sign some 15 bilateral agreements in the
economic, healthcare, social welfare, cultural and military sectors.
The Ukrainian foreign minister also signed an agreement on cooperation between
the two countries' diplomatic academies.
Belgrade hosts Italy in Serbia investment conference
A large number of Italian businessmen flew to Belgrade on October 18th to attend
an investment conference called "Italy in Belgrade."
The two-day conference brought together Serbian and Italian government
officials, as well as business people from both countries, Beta News Agency
Senior executives of 400 Italian companies, including Terra Nova, Iveco, OTE,
Tegola Candese, and Telecom Italia were led by Deputy Foreign Minister Roberto
In a letter to everyone attending the conference, Italian Prime Minister Silvio
Berlusconi stressed that the delegation would be the biggest to visit Serbia in
the past 15 years.
At the start of the meeting Serbian Premier, Vojislav Kostunica, emphasized that
Italy is Serbia's third-biggest trading partner, although Italy is eighth when
it comes to investment in Serbia.
Vice Premier, Miroljub Labus, said the risk of investing in Serbia has dropped
considerably, adding that he hopes the OECD will reduce Serbia's risk level.
International Economic Relations Minister, Predrag Bubalo, said there are
already thousands of foreign companies doing business in Serbia, adding that
foreign investors are very much interested in the country.
Italian official, Adolfo Urso, said Serbia's free-trade treaty with Russia could
be a major asset to companies willing to invest in the country.
He added that this is one of the reasons why the Italian government has set up
two additional funds with over €40 million for companies that are up to
investing in Serbia. Urso also drew attention to a credit line of €33 million
for small and medium enterprises that choose investment in Serbia.
MINERALS & METALS
Hereward Ventures plc awarded exploration rights in Timok copper-gold belt
Hereward Ventures plc announced recently that it has been awarded an exploration
permit in the historic Timok copper-gold district in eastern Serbia, CNNMatthews
Hereward is the first company to be awarded a permit in this highly prospective
belt and will be commencing exploration activities immediately. The Timok
district lies within the Carpathian mineral belt of Eastern Europe which hosts
numerous world class gold and copper-gold deposits containing over 22 Moz gold
and 17 Mt of copper.
Issued by the Ministry of Mining and Energy of the Republic of Serbia and
covering 73 square kilometres at Dobro Polje - Bukova Glava, the permit is
situated in southern part of the Cretaceous-aged Timok district that includes
the world class mines at Bor, Majdanpek and Veliki Krivelj which contain in
total over 10Moz of gold and 10Mt of copper.
The northern Timok district has been the site of tremendous exploration success
by government surveys over the past century. During the past two decades,
however, virtually no modern exploration activity has been undertaken in the
southern half of the belt. Recent exploration efforts by Hereward have
identified three areas of significant alteration that are highly prospective for
copper and gold mineralisation.
Commenting on the award of this new permit, Chairman, Michael Thomsen, stated in
London: "Hereward has secured a valuable new opportunity as Serbia opens up
its resources to exploration and development. Our new permit in this part of the
Timok Belt represents an impressive opportunity 30 kilometres due south of the
huge Bor mining complex and offers excellent potential for the discovery of new
high sulphidation gold deposits and porphyry copper-gold systems. We will
continue to pursue further opportunities in both exploration and investment in
existing mines in Serbia."
Montenegro government publishes tender for majority stake in Telecom
Montenegro's government published an international bid for the sale of its 51
per cent stake in Telecom, the republic's telephone, cellphone and Internet
provider, Canadian Press reported.
Potential buyers have until December 22nd to make offers, and must already have
more than 700,000 land lines and cellphone users, and show 2003 profits of more
Telecom's overall value is estimated at around US$187m. Its reported earnings
for 2003 were US$22.5m, and in the first quarter of this year, earnings were
US$18.1m, making it one of the most profitable companies in the cash-strapped
The remaining 49 per cent of Telecom was privatised in 2001 through a
government-organized voucher program. The method allowed thousands of ordinary
citizens to acquire small stakes in the former state monopoly.
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