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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $
GNI per capita
 US $ 106
Ranking is given out of 208 nations - (data from the World Bank)

Update No: 110 - (27/07/06)

There is nothing more important for a state than its territorial integrity. Having lost Montenegro, which seceded in June from its union with Serbia, the Serbs now look as if they may have to say goodbye to Kosovo, dear to Serb nationalists as the battlefield where their forbears were defeated by the Ottoman Turks in 1389 in the Battle of the Field of Blackbirds (otherwise known as the Battle of Kosovo), leading to five centuries of subjection. Kosovo has many shrines and churches sacred to the Serb Orthodox.
Actually, even before the war of 1999 the ethnic Serb there comprised only 10% of the total population. They are far fewer now after the terrible at that time.

Kosovo makes bid for independence as talks open 
Kosovo made its formal bid for permanent independence from Serbia on July 24th in the opening round of top-level negotiations on the UN-administered province's future.
Agim Ceku, Kosovo's provisional prime minister, said the chance to spell out basic positions could open the way for the international community to decide in favour of independence, as demanded by Kosovo's ethnic Albanian majority, by the end of this year. The one-day meeting under United Nations mediation in Vienna was the first between the two sides' leaders since Nato's 78-day air campaign drove Yugoslav Serb forces out of Kosovo in 1999.
Vojislav Kostunica, the Serb prime minister, insists that "Kosovo is part of Serbia" and that independence imposed against Belgrade's will would be "illegal and worthless."
Martti Ahtisaari, the UN's special envoy, has urged the two prime ministers to break the deadlock.
Seven rounds of technical talks over the last six months have failed to produce any sign of agreement on the main question: will Kosovo become an independent state, or must it accept wide autonomy under symbolic Serbian sovereignty?
Serbia's refusal to redraw its international borders has blocked bargaining on lower-level issues, such as municipal decentralisation and protection of historic Serb religious sites within Kosovo.
Mr Ceku on July 22nd called on the UN administration and Nato-led military forces to strengthen their control of the northern boundary with the rest of Serbia by "establishing measures which are the same as on the rest of the Kosovo borders."
Belgrade's financial support for the ethnic Serbs, concentrated in the province's northern municipalities, has enabled them to maintain a boycott against Kosovo institutions. They have also threatened to secede if independence from Belgrade becomes official.
Research commissioned by the UN says the prevalence of firearms in private homes makes the province ripe for violence, if ethnic tensions continue.
Mr Kostunica warns that creating a new state would give rise to renewed regional instability. "We must give compromise a chance, we must find the best way of giving Kosovo autonomy within Serbia," he said before going to Vienna.
Most Western diplomats, however, argue that granting independence would cause fewer problems than allowing Kosovo's unclear status to continue indefinitely. When the UN protectorate ends, the European Union is expected to take over responsibility for policing and managing the economy of a territory that is heavily dependent on aid.
About 100,000 people - including half of Kosovo's Serb minority - fled in 1999. Fewer than 5 per cent have returned. Still, guaranteeing rights and safety for such ethnic minorities - who now make up about 10 per cent of Kosovo's population of 2m - is the biggest challenge for the ethnic Albanian leadership.

Road to Europe opens
After presenting EU officials with an action plan defining Serbia's cooperation with the International Criminal Tribunal for Former-Yugoslavia (ICTY) in The Hague, Kostunica expressed satisfaction with his meeting with European Union officials. "The plan makes us more than optimistic when it comes to Serbia's road towards Europe," the Serb premier said on July 18th. The EU cut off talks on Serbia's membership to the bloc in May after Belgrade failed to hand over fugitive war crimes suspect Ratko Mladic.
The plan presented by Kostunica contains a media campaign to be launched within Serbia to gain the population's backing of the arrest of Mladic as well as security reforms and improved co-operation mechanisms with the ICTY.
Kostunica met in Brussels, German Foreign minister Frank Steinmeier, the EU enlargement commissioner Olli Rehn, and EU foreign policy chief Javier Solana.
Speaking after the meeting, Rehn expressed satisfaction with the Serbian action plan but reiterated EU demands that the resumption of negotiations on Serbia's EU membership would hinge on the arrest of Mladic and handing him over to the ICTY.


The following article shows the resonance of Kosovo's history for the Serbs:- 

Between Empire of Heaven and Empire of Earth Again 
Can Karpat, AIA Balkan Section 
Tomorrow the Kosovo final status talks enter a brand new phase. For the first time since the war, the leaders of Kosovo and Serbia meet in order to present their positions on the status of Serbia's breakaway province. There is no reason to believe that while seven purely technical rounds have failed, these new highly political rounds would succeed. Does it mean that the international community has switched to the Plan-B, namely the "Diktat solution"? Is this the beginning of the end for Serbia...Serbia's choice 

Knez Lazar 
"The Downfall of the Serbian Empire" is one of the best known Serbian epic songs, which tells the choice of Knez Lazar on the eve of the Battle of Kosovo in 1389. "Lazar, glorious Emperor, which is the empire of your choice? Is it the empire of heaven? Is it the empire of the earth?" If Lazar chose the empire of the earth, the Ottoman army would all perish. However, the empire of the earth would be nothing but temporal. If Lazar chose the empire of heaven, he and his men would all die, but ensured their place in heaven. "And the emperor chose the empire of heaven above the empire of the earth." Because the empire of the earth is not eternal.
For centuries long this song on Lazar's choice had been a sweet consolation for the Serbs, who had been defeated by the Turks in the Battle of Kosovo. It comforted the Serbian psyche: They were not defeated; they chose to be defeated, for no less than a secure place in heaven.
The Serbian Prime Minister Vojislav Kostunica should better prepare himself for such a choice today. When Kosovo will become a lost cause for Serbia, Prime Minister should be able to tell his people that heaven is waiting for them to sooth their wounded pride. This time heaven may not be that spiritual, however, as it was in case of Prince Lazar. EU membership would be Serbia's earthly compensation.
Today the Kosovo final status talks enter a new top-level phase. Kosovo Albanian and Serbian high-level leaders are to meet face-to-face in order to present their positions on the future of Serbia's breakaway province.
The Serbian President Boris Tadic will sit opposite Fatmir Sejdiu, the President of the province that still, though de facto, belongs to Serbia. And Vojislav Kostunica will sit in front of his counterpart Agim Ceku, whom Serbia has been accusing of serious war crimes for years.
One must not be a clairvoyant to guess the outcome of this new second phase: dialogue of the deaf and failure.

The beginning of the end
There is no reason to believe that while seven purely technical rounds have failed, these new highly political rounds would succeed. From now on, the two sides will discuss the future status of Kosovo, and not the peripheral issues like decentralization, the economy or protection of the Serbian cultural heritage and religious sites in the province.
Not even the question of the protection of the Serbian culture in Kosovo, definitely one of the softest issues on the agenda, could be resolved during the seven rounds of talks.
Even the Special Envoy for the Kosovo Future Status Process Martti Ahtisaari stated that he did not expect the talks to generate any concrete results and added that this would likely have to wait until after the next UN General Assembly session in September.
Thus Martti Ahtisaari confirmed the general belief that the talks are only a necessary transition period, which will serve as a confirmation of the failed status talks. As soon as the failure of the second phase of the talks is totally confirmed, the Kosovo case will be transferred to the UN Security Council (UNSC), which will probably impose its decision as an "international Diktat" to the two sides.

The attitude of Russia
Serbian Prime Minister Vojislav Kostunica with Russian President Vladimir Putin and China, the two permanent members of the UNSC, will be decisive since all the others are in favour of some form of independence for Kosovo. However, as long as Russia is concerned, the international community receives highly contradictory signals from Moscow.
Until very recently Russia has totally backed the Serbian cause. However, now, Moscow is keen to change its policy on Kosovo in light of the precedent it would set for other regions like, not unexpectedly, Georgia's breakaway regions of South Ossetia and Abkhazia and Moldova's breakaway region of Transnistria.
The USA and Great Britain insist that a comparison cannot be drawn between Kosovo and Georgia and Moldova. However, sooner or later they will have to assure Russia's vote in the UNSC. And the price of the Russian vote is now well known. Since according to the Western powers Kosovo's independence will be the key to the total pacification of the Balkans, it would be not a big surprise if, at the end of the day, Russia gets at least some kind of assurance for a similar deal for South Ossetia, Abkhazia and Transnistria.

The elections of the year
Meanwhile party leaders in Serbia are discussing possible dates for the next general elections. While Vojislav Kostunica's Democratic Party of Serbia (DSS) prefers elections left to next spring, Boris Tadic's Democratic Party (DS) prefers this autumn. In any case, the elections will be held probably before the Kosovo issue is resolved.
Vojislav Kostunica's minority government is losing blood every day, namely its working majority in Parliament. On the one hand, since the death of their leader, Slobodan Milosevic in The Hague, the Socialist Party of Serbia (SPS) has threatened to withdraw their support from the government if any other forcible extraditions take place. On the other hand, the Europhile-technocrat liberal party G 17 Plus warns the government that they will pull out of the coalition by October if pre-accession talks with the EU are not resumed.
Serbia goes through an extremely difficult year. On 3rd May the EU suspended pre-accession talks with Serbia after Belgrade failed to deliver General Ratko Mladic to The Hague. On 21st Montenegro seceded from its state union with Serbia and became independent. The Presevo Valley, Sandzak and Vojvodina may be the next regions, which would bedevil the political atmosphere in Serbia. And of course, Kosovo.Unsurprisingly the ultra-nationalist Serbian Radical Party (SRS) exploits this situation to the extreme. No less than 37 per cent of the Serbian people support this party at the public surveys. A particularly sad picture since nothing but the mentality of SRS and alike were responsible for this desperate no-way-back situation in Kosovo in the first place. 

Vojislav Kostunica
Very hard times are waiting for moderate nationalist Vojislav Kostunica. How will he persuade his voters that he is the reasonable Prince Lazar, and not the treacherous Vuk Brankovic, whose betrayal, so the Serbs like to believe, supposedly condemned the Serbian kingdom to defeat before the Turks in 1389? What will the new epic song look like?
In his open letter on 13th July, Vojislav Kostunica himself made this point clear: "Can such a country, by any measure a democratic one, survive the forcible taking of 15 percent of its territory? What democratically elected government could explain to its voters after such an act that they should continue to believe in the principles of tolerance, liberalism and the sacrosanct will of the people - the values of enlightened Western civilization, in the name of which they toppled an evil, authoritarian regime?"
"Unlike DS, DSS and other pro-Western parties, SRS is able to give its supporters very simple and clear messages. And in times of political suffocation people, who lost their confidence even in themselves, often prefer this kind of simple and clear messages. Sad but history can testify to this."
The general elections in Serbia will be by far the most important elections in the Balkans this year. If the two major Serbian parties DS and DSS cannot find a common ground to cooperate, not only Serbia would stray from the path that leads towards democracy, but the Western powers would also have to deal henceforth with negotiators that they never dreamt of in their worst nightmares at the status talks in Vienna.

A New State or a New Bone of Contention in the Balkans? 
Can Karpat, AIA Balkanian section 

Kosovo Forces sectors 
International community starts shuttle diplomacy in order to resolve the acute problem of Kosovo. Whatever the final status of Kosovo may be, one thing is obvious: the Kosovo problem represents a turning point in the Balkans, which would either lead to the long yearned peace and stability, or sow the seed of a new chaos in the region. That is why this is a great challenge for all of powers involved in the negotiation process that have just begun… Is the independence more probable than any other option? Although Kosovo is administratively submitted to the United Nations, it is still judicially dependent on Serbia-Montenegro. Therefore, it is no wonder that Belgrade and Kosovan Serbians found their thesis upon this juridical fact, and claim for the dependency of Kosovo on Serbia-Montenegro as autonomous region. However, one can consider this thesis either out of date for it mainly refers to the related article in the Constitution of the Yugoslavian State, which no longer exists, or unbending, for it is after all the very reason of the Kosovo problem. As a matter of fact, when in 1989 Milosevic had the autonomous status of Kosovo suppressed in order to establish a more centralist administration within Yugoslavia Federation, the Albanians reposted with "civil disobedience" to Serbian authorities in Kosovo. 
Thus Kosovo was directly involved in the Yugoslavian civil war that started in 1990. In 1991, the Albanians under the leadership of Ibrahim Rugova boycotted the elections organised by the Serbian administration, and arranged their own elections. Same year, in the referendum 99% of the Kosovans voted for the independence of Kosovo. 
Thereafter, at the risk of losing the international sympathy for their cause, the Albanians of Kosovo abandoned the tactic of civil disobedience to opt for armed resistance instead. With the establishment of the Kosovan Liberation Army (UCK), the "spirit of revolutionary committee" of the 19th century, which had once ended the Ottoman reign in the Balkans, was resuscitated in the 1990s, this time against Belgrade administration. Nevertheless, although Belgrade did not give up the autonomy option, it rather enlarged the content of that autonomy. It may be that the Serbians saw that time passes by in favour of the Albanians, and that the UN Mission in Kosovo, which currently holds Kosovo under its guardianship, is inclined more to the independence of the region than to its dependency on Serbia-Montenegro. 
Consequently, the Serbian thesis was "softened", and now it proposes a status that is "more than an autonomy, and less than an independence". According to this up-dated thesis, Kosovo will have a full executive, legislative and judicial authority, and it will also have its own administrative institutions in order to maintain order within Kosovo. In return, Serbia will get hold of the State sovereignty over Kosovo. That means that Serbia will control frontiers, customs, and monetary policies of Kosovo. Moreover, Serbia and Kosovo will have the common Ministers of Defence and of Foreign Affairs; they will share the same chair in the UN. Nevertheless, what Belgrade sees as a concession, the Albanians of Kosovo see as an unacceptable thing. The Serbian thesis, though up-dated, seems all the more unrealistic as Serbia has no forces at all in Kosovo since 1999, when the NATO operation started. Serbian strategy consists of keeping the bargaining margins wide in order to obtain as much as possible from the Kosovan territories in the future. As a matter of fact, some Serbian milieus, which saw that neither the UN, nor the USA would accept the official Serbian thesis, try to bring some alternative propositions to the negotiations table. 
Nevertheless, their recent proposition to divide Kosovo between the two ethnicities according to the proportion of their populations was definitely rejected both by the Albanian and the Serbian nationalists. The former Serbian Prime Minister, Zoran Cincic, who proposed the division of Kosovo between the two ethnicities like in Bosnia, was assassinated on the 12th of March, 2003. As to the Albanian thesis, a much more "stubborn" and inflexible thesis than the Serbian one, it proposes just one solution: an independent and sovereign Kosovo. And it seems that the Albanians have international support. It is known that several European and American politicians estimate that at the end Kosovo will be an independent State. International Balkan Commission, also known as the Amato Commission, for its chairman is Giuliano Amato, the former Prime Minister of Italy, in its report entitled "The Balkans in the Future of Europe", clearly argued that only independence can resolve the Kosovo problem. The International Crisis Group Director, James Layon stated: "The international community made up its mind for the independence of Kosovo and the only problem is to choose the perfect time to proclaim it". Impact of an eventual independence of Kosovo in the Balkans 

Russia's position
The traditional influence of Russia over the Balkans is well known from history. However, after the collapse of Yugoslavia, the Kremlin lost an important ground to exercise its influence. Therefore, it may be argued that Russia will not be willing to face another prestige loss with the independence of Kosovo. This explains Moscow's support of Belgrade administration. During his visit, the Serbian President, proposing the division of Kosovo between the Albanian majority and the Serbian minority, declared, however, that Kosovo should not be separated from Serbia-Montenegro. 
On the other hand, the Chechen problem in mind, one can also argue that Russia has its own interests and anxieties over eventual independence of Kosovo. As a matter of fact, Russia will be very annoyed with this independence, which may be a precedent for some problematic ethnic minorities living on Russian soil. Turkey and China, for similar reasons, are not very keen to approve Kosovo's independence. For China, its claims over Xinjiang (East Turkistan) are at stake. As for Turkey, the Cypriot and the Kurdish issues may be affected from this event. Turkey is more involved in the Kosovo affaire than China is, for not only this country is very close to this troubled area, but also there is the Turkish minority living in Priznen (city in the south of Kosovo) and in the nearby places, and the Kosovan refugees living in Turkey. Another State, which is as anxious as Russia, Turkey and China, is Macedonia. Skopje administration is worried that the independence of Kosovo may trigger the separatist movement of the Albanians living mainly in the western part of the country. Eventual collapse of Macedonia may cause a major anarchy in the Balkans, for this event would be seen as an alarum for the "Greater Albania" project, which consists in uniting all the Albanians under the same political entity. Finally, the establishment of an independent Kosovan State in the Balkans may also provoke the Serbians to claim the Serbian part in Bosnia-Herzegovina. Although, it may seem as a conspiracy theory, one should not forget that since 1990, Serbia suffers from a systematic loss of territories and prestige. 
Furthermore, Kosovo, with its 60 billion tons of coal reserves, is the unique energy centre of Serbia-Montenegro. History has proved many times to what catastrophes the "Balkan reality" may lead the whole world. So, another Sarajevo catastrophe, similar to that of 1914 and 1990, should be taken into account. In the other camp, which supports the independence of Kosovo, there are two major political powers: the United States and the European Union. With this independence, the USA plans to pierce the Slav bloc in the Eastern Europe, and the Russian hegemony on the Adriatic coasts. This will be a great strategic gain for Washington on its path to the Middle East. In this regard, it is highly significant that the American Army built up a huge military base in Kosovo. As for the EU, it supports the independence for reasons of security along its Eastern frontiers. However, Brussels should also determine what to do with this new Kosovan State. Once made, the choice will trace the real course of the EU: the empire, or the enlargement. 
A new challenge for the EU? According to the Amato Commission, the choice for the EU should not be a hard one: "As the European Union, we shall either keep maintaining our de facto colonies in our backyard, the Balkans, or help them accomplish the conditions, which will make them members of the Union". Thus, in its special report, the Commission urged the EU to the enlargement towards the Balkans, and to make Kosovo, Albania, and Macedonia members until 2014. Therefore, the Albanians, instead of sacrificing their lives for the improbable Greater Albania project, will reach their aim, namely the cultural unity, under the EU roof. Commission suggests a many-phased transition period until 2014, beginning with "the full independence without sovereignty phase," when the international community will be in charge of protection of minorities and human rights, and then the "guided sovereignty phase," when the membership negotiations will start between Kosovo and the EU, and finally the "common sovereignty phase" like in Slovenia, Poland and the United Kingdom. According to Bilgin Celik, the Turkish faculty member from Dokuz Eylul University, this will be a "member-State building process," rather than a "State building process." 

The Balkan Reality
Consequently, Kosovo will never be acquainted with the notion of "national independence," as defined in the 19th century in Europe. This is a great challenge for Brussels. However, can the EU actually face such a challenge at this moment? Actually the EU passes through a rather critical transition period. The French and the Dutch recent rejection of the European Constitution still has a heavy impact on the future of the Union itself. The question is whether the Union, which has had to "digest" the new ten member States, and now envisages welcoming Bulgaria, Romania, and even Turkey, is able to face the "Balkan reality" - the traditional bone of contention throughout the history. Having accepted the Greek part of Cyprus as a new member-State, the Union has already a serious political challenge ahead. In fact, the Europeans, who took over the solution of the chronic Cyprus problem from the UN, now continue to wait for the new Annan Plan. If it is remembered that Cyprus issue had become a serious international problem only since 1950s, it would be a rather perilous enterprise for the EU to defy the Balkan problems, which go back as early as to the beginning of the 19th century.

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TriGranit signs contract to build Belgrade station 

The Serbian government recently announced that Hungary's TriGranit Zrt signed a contract with Serbia's state-owned railway company, Zeleznice Srbije, to build a 170 million Euro railway station in Belgrade, news agency reported. 
TriGranit, which is one of the biggest construction companies in the region, will complete the construction of the Prokop station which was never completed after commencing 30 years prior. TriGranit is currently building five other railway stations in Europe, which is a guarantee that the work would be properly done, Serbian Minister of Capital Investments Velimir Ilic was cited as saying. TriGranit Executive Director Todd Cowen said the general contract envisages that the company would complete the railway station and receive 128,000 square metres of office space at the station for its own use. Cowen said he expects the final contract to be signed by the end of September, when work on the station should begin. He added that the construction, which would involve Serbian subcontractors, should be completed in two years.

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