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Update No: 111 - (25/08/06)
Kosovo the conundrum
Serbia has lost Montenegro, a grievous blow. Montenegro is a splendid place,
just south of Croatia on the Adriatic with magnificent mountain scenery. It has
a great future as a tourist centre. It may even have huge oil reserves offshore,
a secret better kept until after independence.
But Serbia still has Kosovo, a poisoned chalice if ever there was one. It would
be much better off without it, as France was without Algeria, as De Gaulle,
verily a world statesman, well realised.
Serbia unfortunately has no equivalent to De Gaulle in place.
Violence flared in the province when the Kosovo Liberation Army, supported by
ethnic Albanians, came out in open rebellion against Serbian rule in the
mid-1990s, triggering a brutal Yugoslav military crackdown.
Serbian forces began a campaign of 'ethnic cleansing' against Kosovo Albanians,
triggering the NATO bombing campaign that drove Serb troops from the province.
Some 800,000 people fled to Albania, Macedonia and Montenegro and some 10,000
died in the conflict.
For once the world did something, the US intervening to put an end to the misery
in 1999.
Serbian intrangisence
Serbia's government hasn't changed its position on the status of the
breakaway province of Kosovo, according to an official announcement. Comments
made by the government's coordinator for Kosovo indicating that it might be
ready to divide the province had been "misinterpreted and taken out of
context," the Serbian prime minister, Vojislav Kostunica's Democratic Party
of Serbia spokesperson Andreja Mladenovic, said in early August.
Serbian government coordinator for Kosovo Sanda Raskovic Ivic was quoted as
saying to the BBC that Serbia might agree to split Kosovo in a compromise
solution, with Belgrade retaining under its control 15-20 per cent of the
province. The statement caused commotion and confusion in Belgrade, because the
Kostunica's government has so far roundly rejected independence for Kosovo,
offering ethnic Albanians only wide autonomy.
Raskovic-Ivic's statement was actually, talking only about two kinds of autonomy
in Kosovo, one for ethnic Albanians with regard to Belgrade, and the other for
minority Serbs, in respect of Kosovo's Albanian-dominated institutions, said
Mladenovic.
'No to partition'
Kosovo's overwhelmingly ethnic Albanian majority of 1.8 million wants
independence - which is opposed by its tiny 100,000 Serb minority and by the
Serb authorities. The international community, which has safeguarded peace in
Kosovo since it was put under United Nations control in 1999, also opposes
partitioning, and is trying to arrive at a compromise solution in ongoing
UN-mediated talks between Belgrade and Pristina.
Seven rounds of UN sponsored talks in Vienna have however yielded scarce
results, triggering speculation that the UN might be forced to impose some kind
of phased independence.
"The partitioning of Kosovo will not be tolerated, period," said UN
administration spokesman in Pristina, Alexander Ivanko. Politicians in Belgrade
also insist that Serbia cannot be partitioned, and that Kosovo must remain
within its boundaries.
"To all those who are thinking about an imposed solution, Serbia can
respond right now that such a solution would be unacceptable," Mladenovic
commented.
German diplomat named Kosovo's new UN governor
UN Secretary-General Kofi Annan has chosen veteran German diplomat Joachim
Ruecker to be the next UN governor of Kosovo, the United Nations announced on
August 15th.
Ruecker, who now serves as head of economic reconstruction for the UN mission in
Kosovo, will be the sixth UN administrator in seven years for the southern
Serbian province. He may be its last as the international community considers
granting it independence in a process due to be wrapped up by the end of the
year.
Ruecker, 55, will succeed Soren Jessen-Petersen of Denmark, who announced his
resignation in June.
Kosovo has been under UN administration since 1999 following Nato bombing that
expelled Serb forces to end what Western powers said was repression of civilians
in fighting an ethnic Albanian rebel insurgency.
Ninety per cent of Kosovo's 2 million people are ethnic Albanians. UN-brokered
talks are under way to determine whether Kosovo will remain part of Serbia, as
sought by the government in Belgrade, or becomes independent, as the vast
majority of Kosovo's residents insist.
The talks that are to determine the future status of the province began in
February and are expected to continue until the end of the year.
Ruecker has held a variety of posts in Germany's Federal Foreign Office,
beginning in 1979. Before going to work for the United Nations, he headed the
Foreign Office's Budget and Finance Division in Berlin.
In his work in Kosovo, he has led efforts to revitalize the ravaged economy in
the province, where unemployment is 60 per cent. UN officials in Kosovo said an
advantage of his appointment to the top UN job was that he could hit the ground
running.
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TELECOMMUNICATIONS
Serbia raises 1.5bn Euro from telecoms privatisation
Serbia recently completed the disposal of a mobile phone network in the
country's largest privatisation deal to date, giving support to investor
confidence in the face of lingering political problems, the Financial Times
reported on August 2nd.
Telenor, the Norwegian mobile telecommunications company, made the winning
1.51bn Euro (US$1.9bn) bid for the state-controlled Mobi 63 network, which
claims 45 per cent market share.
The winning bid out-stripped government expectations for the sale of the
company, which recently came under state control after its private-sector main
shareholder fled Serbia amid accusations of corruption. Privatisation officials
said they had expected the auction would easily top 1bn Euro, including the 220m
Euro licence price, but "not go this high."
Telenor - already active in neighbouring Montenegro - won 100 per cent ownership
plus a 10-year operating licence for Mobi 63 over regional rival Telekom Austria
after eight rapid-fire bidding rounds.
The brisk bidding "shows there are not so many assets left" in the
regional telecoms market, said Martin Schlaff, head of an Austrian private
investment group that held 30 per cent of Mobi 63 prior to the sale.
"Obviously the bidders who went so far strongly believe in Serbia's growth
potential."
Before the Mobi 63 sale, Serbia's largest privatisation was the 518m sale of Nis
Tobacco to US-based cigarette company Philip Morris in 2003.
Serbia - still nursing political wounds from its 1990s wars - trails behind its
neighbours in free-market economic reforms. Yet some investors say the former
Yugoslavia's most populous republic is ripe for foreign investment as other
ex-communist markets cool down.
Schlaff said he would have liked to hold on to his Mobi 63 shares, though
"not for that kind of money."
The government insisted he sell as par to the same package to a major strategic
investor.
The Schlaff group had first bought into the local mobile service provider -
known until four months ago as Mobtel Serbia - as majority owner, buying 51 per
cent from a family company led by Serbian entrepreneur Boguljub Karic.
Karic fell foul of the authorities and fled the country earlier this year to
avoid bribery charges. The government - his co-owner and supposed partner - also
accused him of hiding dividends from their joint venture.
In April, the government reached a debt settlement with Schlaff, opening the way
for re-privatisation under the new brand, Mobi 63, which has about 2.5m users.
Telenor officials said they were not worried about legal risks arising from
Karic's former involvement.
Telekom Austria, however, said it declined to bid higher for Mobi 63 because it
saw more promise in going after the expected third mobile network licence.
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