Books on Serbia & Montenegro
% of GDP
Update No: 091 - (26/11/04)
In Belgrade, unity is gone
Four years ago in October, 2,000 over one million people filled the streets and
squares of central Belgrade. In the capital of Serbia, they released an
extraordinary force of energy and unity against the regime of Slobodan Milosevic,
the man held chiefly responsible for plunging the former Yugoslavia into four
wars, now on trial in The Hague on charges of war crimes.
The previous month, Milosevic had refused to accept or even release the complete
results of an election after the opposition leader, Vojislav Kostunica, had
claimed victory. The incensed opposition called a general strike. Tens of
thousands of people started converging on Belgrade; the swelling crowds kept
watch until opposition leaders had also won over key police units, and Milosevic
Kostunica, a constitutional lawyer with more than a tinge of Serbian nationalism
in his political blood, was catapulted into power by an opposition that united
after a decade of bickering that had allowed Milosevic to exploit those
Today, the unity of those heady days of October 2000 has vanished, whether at
home in Serbia-Montenegro, which still includes Kosovo, or in the Balkan region
The Kosovo conundrum
The major problem is Kosovo - the southern province that is part of Serbia but
has been a United Nations protectorate since 1999, after NATO intervened to stop
the ethnic cleansing of Kosovo's Albanians by Milosevic's security forces. The
Balkans have seen resolution of almost all the war and peace issues that plagued
the region in the 1990s. There is still one serious threat to stability in the
Balkans today, however: the unsettled status of Kosovo. This is the issue that
must be settled if the Balkans as a whole are to proceed successfully towards
their European destination.
Post-Milosevic Serbia appears to have given up the threat of force to regain
control over Kosovo, but the majority Albanian population there still fears Serb
intentions. Discontent is growing. Uncertainty over status, an unsuccessful UN
administration (UNMIK), concern about Belgrade's efforts to partition Kosovo,
determination on the part of Albanian extremists to ethnically cleanse the
minority population and economic crisis are combining to generate a predictable
rebellion, which previewed with the March ethnic riots. The June election of
Boris Tadic as Serbia's president (over an extreme nationalist opponent) reduced
the risk of an early crisis, but the handwriting is on the wall.
This presents the international community with a quandary. A crisis in Kosovo is
predictable, but that does not mean the political will to prevent it can be
generated in advance. The war on terror and post-war Iraq are distracting the
U.S. Europe has been preoccupied with writing a constitution and expanding its
membership. Mistreatment of Serbs in Kosovo after the NATO/Yugoslavia war has
greatly reduced international sympathy for Albanian aspirations. The
international community has imposed on the Kosovars a policy of "standards
before status," which requires them to show progress towards
democratization before the internationals will embark on deciding status.
Thus here we sit, waiting for a crisis we know is coming but unable to move on
deciding Kosovo's status because of its failure to make progress in treatment of
Serbs and other minorities. Should we move ahead anyway, possibly undermining
further any hope of progress on the standards? Or should we stand pat, insisting
on progress and risking radicalization of the Albanian population, and possibly
even UNMIK's withdrawal?
Kosovo's status will not be decided in a vacuum. Three "Yugoslav"
factors are relevant: progress of reform in Belgrade, the political situation in
Pristina, and Serbia's relations with Montenegro. Broader Balkan and global
issues also need to be taken into account.
Progress of Reform in Belgrade
While the election of Tadic pulled Serbia back from the brink, it will not
in itself put Serbia on a clear path. The Radicals, whose leader is in The Hague
awaiting trial for war crimes, are still the largest party in the Serbian
parliament, and Prime Minister Kostunica governs only with the support of
Slobodan Milosevic's Socialists. Security and judicial sector reforms have
stalled (and even in some instances reversed), and Serbia's much-needed new
constitution is hostage to the political situation. Cooperation with The Hague
Tribunal is blocked, at least for the moment. As a result, the U.S. has
suspended bilateral aid and the EU is withholding a "feasibility
study" for Serbia and Montenegro's Stability and Association Agreement.
Tadic must tread carefully. His formal powers are limited. He needs to manoeuvre
the Socialists out of the majority and his own Democratic Party into it, without
however causing a break-up of the existing governing coalition. He would like to
avoid early parliamentary elections, fearing the Radicals might gain. But even
if Tadic is successful in reconstructing a majority that includes all the major
democratic parties but not the Socialists, he will still have only a fragile
base from which to deal with Kosovo, where nationalists both inside and outside
the majority will exploit any concessions to Albanian aspirations.
That said, a democratic regime in Belgrade aiming for entry into Partnership for
Peace, the Schengen area and eventually NATO and the EU has to consider Kosovo
more a burden than an asset. Belgrade has elaborate plans for governing the
Kosovo Serbs and the territory they inhabit, but across the entire political
spectrum there is no stomach for governing 1.8 million Kosovo Albanians. Tacitly
even extreme nationalists in Belgrade have given up Milosevic's hope of either
repressing the Albanians or chasing them from Kosovo.
Serbia even less Kosovo still a mess
Serbian politics have quickly degenerated into infighting that Serb analysts
say has delayed plans to reform the economy and break the damaging links, left
over from communism and the Milosevic era, between the police and the military
and between organised crime and the security services.
As prime minister of Serbia, Kostunica now heads a fragile minority government
that includes his own nationalist Democratic Party of Serbia and radical
extremists instead of a united coalition of liberal parties.
Such fragility and Western scepticism notwithstanding, Kostunica exuded
confidence in an interview in his office that Serbia was on the right track and
could pursue reforms to move closer toward the European Union. "We need a
legal framework for reforms, and we need to struggle against corruption,"
Kostunica said. "People want to live better. The problem is that making
legislative changes means you can't make the people better off overnight."
The last decade of war and sanctions against Serbia has devastated the economy.
The average monthly salary is €194, or US$246; official unemployment is over
25 per cent. Milos Macura, the Belgrade manager of Deloitte & Touche, the
consultants, said last year's gross domestic product had reached half the level
In addition, Serbia must look after at least 400,000 Serb refugees from the wars
in Bosnia, Croatia and Kosovo.
Kostunica was even optimistic that the complex union between Serbia and the
republic of Montenegro, which replaced what remained of the former Yugoslavia's
six republics, would succeed. He was hopeful too, that a new constitution
designed to break with the Milosevic era would be passed in coming months,
despite the fact that it requires a two-thirds majority in the fractious
Parliament and a referendum.
The Hague is Kostunica's bugbear
His tone, however, changed when asked about Serbia's relationship with the
International Criminal Tribunal on the Former Yugoslavia. Over a year ago, the
tribunal, set up in 1993 to bring to justice people accused of serious
violations of international humanitarian law, had asked Serbia to hand over four
army generals. Kostunica said he had no intention of arresting them.
"We are in favour of collaborating with the tribunal," he said.
"But we are in favour, too, that the tribunal does something for us. Those
who voluntarily surrender should be allowed to return to their country and
remain there until the trial begins."
Kostunica's stance has struck a raw nerve in a country trying to come to terms
with the Milosevic era. "The Milosevic legacy is still here," said
Milan Pajevic, advisor to Miroljub Labus, deputy prime minister and minister for
European integration. "That legacy is to disunite, to divide and
Aleksandar Simic, one of Kostunica's main legal advisors, said the tribunal had
allowed Croat indictees to return home until their trial began, implying - in a
refrain nearly universal here - that the tribunal was biased against Serbia.
Further, he warned in tones reminiscent of Serb nationalists of the 1990s, that
if the generals were arrested, "there would be problems of stability and
security. The generals did their jobs." Simic added: "They are
popular. Any attempt by the government to arrest them would affect the stability
of the country."
"And we have examples of that in our recent past," he added, in a
reference to the assassination in March 2003 of Prime Minister Zoran Djindjic of
the liberal Democratic Party.
Djindjic, Kostunica's arch-rival (the two leaders would not even communicate by
telephone) was shot in a narrow side street behind his office, allegedly by
criminal gangs with support of extreme nationalists and the security services,
after he announced plans to fully cooperate with the tribunal at The Hague.
Kostunica's coalition partners insist that the generals should be arrested.
"There should be complete and full cooperation with The Hague," said
the foreign minister, VUK Draskovic, head of the nationalist Serbian Renewal
Pajevic said: "We have a law. It simply says what every government should
do. It is so simple. We have to get the Justice and Interior ministries to move
faster. Whatever we think about the tribunal."
Despite these differences, almost all of Serbia's political leaders said Carla
Del Ponte, the tribunal's chief prosecutor, had played a political game with
Serbia. "The view by 76 per cent of those polled is that the tribunal is
political," said Rasim Ljajic, minister of human and minority rights for
Serbia and Montenegro and head of the Council for Cooperation with the tribunal.
"We asked the tribunal not to issue the indictments against the generals
before last December's elections. But they were served. The Radical Party won
the most votes."
Kostunica just as recalcitrant on Kosovo's elections in October
Kostunica's views on Kosovo are just as strong and unswerving. He had
recommended that Serbs boycott Kosovo's parliamentary elections in October that
Tadic had urged them to participate in. "It is not appropriate to speak of
free and fair elections in Kosovo," he said. "It is not safe for Serb
children to go to school or farmers to go to the fields. Whole towns have been
cleansed of Serbs."
Last April, Kostunica won parliamentary approval for his plan to devolve more
political powers to the Serb minority in Kosovo. Kostunica warned the
international community against what he termed rewarding such violence, pledging
that Serbia would never accept an independent Kosovo.
Some of Kostunica's advisers suspect a "hidden agenda" that links
cooperation at The Hague, resolving the Kosovo problem and ironing out issues
over the union with Montenegro to moving Belgrade closer to the European Union.
However, Simic, Kostunica's legal adviser, said "any hidden agenda"
would be rejected and that "Kosovo is a part of Serbia and will remain part
Lafarge opens revamped plant
Lafarge SA officially opened a modernised 1.5m tonne cement plant in
Serbia-Montenegro, SE Europe reported recently, the company said in a statement
by SE Europe on October 20th. A new dry process clinker production line has been
added to the plant, at a cost of over 50m Euro, marking the largest foreign
investment in the country for five years, Lafarge said. "The investment
will enable the Beocin plant to keep pace with the construction market's strong
growth potential in Serbia and Montenegro," the company said. Lafarge
acquired Beocin-ska Fabrika Cementa, which owns the Beocin, plant is the top
player in the country's cement market, in a round of privatisations in April
European Agency for Reconstruction invests 370m euros in Kosovo's energy
The representatives of the European Agency for Reconstruction (EAR) said at a
press conference in Prishtina that they have invested some 374m [euros] in the
energy sector, KosovoLive web site reported.
EAR has provided 174m euros only for reparation of Kosovo B Power Plant.
Balduing Zimmer, Reparation Project Manager, said that Alstom, which won the
tender for reparation of the B2 Unit, would guarantee reparation only for a
one-year period. He added that KEK [Kosovo Energy Corporation] should enter into
an additional contract for maintenance of equipment.
EAR project manager, Ioan Brow, said that they would now focus on providing
assistance for reforms in the institutions. EAR will also help development of
the Office of Energy.
Serbian finance minister, British MPs discuss reforms, EU entry
Finance Minister, Mladjan Dinkic, said recently in a discussion with a British
parliamentary delegation that the European Union decision regarding a
"twin-track" solution would significantly ease Serbia-Montenegro's
approach to the EU and speed up the drafting of the feasibility study, FoNet
News Agency reported.
Dinkic acquainted the British MPs, headed by the chairman of the House of
Commons Foreign Affairs Committee, Donald Anderson, with innovations in Serbian
tax regulations, a statement from Dinkic's cabinet said.
Dinkic also said that Serbian fiscal institutions were ready to start
implementing value added tax. He added that a total stability of the banking
system had been achieved in Serbia, and that the level of the grey economy had
been significantly reduced.
Dinkic conveyed to British MPs the readiness on the part of the Serbian
government to reform the state administration, restructure public companies,
speed up privatisation and attract direct foreign investments. He noted that at
10 per cent, Serbia had the lowest taxes on company profits.
The statement said that mutual satisfaction with the levels of cooperation
between Britain and Serbia so far had been noted during the discussion, and that
readiness for a further improvement had been expressed.
Kosovo Telecom Company to invest 30m euros in improving telephone network
The Kosovo Post Telecom [PTK] has announced two tenders to do with supply of
telecommunication equipment for extension of network and increasing capacities
of land telephony, KosovoLive web site reported.
The PTK has allocated 30m euros for the two tenders, which will remain open
until 23rd December.
The first tender is related to modernization and expansion of the landline
telephony network all over Kosovo; the second with microwave equipment,
necessary for increasing the capacity of transmitting network.
Director of landline telephony at the PTK, Besnik Shatri, said that those
projects are part of the efforts to extend network of landline telephony all
over Kosovo and improve thus the quality of PTK services.
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