DEVELOPMENT: Rebuilding Kosovo at Developing Countries’ Expense

By IPS Correspondents Reprint | | Print |

FLORENCE/BRUSSELS, Nov 21 1999 (IPS) - More than 900 non governmental organisations called the European Union (EU) to readjust its budget so that the reconstruction of Kosovo will not be paid by shrinking programmes in developing countries.

The warning came from James Mackie, Secretary General of the Liaison Committee of Development NGOs, during a seminar held at the European University Institute in Florence (Italy) November 18- 19.

The issue has been under debate since the end of NATO’s air attacks against Yugoslavia over Kosovo, in June.

A EU spokesman confirmed to IPS that the Mediterranean and Latin American EU programmes were being examined as a source of funds. The EC has promised to raise 500 million euros (some 520 million dollars) for Kosovo in 2000, without increasing the overall budget.

Latin America and the Mediterranean have shown “a low absorption over the last years,” a spokesman for External Relations commissioner Chistopher Patten said in the aftermath of the second Kosovo donors conference held on 17 November in Brussels.

The NGOs have found support for their demands among a number of members of the Strasbourg-based European Parliament, who have requested budgetary increases rather than the reallocation of funds marked for development programmes.

The Parliament already rejected the initial EC proposal. The EU 15 member countries will hold a ministerial meeting on 25-26 November to take a stance on the matter.

The World Bank and the European Commission (the EU executive branch) estimate that the reconstruction of Kosovo will cost 2.3 billion US dollars in the next five years. More than half of that sum is expected to come from the EU.

NGOs have expressed shock at the recent proposals for the EU’s 2000 budget, made by Commissioner Michaele Schreyer to the European Parliament on 9 November.

Patten’s spokesman stressed however that no decisions have been taken yet, noting that “Commissioner Schreyer mentioned this when she presented the different sources for the financing for Kosovo” to the donors meeting.

The NGO Liaison Committee supports the bloc’s efforts to play a leading role in the Kosovo reconstruction effort but “finds it unacceptable for it to be financed from European funds allocated mainly for cooperation with developing countries.

The Liaison Committee believes the Commission has dismissed the priorities and budgetary choices made by euro-parlamentarians in Strasbourg on 28 October:

According to the network’s information, the co-financing line for NGO projects would be reduced from 200 million euro in 1999, to 140 million in 2000.

Therefore, the entire cost of the Kosovo operation would be borne by the External Affairs budgetary lines, which represent 8.4 per cent of the total EU budget and include also development cooperation funds.

The NGOs requested the EC to raise the ceiling “in the external relations category (…) so as to be able to finance the rebuilding of Kosovo without affecting development cooperation and humanitarian aid projects with parts of the world other than Kosovo,” the network said in a statement.

The 500 million euro proposed by the Commission for Kosovo next year “are necessary in order to fulfil the most urgent demands,” commissioner Schreyer told reporters.

She pointed out that the Commission’s proposal is backed by a recent report – ‘Towards Stability and Prosperity: A Programme for Reconstruction and Recovery in Kosovo’ – jointly prepared by the EC and the World Bank.

The report estimates external financing requirements until December 2000 at 1.1 billion dollars with housing, energy and private- sector development as priority areas.

When presenting a draft budget for the year 2000 to Parliament on September 14, Finland’s Finance minister Suvi-Anne Siimes stressed that key features would be the reconstruction of Kosovo as well as humanitarian aid following the earthquakes in Turkey and Greece, and the massacres and destruction in East Timor.

There was no doubt, she said, that finding the aid for Kosovo would put a strain on existing financial resources but she was optimistic that the second donors conference in Brussels could pave the way to a satisfactory overall package.

She also reminded members that the budget had to be seen in the context of financial discipline at present being applied in national budgets.

The area of foreign aid is likely to present difficulties in the negotiations with Parliament in the months ahead. While the European Council has struggled to place funding in a special reserve for Kosovo, it clearly trimmed spending in other areas, such as aid to Latin America and Southern Africa.

It was this particular point that British socialist parliamentarian Terry Wynn raised when the 2000 draft budget went through its first reading in September.

Full funding for Kosovo as envisaged by national budget officials could mean modifying the financial perspectives for 2000- 2006 approved in the Berlin European Council.

French centrist parliamentarian Jean Louis Bourlanges introduced an amendment to avoid budget cuts in other EU ‘external actions.’ It would add 500 million euro for Kosovo, 125 million to fund a fisheries agreement with Morocco, 30 million for East Timor and 50 million for Turkey.

While the revised draft budget did include funds for such actions, it cuts 150 million euro in aid to Russia and another 150 million for the MEDA programme (to countries in the Mediterranean region), as well as some 10 percent in other ‘external actions.’

Bourlanges said these linear cuts “have no justification whatsoever” and would mean that Africa and/or Latin America would have to pay for Kosovo.

European sources last week said that if the ministers rejected the Parliament’s request, the legislative body would then reject the totality of the Berlin Financial Perspectives, for which it would only require a simple majority.