BALKANS: Serbs Want to Hand Kosovo an Independence Invoice

By Vesna Peric Zimonjic Reprint | | Print |

Vesna Peric Zimonjic

BELGRADE, Feb 20 2007 (IPS) - As the Albanian-dominated southern Serb province Kosovo inches towards independence, nationalist Serbs are raising an economic obstacle to back the political resistance to independence – an accounting of the money spent to develop Kosovo all these years.

As nationalist Serbs see it, they paid for the development of Kosovo, and the province cannot just walk away pocketing Serb money that has gone into it. The southern province has a population of about two million ethnic Albanians, and just about 90,000 Serbs.

The Albanian population is looking for final independence from Serbia; official Belgrade struggles to keep Kosovo within Serbian jurisdiction.

Negotiations on the future status of Kosovo over a year so far have mostly deal with political and historical issues. A fresh round of talks will be held in Vienna Wednesday. The United Nations Security Council is expected to take a final view on the status of Kosovo later this spring.

But Serb rhetoric is mounting over property issues in the impoverished province. According to UN statistics, unemployment is now almost 50 percent. The per capita gross domestic product (GDP) is around 1,300 dollars, the lowest in the Balkans.

Privatisation is slow in an area that has suffered decades of neglect.

After 1989, when Belgrade put an end to broad autonomy for Kosovo and introduced direct rule, mining, coal production and industrial output collapsed. The ethnic Albanian workforce was simply laid off.

Electricity production has not reached pre-1980s levels yet, and parts of the province remain without power for up to eight hours a day.

“It is hard to say when Kosovo will be able to reach economic sustainability when all these factors are taken into account,” Ivan Ahel, one of the rare impartial Serbian experts on Kosovo told Belgrade media. “But separation from Serbia would enable progress and open a road towards European integration, which is the aim of the whole region in the end.”

But Serbian government and media are instead mounting a campaign to prove that state and other property in Kosovo mostly belongs to Serbia. A favourite argument is that “Serbia has invested more than 30 billion dollars in Kosovo since World War II.”

“This is simply not true,” leading economic analyst Misa Brkic told IPS. “It was all the republics of former Yugoslavia that were obliged to put money in the Fund for the Underdeveloped Regions. None of them is asking for property to be restored to them; times have changed and life went on.”

Former Yugoslavia fell apart in the wars of the 1990s that took more than 100,000 lives and led to the creation of six states – Bosnia, Croatia, Macedonia, Montenegro, Serbia and Slovenia. Kosovo, officially part of Serbia still, is almost certainly going to be an independent entity as well.

“If I were Serb prime minister, I would visit Pristina now and establish firm economic cooperation to the benefit of both,” Brkic says. “Instead, Serbia is now keeping a border with Kosovo which is less permeable than the border between former East and West Germany.”

The United Nations has administered the province over this period following North Atlantic Treaty Organisation (NATO) bombing of Serbia in 1999 due to repressive politics against ethnic Albanians.

Privatisation began in Kosovo only in 2003, involving some 300 firms. It was begun under the auspices of the Kosovo Trust Agency (KTA) controlled by the UN administration.

Joachim Ruecker, the top UN official in Kosovo told local media that for the first time the province’s economy grew “by almost five percent in 2006”, driven mostly by the private sector. Ruecker said that the growth was “not sufficient yet to reduce unemployment.”

But Serbian head of the economic team for Kosovo Nenad Popovic told IPS that the sale of property in Kosovo was “hasty and for a mere fraction of the real price.”

Serbian media reported that the sale of 300 firms brought only 344.5 million dollars into the Kosovo budget.

“This was also a mono-ethnic privatisation,” the daily Politika reported. “All the under- priced property went to ethnic Albanians with complete disregard of any Serb investment in the past.”

Conflicting claims over property in Kosovo are due to be resolved through a proposal from the United Nations Office of the Special Envoy for Kosovo (UNOSEK).

A mere 323-word section within this proposal on the economy describes the province’s future membership of international financial institutions, and guarantees property rights to minorities (Serbs, Roma and others), particularly the Serbian Orthodox Church whose seat is officially in Kosovo.

There is also a short note on external debt, which Kosovo will share in the manner of the foreign debt of all former Yugoslav republics under an agreement reached in 2001, 10 years after former Yugoslavia began to fall apart. The foreign debt of Kosovo is estimated at 1.4 billion dollars.

Despite the UNOSEK document, Serbian media are flooded with reports listing property the UN is ready to “give away to Kosovo for free.” The most common talk among Serbs now is that Serbia is being “robbed” by the international community.

The published lists include 1,358 business premises of firms such as the postal services, the railway service, electricity supply, the airport in capital Pristina, and arable land and forests. The pro-government Politika claimed that 58 percent of all immovable property in Kosovo “belongs to Serbia.”

Prior to the talks on the final status of Kosovo the official estimate was that Serbia can claim property worth some 250 million dollars.

“The point is that the philosophy of politicians here has to change, from an emotional to the market one,” Brkic told IPS. “Kosovo is the territory where no Serb authority will go into again, but this is the closest place where Serbia can export more than 100,000 products. The area is hungry for goods and food. The only property Serbs can claim is their private property, and that is taken care of by international laws.”