RIGHTS-DEVELOPMENT: Donors Focus on Kosovo Criticised

By IPS Correspondents Reprint | | Print |

Niccolo' Sarno

BRUSSELS, Jul 14 1999 (IPS) - The priority given to Kosovo in the allocation of humanitarian resources is leaving aside Serbia, Albania and Macedonia, where refugees have put a tragic strain on domestic social and economic conditions, NGOs and the World Bank warned Wednesday.

“As the refugees from Kosovo are moving back (from Albania), a concern that the humanitarian groups and donors will move with them and leave Albania has been raised,” said Olivia Lind Haldorsson, of VOICE, a Brussels-based network of non governmental organisations (NGO).

VOICE (Voluntary Organisations for Cooperation in Emergencies), comprises 70 European NGOs working on humanitarian issues.

“In some areas (of Albania) the restoration of existing structures had to be interrupted, as resources had to de redirected to meet the refugees’ immediate needs,” said Haldorsson, from Tirana, where VOICE set up an office.

“If the problems are not addressed now, more complicated and costly interventions could become necessary in the future,” and development projects should be initiated now, using existing structures, Haldorsson added.

The estimated refugee population in Albania decreased from about 444,000 in mid-June (when the air raids against Yugoslavia ended), to about 69.000 this week, according to the United Nations High Commissioner for Refugees (UNHCR) and the European Union’s executive European Commission (EC).

Since mid-June, more than 640,000 of the 800,000 ethnic Albanians who had fled Kosovo have gone back to the province, prompting in turn more than 130,000 Serbs and Roma Gypsies to flee the province for Serbia proper or Montenegro.

The newly-appointed UN administrator for Kosovo, Bernard Kouchner, said this week that humanitarian aid to the region would have to be provided “much sooner than expected” as a result of the unforeseen speed in which ethnic Albanian refugees are returning.

Senior officials of the World Bank warned that allocating urgently-needed funds mainly on humanitarian aid in Kosovo itself will not be enough to lay the basis for peace in the Balkans.

“Reviving Kosovo will quickly run into some powerful obstacles without a regional framework that jumpstarts and improves economic and social conditions for all the affected countries of south-eastern Europe,” said this week Rory O’Sullivan, the Sarajevo-based World Bank’s Special Representative for the Balkans.

“It is clear that economic growth and prosperity in the (Serbian Kosovo) province and in the wider region is clearly a prerequisite for stability and a lasting peace in south-eastern Europe,” O’Sullivan said.

Financial aid to rebuild the Balkans after the Kosovo war was at the core of a meeting between finance ministers from the G-7 group of industrialised countries and the heads of international financial institutions held in Brussels on July 13.

World Bank President James Wolfensohn had already said, ahead of the meeting, that the reconstruction process in Kosovo had to take place within a wider strategy including Albania and Macedonia.

“I would like to urge you all here today to redouble your efforts to help these countries in south-east Europe fill their immediate balance- of-payments gaps in 1999,” Wolfensohn told international policy makers here.

Wolfensohn was attending the inaugural session of the High Level Steering Group – a special European Commission-World Bank chaired partnership for coordinating the international donor response to the Kosovo crisis.

“Unless we meet these financing requirements we may risk hurting the most vulnerable people, because it will be necessary to make cuts in health and education spending, and pensioners would have to survive on less money,” he added.

The World Bank also said it can plan its activities in the region only for the next 12-18 months, because Kosovo’s future is still linked to the political future of Serbia.

Financial and academic observers say it is unrealistic to think the economy of the region can be boosted without helping Serbia, but western governments insist they will not give reconstruction assistance to that country as long as president Slobodan Milosevic remains in power.

President Martti Ahtisaari of Finland warned this week that he foresees no rapid political change in Yugoslavia, and insisted in helping Serbia to at least restore the electricity and water supply systems destroyed by NATO before the winter settles in the region.

Some humanitarian assistance is being allocated for Serbia, but is being delayed by disagreements between most EU leaders on one side and the United States and Britain on the other over the extent of such aid.

“Because of current uncertainties about Kosovo’s future legal status – and its economic viability if the present uncertainties persist – the strategy is limited to one of a near-term emergency nature,” the World Bank said this week.

Donor countries ought to “go back and say: look, in order to have a useful and meaningful reconstruction programme, contacts need to be established with Serbia,” said Christiaan Poortman, the World Bank’s south-east Europe coordinator.

“For example, do you halt new roads and power lines at the border?” he asked.

A recent World Bank report warned that reviving Kosovo’s economy must go parallel to a sustained support to neighbouring countries.

“Jumpstarting Kosovo’s stationary economy will only be possible within a broader strategy of repairing the economies of neighbouring countries, particularly Albania and Macedonia as well as Bosnia-Hercegovina, Bulgaria, Croatia and Romania,” said the report.

A European Commission summary of the economic effects of the war on neighbouring countries showed that the influx of 444,000 Kosovo refugees in Albania put a “tremendous strain” on the country, posing “a real challenge to economic stability.”

The EC estimated that Albania’s reliance on external aid is expected to increase drastically, as the country’s current account deficit is expected to double to 12 percent of the gross domestic product (GDP) in 1999.

Also, neighbouring Bulgaria’s “inability to attract sufficient external financing would put increased pressures on the budget and jeopardise the continuation of the reform process,” the EC warned.

The EC also expects the national budget of Macedonia to “deteriorate dramatically in 1999,” because some 70 percent of the country’s exports have been affected by the war.

The EU announced this week it has earmarked 507 million US dollars for Kosovo, but the money will come from allocations included in the EU’s 2000-2006 budget rather than from breaching its tight budget ceilings this year.

The fact that EU officials are expected to raise money for Kosovo by cutting other foreign spending has heightened concerns that the bill for reconstruction would reduce aid flows to other regions of the world, particularly developing countries.

A European Investment Bank (EIB) preliminary estimate put the total cost of rebuilding Yugoslavia -including Serbia and neighbouring Macedonia and Albania- at around 25 billion US dollars over five years.

A Kosovo donors’ meeting conference will take place in Brussels on July 28, where fundraising will begin and an interim damage assessment report will be presented.