Kosovo's Next Struggle Will Be Fixing Economy, Repairing Roads
By Celestine Bohlen
Jan. 29 (Bloomberg) -- A drive down the pockmarked Bill Clinton Boulevard in Kosovo's capital Pristina shows why this region's almost nine-year struggle to secede from Serbia might have been the easy part of independence.
The hard part for Kosovo, set to declare its freedom soon, will be to kick-start its damaged economy, repair its roads and generate enough electricity to keep the lights on.
``Getting the economy going is a top priority,'' says U.S. Admiral Mark Fitzgerald, the Naples-based commander of NATO's Allied Joint Force. He was in Kosovo this month to meet newly elected Prime Minister Hashim Thaci, a former rebel commander.
With 16,000 North Atlantic Treaty Organization troops keeping a tenuous peace between Albanian and Serbian residents, Kosovo enters the world of nations with major handicaps.
The poorest region of the former Yugoslavia, it inherits a shoddy infrastructure; a population of about 2 million, half under the age of 25; an unemployment rate above 50 percent and a tax system that depends on custom duties for 60 percent of receipts.
``From today to a sustainable economy, it is a question of years and years,'' says Markku Laamanen, deputy head of the Kosovo mission for the Organization for Security and Cooperation in Europe.
Adopted Orphan
Since 1999, when a NATO bombing campaign pushed Serbian forces out of the mostly Albanian region, Kosovo has been the adopted orphan of the international community. While the U.S. and European Union back independence, Serbia and Russia oppose it. The EU, the World Bank and other international institutions have kept the economy afloat. Last year alone, the United Nations' budget for Kosovo was $217 million.
For Albanians, who make up 90 percent of the population, independence means a new beginning. After the 1990s -- marked by political repression, war, thousands of dead or missing, and mass migration -- many say they are tired of the disputes that have made the Balkans a tinderbox since World War I.
``This part of Europe has produced lots of history, hyper- history even,'' says Agim Zatriqi, director of Radio Television Kosovo, the public broadcasting company. ``Now is the time to produce more useful things, like goods.''
Soon, Kosovars won't be able to blame their international mentors for the slow pace of economic change, says Akan Ismaili, 34, chief executive of Ipko.net, Kosovo's first Internet provider and second-largest mobile-phone provider.
`Psychology of Dependence'
``What will change is the psychology of dependence, which has been a barrier until now,'' says Ismaili, whose company sold a majority stake in 2006 to Telekom Slovenije d.d., Slovenia's national phone company, and is now planning $200 million in new investments.
Along with a flag and a country code, Kosovo, which uses the euro as its currency, will get a credit rating. Without this much-needed benchmark, companies face interest rates of 12 percent and higher. ``Any level of risk is better than the unknown,'' Ismaili says.
From roads and housing to schools, you name it and Kosovo needs it. Electricity production is so erratic, lights go out in the capital several times a day, while some villages have no electricity at all.
The World Bank has sponsored plans for a new power station fueled by Kosovo's plentiful lignite coal deposits. Four U.S. and European companies have submitted bids. The new plant, which will cost as much as $4 billion, won't be operational until 2014, however. The project's second phase, which would generate revenue by selling energy to neighboring countries, won't come on line until four years later.
Mining and Tourism
The UN and EU have helped Kosovo with privatization. ArcelorMittal, the world's largest steelmaker, bought two steel mills, although the sale won't be final until Kosovo's status is resolved. Mining and tourism remain prospects for foreign investors, says Paul Acda, an official at the UN's Kosovo mission.
Serb enclaves see independence as a threat. Of the estimated 120,000 Serbs left in Kosovo, about half live in the region above the Ibar River, which includes the northern half of the city of Mitrovica. Supported by Serbia politically and economically, Serbs here vehemently oppose secession.
Slavisa Stanic, general secretary of the Mitrovica Chamber of Commerce, says international interference prevents Albanians and Serbs from solving their problems themselves.
`More Investment'
``If there were fewer stories in the media about independence, there would be more investment,'' he says. ``Not in Albanian businesses, though, because they have a well-known reputation for being swindlers.''
Such sentiments have kept tensions higher here in than in other parts of Kosovo. Milan Ivanovic heads Mitrovica's Serbian National Council, which assist Serbs with Belgrade's help. On Jan. 10, he dismissed an appeal for interethnic peace, delivered in Serbian by Prime Minister Thaci before the Parliament, as ``demagoguery and hypocrisy.''
Serbs, Albanians and international observers worry violence could break out after Kosovo is independent. Still, with NATO troops guarding the Serbian border, no one expects another war or even the kind of rioting that killed 19 people in March 2004.
``There will be a burst of fever, but it will not last long because it is not sustainable,'' says French Lieutenant General Xavier de Marnhac, commander of NATO's Kosovo force. ``The NATO flag will wave over Kosovo for a long time to come.''
To contact the reporter on this story: Celestine Bohlen in Pristina, Kosovo, at cbohlen1@bloomberg.net
Last Updated: January 28, 2008 19:03 EST |
