Kosovo’s costly World Bank membership

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Kosovo’s costly World Bank membership
Osservatorio Balcani Osservatorio English News
Publishing date: 20.07.2009 10:44

(Santinbon/flickr)
Membership in the World Bank costs Kosovo greatly because it must pay its portion of the old Yugoslav debt. As outlined by the Ahtisaari plan, membership comes despite Kosovo not receiving any assets deriving from the dissolution of Yugoslavia. Belgrade’s continuing politics to pay Kosovo’s foreign debt, as part of Serbia’s general debt, is breaking down
In July 2008, when Kosovo applied to join the world’s leading financial institutions – the IMF (International Monetary Fund) and the World Bank – citizens heard promises and plans for securing future development funds for capital investment, but there was little warning that Kosovo had to first pay inherited debts.

At the beginning of July 2009, after they signed the membership accords with the Bank and the IMF, Kosovo leaders agreed to pay a World Bank debt of 231 million dollars for loans obtained during the 1980s in Yugoslavia.

Kosovo’s original debt was 381 million dollars, but the US stepped in and agreed to pay 150 million dollars of the debt.

These agreements marked a milestone between Kosovo and international institutions after Kosovo declared independence on February 2008. Many believe that Serbia had agreed to delegate this particular debt to Kosovo but had preferred to not make it a public issue, but rather keep silent.

However, the foreign debt for the newest state in Europe does not end with the World Bank. According to the Serbian government, the alleged debt is estimated to be 1.2 billion dollars. Kosovo authorities, on their side, claim that foreign debt is much less than a billion dollars. Aside from the World Bank, the loans have been negotiated through the Paris Club, an informal group of financial officials from 19 of the world's richest countries, and the London Club – an informal group of private creditors on the international stage.

These loans had financed capital projects in Kosovo during the 1980s, and were signed in the name of Kosovo People’s Bank and the Yugoslav Federation. The banks in Kosovo were nationalised during the Milosevic regime in the 1990s, which today makes Serbia the only entity eligible to manage the payments.

Political institutions in Pristina have agreed to repay the money spent in projects implemented in Kosovo. Because of a special clause in the Ahtisaari Plan (developed by Martti Ahtisaari, the former UN mediator in the Kosovo status talks), the Kosovo constitution included responsibility for the debt. Adopted in March 2007, the Ahtisaari plan foresaw an agreement between Pristina and Belgrade on the debt issue. If there was no agreement, then an international arbitrator should mediate the foreign debt.

None of this has happened because Serbia has not signed the Ahtisaari Plan and thus does not feel obliged to it, as the plan recommended supervised independence. Belgrade continues its battle and to demonstrate that Kosovo is a part of Serbia still does not give up on paying Kosovo’s foreign debt.

Politicians in Serbia are divided on this issue. Serbian Minister of Finance Mladan Dinkic requests the Government to stop paying Kosovo’s debt since it declared independence. After Kosovo announced independence, Dinkic declared, “It is foolish to continue servicing Kosovo’s debt,” He considers that it is unfair for taxpayers in Serbia to pay for loans taken for constructing facilities in cities in Kosovo where not even a single Serb lives today.

The other camp, led by Prime Minister Mirko Cvetkovic and President Boris Tadic claim that by giving up on Kosovo’s foreign debt, Serbia is also giving up on Kosovo. Officials from Serbia’s Ministry of Kosovo deeply criticise the idea of not paying the debt, when “we (Serbia) are working to return our economic sovereignty in Kosovo.”

A non-nationalistic stand comes from the Brussels-based European Economic Institute, which suggests putting the payments on hold until an international solution is reached for the status of Kosovo.

Yugoslavia’s heritage and Kosovo

Kosovo was part of Serbia in 1991, during the dissolution of Yugoslavia when all succession states assumed the debt and assets based on their participation to the economy of the federation (Badinter Arbitration Commission).

Serbia (including Montenegro at the time) had about 38% share of debts, which it would only renegotiate and continue to pay back in 2002 when it renegotiated terms with the World Bank, the Paris Club and the London Club. Economic experts say Kosovo should take responsibility for more than just 4% from Serbia’s share of Yugoslav debts, but also the assets.

The economic expert and director of the Institute for Development Research RIINVEST, Muhamet Mustafa, even proposes to officials in Pristina to give up on both debt and assets, as it would save all sides from long procedures.

However, he notes that Belgrade is somehow trying to impose on Kosovo the obligation to pay the inherited debt but not take part in asset succession which benefited constituent regions following the dissolution of Yugoslavia.

Mustafa, who also represented Kosovo in the 2006 discussion with Serbia on economic issues, which were finalised with the Ahtisaari Plan, says, “If Serbia wants to normalise relations with Kosovo then it has to agree on both assuming foreign debt, repay Kosovo for all war damages during the 1990s, including expulsion of 70% of public servants, damages to the autonomous budget worth billions, robbing of pension system and savings worth hundreds of millions of euros.”

The Vetevendosje (Self-determination) movement also called on the government not to pay the debt, as outlined by the Ahtisaari Plan, until Serbia repays Kosovo for damages caused during the war and return the country’s capital owed to it from the breakup of Yugoslavia.

In case Kosovo decides to take over the debt and pay for loans spent in Kosovo, then Serbia’s cooperation is necessary since Pristina does not hold the original contracts and documents supporting the claims.

GAP Institute, a Pristina-based think tank, recommends that Pristina express its willingness to take over servicing of the debt that was used for projects in Kosovo. A GAP position paper notes, “Kosovo should not deny the obligation, and in the path towards developing a sustainable and a respected state, it should recognize the moral obligation to take over the debt that belongs to Kosovo.”

These calls come at the time when Kosovo is preparing to ask for loans to fund capital investments. The head of the institute, Shpend Ahmeti, stresses further that Kosovo should have asked from the donor conference in July 2008 to repay all its foreign debts, instead of pledging 1.2 billion euros in projects.

Ahmeti says, “Kosovo would get rid of an old burden, avoid inflation, while now most of the project money from the donor conference is spent on consultants coming from EU countries.”

Upon the recommendation of IMF, Kosovo has, since 2008, set aside 50 million euros from its budget in order to be prepared to pay for its foreign debt. Currently the IMF warned the government on its increased expenditures, arguing that it is spending more than it can afford and is adopting laws without being certain it can support them financially. The body has also appealed to abandon plans for increasing public sector expenditures before local elections in November this year.

Serbia could put more pressure on the Kosovo government and allocate the rest of the debt it is paying to Paris Club and London Club. However, such a move would mean that Serbia acknowledges Kosovo as an international subject towards world bodies, as demonstrated with Kosovo’s World Bank debt.

Serbia, alongside Bosnia and Herzegovina managed to secure loans worth hundreds of millions of euros recently, an indicator of a serious borrower, which Kosovo has yet to prove. This means that Pristina has to set aside more than 50 million euros a year in order to handle the inherited debt and the fresh loans – with which it wants to finance road-infrastructure projects and its new energy plant.

In the future, when the Kosovo government proclaims “victories” such as IMF and World Bank memberships, it would be good to inform the citizens/taxpayers, as an indicator of responsibility, the burden brought by being an independent international subject.

Suha Reka Massacre

Police officer recalls Berisha murders
9 July 2009 | 12:38 | Source: Beta
THE HAGUE -- Police officer Velibor Veljković has confirmed before the Hague Tribunal that his colleagues killed several dozen members of the Berisha family in Kosovo.


Vlastimir Đorđević (Beta-AP, archive)


As a witness at the trial of former MUP Public Security Chief Vlastimir Đorđević, he claimed that he had not seen the actual murders themselves, but he pointed the finger at officers Slađan Čukarić, Radovan Tanović and Miroslav Petković, who had been under the commander of then Suva Reka Police Chief Radojko Repanović.

Veljković said that he and others had carried bodies out of the café where the crime had taken place and piled them on to a truck.

He explained how he had seen an old woman and man still showing signs of life, and how the police had then executed them.

The witness said that he had bumped into Čanović, Tanović, Petković and Repanović in front of the police station at about midday on March 26, 1999.

Repanović then ordered him to do “something that would be considered a crime,” which he had refused to, the witness said, adding that he could not remember the details.

He said that he had then entered the station just as an Albanian, Petrit Elshani, was being hastily led out, having spent some time in custody.

“I heard shots, and when I walked out he was dead, and Čukarić, Tanović and Petković were standing around him,” he said.

The three officers and Repanović then made towards the Berisha family house, from where an explosion and shots were heard shortly afterwards.

Veljković said that he had seen civilians, mostly women, children and the elderly, running towards the shopping center by the bus station. Some of them fell after being shot.

He said that he had then picked up and loaded “five or six” corpses on to a truck. In the meantime, he said that he heard another explosion and more shots coming from the shopping center.

After the explosions stopped, he went over and saw many civilians lying dead in a café, and the three officers standing out front.

Without stating who had given the orders, he said that he had then participated in loading some “90 to 100” bodies, including “four- and five-year-old children,” on to the truck.

“I saw that an old woman had been wounded, but was alive, and she stretched her arms out to me…I was scared, even though I had a rifle, and I shouted that she was alive, and then someone, I don’t remember who, came in and killed her… Then one older man got up, I know that he was a bus driver earlier… He said: ‘You’ve killed my whole family, at least leave me.’ I ran outside and then someone, I don’t remember who, killed him,” Veljković said.

Shireta Berisha, who survived the massacre in Suva Reka in which four of her children were killed, testified earlier in the trial. Only two others survived along with her.

According to the indictment, Serbian police killed more than 45 members of the Berisha family in the café.

Čukarić and Repanović were recently sentenced to 20 years in jail each for the crimes, while Petković received 15 years. Security official Milorad Nišavić was sentenced to 13 years in prison.

Police officer Radovan Tanović, who also participated in the crimes, was later killed during the Kosovo war.

www.b92.net 1995 - 2009.

Serbian aim to kill all Kosovans is nothing new

Serbian aim to kill all Kosovans is nothing new

The leading Serb historian Vaso Cubrilovic wrote: "At a time when Germany can expel tens of thousands of Jews . . . the shifting of a few hundred thousand Albanians will not lead to the outbreak of a world war". He recommended a series of measures: the enforcement of laws to make economic activity by Albanians impossible, the "ill-treatment of their clergy, the destruction of their cemeteries", and "secretly burning down their villages and city quarters". All of these measures were adopted.

By Fintan O'Toole (The Irish Times), 1999

Here is the Catholic archbishop of Skopje, Macedonia, writing to the Pope about the situation in Prizren in the neighbouring province of Kosovo: "The city seems like the Kingdom of Death. They knock on the doors of the Albanian houses, take away the men, and shoot them immediately.
In a few days the number of men killed reached 400. As for plunder, looting and rape, all that goes without saying; henceforth, everything is permitted against the Albanians, not merely permitted but willed and commanded."

Or consider the testimony of a Ukrainian newspaper correspondent in Kosovo. A Serbian officer has told him the worst atrocities are committed by irregular paramilitary bands.

"Among them were intellectuals, men of ideas, nationalist zealots, but these were isolated individuals. The rest were just thugs, robbers who had joined the army for the sake of loot." He concludes that "the Serbs . . . in their endeavour to correct data in the ethnographical statistics that are not quite favourable to them, are engaged quite simply in the extermination of the Muslim population."

These stories could be multiplied many times over from any number of reports on the situation in Kosovo. But the dates are worth noting. Both of these accounts, cited by Noel Malcolm in his book Kosovo: A Short History, were written in 1913. The first, by Archbishop Lazar Mejda, included an estimate that 25,000 Albanians had by then been massacred in Kosovo. The second was written by Lev Bronstein, afterwards known as Leon Trotsky, then an obscure journalist. Though he had seen much violence already in Russia, he was deeply shocked by the viciousness of the assault on the general Albanian population which followed Serbia's invasion and annexation of Kosovo in 1912.

It is worth recalling these events because they put into perspective what is happening in Kosovo now. It is easy to assume that the all-out Serbian assault on the Albanian population there is a response to NATO's bombing campaign. No one reading accounts this week of the terrible massacre of Albanians at Mej defends what the Serbs are doing. But many do believe that things would be better were it not for the bombing, that the Serbs have been somehow maddened by the air raids. This is to misunderstand the deep-seated impulse within Serb nationalist ideology towards the extermination of the Kosovans.

It's important, when such impulses are discussed, that we make certain things clear. One is that what is going on is not an inevitable working-out of immemorial animosities, some pathological aberration bred in the Balkan bone. On the contrary, what we are talking about is something quite recent, a 20th-century response to 20th-century conditions.

And it must be stressed that all of this has no more to do with the Serb character than, say, the Omagh bombing is an expression of the Irish character. It's about a specific political ideology, developed in very particular circumstances over the last century and exploited for very particular political purposes over the last 15 years by Slobodan Milosevic and those around him.

An analogy with Nazism is useful. There was, even in the 19th century, a strong strain of antiSemitism in Germany. It was what historians call "eliminationist", geared towards the physical removal of the Jews from Germany. But in conditions of crisis, and under the ideological direction of Hitler and his party, it became "exterminist".

The same kind of movement is evident in the dominant strain of Serb nationalism. A desire to get the Albanians out of Kosovo has slipped, in conditions of crisis and ideological exploitation, into a desire to eliminate the Kosovans altogether.

These genocidal tendencies are not a product of NATO's bombing campaign. They were evident in 1912 and 1913, when Serbia first invaded Kosovo. They were implicit in the policy, after the formation of Yugoslavia, of denying the very existence of the Kosovans: the Yugoslav government told the League of Nations in 1929 that "there are no national minorities" in what it called "Southern Serbia". They were evident in the fierce suppression of the language and culture of the Kosovans and the assassination of their intellectuals and writers.

The aim, essentially, was to push the Kosovans into exile by making their lives unbearable. In 1937, for example, the leading Serb historian Vaso Cubrilovic wrote: "At a time when Germany can expel tens of thousands of Jews . . . the shifting of a few hundred thousand Albanians will not lead to the outbreak of a world war". He recommended a series of measures: the enforcement of laws to make economic activity by Albanians impossible, the "ill-treatment of their clergy, the destruction of their cemeteries", and "secretly burning down their villages and city quarters". All of these measures were adopted.

This strain of Serb nationalism was largely buried during the Tito years, but reemerged after the collapse of the Communist regime. After Milosevic came to power, on the back of his promises to "defend" the Serbs of Kosovo, Kosovo's autonomy was withdrawn and a systematic oppression of the Kosovans was resumed. This was not oppression for its own sake. It was aimed at the actual removal of the Kosovo Albanians.

Arkan, the notorious gangster and war criminal, who was elected to the Serbian assembly as a "representative" of Kosovo in elections boycotted by the Albanian population, made this quite clear. Most of the Kosovans, he explained, had come in from Albania in the last 50 years and they ought to be regarded as "tourists".

This claim is, of course, utterly ludicrous, even by the standards of Serb nationalist rhetoric. But it's not meant as a rational argument. It is an implicit demand for the mass expulsion of the vast majority of the population of Kosovo. Tourists, after all, go "home", in this case presumably to Albania.

All of this predates NATO's involvement. None of it was a response to any action by the international community or, indeed, by the Kosovans themselves who persistently sought peaceful solutions. It has no more to do with foreign interference than Hitler's assault on the Jews had. It was axiomatic for the dominant strain of Serb nationalism that, sooner or later, one way or the other, the Kosovans were to be eliminated. Their obliteration was fundamental to the whole Serb project as envisaged by Milosevic and his allies. The achievement of this aim was a matter of timing and tactics, not of principle.