30 May 2006

Safety in Kosovo remains elusive

By Eric Jansson
Published by the Financial Times, 30 May 2006

Few Serbs can forget the jumpy young man who scaled the Church of St Andrew in Podujevo two years ago.

Thousands of times, television screens across Serbia – including the beleaguered Serb enclaves in breakaway Kosovo – have replayed the videotape. It shows the man climbing to the burning church’s rooftop and attacking a metal cross – tugging, twisting it until it crashes down, to the delight of a crowd of ethnic Albanians in the churchyard below.

The unidentified man generated an iconic image of the pogrom that swept through Kosovo in March 2004. The three-day orgy of violence pitted tens of thousands of rioters against minority communities, Serbian Orthodox churches and their United Nations and Nato protectors.

The damage toll catalogued afterwards in a report from Kofi Annan, UN Secretary-General, listed 19 people killed, 954 injured, and 730 houses and 36 religious sites destroyed, some containing priceless examples of ancient Byzantine Christian art.

“The March riots” remain a vital reference point for diplomats and Nato military commanders gauging the probability of a sudden return to violence.

Since then, Kosovo’s secessionist leaders have struggled to persuade others of their commitment to the safety and human rights of minorities in Kosovo amid discussions about possible independent statehood.

“There will be no repeat of March 2004. The citizens are aware how much damage an event like that can cause,” says Fatmir Sejdiu, president since March this year.

But many observers warn that serious violence may erupt again if Kosovo’s provisional authorities do not achieve full independence from Serbia this year.

The president denies this, but he warns: “The international community has to be careful. We do not want to stimulate politics that could generate conflict. It is not good to test the citizens’ patience.”

When the UN and Nato intervened in the province, they pledged to create a safe, multi-ethnic space before determining Kosovo’s political status. It is no longer clear that this goal can be achieved. The UN initiated Kosovo’s status negotiations in late 2005 although an overwhelming majority of Serbs in the province still say their basic right to safety is trampled routinely.

A steady trickle of violent incidents against Serb communities keeps the intimidation factor high. This month alone brought several shootings and the stoning of a busload of 60 Serbs travelling to market. On May 6 gunmen ambushed a Serbian Orthodox priest, his wife and two children travelling in their family car. They narrowly escaped.

Extremists also struck Podujevo, vandalising a second church and setting back reconstruction efforts funded by the Council of Europe.

Sava Janjic, an influential monk who is the Serbian Orthodox Church’s diplomatic contact point in Kosovo, calls this “persecution”.

He says: “The Church is its people, and our faithful people, clergy and monks have been living for years without basic freedoms and dignity. In most of Kosovo we still cannot move without military or police escort, and we are exposed to everyday verbal abuses and harassments.”

Slavisa Petkovic, the only Serb minister in the provisional government, claims that open persecution ended in late 2004, when he took office, and that threats to minority communities are on the wane. “There has been a substantial relaxation of relations between most Serbs and Albanians living in Kosovo,” he says.

Yet Mr Petkovic’s own parents are among the many Serb refugees who choose not to return. More than 223,000 Serbs and other minority individuals have left the province since the war. Fewer than 15,000 have moved back, according to the UN High Commissioner for Refugees.

Contradicting both UN officials and Kosovo’s elected leaders, Hilmi Jashari, the province’s top human rights lawyer, says that little progress is being made. “I would not say that the human rights environment has changed dramatically from 2004 until today. In fact, from 2000 until now I have not seen a dramatic change,” he says.

As acting chief of Kosovo’s human rights office, a public institution founded by the UN mission but independent from it, Mr Jashari says he recently reopened his file on the March riots in response to complaints that they were “never properly investigated” by local or international authorities.

A Human Rights Watch report released today sides with the complainants, lending weight to claims that neither basic safety nor legal protection can yet be taken for granted.

Kosovo business holds its breath

By Eric Jansson and Neil MacDonald
Published by the Financial Times, 30 May 2006

In the shadow of the Bjeshket e Nemuna, the Damned Mountains of western Kosovo, sits a small factory that slices, fries, spices and bags 100 kg of potato crisps an hour under the domestic brand name of Luko Chips.

Luko, the company, boasts assets of which most small businesses in Kosovo can only dream: free access to western technical expertise, a ready supply of fresh raw materials – four locally-grown varieties of potato – and investments of €110,000 from a charitably-motivated Swiss owner who plans a distribution of shares to workers this year.

Luko’s production line, overseen by polyglot managers in white coats, is orderly and clean and the company has succeeded in forming regular partnerships with local suppliers. Well-managed local production does, in fact, exist in Kosovo.

But the scarcity of such examples is a perennial concern for economists, who note that domestic businesses’ overwhelming preference for small-scale, import-based trade and services – rather than production and export – contributes to a gaping trade deficit. In 2004, this ballooned to 41 per cent of gross domestic product.

With the province’s current account deficit rising to 31.5 per cent of GDP last year, according to a World Bank estimate, a heavy burden of maintaining financial stability still falls to foreign donors, whose sizeable contributions are backed up by remittances from a robust Kosovo Albanian diaspora that sends home some €350m (14 per cent of GDP) annually.

Kosovo’s post-war economy has neither grown nor shrunk significantly since 2001, in spite of massive inflows of aid and remittances, plus rapid growth in local commercial and household lending.

Many companies, including Luko with its distinct advantages, struggle to turn a profit. “I cannot pretend this is a favourable environment,” says Jan Stiefel, Luko’s general-director.

The view from dusty Gurrakoc, where the potato chips factory is located, and the hundreds of other sleepy towns where most of Kosovo’s population lives, contrasts sharply with the view given by elected officials in Pristina.

The politically-minded capital is buzzing this year with predictions of imminent independence, seven years after Serbia withdrew its forces from the rebel province. Local politicians routinely promise economic renewal if and when the province’s secession becomes final. Independence, they argue, would allow Kosovo to capitalise directly on an ongoing privatisation process that has so far attracted €240m in investment, revenues from which are held in a trust fund outside the province in the absence of sovereignty.

World Bank economists cautiously echo this view, calling Kosovo’s unresolved status “the major deterrent to private-sector growth” although bank officials cite “heavy pressure” from the United Nations diplomats in charge of Kosovo not to publicise this opinion.

Soren Jessen-Petersen, special representative at the head of Kosovo’s UN-run administration, says economic expectations should not be linked explicitly to the status issue.

“The lack of status is a major obstacle to foreign direct investment,” he says, but adds: “The short term will be extremely difficult. You do not just raise the flag one day and the investors arrive the next day.”

Whatever Kosovo’s political status may be 12 months from now, those investors already on the ground say that everyday barriers are the primary obstacle to economic growth.

Ironically, some of the greatest difficulties are found in areas where Kosovo claims comparative advantages.

For example, UN and World Bank officials describe Kosovo’s mineral and energy resources as critically important for its economic future. But the lack of a reliable electricity supply still forces companies to depend on their own power sources.

The potato chips factory in Gurrakoc, in typical fashion, powers everything – from production lines to the head office’s fluorescent lights – using a diesel generator. The fuel costs drain a company whose monthly revenues fall just narrowly short of running costs.

Luko has addressed this typical problem in an innovative way. Pushed to cut spending in the face of soaring fuel prices, it last year started recycling sunflower oil by mixing it with diesel to run the generator.

Staffing problems are also rife. Companies report severe difficulties finding skilled workers, although an estimated 35 percent, possibly more, of the province’s workforce is unemployed. Companies are flooded with applications, but recruiters complain that most job-seekers lack a standard high school education – a sad legacy of Serbia’s blockade against Kosovo’s home-grown schools during the 1990s.

Security also remains a problem. Some foreign investors complain privately about threats or intimidation by local rivals.

Even some pro-independence analysts say that the greatest obstacles to Kosovo’s economic growth are practical and technical, rather than political.

“Kosovo is not a big economic problem. Believe me, it is easy to manage. You just need rule of law, better infrastructure and improved education for this big, young population,” says Muhamet Mustafa, president of Riinvest, a leading economic research group in Pristina.

Citing the case of Estonia, Mr Mustafa notes that Europe’s smallest, poorest transition economies were the quickest to emerge as success stories after the Soviet empire’s collapse. Whether Kosovo can follow suit in the wake of Yugoslav rule – plus seven years of international guidance – remains to be seen.

Kosovo's confident leader-in-waiting

By Eric Jansson
Published by the Financial Times, 30 May 2006

The popular independence movement that dominates democratic politics in Kosovo claims few greater heroes than Agim Ceku, prime minister of the breakaway province, elected two months ago.

Slim and youthful, the shaven-headed Mr Ceku, 44, exudes an effortless authority born of long experience as a military commander.

After fighting Serb troops as a high-ranking officer in the Croatian army in 1991, the Kosovo Albanian veteran went on to become chief of staff for the Kosovo Liberation Army (KLA).

Politics may be a softer game, but Mr Ceku now faces another decisive battle as leader of the Kosovo government that could this year gain formal independence for the province – or squander the apparent goodwill of the leading western powers.

Sitting in his oak-panelled office, the former commander points to a wall where an oil-painted canvas shows him hard at work in the aftermath of the Kosovo’s 1998-99 war. Mr Ceku is depicted in rebel fatigues, sleeves rolled up, flush with victory over Slobodan Milosevic’s Serb forces, plotting Kosovo’s way forward in the company of Nato generals and United Nations envoys.

“At that time, I thought independence would come in two or three years,” he says.

It is now seven years and counting for Mr Ceku, whose patience is being further tried this year as Pristina and Belgrade tiptoe through their first tentative efforts at postwar dialogue.

The prime minister’s power remains strictly limited by the foreign diplomats who retain final decision-making authority over Kosovo’s future status. His government claims only limited powers as one of several “provisional institutions of self-government” established under United Nations supervision four years ago.

Mr Ceku claims that the UN Security Council has already quietly made up its mind about Kosovo’s future political status. “Everyone knows what the decision is going to be,” he says, flashing a confident smile that leaves no doubt he means independence.

Soren Jessen-Petersen, head of the UN mission in Kosovo, insists that “nothing has been determined” about the details of the province’s future status.

The Kosovo government’s counterparts in Belgrade also disagree vociferously that independence is a foregone conclusion. The Serbian government remains fundamentally opposed to the province’s secession, continuing negotiations notwithstanding.

In Belgrade, where the KLA is remembered as a “terrorist” army, Mr Ceku is still wanted on a warrant accusing him of war crimes, in Croatia and in Kosovo.

Vojislav Kostunica, the prime minister in Belgrade, holds Mr Ceku personally responsible for vicious anti-Serb violence that occurred both during the 1998-1999 war and afterward.

The Serbian government calls his rise to political leadership, even if welcomed by the UN, “completely unacceptable” and “a mockery of the values that democratic society is founded on”.

Mr Ceku declines to comment, saying only that he cares more about the views in Washington and Brussels, where he claims powerful friends. He has been twice arrested on Belgrade’s warrant – in Slovenia in 2003 and in Hungary in 2004 – and twice freed after hasty diplomatic interventions.

Ironically, Belgrade’s campaign against Mr Ceku could help the Kosovo Albanians’ drive for full and unconditional independence. Few in the international community see intractability and accusation as winning tactics.

For his part, Mr Ceku is wrong-footing Belgrade, toeing the international line whenever possible and openly courting Serb public opinion. To the shock of the ethnic Albanian deputies who filled the legislature in March for his inaugural address, he delivered a conciliatory speech in fluent Serbo-Croat, calling for reconciliation with the province’s ethnic minorities.

“In a democratic Kosovo, you Serbs, like Kosovo’s other citizens, will have a future, because it belongs to everyone, and together we will create a society guaranteeing freedom, equality, economic progress for everyone regardless of their ethnicity,” he pledged.

Most Serbs disbelieve him instinctively. Conciliatory gestures have come from Pristina’s leaders before, including some of Mr Ceku’s predecessors who, when an anti-Serb pogrom swept through Kosovo in March 2004, hesitated before condemning the outrageous violence.

But the government’s approach is accompanied, promisingly, by small signs that Kosovo’s ethnically riven society has begun to normalise. Among Mr Ceku’s colleagues is one Serb, Slavisa Petkovic, the minister in charge of refugee returns. He and other Serb politicians have begun openly questioning the longstanding policy, backed by Belgrade, of boycotting the elections and parliamentary sessions.

Western diplomats praise Kosovo’s infant democracy for its weathering political upheavals. The death this year of Ibrahim Rugova, Kosovo’s longtime president and a pacifist icon widely regarded as “the father of Kosovo independence”, passed without incident, followed by parliament’s election of Mr Rugova’s successor, Fatmir Sejdiu. Similarly Kosovo in late 2004 peacefully received the resignation and extradition of a prime minister, KLA veteran Ramush Haradinaj, when international prosecutors indicted him for alleged war crimes.

Mr Petersen hails the ethnic Albanian majority for its “calm and dignity” in the face of such challenges.

But whether it would respond in such a way if forced to accept any future status for Kosovo other than full independence is the province’s million dollar question.

Last fight will shape Kosovo's future

By Eric Jansson and Neil MacDonald
Published by the Financial Times, 30 May 2006

International administrators have racked up an impressive list of achievements during their seven years on the ground in Kosovo, the mainly ethnic-Albanian province severed from Serbia through international military intervention in 1999.

Helped by foreign donations totalling €2.14bn and further pledges worth €610m, the United Nations administration established after the Yugoslav Serb regime pulled out has already left an indelible signature on this most unsettled corner of the western Balkans.

The UN Interim Administration Mission in Kosovo (UNMIK) has maintained law and order and, arguably, helped an enduring peace start to take root.

International administrators have designed and helped build a democratically elected provisional government, parliament and presidency, which will operate under direct UN supervision until further notice. UNMIK also advertises its success overseeing the installation of “the framework of a functional market economy”.

In this landlocked province of fertile plains and snow-capped mountains – roughly one-third the size of the Netherlands – scarcely a town or village is untouched by the international reconstruction effort. Kosovo’s 2m people have seen 1,400 km of roads and some 50,000 war-ruined houses rebuilt, as well as schools, hospitals and religious buildings.

Nato – which intervened with a 78-day bombing campaign to expel Serb military and police forces from the province – has taken on an equally daunting job. After Belgrade’s capitulation in June 1999, multinational forces under Nato command brought basic security to the ethnic Albanians who account for an estimated 90 per cent of Kosovo’s population, many of whom suffered bitterly at the hands of Serb authorities before and during the war.

The alliance has also protected Kosovo’s acutely endangered Serb minority – with the exception of some fatal lapses.

Despite the basic peace and security, however, the international intervention in Kosovo cannot yet be called a success.

Kofi Annan, UN Secretary-General, in January expressed “serious concern” that Kosovo was backtracking in efforts to achieve the UN’s stated goal – creating a “sustainable multi-ethnic, democratic society in which members of all communities can live in dignity and security.”

Conditions could deteriorate further unless Kosovo is allowed out of the limbo it entered directly after the war. “The sooner we bring this holding operation to an end the better for all the people of Kosovo,” says Soren Jessen-Petersen, the Dane who heads the UN mission as Mr Annan’s special representative.

The way to end this holding operation is to resolve Kosovo’s status – but that has not been achieved by the war, UN Security Council Resolution 1244 which established UNMIK, or the past seven years.

However, if current bilateral status talks in Vienna are to be taken seriously, a year from now Kosovo will be either a newly independent state or an autonomous territory remaining within Serbia’s internationally recognised border.

The trouble is that Resolution 1244 offered fig leaves to both Nato and Serbia. For Nato, “victory” meant the expulsion of Serb forces; for Belgrade, then dominated by the authoritarian regime of Slobodan Milosevic, the Yugoslav president, “victory” meant preserving territorial integrity. The resolution offered both.

Seeking a new way forward, the UN initiated painstaking “status negotiations” between Serbia and the Kosovo Albanian leadership at the end of 2005.

But Belgrade’s position is unambiguous. “This huge intention of the Kosovo Albanians to create an independent state is a grave contradiction of international law,” says Alexander Simic, a high-level Serbian adviser on the talks. “You cannot create an artificial nation.”

Neither side has made any concession on ultimate sovereignty. Belgrade has shown less discomfort over Montenegro’s close-run referendum on May 21 to become independent – killing the last vestige of what used to be the six-republic Yugoslav federation – than it does over the prospect of accepting a fait accompli in Kosovo.

But the Serb nation has a long history in Kosovo, which is, after all, still internationally recognised as part of Serbia’s territory. Kosovo, unlike Montenegro, boasts no history of independent statehood, even if some Kosovan leaders call the 1987-99 period a “Serb occupation”.

On this issue, moreover, Belgrade can summon allies on the UN Security Council. Vladimir Putin, Russia’s president, has warned against setting a precedent for secession by minor provinces. Beijing, mindful of Nato’s bombing of the Chinese Embassy in Belgrade in 1999, might also side with Serbia.

On the other hand, while UN officials insist that nothing about Kosovo’s status is pre-arranged, diplomats from Washington and London have signalled that independence is likely around the end of this year.

Secessionist leaders from Pristina, Kosovo’s capital, remain engaged in the stilted dialogue with Belgrade. A set of “ground rules” for the UN-mediated negotiations will help direct the outcome. These are: no partition; no return to direct Serb rule as before 1999; no creation of a “Greater Albania”; and any status decision being acceptable to the majority of Kosovo’s people.

Most citizens in Kosovo demand independence. “The Serbs should look at the realities and see that independence is the only option supported by the majority. It is not negotiable,” says Fatmir Sejdiu, Kosovo president and leader of the province’s negotiating team.

No sooner did the UN call for status negotiations than graffiti appeared throughout the province. “No negotiations! Self-determination!” says the writing on walls everywhere, scrawled by youth activists whose political identity was formed in the 1990s under the late Mr Milosevic’s oppressive rule.

Hashim Thaci, Kosovo Liberation Army militant and now leader of the parliamentary opposition, says: “We already created the reality of an independent Kosovo in June 1999. The only thing we are negotiating are modalities to implement the will of the people.”

But independence – whether achieved through negotiation or by the imposition of an international deal against Serbia’s will – would leave Kosovo with an uphill battle from the start.

Uppermost in many Western policymakers’ minds is the province’s capacity to export instability and crime – a factor that Boris Tadic, Serbia’s president, argues would be more controllable within the framework of a larger state. Mr Sejdiu pledges an “absolute commitment to prevent Kosovo becoming a door or a springboard” for terrorism and crime. Nato forces and possibly European Union police are almost certain to stay on after any status settlement, just to make sure.

For most citizens, safety and money are the top issues. The province’s economy remains in the doldrums, with 37 per cent of the population living on less than €1.42 per day and 15 per cent lacking money to buy adequate food, according to the World Bank. The real rate of unemployment is unknown; most analysts put it above 30 per cent.

Adding to existing economic challenges, Kosovo could inherit a heavy burden of old debt from Serbia, which has continued servicing all its share of ex-Yugoslav obligations to international creditors.

Joachim Ruecker, the German diplomat in charge of privatisation, says foreign investment will ease Kosovo’s way. “There is momentum here. There are very serious investors coming even before status. There is no reason to wait,” he says.

Foreign investment has picked up lately. But Kosovo remains a place for the brave, and those who enter will still need nerves of steel.

Interest starts to stir in Kosovo sales

By Eric Jansson
Published by the Financial Times, 30 May 2006

Ferronikeli until recently lay broken and mostly abandoned. The battered mining and smelting complex in central Kosovo was a prime example of how disinvestment and war can bring heavy industry to its knees.

Quartered in offices with broken windows, a postwar executive board continued to meet but found little business to conduct.

Kosovo’s international administration took this and other “socially owned” companies – defined under Yugoslav law as the collective property of workers – under trusteeship. In this post-Yugoslav arrangement, Ferronikeli’s managers were compelled to seek permission for even minor transactions, such as the sale of scrap metal from the factory yard.

Now, suddenly, the grim situation is about to change. Kosovo’s privatisation authorities this month finalised the sale of Ferronikeli to Zurich-based International Mineral Resources (IMR)/Alferon, part of Eurasian Natural Resources, one of the world’s largest mining and metals groups. Foreign investors are ready to seek profits in the renewal of Kosovo’s industrial base.

The deal – with a sales price of €30.5m linked to a €20m investment commitment – is Kosovo’s largest privatisation. The sale comes shortly ahead of other big sales, including the Rahovec winery and vineyards, Peja Brewery and IMK pipe factory.

IMR/Alferon promises to reactivate at least 1,000 jobs while stimulating new business in a host of sectors linked to mining and metals. The earlier sale of another metals complex, the Llamkos galvanised steel plant, already shows this can work. The Llamkos sale yielded just €4.2m initially but has since brought €28m in capital investments to Kosovo, according to the Kosovo Trust Agency (KTA), the body in charge of privatisation.

The Ferronikeli sale places the KTA “firmly on track” to meet its target of selling “90 per cent of the value” of companies slated for privatisation by the end of 2006, says Joachim Ruecker, KTA chairman.

When Mr Ruecker, the German heading up economic reconstruction for the UN mission in Kosovo (UNMIK), set this sales target last year, it appeared unrealistic. Kosovo’s internationally managed privatisation process, launched in 2002 but stalled almost from its inception, had barely begun to move by early 2005. But since Mr Ruecker took over, it has accelerated rapidly, so far bringing total sales to €240m.

The privatisation chief says an executive decision made by UNMIK, granting the KTA the right of eminent domain in the province, has allowed the agency to press forward with sales. Previously, a host of practical and legal complications, often on ownership, caused delays.

The delays proved costly, depriving Kosovo’s traditional industrial base of new investment over several years and contributing to a widespread perception among investors that the province has little to offer.

For example, Claudio Viezzoli, western Balkans director at the European Bank for Reconstruction and Development (EBRD), says the bank initially saw few opportunities, although it was among the first investors to arrive, 15 days after the war ended.

“We had the impression that all the large companies were either being dismantled or cannibalised, which in part is what did happen,” he says.

UNMIK’s decision to grant eminent domain to the KTA, however, opens the way for large projects, such as a potential €50m investment Mr Viezzoli says the EBRD is now considering at Pristina Airport – ownership of which is contested by Serbia’s military.

Yet UNMIK’s “clever mechanism”, as Mr Viezzoli calls it, only sidesteps the fundamental question dogging privatisation in the province. The very ownership of Kosovo itself – and with it the companies registered there – remains the subject of bitter dispute between leaders in Pristina and Belgrade.

Kosovo Albanian elected officials, all secessionists, sit on the KTA board where they are outnumbered by international officials. They say “the internationals” are selling off companies too slowly and too cheaply.

Bujar Dugolli, minister of trade and industry, acknowledges the Ferronikeli sale as a success. But he argues that Mr Ruecker and his UN colleagues should do more, transferring privatisation controls to Kosovo’s democratically elected leaders and releasing privatisation revenues from UNMIK-controlled escrow accounts. Mr Dugolli proposes “unblocking the privatisation fund and loaning part of it to commercial banks” to stimulate economic growth.

As long as the UN seeks a mediated settlement, and as long as Serbian negotiators assert Belgrade’s rights over companies in Kosovo, Mr Dugolli can probably expect to wait.

Politicians keep invading the pitch

By Eric Jansson
Published by the Financial Times, 30 May 2006

Every so often Agim Islami, a Pristina dentist, posts a letter to the International Tennis Federation (ITF), world tennis’s London-based governing body.

In his letter, Dr Islami politely asks the ITF to register the Kosovo Tennis Federation (KTF), of which he is president, as the world’s 204th internationally recognised national tennis organisation.

An affirmative response would give the KTF equal status to fellow minnows like the Palestinian Tennis Association and the Aruba Lawn Tennis Bond, as well as to giants such as the formidable US and Australian federations.

But the ITF’s answer always comes back crisp, polite – and negative.

Bizarrely, Dr Islami’s difficulty with the ITF – like so many complications of life in Kosovo – can be traced circuitously back to Belgrade and the war.

Despite the 1999 victory of the secessionist fighters who, with Nato’s help, pushed Serb forces out of Kosovo, and despite the past seven years of international rule, the province still lies legally within the sovereign territory of Yugoslavia.

Yugoslavia voted itself out of existence in 2003, succeeded by the Union of Serbia and Montenegro. Kosovo, though administrated as a United Nations protectorate, still now lies within Serbia’s internationally recognised border.

Accordingly, ITF rules bar the organisation from recognising the KTF without permission from Serbia’s tennis federation.

In the tense political climate that has poisoned this region since 1989, allowing Kosovo to field of its own would be unthinkable in Belgrade.

"Not one Serbian sports federation, tennis included, will allow us to play. If they did, they would be treated as traitors in Belgrade," says Dr Islami, sitting in the KTF’s humble headquarters, a spare room in his dental surgery.

When Kosovo’s citizens complain that United Nations Security Council Resolution 1244 has stranded them in a legal vaccum, they refer to problems of this nature almost as often as they do to much wider political, economic or military affairs.

Although Resolution 1244, the basis for international rule in the province, protected Kosovo from renewed Serb aggression, it stopped short of granting the province’s citizens a new and recognisable international identity.

Kosovo’s athletes are therefore barred from international competition for the same reason that the province’s citizens are asked to carry "United Nations Mission in Kosovo" passports. There is no such thing as a Kosovo passport.

Likewise the province’s telecommunications service can register neither its chosen ".ks" Internet identity in place of the outdated Yugoslav ".yu", nor a unique international dialling code that would be distinct from Serbia’s.

Sport promoters in Pristina have succeeded in sidestepping Belgrade’s intransigence and the UN’s benign intractability in just four instances: table tennis, handball, karate and the Paralympics – the only events in which Kosovo’s athletes are regularly invited to participate outside their own province.

For people who love sport as passionately as most in Kosovo do, the long wait for political status is agonising and humiliating – as is the toll taken on the many aspiring competitors in the province’s overwhelmingly youthful population.

"If you become the champion of a sport in Kosovo, you stop there, because there’s nowhere to go. There’s a lack of motivation," says Dr Islami.

In Does Anyone Have a Plan?, a new documentary film on the Kosovo crisis released by the Balkan Investigative Reporting Network, Luljeta Shala, a 29-year-old competitor in kata, the martial art, asks: "Do you have any idea how it feels to train so hard, but to have to watch all the international competitions on television because Kosovo isn’t a state, and I can’t participate?"

Ms Shala’s only alternative at present, should she wish to compete, would be to seek a second citizenship – following the course of Luan Krasniqi, a local hero and Olympic champion from Kosovo who won bronze for Germany as a heavyweight boxer in 1996.

Competitors unwilling or unable to choose such drastic measures must settle for restrictions that are uncomfortably reminiscent of life during Slobodan Milosevic’s authoritarian Yugoslav rule – though not nearly as severe.

Under Mr Milosevic, who stripped Kosovo of its autonomous status and sought forcibly to impose Belgrade’s authority in the province, even private sporting activity was prohibited if players refused to operate under the aegis of Yugoslav sporting federations as part of Serbia.

"I remember being at a football match, with some 2,000 people watching, when a Serb policeman walked out into the middle of the pitch and stopped the game, two minutes before the end," says Dr Islami. Police often took a similarly merciless line on children’s sport.

Popular outrage at such arbitrary restrictions fuelled Kosovo’s secessionist movement through the 1990s. Failure by the international community fully to reopen the field of play continues to fuel it today.

Capital of potholes and restaurants

By Neil MacDonald and Eric Jansson
Published by the Financial Times, 30 May 2006

Opposition newspapers slam him for the “Izmet Beqiri holes” that pock the downtown road surfaces of Kosovo’s capital city, Pristina. Mr Beqiri, mayor for the past three years, retorts that he is too strapped for cash to take care of basic maintenance, let alone pave the other 80 per cent of the municipality’s roads. “Simply fixing the streetlights, which were all smashed up before, has been an achievement,” he says.

His annual budget for capital investment is only €9m. The municipality of Tirana, capital of neighbouring Albania, reportedly raises nearly four times that amount each year between fund transfers and tax revenues, although the population there is less than double Pristina’s.

Tirana’s reforming mayor, flamboyant artist and ex-culture minister Edi Rama, has won international acclaim for brightening up drab ex-communist urban facades. Mr Beqiri says he admires those achievements and longs for the same freedom to address similar social and environmental problems.

But here, the municipal organs are intertwined, financially and administratively, with the United Nations Mission in Kosovo (UNMIK), the executive arm of the UN protectorate in the mainly ethnic-Albanian province that broke away from Serbian control seven years ago.

Powerful financing options increasingly used by other south-east European cities, such as municipal bonds, are unavailable as long as Kosovo lacks the permanent, predictable status of a sovereign country.

Additionally, the unassuming Mr Beqiri – a loyalist of the ruling Democratic League of Kosovo (LDK) who formerly managed public swimming pools – shows some reluctance to tamper with his home city, where he has lived for 40 of his 41 years. “Pristina is beautifulin its own way,” he says.

His top priority as mayor, he says, is to impose some order on haphazard growth. The municipal authorities recently adopted a General Urban Plan, the first of its kind in Pristina, outlining a comprehensive vision for the next 16 years, including three concentric ring roads to ease traffic flow around seven main districts.

In the past, only a few upscale pockets showed evidence of planning. One of these is Pejton City, the central commercial and diplomatic quarter named for the racy 1960s hit US television series “Peyton Place”.

Josip Broz Tito, second world war partisan leader and Yugoslavia’s president for life, had a flair for the theatrical, but he also understood how to balance conflicting interests. Residents still sometimes cite street names from the Tito period – a mix of Serb, Albanian and communist war heroes and literary figures – in place of the recently posted names from Kosovo’s ethnic Albanian liberation struggle. Serb-nationalist signage put up under Slobodan Milosevic, Serbia’s ruler in the 1990s, never took hold, whereas two of the latest street names – Mother Teresa Street and Bill Clinton Boulevard – are accepted.

Just as Constantinople became “Stamboul” and hence Istanbul, some locals say that Kosovo’s capital started out as Prima Justiniana, an episcopal centre founded by Byzantine emperor Justinian I in the sixth century. But nothing comes easy for Pristina: neighbouring Macedonia’s capital, Skopje, and a nearby southern Serbian city, Leskovac, both lay claim to the same origin.

Later Byzantine documents refer to Pristina only as a “village.” Aside from Roman artefacts in the museum and some prehistoric house foundations uncovered on the outskirts, the city’s heritage is most evident in the two Ottoman mosques dating to the 1400s in the “old town,” which otherwise contains late nineteenth and early twentieth century landmarks.

Nearer the city centre, the buildings tell of Kosovo’s more recent history. Next to the university library stands a large, unfinished Orthodox church, an attempt by Serbs under Mr Milosevic’s leadership to assert their dominance.

Although most of the Serbs fled in 1999, Kosovo must now prove its readiness for independence as a tolerant, multi-ethnic society, say United Nations mediators in the ongoing status negotiations with Serbia. Patches of fresh white paint on the church’s otherwise unpainted dome show where the authorities covered anti-Serb slogans.

While the independence war made the local society ethnically uniform, ethnic Albanian refugees from around the war-torn province packed into the capital, whose population swelled from around 250,000 to nearly 500,000, according to Mr Beqiri. At the same time, the internationals – aid workers, consultants and UN administrators – brought a new, multicultural element that the mayor says has become one of Pristina’s greatest assets.

The striking youthfulness of the locals – around 70 per cent are under 30 years of age – could one day be a demographic time bomb, but for now it livens up the streets and provides strong human resources.

English is almost universally spoken in the servicessector, and expatriate westerners express surprise at the range of good restaurants around town. “It’s not so bad, although there’s no classical music,” says a western European banker who flies home to his family about every three weeks. Another expatriate, a hard-bitten UN administrator, grudgingly calls Pristina “better than Sierra Leone”.

On the downside for the mayor, the high-spending international presence is a magnet for continued rural-urban migration, even though “Pristina is not exempt from any of Kosovo’s problems, including high unemployment”.

As with any centre of post-conflict reconstruction, economists worry about what will happen to Pristina’s flourishing small and medium-sized enterprises when the internationals eventually leave. Officials at the International Monetary Fund, however, say a local middle class has started to blossom, making much of the local services sector self-sustaining.

Travel Journal: Belgrade to Berwick

By Eric Jansson
Published by the Financial Times, 20 May 2006

Straight as an arrow and smoothly paved, there is nothing outwardly menacing about the Road of Brotherhood and Unity. But like no other motorway I know, the Bratsvo i Jedinstvo motorway across Serbia and Croatia suffers from a bad mood. I feel mildly ashamed to confess such irrationality but I cannot help suspecting that it is haunted.

Set off from Belgrade on a crystal-clear day and one frequently encounters the most improbable pea-soup fog, downpours or blizzard conditions within the hour. The regularity with which my trips to Zagreb have been spoilt in this way is a strange fact, cast in an even stranger light by an apparent miracle my family once experienced on the road.

The Fiat containing the three of us suddenly spun wildly out of control on black ice in a snow squall. With a concrete wall on one side and a deep ditch on the other, catastrophe seemed almost certain. Then, in a way wholly unrelated to my frantic tugging at the wheel, unseen forces brought us out of our tailspin and guided us to a halt, with our back bumper gently kissing the centre reservation. We were facing backwards against traffic, but safe and intact.

Yet hauntings and miracles were far from the mind as we prepared to leave Belgrade one last time, bound for Northumberland at the end of a four-year Balkan sojourn. An emerald-blue sky and glorious sunshine presented themselves as antidotes to morbid superstition. With the great task of packing and loading completed, we belted ourselves into place. The domestic disorder invited by departure had been brought heroically to heel. We filled the moment of transition that precedes every long road trip - when one turns from the frenzy of preparation to the journey itself - with a brief prayer: Lord, have mercy.

He always does, of course. Nevertheless, within the hour our long-suffering Fiat was creeping at a snail's pace through a blizzard that had rushed up to meet us, burying the Brotherhood and Unity in white.

This time we did not join the jack-knifed trailers and cars stalled on the hard shoulder. After an exhausting 10 hours we passed through the storm. The feeling of relief was powerful, because we were so keen to leave.

Few citizens of the world are familiar with the Balkan stomach ache. It is a chronic, contagious condition, whose primary symptoms are intense self-pity, guilty despair and political vertigo. These symptoms are, of course, the predictable and direct consequences of war. But stay in the region long enough and one becomes convinced that the disease, which afflicts whole nations, infects the air itself.

So when we reached tranquil Bled, Slovenia, with the Balkans firmly behind us, stepping out and filling our lungs with crisp Alpine air, it was as if yet another miracle had happened: we had only to enter the spotless foyer of that vast and impressive spa called the European Union to start feeling cured.

If Bled, with its oxygen, Jungendstil guest houses and fairytale scenery - a sparkling mountain lake with a frosty island in the middle - initiated the treatment, then it was reinforced by other pleasures along the way. Everywhere the mundane leapt out at us as if it were exceptional, for there is nothing like the profound joy of diving back into a place that "clicks" after living in a place that does not.

Constantly through the Alps there was the admirable state of the roads, so immaculately kept. No sooner had fresh snow fallen in the Tyrolean Alps than legions of ploughs arrived to take it away. The contrast to our experience in Serbia and Croatia, where snow had made driving almost impossible, was extreme. People who expect proper ploughing, perhaps the Austrians above all, take it for granted; but one must remember that in most of the snow-prone world, well-maintained modern machines remain scarce. Ploughing remains the exception and paralysis the rule. Being accustomed to paralysis, we were positively amazed.

In such a spirit of wonderment my wife and I ogled the rich shops and sampled the fine bakeries in the Austrian town of Bischofshofen as if they were entirely novel to us - though in fact they were not. Down the road I was charmed by the genteel manners of an OMV petrol station attendant and by his colleague, a similarly refined lady, sitting behind the till, where she had the station's sound system piping soothing baroque choral music directly into customers' souls.

By nightfall, having rolled between the jagged peaks crammed around the Deutsche Alpenstrasse, we reached the Bavarian village of Aschau im Chiemgau, familiar to us from our honeymoon. As if offering final confirmation of the health and wealth of the west, Aschau's humble streets were aglow in the evening with log fires, free mulled wine and the music of a local brass ensemble.

But the next stop, the Rhein valley, offered first reminders that the west, in all its wealth and glory, also suffers from imbalances.

We passed through Bingen - home of Hildegard, mystic songstress of the 12th century - and stopped in Bacharach, namesake of our own age's pop maestro, Burt. The maze of tiny lanes and tilting timber-frame houses that comprise Bacharach's town centre is a medieval marvel, situated in the shadows of a ruined shrine and surrounded by the eye-catching asymmetries of preserved town walls and the vertical vineyards that in past centuries were the burghers' chief source of wealth. But where were the burghers?

Bacharach, it seems, has almost no need of itself during the winter. Summer tourism is the big business. Walking through empty streets, searching almost entirely in vain for a working guest house - a working anything - I felt I was lost on a film set.

With local industry comprehensively outstripped by national and multinational industry, the town as a thriving organism had perished. Pretty little Bacharach stood as a monument to herself, her beauty now like that of an ornamented mummy - a relic of sumptuous but extinguished splendour.

We slept in the only available pension. The proprietress, a kindly Filipina, gave the vaguest explanation for her residence there: "Well, it's so beautiful, isn't it?"

A fast drive through grey rains brought us to Ijmuiden on the Netherlands' North Sea coast, and a ferry through the black night carried us to Newcastle.

Our wonderment was revived as, driving up the Northumbrian coast, we beheld riches ancient and modern and relished the familiar green countryside, so utterly peaceful and so utterly oblivious to peace's rarity.

Before us lay Berwick-upon-Tweed, England's northernmost city, and nearby the hamlet where our farm cottage awaited us.

Berwick, an attractive, stone-built settlement, where the Tweed river meets the sea, offered yet another inspiring vision of western wealth, with its arched bridges, graceful towers and busy high street. We stood in awe of it, relishing the sight. Berwick, unlike Bacharach, lives and works all through the year.

But we forgot at first - until neighbours reminded us - the party line. This, after all, is the hard-bitten north. Berwick: a place of chill winds, toil and sacrifice. This must be remembered, even while one shops for fun in the handsome city centre. One detects a trace of something oddly familiar in the air. Is it really? Could it be . . . self-pity?

Dividing loyalties

By Eric Jansson
Published by the Financial Times Magazine, 20 May 2006

It was a crystal clear day last summer in Montenegro when the Church of the Holy Trinity descended from on high. It appeared first as a dark speck in a blue sky. Then, as it turned and caught the sun, there was a blinding white light. The silvery church rocked gently, its three bells chiming at random, sending strange music to onlookers below. Ropes dangled, and a dozen men scrambled to grab them. Straining, they pulled the church toward the earth and secured it to the mountaintop.

To many Serbian Orthodox believers, the Church of the Holy Trinity’s spectacular arrival on the peak of Mount Rumija was nothing short of a miracle. Never mind the mechanics of its journey: the lightweight tin structure topped by a Slavonic cross was welded together on a football pitch in the seaside town of Bar, then airlifted by a noisy Soviet-built Mi-8 helicopter, part of the Serbian army’s rickety fleet. The real miracle, as religious Serbs see it, is the fulfilment of a mythic "promise" chronicled by Serafim of Prizren, a 19th-Century monk, that God would help rebuild the holy shrine on Rumija’s summit that was razed by Turks in 1571.

But, as ever in the Balkans, there is another side to the story. Indeed there was once a Christian shrine on Rumija, which was destroyed by invaders. Yet for longer than a millennium, Mount Rumija has been known primarily as a place of peace. Following a tradition that predates the cataclysmic Great Schism of 1054 - when Christendom divided into the Catholic west and the Orthodox east - local people have climbed together to the barren summit on the feast day of the Holy Trinity, carrying a cross. Neither the schism, nor Islamic conversions under Ottoman rule, nor communist atheism in the 20th Century, nor Yugoslavia’s wars of secession deterred the faithful Serbs and Montenegrins who made this annual trek - among them Orthodox Christians, Catholics and Muslims.

The flimsy metal sanctuary has shattered this happy ecumenical tradition. By laying claim to the mountaintop, the Serbian Orthodox Church and its partner in national yearning, the army, have chased away Montenegrins of other faiths who regard Rumija as a holy site, provoking a political uproar. Montenegro’s prime minister Milo Djukanovic flirted with the idea of knocking down the church, which many see as a Trojan horse. He backed off only after Patriarch Pavle, Serbia’s leading bishop, published an exquisitely dainty open letter that placed God on his side. "I hope that no one will dare to burden his own conscience by such a crime and by such sacrilege," he wrote. So the church continues to stand, an emblem of the mounting tensions as the 650,000 citizens of Montenegro prepare to vote tomorrow (May 21) on whether to break away from Serbia, its partner republic, and seek recognition as a sovereign state.

The "Union of Serbia and Montenegro" was founded upon the final dissolution of Yugoslavia in 2003, the unwanted orphans of a splintering Balkan family. On the night of its founding, women working in parliament offices in Belgrade hung their heads and wept. When that evening I met Zoran Djindjic, the Serbian prime minister (who was assassinated soon thereafter), I offered my congratulations. "For what?" he snapped. "Who wants this?" To be divested of federal powers and yoked, as an equal partner, to a tiny country producing just 5 per cent of the new union’s GDP was for Serbia a scarcely bearable humiliation. But that doesn’t mean that Serbia’s current prime minister Vojislav Kostunica is eager to sever the tie. To do so would strip Serbia of its last vestige of regional supremacy, its access to the sea and its say in Montenegro’s military affairs. As the vote nears, he has noted scornfully that Montenegro is "too small to be independent, smaller even than Belgrade".

In truth, tiny Montenegro has a lot going for it. By breaking with former Yugoslav president Slobodan Milosevic strategically and morally in 1997 and casting their lot with the US and the European Union, Montenegro’s political leaders succeeded in keeping war off their home turf - a feat not even serene, bucolic Slovenia managed when breaking away from Serbia’s stifling embrace. Montenegro now uses the euro as its official currency - again something not even Slovenia, now an EU member, can claim. It holds democratic elections, generally treats its ethnic minorities well and is rapidly privatising its heavy industry, scrapping a rotten socialist legacy.

Topping it all, Montenegro has been named the world’s "fastest-growing travel and tourism economy" three years running by the London-based World Travel and Tourism Council. It is not hard to see why. "At the birth of our planet, the most beautiful encounter between the land and the sea must have happened at the coast of Montenegro," Lord Byron wrote after a visit there in the 19th Century. Along the Adriatic shore, dotted with lovely towns and intimate coves, turquoise waters lap upon white beaches beneath towering black mountains. Magnolia trees and wild orchids blossom through long summers. Venetian-built villages of white stone glimmer in the sun. A short drive takes vacationers from the seaside to the Dinaric Alps, a haven for skiers and river-runners, who go shooting on wooden rafts down the Tara valley, one of the world’s deepest canyons. So far, all of this is unspoiled by mass tourism - and yet it is closer to London by air than southern Italy. This is why a vanguard of European bargain hunters, led by the British and the Irish, have been buying up property in idyllic towns such as Kotor, Perast and Sveti Stefan, causing seaside real estate prices to leap 50 per cent in 12 months.

Enter the dead hand of politics and diplomacy. In February, Javier Solana, the European Union’s foreign policy chief, declared that, to earn European recognition, the independence measure must gain 55 per cent of the vote with at least 50 per cent turnout. This is a higher threshold than is normally imposed on EU members - and one, some point out, that closely matches the opinion poll predictions. It was Solana who first proposed the union of Serbia and Montenegro, nicknamed "Solania" by cynical citizens of both republics. When asked to defend the high referendum bar, Solana’s office said: "This is not a referendum on whether people can smoke in a pub. Independence is a question you ask only once. You have to ensure that the outcome is solid enough to guarantee stability."

Now that the US has taken a back seat in the Balkans, European fears and uncertainty once again steer international diplomacy in the region. Europe recognises - and is afraid of - those men who turned out on Mount Rumija, in camouflage and in track suits, to anchor the church, and of the larger crowd of Serb nationalists who trekked to the mountaintop one month later to celebrate its consecration. Slobodan Milosevic died in March, but the disastrous "greater Serbia" project he teased into a frenzy during the 1990s still claims hardline adherents such as these, who see Montenegro as the next battleground in a holy crusade against western influences. Srdja Trifkovic, a prolific Serb-nationalist pundit based in the US who attended the consecration on Mount Rumija, noted in an internet posting after the event: "A thousand of us up there on that mountain can deal with a million Oprah-watching Big Mac eaters any time."

Djukanovic therefore has a fight on his hands to try to persuade leaders in Europe that his country’s independence will help bring the stability the EU wants in the former Yugoslavia. This is his case: "Greater Serbian nationalism is still alive and it is influential in Serbia," he told me. "The fact that they still have Montenegro within the Union - under control as they see it - fuels their hope. Today Montenegro, tomorrow Republika Srpska [in Bosnia], Kosovo and then maybe the Krajina [the former Serb enclave in Croatia]. There is only one way to put an end to it. That is through Serbian independence." And in his view the only way to achieve Serbian independence today, since Serbia will not seek it on its own, is by letting Montenegro break away.

As hard-headed a politician as any in the Balkans, Djukanovic hardly fits the mould favoured in western capitals. Once a dazzling star of Yugoslavia’s communist youth organisations, he has transformed himself into a market-loving democrat, but is dogged to this day by rumours of corruption during the Milosevic era. He likes to talk straight and act boldly. Serbia harbours "hegemonic aspirations", he charges. EU policy in the Balkans remains "superficial" and "defective". For security, Djukanovic turns to Nato, not the EU. He has declared that he will seek Nato membership for Montenegro "immediately" upon independence, and to Serbia’s horror he is prepared to offer Adriatic ports in exchange.

The wild card in the referendum is those ethnic Serbs who constitute a majority in parts of Montenegro’s northern mountains, near the border. If the referendum succeeds, the hardliners among them may simply refuse to accept statehood, and that could tear apart Europe’s newest sovereign nation. Yet the northern hardliners may find themselves outflanked, despite all the tough talk on Mount Rumija. Deep in the Dinaric Alps, there is evidence of a new hybrid politics reconciling Serbian nationalism with Montenegrin independence. Its unlikely proponent is a cousin and bosom buddy of a Serb nationalist hero, Veselin Sljivancanin, a former Yugoslav Army major now facing trial in The Hague for allegedly ordering a mass killing in Croatia in 1991 as one of the "Vukovar Three".

When I sat down with Isailo Sljivancanin in a bleak, smoky hotel bar in Zabljak, the Montenegrin ski-town where he is mayor, he tossed back a slug of Turkish coffee and made a simple, straightforward declaration. "I’m against quarrelling with Serbia. I’m for a democratic split." And with a wave of his leathery hand, the rosy-cheeked Sljivancanin heaped scornful pity on those whose terminal allegiance to the disastrous Greater Serbia project blinds them to the humbler promise of this heavenly little land. "Some people, when they are in hell, don’t know what they are doing."