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Thursday, 23 November, 2000, 19:36 GMT
Analysis: Stability in the Balkans?
Vojislav Kostunica
Vojislav Kostunica has restored relations with the West
By Jonathan Eyal

When Yugoslav President Vojislav Kostunica takes his seat at a regional summit on Friday, the Balkans will mark another milestone.

Mr Kostunica is joining the heads of European Union member states, as well as the leaders of Albania, Bosnia, Croatia and Macedonia, for a summit in Zagreb, Croatia.

The real questions about Balkan stability are only beginning

For the first time since the end of communism more than a decade ago, the entire Balkan region is free from dictatorship.

Having served as the source of wars and privations, Yugoslavia can now play its rightful role as a regional anchor of stability. And both the EU and the Balkan states are expecting much from the summit.

No doubt the outcome of the gathering will be beneficial: the EU will take the lead in regional integration, and Zagreb will also be the venue for the launch of deeper Balkan co-operation efforts.

Nevertheless, the tasks facing President Vojislav Kostunica and his other Balkan partners remain awesome.

Poor economy

For President Kostunica, there are two key priorities - the elimination of his country's international isolation and the reform of Yugoslavia's internal economy.

Policeman outside Zagreb hotel where the summit is being held
Security is tight as old enemies come together
The omens are good: Mr Kostunica has moved fast to re-establish the links with key Western countries that were broken off during the Kosovo war last year, and he is committed to the creation of a market economy.

The EU has reciprocated by lifting most of the sanctions on Yugoslavia, and offering financial help.

But the real questions about Balkan stability are only beginning. Yugoslavia suffers from the least reformed communist economy in Europe, and from the ravages of Nato's air strikes. It will take years before the Yugoslav people start enjoying the benefits of prosperity.

EU priorities

More importantly, there are huge questions about the EU's economic and foreign policy priorities in the region.

Much of the economic assistance pledged to the Balkans was made on the assumption that Yugoslavia would remain beyond reach for many years to come - the transport infrastructure which the EU funded in the Balkans explicitly by-passes Serbia.

Most of the cash pledged for the region's states is already committed. But, if Yugoslavia is now to be supported, money will either have to be diverted from existing projects or the aid budget will have to be substantially increased.

Each Balkan country has a different status with the EU

Ever since the collapse of the Slobodan Milosevic dictatorship, the EU has given contradictory signals on both counts. But its immediate economic dilemma is partially alleviated by the anticipated growth in Balkan co-operation.

The Danube River, blocked since the Kosovo war last year, is being cleared for navigation, thereby allowing Romania and Bulgaria access to central European markets at cheaper transport costs. Trade will flourish between Balkan countries, and this time without the black market that was so much a by-product of the sanctions against Yugoslavia during the last decade.

Greek companies involved in infrastructure development, such as cement producers, but also telecommunications, are well-positioned to benefit from regional aid projects. And the movement of people in the region, hitherto subjected to impossible bureaucratic hurdles and corrupt officialdom, is already improving.

But even here, the gains, although real, will not be sufficient.

Competing nations

All the Balkan countries suffer from similar problems. They all compete for scarce Western investment, they all have a decrepit industrial base which needs to be dismantled, and a large but poor agricultural sector starved of financial credits.

He is still expected to compete with his neighbours from a position of inferiority

And they all seek to join the same European institutions.

Most of the products which the Balkan countries export compete with those of their immediate neighbours. So economies of scale are not an option, even if the political climate allows for regional co-operation.

Furthermore, each Balkan country has a different status with the EU. Bulgaria, Romania and Slovenia are candidates for fully-fledged membership in the EU, even though the time-span required for their full integration differs widely.

The other former republics of Yugoslavia, and Albania, enjoy no such advantages.

This division presents the EU with a further inherently insoluble dilemma. If it extends the status of candidate membership to all the region's states it will be accused of diluting the whole concept of Union enlargement, since it is hardly likely that all of them can be accommodated, even in the next 15 years.

But if Brussels maintains the distinction between those who are fully-fledged membership candidates and those who are not, it would condemn the poorer Balkan states to semi-permanent neglect.

Poor relation

President Kostunica of Yugoslavia is already discovering that, although he has been welcomed as a regional partner, he is still expected to compete with his neighbours from a position of inferiority.

None of these problems is an argument for postponing the political changes which the Balkans so badly need. But they should serve as a warning that the task of pacifying the region will require years of hard work and large amounts of EU cash.

In short, they will require constant engagement at all levels - precisely what Western governments have invariably failed to do in the Balkans for the last two centuries.

Jonathan Eyal is Director of Studies at the Royal United Services Institute in London

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16 Nov 00 | Europe
Belgrade restores ties with West
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