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Last Updated: Thursday, 14 February 2008, 20:26 GMT
Is Kosovo a viable independent state?
Ethnic Albanians in southern Kosovo
Does Kosovo have a future as Europe's newest state?
With Serbia's small southern province of Kosovo expected to declare independence from Serbia on 17 February, our correspondent Nick Thorpe examines whether it has what it takes to survive as a state.

There are many households in Kosovo. But no-one knows quite how many.

So many people have gone - migrated in search of work, or fled to areas where their ethnic group is in the majority. So many have returned, or keep one foot in Kosovo, one in another country.

There is no reliable figure for the population. Most estimates swing between 1.7 and 2.4 million.

Gerald Knaus, head of the European Stability Initiative in Vienna, says that's a serious problem.

"If you don't know how many people there are, how can you make credible policy in fields like education, social policy, pension, if you have no idea about the basic demography of your population.

"It is a big governance failure."

Market economy

It is clear, though, that unemployment is high. It's estimated that more than 40% are jobless - and the figure is even higher in the countryside.

On the other hand, Paul Acda, head of the Reconstruction and Economy unit of the UN mission in Kosovo says serious progress has been achieved since the UN took over.

"In 1999, 850,000 people coming back displaced by Serbian action, hardly a house that had a roof on it, whole of infrastructure destroyed, and dead economic structure, firmly entrenched in Soviet concepts.

"We have created a market economy, benign fiscal arrangements, market regulators, and got people to think in terms of buying and running businesses as commercial enterprises.

map

"It's slow, and there's still work to do of course, and there's still minds to change in some areas."

One of the many ironies of the Balkans is that poor, overpopulated Kosovo is rich in minerals.

The late President Ibrahim Rugova used to present visitors with spectacular chunks of crystals from the mine at Trepca, in the north. Fifty million tonnes of lead and zinc remain unexploited, according to a recent survey.

But the equipment is old. Only 600 of the former workforce of 3,000 remain. And in winter, the management have to beg and borrow railway wagons from elsewhere in the Balkans.

Another mineral wealth is lignite, or brown coal. Kosovo has second largest lignite deposit in Europe, and could potentially earn money by exporting power to the region.

But in order to make the most of its mineral resources, Kosovo needs to find investors.

Insecurity

Paul Acda says: "The biggest indication of how some people see the future, in terms of inward investment, is a project to build new thermal generator - Kosovo C.

"That's to be done entirely by private investors. The cost of investment 3.5 billion euros ($5.11bn; 2.59bn). So there is major investment in industry here."

But investors demand security. And uncertainty over Kosovo's future status has meant that this has been in short supply in recent years.

It has been one of the strongest arguments for independence - with security guaranteed by the incoming EU mission in Kosovo.

But Gerald Knaus says the EU needs to focus on more than law and justice, the main part of its remit.

It should be offering pre-accession funding for agriculture, he says, and providing a clear list of tasks to fulfil, with the certainty of EU membership as the reward.

And instead of keeping the people of Kosovo trapped inside a "ghetto" the EU should give young people a chance to look for jobs in northern and western Europe, if they cannot find work at home, he argues.

Storm of disapproval

The viability of an independent Kosovo depends first and foremost on the circumstances of its birth, and the Serbian government has drawn up a list of punitive measures.

After the declaration of independence, and a degree of international recognition, a 120-day transition period is expected

Roy Reeve, head of planning for the EU mission, predicts Serbia will put pressure on Kosovo by enacting a series of measures related to supply, the provision of water for domestic and industrial use and various trade embargos.

International officials are confident that Kosovo can weather the storm of Serbian disapproval - from outside.

But some 120,000 Serbs inside Kosovo also bitterly oppose independence - 5% of the population.

There are two fears: of an exodus of Serbs from areas where they are in the minority, and of an attempt by the north, where they're in the majority, to declare independence from Kosovo - and attach themselves to Serbia.

After the declaration of independence, and a degree of international recognition, a 120-day transition period is expected - the slow birth of Europe's newest state.

Whether Kosovo will work or not depends on the degree of hostility it meets, and the quality of the help it receives.


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