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Tuesday, May 4, 1999 Published at 09:59 GMT 10:59 UK

Analysis: Who will rebuild the Balkans?

Inspecting the damage in Novi Sad, northern Serbia

By Jonathan Eyal

Kosovo: Special Report
The war in Kosovo shows no signs of ending. Almost regardless of the strategy which Nato adopts, the confrontation is guaranteed to last for many more months.

Yet, as the generals continue their campaign with their traditional claims of daily "victories", diplomats in all European and North American capitals have been working behind the scenes on a set of proposals intended to bring stability to the Balkans once the war is over.

[ image:  ]
An emergency summit of EU heads of government has discussed a plan put forward by the German presidency for a "stability pact" in the area.

The Nato summit in Washington focused heavily on the possible shape of a post-war settlement.

Businessman Paul Beza assesses the economic impact on the region
The air in Europe has been filled not only with bombs, but with various reconstruction schemes as well.

Unfortunately, the Balkans are the graveyard of many previous plans, announced with great flourish and good intentions, and then abandoned at leisure.

Looking for a better future

Discussing the reconstruction of the Balkans at this stage makes perfect sense. Kosovo will require military protection and economic support for decades.

[ image:  ]
Meanwhile, the people of Yugoslavia must be persuaded that, if they are finally rid of their despicable leader, they may look forward to a better future.

The other neighbouring countries which have kept out of the war and have behaved responsibly also need reassurance.

And it is better to discuss such arrangements now in order to avoid the unsightly rows over burden-sharing between the EU and the US which accompanied the imposition of peace in Bosnia earlier this decade.

Like it or not, both the EU and Nato are already pledged to the Balkans. Greece is a member of both organisations, Nato has its biggest military commitment there and Slovenia is about to open its membership negotiations with the EU in the coming months.

[ image: A man sits in the rubble of his house inside Kosovo]
A man sits in the rubble of his house inside Kosovo
If a bigger involvement is inevitable - and it is - better to sort out priorities now, rather than create policy on the hoof. The credentials of the current reconstruction policies are, therefore, impeccable.

However, both the EU and Nato are likely to encounter huge problems, both at the conceptual and the practical stages.

What is required is not only a change of minds in the Balkans, but also a change of psychology in the West. In short, both sides of the old ideological divide in Europe will need to be transformed if the current proposals are to work.

'Second Marshal Plan'

EU leaders are now fond of talking about a "second Marshal Plan" for the Balkans, copying the massive reconstruction effort at the end of the Second World War.

Such talk produces good headlines in the media, but is misconceived.

[ image: Even before the conflict, Albania was poor]
Even before the conflict, Albania was poor
The Marshal Plan came after the aims of the war were accomplished. In the current crisis, however, there is no agreement what the war aims should be.

The war started in order to avert ethnic cleansing in Kosovo. It then shifted to reversing the result of the ethnic cleansing which Nato failed to avert.

When Nato's air campaign started, the aim of the operation was to force Slobodan Milosevic to sign a peace deal. A few weeks later, President Clinton claimed that Milosevic's removal from office was the ultimate goal.

[ image:  ]
And nobody knows what the fate of Kosovo will be. The current reconstruction plans are therefore discussed in a strategic void.

Instead of seeking to consolidate the eventual end of a Balkans war, they are offered as a substitute for the absence of war aims. It is difficult to decide what to reconstruct until one is clear what needs to be destroyed.

The answer in the Europe of 1945 was clear; the reply in the Balkans at the end of this century remains as elusive as ever.

Furthermore, the original Marshal Plan was intended to support vulnerable democracies, who had their own relatively efficient administrations.

Waste and corruption

In the case of the former Yugoslav republics, however, offering cash is often part of the problem, rather than a solution:

  • Bosnia: Billions of euros were poured into Bosnia since 1995 to no great effect; the country remains divided, and the black marketeers are the main net beneficiaries.

  • Montenegro: A component part of Yugoslavia, Montenegro is now ruled by a pro-Western politician, but also a man who played a leading role in the war against the Bosnian Muslims and ran many of the Yugoslav sanction-busting smuggling activities.

  • Croatia :Franjo Tudjman, the Croat leader and another Western darling, presides over a mixture of nepotism, fear and corruption.

    In Bulgaria and Romania, where democratically elected administrations are in the hands of well-meaning politicians, there is a huge lack of expertise.

    Even if one ignores the faintly ridiculous sight of the European Commission proposing to train Balkan administrations in how to eliminate waste and corruption, one conclusion is inescapable: the effort will take years and will have to be undertaken often against the wishes of the local leaders.

    Who will pay?

    Finally, there is the question of the resources available.

    The original Marshal Plan was launched at a time of an ideological confrontation with the Soviet Union. Discussions about sharing the burden for this effort with Europe were meaningless; the US effectively pledged to spend whatever it took in order to make sure that communism did not spread further West.

    [ image: Serbia's Zastava car plant has been hit]
    Serbia's Zastava car plant has been hit
    This ideological fervour clearly does not apply to the Balkans. Indeed, Congressmen in Washington have served notice on the Europeans that they do not propose to authorise reconstruction funds after the Kosovo war is over.

    Europe is wealthy enough to sustain this effort; the question is whether it has the political courage to persuade public opinion that grants to, say, Andalucia in Spain, should be diverted to Arad in Romania.

    Regional suspicions

    Both the EU and Nato are suggesting that, while plans are put together for the area, the Balkan states should be encouraged to co-operate with each other.

    [ image: Most would prefer integration with the EU to closer regional ties]
    Most would prefer integration with the EU to closer regional ties

    Such co-operation is logical, and should not come at the expense of a wider European integration. Correct, but only up to a point.

    A great deal is already being done, and many of these activities do not require government co-ordination. Greek investors dominate markets in Serbia and Macedonia, and the remittances of Albanian workers in Greece are just about the only source of foreign revenue in Albania itself.

    Turkish construction and transport firms, as well as Turkish bakeries, predominate in Romania. More attuned to local markets and willing to take greater risks, such investors will clearly remain in a better position to exploit regional opportunities.

    [ image:  ]
    But there are also great limitations on how far this process can go. All the region's states suffer from similar problems: relatively large agricultural sectors, redundant industrial capacity, a surplus of labour and a decaying infrastructure.

    Not only do they have little to offer each other, but they actually compete with each other for the same Western capital resources.

    Secondly, Greece will always be in a different position from the rest of the region: as a EU member, it is bound by certain tariff restrictions and trade practices which do not apply to others.

    Furthermore, if the West as a whole proved unable to solve the Greek-Turkish dispute, the Balkan states cannot be expected to do better.

    Very often, their solution is to carefully skirt around the dispute altogether, in the hope of avoiding any new tensions.

    And, ultimately, the obstacle to regional co-operation is psychological: although everyone assures the Balkan states that they have nothing to fear, the area's leaders instinctively regard regional co-operation as inferior to European integration and suspect that, the more they succeed in co-operating regionally, the less they will be considered as serious candidates in either the EU or Nato.

    'War of European integration'

    And this is where a transformation needs to take place in Western thinking.

    For over a century the Balkans were considered partly a geographic area, and partly a disease which needs to be quarantined.

    [ image:  ]
    Romania fought hard to be admitted as a Nato member, but its application was ultimately turned down, in favour of Central European countries which were less in need of this security reassurance.

    The EU is expanding but, yet again, not to the Balkans. Unless there is a realisation that Europe will not be peaceful without fully integrating the Balkans into its institutions most of the regional reconstruction projects will fail.

    The real Marshal Plan, therefore, has to be for Western Europe's minds and hearts.

    If this is successful, the Kosovo disaster will go down in history as the last war of European integration. And that, surely, is an aim worth both fighting and paying for.

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

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