Tuesday, October 30, 2007

US Ponders Freezing Kosovo's Status until 2020

The US State Department is discussing a new approach to Kosovo that would leave its political status frozen, while pumping huge sums into its economy.

By Krenar Gashi and Berat Buzhala in Pristina

Billions of euros injected into Kosovo’s budget and a 12-year freeze on its political status, followed by a referendum, form the main planks of a potential settlement for Kosovo under discussion by US diplomats.

A senior source within the State Department has described for Balkan Insight and Kosovo’s Express daily, parts of a draft proposal for Kosovo that is currently in preparation.

“The US has two options: to recognise, together with a few other countries, Kosovo’s independence and to cause thereby many global and regional problems; or to drop formal independence for some years, relaxing tension in the region and boosting Kosovo’s economy”, the source said.

Balkan Insight has not been able to verify the contents of the proposal from other sources.

The new US initiative comes at a time when Kosovo’s complex status resolution process has reached an apparent deadlock, and there are no signs of a compromise around the corner.

Kosovo Albanians rely on the US to support their demand for independence, while Serbs depend on Russia to oppose it.

Facing this unenviable situation, State Department officials are considering a possible alternative option, the source said, without stating by whom, or at what level of seniority, the draft document has been commissioned.

“A freeze on Kosovo’s political status until 2020 means a period in which to boost Kosovo’s economy…as it is also foreseen that the EU and the US would inject up to €7 billion a year into Kosovo’s budget, as a pay-off during this period”, the source went on.

“No country would normally be interested in helping Kosovo to such a high level, however this is what we call a ‘white peace’…Nobody would win politically; not the Albanians, the Serbs, Russia or the West”, the source said.

Kosovo has been administered by the UN since 1999, when NATO’s campaign of air strikes forced the Serbian authorities to withdraw from the territory, although formally it remains part of Serbia.

The first phase of negotiations on Kosovo’s status between Pristina and Belgrade during 2006 failed to produce agreement. As a result, the UN tasked former Finnish President Martti Ahtisaari, who had been chairing the talks, to draft his own proposals.

Ahtisaari’s plan, which recommended internationally-supervised independence for Kosovo, did not receive the endorsement of the UN Security Council, due to objections from Russia. As a result, the international community initiated a new phase of an additional 120 days of negotiations, which are at present showing no signs of delivering a breakthrough.

Last week the “Troika” of mediators from the EU, Russia and the US, which has been overseeing the current phase of talks, presented the two sides with a list of 14 principles as a basis for resolving Kosovo’s status. Read the principles at: http://www.birn.eu.com/en/108/15/5350/

Wolfgang Ischinger, the EU representative on the Troika, said last week that both parties should give up their initial stances.

“The two sides have to realise they cannot get 100 per cent of their demands. They have to realise that if they settle for just 50 per cent, it is a much more desirable outcome for both than no agreement at all,” Ischinger was quoted in the British The Financial Times daily on Friday.

The State Department proposal currently being drafted does not oppose the Troika principles or Ischinger’s statements.

According to the source that revealed the draft document, Kosovo’s status over the next 12 years would be similar in some ways to that of Hong Kong which enjoys extensive self-government under Chinese sovereignty, though, unlike Kosovo, it is not under international administration.

The draft envisages the holding of a referendum to determine Kosovo’s long-term status on January 5, 2020.

The source also said that Kosovo would become a Free Trade Zone, offering a light taxation and custom regime that would attract foreign investment. In the meantime, Kosovo would be allowed to join the International Monetary Fund and other international financial institutions.

The source added that the initial idea behind this proposal had already been communicated to the Kosovo Albanians’ negotiating team.

However, Veton Surroi, a member of the Kosovo team, and leader of the ORA party, said that he was not aware of such a document.

“Based on the contacts that we have with American diplomacy, I can say that this proposal doesn’t, as such, exist”, Surroi said on his return from Vienna on Sunday.

Asked whether the Kosovo negotiating team would agree to a 12-year freeze, Surroi said only that “Kosovo’s assembly should set the independence date before Christmas”.

Meanwhile, many in Kosovo believe that the proposal currently being considered would multiply problems and cause confusion.

Lulzim Peci, head of the Kosovar Institute for Policy and Research Development, KIPRED, believes that “the public will be divided once this proposal is formally introduced”.

“Besides that, none of Kosovo’s politicians are mandated to choose between accepting such a proposal and declaring independence unilaterally”, said Peci, and added that “a decision of that kind should be made through a referendum”.

Shpend Ahmeti, an economist with Kosovo’s Group for Policy Analysis, GAP, said that the amount of money mentioned in the draft document seemed enormous.

“It is hard to believe that this plan can talk about this amount of money. In a planned donors’ conference for Kosovo, the total amount that we expected to be raised reached only €2 billion, and that was for a period of three years”, Ahmeti told Balkan Insight.

Peci believes that if funds on this scale were invested into Kosovo’s economy over the next 12 years, they would help Kosovo reach a level similar to that of the more developed EU countries in the region, such as Slovenia.

“Other countries would, by contrast, suffer from such a boost to Kosovo’s economy, considering that even countries, like Bulgaria and Romania, that recently joined the EU, are not receiving that much support from the [EU budget’s] cohesion funds”, he said.

Ahmeti is also worried. “We should bear in mind that Kosovo lacks a clear vision for pursuing a fast rate of economic development”, he says.

Yet the possible distortion that such a huge provision of funds may cause to the economy of Kosovo and the region is only one of the problems the draft proposal may encounter – if it ever becomes US policy. Of more immediate interest are the likely reactions of the opposing sides, especially the Kosovo Albanians who believe Washington has already promised them independence now, and not in 12 years’ time.

Krenar Gashi is BIRN Kosovo Editor. Berat Buzhala is editor-in-chief of the daily newspaper Express. Balkan Insight is BIRN’s online publication

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