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Balkans: Money Pledged Is Not Money Spent

  • Alexandra Poolos

International donors have ended their two-day Balkan Stability Pact fund-raising conference with what the meeting's organizers describe as a surprising success. Some analysts question that boast. RFE/RL correspondent Alexandra Poolos spoke with both sides.

Prague, 31 March 2000 (RFE/RL) -- Organizers of a fund-raising conference for reconstruction in the Balkans say the meeting has brought an unexpectedly hefty sum of economic aid aimed at sowing the seeds of stability. Donors pledged some $2.3 billion in economic aid at the Brussels meeting that ended yesterday (Thursday), a sum the meeting's organizers say far exceeds earlier projections.

The projects approved for funding are largely quick-start schemes, designed to improve Balkan infrastructure rapidly and expedite democratic reforms. Conference organizers -- EU and World Bank officials -- say that some of the pledged money has already been put to use. Today (Friday), they say, work began on the pact's first project -- easing the traffic at the heavily congested Blace border crossing point between Macedonia and Kosovo.

The donors conference was held nine months after the pact was adopted as a European Union-led program for repairing the damage from last year's Kosovo conflict. The pact has been strongly criticized in the Western for being slow in getting its aid engine started.

Some independent analysts do not believe the donor conference accomplished very much. One of them, James Lyon of the Brussels-based International Crisis Group, is quite skeptical about the results of the two-day meeting in the Belgian capital. Speaking to RFE/RL by telephone from his office in Sarajevo, Lyon said that in many ways, the Brussels meeting was simply a repeat of events at the founding meeting of the Balkan Stability Pact last year in Sarajevo:

"None of the money [pledged in Brussels] is new. This whole fund-raising conference was simply smoke and mirrors, because they're not donating a single new dollar or euro or deutschmark of funds for the Stability Pact. What they're doing is they're taking funds that have already been allocated and they're putting a new label on them."

Lyon says he also fears the money will not reach the Balkans quickly:

"The other thing is, none of this money is even going to hit the Balkans until 2001. So this is allegedly the quick-start program, but we have to ask ourselves is this really a quick start, because the original summit was [nine] months ago and we just don't see any money here on the ground. They haven't even paid the one-and-a-half million [German marks] they owe from the electricity and telephone [costs at] the summit."

Lyon believes that the Stability Pact is a good idea, with a program that seeks to solve Balkan problems in the only way possible -- regionally. But he says that he objects to how slowly the program is being implemented, and he worries that the money will be misused once it reaches the Balkans. Lyons cites Bosnia as an example of misused economic aid:

"A lot of the democratization and institution-building money that was spent here in Bosnia appears to have been spent in vain -- it's money down the toilet. To date, when you look at what effect the money that's been spent on democracy-building had in Bosnia-Herzegovina, the answer is literally none."

Organizers of the donor conference say that the money will be used over the next 12 months to develop infrastructure, promote private-sector development, support institutional reform and encourage democracy. Projects include a water project in Albania, a transport rehabilitation scheme in Montenegro, a power integration project in Bosnia and a campaign to raise awareness of the danger of landmines.

But even the conference's organizers worry whether the money will really be used as intended when it reaches the Balkans. Andrew Levi is the spokesman for Stability Pact coordinator Bodo Hombach. Levi says that the focus of international donors will now turn toward monitoring the use of funds allocated for the quick-start program:

"In the days and weeks following this conference, we're turning our attention as a priority to the question of implementation rather than finding new projects. And we will wait [to hold a] a new conference until we have seen that the projects decided on [at the conference] are really being implemented in the way we expect."

Analyst Lyon says that one positive outcome of this week's conference was a new agreement to liberalize trade regulations to make it easier for Balkan countries to export to the EU. Lyon believes that economic growth is the key to long-term stability in the Balkans. He says the only way that growth can occur is if Balkan countries have access to EU markets:

"That's needed because so much of the funding that goes on here [in the Balkans], so much of what goes on here in the future is going to be dependent on trade and economic growth. They can't have economic growth unless they have trade in Europe."

Four-fifths of the donor countries' money will be in the form of outright grants. For the time being, according to Stability Pact officials, it is not possible to break down precisely how the funds will be allocated.

Lyon says that donors must be more explicit about how the funds are going to be used. Otherwise, he believes, the pact runs the risk of remaining long on talk and short on action.

(Ahto Lobjakas in Brussels contributed to this report.)