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Balkan Report: May 4, 2001

4 May 2001, Volume 5, Number 33

The next issue of Balkan Report will appear on 11 May 2001.

MACEDONIA DIVIDED. The recent attack by the ethnic Albanian National Liberation Army (UCK) -- in which eight soldiers were killed and at least six wounded (see "RFE/RL Newsline," 30 April 2001) -- helped remind Macedonian politicians of all parties why they were trying to form a government based on a grand coalition.

The current government is made up of the conservative ethnic Macedonian Internal Macedonian Revolutionary Organization-Democratic Party for Macedonian National Unity (VMRO-DPMNE), the small Liberal Party (LP), and the Democratic Party of the Albanians (PDSH).

Shortly after the outbreak of violence in the border region with Kosova in March this year, which eventually led to the events of Tetovo, the main political actors in Macedonia promoted the idea of forming a "government of national unity" to overcome the most serious crisis facing the small Balkan state since its independence in 1991 (see also "RFE/RL Balkan Report," 6 April 2001).

While the two main ethnic Albanian parties -- the PDSH, and the opposition Party for Democratic Prosperity (PPD) -- seem to have reached some sort of agreement, the main Macedonian parties -- the VMRO-DPMNE of Prime Minister Ljubco Georgievski and the opposition Social Democratic Union of Macedonia (SDSM) -- are still struggling over the division of ministries in the planned grand coalition government.

This struggle between the VMRO-DPMNE and the SDSM came to focus more and more on the issue of early elections. Accusing the VMRO-DPMNE of fraud during the last local elections, the SDSM's main aim was to take over the Interior Ministry and the Ministry of Justice in order to control the planned parliamentary elections. While the VMRO-DPMNE was not willing to give in -- especially to the SDSM's demand for the Interior Ministry -- it became clear that Georgievski was ready to sacrifice some prominent members of his party, like Defense Minister Ljuben Paunovski.

The Paunovski case serves to illustrate that in addition to the ethnic divide, other serious problems, including corruption and nepotism, also hamper the democratization and transformation in Macedonia.

According to several media reports, Paunovski signed army supply contracts as defense minister with some companies owned by his brother-in-law or father-in-law. The value of these contracts is estimated at about $5 million.

Paunovski claims to be innocent but nevertheless used the accusations against him to strike back at his opponents within his own party (see also "RFE/RL Newsline," 24 April 2001). The Skopje daily "Vest" reported on 26 April that Paunovski told Georgievski at a party meeting: "First you tell the truth about the contract with [the Greek-owned oil refinery] OKTA, and then I will hand in my resignation in public!" Macedonian media also point to a possible connection between the uncovering of this scandal and Paunovski's accusation that Interior Minister Dosta Dimovska knew as early as August 2000 of an emerging armed Albanian threat.

In the meantime, more and more cases of party-based nepotism have come to the surface. If one regularly reads Macedonian newspapers, one can get the impression that the ruling political parties have divided the whole state among themselves. While Paunovski made contracts with his own family to the detriment of state interests, other cases show that this spoils system is based mainly on party affiliation.

The scheme seems to follow a pattern: a member of a particular party is appointed director of a state institution or state-owned enterprise. Then he fills positions within the organization or company with other party members until the whole thing "belongs" to the respective party. Then either the institution or company is used as a sinecure for deserving party members, or its resources are exploited on behalf of the party until the institution or company is bankrupt.

The Skopje airport may serve as an example of the first approach. The director of the "Makedonija" Public Enterprise for Airport Services is also a spokesman for the PDSH. The Skopje dailies "Vest" on 11 April and "Dnevnik" on 17 April reported that recent vacancies in this company have been filled solely by Albanians who happen to be members of the PDSH.

It is not so much the fact that the party appoints members for jobs in this enterprise that is criticized by the journalists; this is considered normal procedure. It is the way in which the jobs were filled that is of interest to the media. First of all, there was no public announcement of the vacancies. Then the vacancies were filled only by Albanians, whereas in former times jobs were divided between the ethnic groups on a proportional basis. Then, on top of all this, the posts were indeed filled, although the company had to cut jobs recently due to overstaffing.

A recent example of the second practice -- using up the resources of a state-owned enterprise -- is the Hotel Molika. According to the weekly magazine "Start" of 20 April, the mountain hotel today is close to bankruptcy. In 1999, Goran Nevenovski, a VMRO-DPMNE parliament deputy, became director of the hotel. Ever since then, the hotel has been treated by the VMRO-DPMNE as party property: deputies and ministers of this party, their families, and friends checked in, stayed for a couple of days, and then left without paying. Nevenovski has a new position by now (in the more lucrative customs office), but the hotel's employees have not been paid in months.

The magazine accuses the ruling party of theft: "It is not only his [Nevenovski's] fault. Most of all, it is the fault of the party leadership and its members' mentality ever since they came to power in 1998. [By this is meant the mentality] to take over all they can without ever paying for the services they use, [the mentality] to use things up and live at the people's expense."

Under these circumstances it is doubtful whether the Macedonian government will be able to cope with the current crisis. Any opportunities for a durable solution to Macedonia's real problems -- interethnic conflicts, dire social and economic conditions -- are likely to drown in a sea of mutual accusations and a struggle for ministries and directors' positions, and thus for a share of the tiny country's limited resources. If the violent clashes of Tetovo did not open politicians' eyes to a more realistic view of the country's situation, the latest ambush in Vejce is unlikely to do so, either. (Ulrich Buechsenschuetz,

BULGARIAN GOVERNMENT GETS U.S. BLESSING. At the end of his current term in office, Bulgaria's Prime Minister Ivan Kostov has received a clear acknowledgement of his pro-Western reformist policy from the White House. President George W. Bush, Vice President Richard Cheney, Secretary of State Colin Powell, and National Security Advisor Condoleezza Rice discussed the situation in Southeast Europe, further NATO enlargement, and the election campaign in Bulgaria with the Bulgarian delegation.

The White House's attention to Bulgaria stems from three major developments. The most important of them is the continuing unrest in the Balkans, especially the recent fighting in neighboring Macedonia. Secondly, Bulgaria has on several occasions opposed Russia's attempts to retain its influence in the region. Thirdly, Bulgaria has arguably remained the only comparatively stable and predictable democracy in Southeast Europe and has also proven to be a loyal NATO ally.

During his visit to Washington, Kostov stressed the important role Bulgaria played during the 1999 bombing of Serbia in preventing Russian troops from preemptively deploying to Kosova. He also emphasized Bulgaria's dedication to fostering security and stability in the region by cooperating with NATO. At the onset of the Macedonian crisis in March of this year, Sofia signed an agreement with NATO to allow the Allies to transit and deploy forces in the country. Bulgaria became the first non-NATO country to sign such an agreement and hopes to be invited at next year's summit in Prague to join the Atlantic alliance.

During his meeting with the Bulgarian delegation, Cheney said that the Balkans must be free from external political influence. He also pointed out that the activities of foreign secret services, mafia groups, and organized crime should not be allowed to further destabilize the region and create problems for European security. Powell spoke with Kostov on another important issue: two important deals involving U.S. investments in Bulgaria's energy sector that are still awaiting the final decision of the Bulgarian government. The Bulgarian press has suggested that the Russian lobby in the energy sector is preventing these deals from going through.

During the past decade, Russian interest groups have penetrated Bulgaria through corporate and often mafia-style organizations using techniques including bribery and energy blackmail. Last year, the Bulgarian authorities expelled five Russian businessmen, some of them former Soviet intelligence officers, for money laundering and other illegal activities. In March, the Bulgarian authorities went further in their effort to reduce the activities of Russia's intelligence service by expelling three Russian diplomats for spying on the Ministry of Defense. This was the first such incident in the history of Bulgarian-Russian diplomatic relations.

Kostov's high-profile reception in Washington suggests that the new American administration regards his government as democratic, reformist, and successful. His cabinet became the first one to complete a full term of office in post-communist Bulgaria. Kostov, who is the leader of the center-right Union of Democratic Forces (SDS), implemented tough policies of monetary restraint, reconstruction and privatization of the major industries, and decollectivization of agricultural lands. But although the cabinet laid the foundations for a free-market economy and the GDP is gradually increasing for a third consecutive year, the reforms have not improved social conditions, and most people live in poverty.

Regardless of his image abroad, Kostov now has to deal with domestic attitudes -- and his support among Bulgarians is only 23 percent. The SDS is running a close race against the ex-communist Socialist Party (BSP), and the party of former King Simeon II, who returned to Bulgaria as a political leader in April. After a Bulgarian court refused to register his National Movement Simeon II (see "RFE/RL Newsline," 23 April 2001), the former king did not withdraw from the race but joined two small political parties and registered with the election commission.

Simeon's party has attracted the so-called "protest vote" of those dissatisfied with politicians from both sides of the SDS-BSP divide (see "RFE/RL Balkan Report," 17 April 2001). It has also changed the bipolar political space by presenting a third formation to challenge the major political contenders and bring in new ideas.

Paradoxically, however, the appearance of Simeon's party could mean that the SDS theoretically has a better chance to continue in office -- as part of a broader coalition government. Although such an outcome may help reduce the sharp political divisions within Bulgarian society, it would present a significant challenge to the SDS, which would have to become a more flexible and accommodating political partner. (Kathryn Mazur is an independent analyst based in the U.S. E-mail:

QUOTATION OF THE WEEK. "The homes of the Albanians [in Lucane in Presevo] are in an intolerable state. The police are meant to protect all citizens from vandalism, not engage in such acts themselves." -- Serbian Deputy Prime Minister Nebojsa Covic. He also noted that some of the police "stank of alcohol and were drunk." Quoted by AP on 27 April.