Balkan Report: June 8, 2001

MACEDONIAN ECONOMY ON THE BRINK OF AN ABYSS. A basic economic law says that one of the ways to destroy capital is through war.

Hopes ran high when the Macedonian state sold its telecommunications company last year. The government expected that the deal would bring the state enough money to give the domestic economy a boost when investing it in necessary infrastructure projects.

The war against the ethnic Albanian rebels has now destroyed all illusions of sustained economic growth. According to the young Macedonian Finance Minister Nikola Gruevski, instead of growth, Macedonia now faces a recession.

Paradoxically, some observers like the executive director of the Macedonian Center for International Cooperation, Saso Klekovski, try to explain the war as a result of economic difficulties: "The virtual exclusion of Albanians from the professions and business has encouraged them to concentrate on the alternative areas of retail or the small business sector, or subsistence agriculture. However, in the current economic crisis, it is extremely difficult to earn a living in this way. Almost inevitably, as the economic pressure on our country becomes ever tighter, the black areas of the economy grow stronger: drugs, prostitution, and gun running.... It was not by chance that the first outbreak of violence this year was in the village of Tanusevci, near the border with Kosova. The people living there have no proper roads to give them access to Skopje, no opportunity to work for their living, no real economic prospects at all. Their only way of earning is smuggling, both into Serbia and Kosova, and back to Macedonia" (see http://www.ok.mk, posted on 9 May 2001; and "RFE/RL Balkan Report," 9 March 2001).

Relying on the same economic data provided by the Finance Ministry, newspaper commentators reach differing conclusions on the effects of the war on the small country's economy, which is mainly based on small businesses.

The facts are quite clear and offer a gloomy prospect: the growth of the gross domestic product (GDP) so far this year fails to meet the projected 6 percent and will currently fall by half, provided that the war ends soon. IMF experts currently holding talks in Macedonia put that figure even lower, at a mere 1.5 percent. Industrial production already fell by almost 9 percent, while the loss in communications amounts to more than 7 percent and that in commerce to more than 9 percent. Foreign currency reserves fell by $110 million.

According to Svetlana Vukcevic, who commented on the situation for the state-owned daily "Nova Makedonija" on 4 June, "this combination of negative trends, even if things calm down immediately, will show its superiority over all attempts to get out of the crisis without bruises." Vukcevic adds that the budget deficit will amount to about $200 million by the end of the year.

Macedonian consumers will pay for the crisis through higher prices as inflation rises to an average of 5 or 6 percent. In any case, government sources say, the inflation rate will not reach 10 percent this year. But since economists warn that the inflation spiral could accelerate despite the government's efforts, Vukcevic says that Macedonia has to be very aware of that danger.

As a possible way of keeping the situation under control, Vukcevic urges the government to conclude a more flexible standby arrangement with the IMF. But at the moment, the government says that there is no need to change existing agreements with the IMF.

In another comment for the Skopje daily "Utrinski vesnik" of 4 June, Nina Nineska-Fidanoska notes the disagreement between IMF experts and the Macedonian government about interpreting basic economic data. While the government looks at the situation quite optimistically, the IMF officials have a more gloomy impression of the economy and the Macedonian budget. Nineska-Fidanoska points out that the IMF warns that all financial reserves could be used up if the war goes on.

That would mean that investment in necessary infrastructure projects would be stopped. Vladimir Jovanovski of the bi-monthly "Forum" of 25 May already said that the Albanian population will be the biggest loser of the current war -- as Tetovo's rapid pace grinds to a halt and agriculture in the war zone does likewise.

There are already examples of what kind of future could be expected in the economically underdeveloped regions of Macedonia. The Skopje daily "Vest" reported on 4 June that water is getting short in some villages around Kumanovo. In the village of Aracinovo close to Skopje, the danger of an outbreak of disease becomes more likely every day. The village is overcrowded with refugees from the war zone, but there are no water mains and no sewage system.

"These problems are not new to us -- they have existed for more than 20 years," Aracinovo Mayor Reshat Ferati says. A way out of this situation would be the construction of water mains and sewer system with money from the Telecom deal. The project is already under way, but there is a need for more money. And while the Aracinovo commune hopes for foreign aid, the fighting continues in the Kumanovo area. (Ulrich Buechsenschuetz, ub@itinerarium.de)

VIOLENCE RETURNS TO BITOLA. The 6 June rioting in Bitola destroyed more than 50 shops and 20 family homes belonging to ethnic Albanians and Macedonian Muslims.

Interior Ministry spokesman Stevo Pendarovski says some 3,000 people joined in the riot, breaking up into five or six groups and plundering properties in various parts of the city. "Yesterday after 8:00 p.m. crowds gathered in the old bazaar of Bitola. They revolted over the killings of [five] soldiers in the Sar Planina."

The mob rioted for more than four hours, well after local authorities declared a nighttime curfew (10:00 p.m. to 5:00 a.m.). Pendarovski says 14 people were injured, four of them by gunshot wounds. He says police arrested five local residents on suspicion of causing the gunshot injuries.

The rioters also burned down a mosque in a Bitola suburb and smashed gravestones. Some chanted "Bitola is burning" and "we're going to Skopje to burn down the government and parliament," before police restored order at about 1:30 a.m..

Rioters burned to the ground the home of the country's ethnic Albanian deputy health minister, Muarem Nexhipi, and his brother's house next door. The Skopje daily "Dnevnik" says Nexhipi has not been seen in Bitola for 10 days and that the house had been empty since midday on 6 June, with its gate wide open. The paper says Nexhipi's family have apparently fled the city.

Qenan Hasani, an ethnic Albanian resident, works as a reporter in Bitola for Macedonian state television and witnessed the riots. He says nothing is left of the deputy minister's homes except for the walls: "All of this happened in the presence of Macedonian police who were just spectators."

In addition, there was also unrest that same night in Resen -- 35 kilometers west of Bitola -- where spokesman Pendarovski says five properties were destroyed. He adds that attackers threw a Molotov cocktail at the mosque but that speedy action by local residents in putting out the fire prevented serious damage to the building.

Government authorities say 13 people were injured in the Bitola rioting, three of them from bullet wounds. Police arrested five local residents on suspicion of causing the gunshot injuries.

The rioting erupted in the wake of news reports that three of five security officers killed in an ambush by Albanian guerillas near Tetovo the day before were from Bitola. The latest destruction followed a demonstration organized by the brother of one of the dead reservists, who led a column of taxi drivers waving anti-Albanian placards.

Many of the commercial properties destroyed had already been severely damaged in anti-ethnic Albanian riots in Bitola on 1 May (see "RFE/RL Balkan Report," 5 June 2001). In the early hours of 1 May and again late the same day, rioters torched over 50 Albanian-owned businesses and scrawled "Death to Albanians" on some of their facades.

That riot was triggered by an ambush three days earlier near Tetovo of a Macedonian security force patrol. That mayhem left eight dead, including four reservists from villages near Bitola. It is still under official investigation, and police have so far only briefly detained four of about 50 rioters. There is some doubt whether the violence was spontaneous or organized.

In another incident on 6 June, this one in the capital Skopje, fire was directed at the parliament building from a passing car while President Boris Trajkovski was conferring inside with Social Democratic Party Chairman Branko Crvenkovski. Skopje police later found the car, which was registered to a company in Bulgaria. They say they have detained two suspects whom they have only identified by their initials, DN and AP.

The Macedonian parliament is due to hold an emergency session on 8 June to discuss the security situation. Prime Minister Ljubco Georgievski has called on the parliament to declare a "state of war." But the European Union and the United States immediately warned against such a move, saying it could further aggravate the situation. In any event, it is not clear whether Georgievski can muster the two-thirds vote he would need to pass the measure.

The two Albanian parties in the Macedonian parliament greeted Georgievski's proposal with derision. A spokesman for the Democratic Party of Albanians, Zamir Dika, told the independent Albanian-language daily "Fakti" that Georgievski's proposal was irrational. Dika said, "Declaring a state of war would simply mean a call for a civil war, with unpredictable consequences for Macedonia."

Similarly, the spokesman for the Party for Democratic Prosperity, Zahir Bekteshi, told "Fakti" there is no point in declaring a state of war since "it would only cause matters to deteriorate further and would lead Macedonia into dark waters with very difficult consequences." In Brussels, a spokesman for the National Liberation Army pointed out that "de facto, we have a state of war already." (Jolyon Naegele)

ALBANIA'S CONSTITUTIONAL COURT REBUFFS ELECTION COMMISSION. Albania's Constitutional Court on 2 June approved a change in the electoral law, formally allowing political parties to endorse independent candidates in the general elections on 24 June. But subsequently, the Central Election Commission (KQZ) ruled that no party or coalition may support more than 20 independent candidates, "Koha Jone" reported on 4 June.

The court had nonetheless forced the KQZ to retreat from its earlier draft ruling that would have forced political parties to put all independent candidates they publicly endorse on their official party lists (see "RFE/RL Balkan Report," 1 June 2001).

Opposition Democratic Party (PD) leader Sali Berisha charged that "the ruling of the Constitutional Court is an irreparable mistake that impairs a free and fair electoral process." Berisha's spokesman Edi Paloka said, however, that the party will respect the KQZ decision.

By supporting formally independent candidates who are not party members, the governing Socialist Party (PS) has been trying to reach out beyond its traditional electorate. "Albanian Daily News" of 5 June noted, however, that some political parties are also putting forward independent candidates in order to receive a higher number of parliamentary seats than they would normally be entitled to. The mixed electoral system -- including both direct and proportional representation -- does not count the independent candidates as members of the respective parties' parliamentary groups. Therefore, each independent candidate who wins a direct seat can "save" his party a seat on the proportional key. This puts smaller parties at a disadvantage, because they are unlikely to win any directly elected seats.

KQZ Chairman Ilirjan Celibashi told the "Albanian Daily News" on 4 June that the commission's ruling was a compromise, but added: "We issued the regulation to stop abuses by [some] parties." The deadline for registration of candidates expired on 4 June.

Eleven political parties have threatened to boycott local electoral commissions in constituencies with independent PS candidates. PS officials have largely ignored the protests, arguing that endorsing independent candidates has been a tradition of the party. Celibashi made clear, however, that "local commissions [chaired by opposition representatives] must register every candidate [and that] it is not up to them to classify candidates as independents or partisan." He warned that "those who block the registration procedure will face the consequences."

Meanwhile, PD officials rejected an invitation by Albanian Public Television (TVSH) to participate in a series of live televised debates with government representatives. TVSH had planned a confrontation between Berisha and PS leader Fatos Nano as the highlight of the debates, shortly before the ballot.

Berisha refused because he feels that "no journalists should moderate the debate who are militant supporters of the Socialists," according to "Koha Jone" of 5 June.

The journalist who planned to moderate the debates is Rudina Xhunga, who was critical of the government under Berisha's presidency, which ended after the unrest in 1997. TVSH refused to change moderators, however, Paloka told "Koha Jone."

PS Public Affairs Secretary Luan Rama countered that "it does not come as a surprise that Berisha refuses to take on Nano.... Berisha's fear is a clear indicator that yet another defeat awaits him."

Meanwhile, the opposition Union for Victory coalition, which includes the PD, charged that "TVSH remains at the service of the election campaign of the PS and its allied parties." The opposition argues that they do not get enough news coverage for their respective election campaigns.

Observers note, however, that TVSH has stopped its previous practice of devoting fixed amounts of airtime in the newscasts to report exclusively on the various political parties' election campaigns. The change came when it became a public service broadcaster in 1998. Instead, TVSH now says it covers stories according to their news value and according to journalistic criteria. (Fabian Schmidt)

QUOTATIONS OF THE WEEK. "President Bush should demonstrate clearly while in Europe that he understands the importance of the Balkans to our own interests, and that America is not looking to renege on the commitments we have made. By so doing, he will reassure our allies -- who are already bearing most of the costs and risks in the region -- and lend needed support to moderate forces in the Balkans." -- Former Secretary of State Madeleine Albright, writing in "The New York Times" of 5 June.

"There is no question but that the SFOR and KFOR forces in the Balkans are making a very valuable contribution to stability in the region, and our interest is peace and stability in the region." -- Secretary of Defense Donald Rumsfeld. Quoted by AP in Thessaloniki on 6 June.

"We cherish the relationship with Macedonia and will make our utmost effort to keep it. But we must maintain our dignity and national integrity." -- Taiwan's Prime Minister Chang Chun-hsiung, quoted by Reuters in Taipei on 5 June.