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L-I: State terror and the "free market" Opening Kosovo to foreigncapital
State terror and the "free market"
Opening Kosovo to foreign capital
by Michel Chossudovsky (3-3-00)
www.tenc.net [emperors-clothes]
In occupied Kosovo under the mandate of UN peace-keeping, State terror and
the "free market" go hand in hand. The concurrent criminalisation of State
institutions is not incompatible with the West�s economic and strategic
objectives in the Balkans. Notwithstanding the massacres of civilians, the
self-proclaimed KLA administration has committed itself to establishing a
"secure and stable environment" for foreign investors and international
financial institutions.
The Minister of Finance Adem Grobozci and other representatives of the
provisional government invited to the various donor conferences are all KLA
appointees. In contrast, members of the KDL of Ibrahim Rugova (in duly
elected parliamentary elections) were not even invited to attend the
Stabilization Summit in Sarajevo in July 1999. More recently UNMIK Head
Bernanrd Kouchner has called for the dissolution of Rugaova�s parliament.
"Free market reforms" have been envisaged for Kosovo under the supervision of
the Bretton Woods institutions largely replicating the structures of the
Rambouillet agreement. Article I (Chapter 4a) of the Rambouillet Agreement
stipulated that: "The economy of Kosovo shall function in accordance with
free market principles". The KLA government will largely be responsible for
implementing these reforms and ensuring that loan conditionalities are met.
In close liaison with NATO, the Washington based financial institutions had
already analyzed the consequences of an eventual military intervention
leading to the occupation of Kosovo: almost a year prior to the beginning of
the War, the World Bank conducted "simulations" which "anticipated the
possibility of an emergency scenario arising out of the tensions in Kosovo". 1
While the bombing was still ongoing, the World Bank and the European
Commission were given a special mandate for "coordinating donors' economic
assistance in the Balkans"2. The underlying terms of reference did not
exclude Yugoslavia from receiving donor support. It was, however, clearly
stipulated that Belgrade would be eligible for reconstruction loans "once
political conditions there change".3.
With regard to Kosovo, the World Bank rather than providing loans to rebuild
the province�s infrastructure has focussed its intervention on providing
"assistance in designing the reconstruction and recovery program" as well as
so-called "policy advice in economic management" and "institution building"
namely "governance" 4. In other words, an army of lawyers and consultants
have been sent in to ensure Kosovo�s transition to a "thriving, open and
transparent market economy." 5
Support granted to the KLA provisional government would be geared towards
"the establish[ment] [of] transparent, effective and sustainable
institutions" 6. An "enabling environment" for foreign capital is to be
established alongside suitably devised "social safety nets" and "poverty
alleviation programs".
Meanwhile, Yugoslav State banks operating in Pristina have been closed down.
The Deutschmark has been adopted as legal tender and the banking system has
been handed over to Germany�s Commerzbank A.G which is the sole private
shareholder in Micro Enterprise Bank (MEB) formed in early 2000 at the
initiative of the World Bank�s International Finance Corporation (IFC), the
European Bank for Reconstruction and Development (EBRD) together with the
Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO),
Germany�s Internationale Micro Investitionen (IMI) and Kreditanstalt f�r
Wiederaufbau (KfW). Commerzbank AG will gain control over commercial banking
functions for the province including money transfers and foreign exchange
transactions.7
The Trebca Mines
The "reconstruction" of Kosovo financed by international debt largely
purports to transfer Kosovo�s extensive wealth in mineral resources and coal
to multinational capital. In this regard, the KLA had already occupied
(pending their privatization) the largest coal mine at Belacevac in Dobro
Selo northwest of Pristina. In turn, foreign capital had its eyes riveted on
the massive Trepca mining complex which constitutes "the most valuable piece
of real estate in the Balkans, worth at least $5 billion." 8 The Trebca
complex not only includes copper and large reserves of zinc but also cadmium,
gold, and silver. It has several smelting plants, 17 metal treatment sites, a
power plant and Yugoslavia�s largest battery plant. Northern Kosovo also has
estimated reserves of 17 billion tons of coal and lignite.
The management of some of the State owned enterprises and public utilities
were taken over by KLA appointees. In turn, the leaders of the Provisional
Government of Kosovo (PGK) have become "the brokers" of multinational capital
committed to handing over the Kosovar economy at bargain prices to foreign
investors.
In the wake of the bombings, the Zvecan smelter (belonging to the Trebca
Complex) located northwest of Mitrovica, however, remained under Serb
management.9 In July 1999, UNMIK head of mission Bernard Kouchner issued a
decree to the effect that: "UNMIK shall administer movable or immovable
property, including monetary accounts, and other property of, or registered
in the name of the Federal Republic of Yugoslavia or the Republic of Serbia
or any of its organs, which is in the territory of Kosovo".10 .
In November 1999, the International Crisis Group(ICG) a think tank supported
by Financier George Soros, issued a paper on "Trepca: Making Sense of the
Labyrinth" which advised the United Nations Mission in Kosovo (UNMIK) "to
take over the Trepca mining complex from the Serbs as quickly as possible and
explained how this should be done" prior to their eventual privatization.11
Meanwhile, the George Soros Foundation for an Open Society had opened a
branch office in Pristina establishing the Kosovo Foundation for an Open
Society (KFOS) as part of the Soros� network of "non-profit foundations" in
the Balkans, Eastern Europe and the former Soviet Union. Together with the
World Bank�s Post Conflict Trust Fund, the Kosovo Open Society Foundation
(KOSF) will be providing "targeted support" for "the development of local
governments to allow them to serve their communities in a transparent, fair,
and accountable manner."12 Since most of these local governments are in the
hands of KLA appointees, this program is unlikely to meet its declared
objective. Out of the 20 million dollars budget for this program, only one
million dollars is being provided by the World Bank.
NOTES
1. World Bank Development News, Washington, 27 April 1999.
2 World Bank Group Response to Post Conflict Reconstruction in Kosovo:
General Framework For an Emergency Assistance Strategy,
http://www.worldbank.org/html/extdr/kosovo/kosovo_st.htm undated).
3. Ibid
4. Ibid
5. Ibid
6 World Bank, The World Bank's Role in Reconstruction and Recovery in Kosovo,
http://www.worldbank.org/html/extdr/pb/pbkosovo.htm, undated)
7. International Finance Corporation (IFC), International Consortium Backs
Kosovo's First Licensed Bank,
http://www.ifc.org/ifc/pressroom/Archive/2000/00_90/00_90.html Press Release,
Washington, 24 January 2000.
8. New York Times, July 8, 1998, report by Chris Hedges.
9.See Diana Johnstone, How it is done, Taking over the Trepca Mines: Plans
and Propaganda,
http://www.emperors-clothes.com/articles/Johnstone/howitis.htm Emperors
Clothes, 28 February 2000.
10. Quoted in Johnstone, op. cit.
11. See Johnstone, op cit. For the ICG report see
http://www.emperors-clothes.com/articles/Johnstone/icg.htm
12. World Bank, KOSF and World Bank, World Bank Launches First Kosovo
Project, Washington, http://www.worldbank.org/html/extdr/extme/097.htm
November 16, 1999 News Release No. 2000/097/ECA.
C Copyright by Michel Chossudovsky, Ottawa, February 2000. All rights
reserved. Permission is granted to post this text on noncommercial community
internet sites, provided the essay remains intact and the copyright note is
displayed. The text can also be photocopied for non-commercial distribution.
To publish this text in printed and/or other forms contact the author at
[email protected] or fax: 1-514-4256224.
Further reading...
Articles by Prof. Chossudovsky
"Cooking the books -
NATO's ethnic cleansing claims challenged"
http://emperors-clothes.com/articles/chuss/nato.htm
"Seattle and Beyond: Disarming the New World Order"
http://emperors-clothes.com/articles/chuss/seattle.htm
"NATO's Reign of Terror in Kosovo"
http://emperors-clothes.com/articles/chuss/chossnato.htm
"The KLA: Grim Origins"
http://emperors-clothes.com/articles/chuss/kla.html
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