Poorest Countries Will Pay Heaviest to Rebuild Kosovo

by Niccolo Sarno

(IPS) BRUSSELS -- Finance ministers of the 15-member European Union (EU) have started to size up the 2000 budget, from which they need to find more than $700 million for the reconstruction of Kosovo.

Up to now, only international cooperation funds have reportedly been considered.

According to acting foreign affairs commissioner Hans van den Broek, the EU will commit up to $717 million a year for reconstruction in Kosovo, in addition to macroeconomic assistance and humanitarian aid.

Senior officials at the EU's European Commission (EC) said reconstruction costs would amount to around $3 billion for the next three years.

"There is a big danger that the losers will be the people of Africa, Asia, Latin America and other poor countries," said James Mackie, Secretary General of the Brussels-based Liaison Committee of Development NGOs, which represents 900 European non-governmental organizations.

"They (EC officials) are going through all budget lines and seeing where cuts can be made," Mackie said.

A senior official at the EC's directorate for cooperation with Africa, Caribbean and Pacific (ACP) countries told IPS that "there are some (ACP) development funds which will go to Kosovo reconstruction next year."

"(EU-ACP cooperation) budgets where implementation has been slow are more likely to be cut," she predicted, adding that it is too early to make any forecasts on the amount and timing of the budget cuts.

"Resources must not be at the expense of assistance earmarked for Africa, Asia and Latin America," said the Brussels-based Eurostep network of European NGOS in a statement sent to the new EC President Romano Prodi and German Chancellor Gerhard Schroeder.

Press reports state that the two areas likely to be hardest hit by cuts are the EU's programs in the Mediterranean and Eastern Europe's former communist bloc countries, which may lose $102 million each, or around 10 percent of their total budgets for next year.

The former European socialist countries' program had already been cut from $522 million in 1998 to $461 million in 1999.

According to the report, the EU budget committee wants to save $307 million for Kosovo by cutting not only Mediterranean and Eastern European programs but also funds originally sought for Latin America, Asia and countries of the 71-strong group of former colonies in Africa, Caribbean and the Pacific (ACP)

Mark Malloch Brown, new head of the UN Development Program (UNDP), said last week he feared the request for funds for Kosovo was taking away funds from projects in Africa.

"This essentially taxes Africa to support Kosovo and I think it is a dangerous trend," he said.

According to Malloch Brown, the Danish government -- a major UNDP donor -- plans to cut almost one-fourth of its contribution to redirect it to Kosovo, while the German cabinet recommended some $25 million in cuts due to its own budget decrease.

"It is obviously causing us quite some concern," said Mackie, who added that "the bigger game is in next year's (EU) budgets."

The final decision on the EU's year 2000 budget is not expected until December, after negotiations between the EU institutions.

So far, only about one-third of the $400 million needed for refugees in Kosovo in 1999 has been donated, said Soren Jessen-Petersen, the U.N. Assistant High Commissioner for Refugees.

"I find it unacceptable that the international community is not in a position to give us the necessary funds," said Jessen-Petersen following a meeting with foreign ministers and ambassadors of countries operating in Kosovo.

"The international community spent billions of dollars on a military campaign that was intended to pave the way for the return of refugees," but most of the money promised by donor nations had not yet materialized, he added.

In May, the EC committed humanitarian aid worth $153.6 million to be spent in Macedonia and Albania and the Serbian province of Kosovo. The sum came in addition to nearly $33 million made available by the EC's office for humanitarian issues, ECHO.

Another $200 million has being pledged for Kosovo this year, for a total of some $387 million, or almost half of ECHO's 1999 budget.

On July 28, representatives of donor countries will meet in Brussels to discuss new humanitarian funding.

Reconstruction resources will be managed by an ad-hoc European Agency for Reconstruction (EAfR) to be based in Pristina, the Kosovo capital.

A previous estimate by the EC put the overall cost of stabilizing the Balkans at $30 billion, while other estimates put the bill at $100 billion for Serbia alone. EU and U.S. officials have made clear that there will be no reconstruction funds for Yugoslavia so long as Pres. Slobodan Milosevic remains in office.

At Germany's prompting, the EU announced the launch of a "stability pact" aimed at promoting sustainable development in the Balkan region, but according to Macedonian Prime Minister Ljubco Georgievski, the project "is being delayed from month to month."

"There is fear that what has been promised will be prolonged to an unspecified time," said Georgievski at a news conference in Salzburg, Austria earlier this month, during a Central and Eastern European economic summit.

Several Balkan leaders at the summit said Western nations were backsliding on their promises of aid to help rebuild countries in the Balkan region hurt by the Kosovo conflict, warning that the focus of aid was being narrowed to Kosovo.

But earlier this month, the United Nations -- which is to run Kosovo's civilian administration along with the EU and the Organization for Security and Cooperation in Europe (OSCE) -- said that a fund set up for its civilian operations in Kosovo was still empty.

"Trust funds have been set up but so far remain empty," said UN spokesman Fred Eckhard, referring to the UN Interim Administration Mission in Kosovo (UNMIK) which is attempting to set up seven commissions among Kosovo Albanians and Serbs on issues ranging from health and education to justice and trade.