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The Government of the Republic of Serbia

In the service of citizens

Urgent establishment of moratorium on further privatisation in Kosovo-Metohija

Belgrade, 2 June 2006

Head of the economic team for Kosovo-Metohija and southern Serbia Nenad Popovic said in an interview for the daily Politika that the team for political talks on the future status of Kosovo-Metohija considers that there is a need for urgent the establishment of a moratorium on further privatisation in Kosovo-Metohija, and a complete revisal of its previous course should be made.

Nenad Popovic

Author: Tanjug

The Serbian government’s official web site presents a portion of the interview.

The sixth round of negotiations in Vienna on the future status of Kosovo-Metohija:

It was probably the most difficult round of negotiations on Kosovo-Metohija thus far. Representatives of the IMF, the World Bank, and the US Department of the Treasury, and several international economists participated in the talks. Our proposals were received very positively by all experts present.

What opposing arguments were presented by the Kosovo-Albanian delegation?

They had a few ministers and experts, and brought forward their arguments, but often reverted to using political platitudes. We talked, above all, about external debts, where the situation is more or less clear and the figure in question is $1.4 million. Serbia pays $100,000 daily due Kosovo-Metohija’s debts. The Kosovo-Albanians say that from 1990 to 1999 they did not participate in the distribution of that money because, allegedly, they were excluded from the economic system. That is an example of a political argument, because it is a fact that money was invested in factories and mines, and ample documentation on the matter exists. Most investment was made in the hydroelectric power plants that were producing three times more electricity than today! And that electricity was used by all people in Kosovo-Metohija.

The issue of property and privatisation:

That is an issue on which we are completely divided. As far as the value of Serbia’s property is concerned, it is estimated that the sum in question is some $14 or 15 billion. But there we have a lot of different statistics and methods of estimation. The figures in question are surely billions of dollars. Kosovo-Metohija is part of Serbia, so it is our property. Kosovo-Albanians even say that it belongs to them. Thus, they are trying to bring in the succession method from 2001, which was implemented on the republics of the former Yugoslavia, which is impermissible. Similarly, we consider that the UNMIK, as an interim organ, did not have the right to form the Kosovo creditors’ agency, which now conducts privatisation of property throughout the province. In our opinion, there is an urgent need to establish a moratorium on further privatisation, and a complete revisal of its previous course should be made.

How many companies have been privatised in that manner until now?

Around 250 companies, of which 99% were bought by Kosovo-Albanians themselves. So, there is no influx of foreign capital, which was, allegedly, their main reason for selling, neither will that money revive the economy of Kosovo-Metohija, because it is laying on the account of the said agency. I want to warn foreign investors that any investment according to this model of privatisation which has no legal basis will be a subject of dispute before international courts. The model of privatisation in Kosovo-Metohija is very questionable in a legal sense and does not exist anywhere else in the world.

Why the haste in privatisation?

We can only be suspicions of their motives for rushing the privatisation process. They want to establish an economic system which is completely independent of Serbia, and wish to conclude privatisation by December. We decidedly told UN Deputy Envoy Albert Roan and EU envoy Stefan Lehne, that the UNMIK does not have the right to do this. We also emphasized that ownership cannot be discussed without talking about privatisation, as we were informed. Because, we came to the negotiating table with the conviction that Mr. Ahtisaari and his colleagues have the mandate for talks on all issues.

Privatisation of Trepca and Kosovo Energy Corporation (KEK):

When Trepca is in question, the World Bank is convinced that its privatisation at the moment would be a complete economic failure without any profit. We hope that together with the World Bank, we will succeed in stopping that. As far as the KEK is concerned, luckily, they cannot do it very fast, but they can start the process, which would do great harm. It is to do with “back-door privatisation” without a tender. There is a struggle going on for the control of Kosovo’s natural resources, but Serbia will not keep silent. Economic questions are among our strongest arguments in the negotiations, which is why they are being contested so much.

The economic reintegration of Kosovo-Metohija into Serbia’s system:

Investment into Kosovo-Metohija will be greatly more attractive if investors could have the entire Serbian market of 10 million consumers at their disposal, rather than just Kosovo-Metohija offering only 2 million. Along with that, Serbia as the only country in the area, can export to the Russian market of 150 million consumers, without customs duties. That is why our platform is the best one possible for the development of Kosovo-Metohija, and that is why economic logic speaks against their independence, at least within the next 15 to 20 years. Otherwise, Kosovo-Metohija might become a small isolated island, in the economic sense.

What can displaced Serbs from Kosovo-Metohija expect who lost their jobs, or those who own shares in companies there?

We insist that all employees be allowed to return to their jobs, wherever it is possible. If this isn’t possible, they should receive fair compensation. The economic team is already preparing a strategy for long-term economic development, which will particularly deal with long-term sustainable economic development of threatened Serb communities in Kosovo-Metohija. It is still too early to talk about concrete sums, but it is certain that the figures will be several millions of euros when it comes to granting credits for the development of Serb communities.