Archive for February 2009

Albania to open its port to Kosovo

February 25, 2009

www.chinaview.cn  2009-02-24 03:41:01
     
TIRANA, Feb. 23 (Xinhua) — Albania is ready to open its northern port of Shengjin on the Adriatic Sea for the use of the landlocked Kosovo, Albania’s Prime Minister Sali Berisha said on Monday.

“Albania is ready to provide Kosovo with a port, which would meet its needs,” a press release on the government’s website quoted Berisha as saying.

Berisha made the announcement in his meeting with a group of representatives from Kosovo, who are in Albania to open talks on using the Shengjin port.

The two sides agreed to study the possibility of enlarging the port which is about 90 kilometers north of capital Tirana and about 100 kilometers west of Kosovo.

Kovoso, an ethnic Albanian-dominated province of Serbia, unilaterally declared independence in February in 2008. Its independence has been vehemently opposed by Serbia.

Kosovo Prime Minister Hashim Thaci sent a letter to Berisha earlier this month, asking him to allow Kosovo to use the seaport.

Albania is currently building a highway to link the central Albanian port of Durres with Kukes and beyond to Pristina, the capital city of Kosovo.

 

 

 
Editor: Yan

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The Long Retreat

February 23, 2009

Βy Patrick J. Buchanan

“The situation in Afghanistan is deteriorating,” said President Obama, as he announced deployment of 17,000 more U.S. troops.
“I’m absolutely convinced that you cannot solve the problem of Afghanistan, the Taliban, the spread of extremism in that region, solely through military means.”
“(T)here is no military solution in Afghanistan,” says Secretary of Defense Robert Gates. Said U.S. Commander Gen. David McKiernan yesterday, U.S. and NATO forces are “stalemated.”
Such admissions by our military and political leadership in a time of war call to mind other words heard back in 1951, when Gen. Douglas MacArthur delivered his farewell address to the Congress:
“(O)nce war is forced upon us,” said MacArthur, “there is no other alternative than to apply every available means to bring it to a swift end. War’s very object is victory, not prolonged indecision.
“In war, there is no substitute for victory.”
But if victory over the Taliban has been ruled out by the United States, have the Taliban ruled out a victory over the American Empire to rival the one their fathers won over the Soviet Empire?
What price are we prepared to pay, in “prolonged indecision,” to avert such an end to a war now in its eighth year?
America had best brace herself for difficult days ahead.
For stepping back from the dreary prognosis for Afghanistan, a new reality becomes clear. The long retreat has begun.
Whether it is in the 23 months Gen. Petraeus favors, or the 16 months Obama promised, the United States is coming home from Iraq.
The retreat from Central Asia is already underway. Expelled from the K-2 air base in Uzbekistan in 2005, the United States has now been ordered out of the Manas air base in Kyrgyzstan. Abkhazia and South Ossetia, ripped away from Georgia by Russia last August, are never going to be returned. And we all know it.
Georgia and Ukraine, most realists now realize, are not going to be admitted to NATO. We’re not going to fight Russia over the Crimea. And the U.S. anti-missile missiles and radars George Bush intended to deploy in Poland and the Czech Republic will not now be deployed.
For Washington has fish to fry with Russia, and the price of her cooperation is withdrawal of U.S. military forces from her backyard and front porch. And the warm words flowing between Moscow and Washington suggest the deal is done.
With tensions rising in Korea, too, it is hard to believe President Obama will bolster ground forces on the peninsula, when even Donald Rumsfeld was presiding over a drawdown and a shifting of U.S. troops away from the DMZ.
In Latin America, the United States seems reconciled to the rise of an anti-American radical-socialist coalition, led by Venezuela’s Hugo Chavez and embracing Bolivia, Ecuador, Nicaragua and Cuba.
Partisans of President Bush may blame Obama for presiding over a strategic retreat, but it is the Bush administration that assured and accelerated such a retreat.
As Robert Pape of the University of Chicago writes in The National Interest: “America is in unprecedented decline. The self-inflicted wounds of the Iraq war, growing government debt, increasingly negative current-account balances and other internal economic weaknesses have cost the United States real power in today’s world of rapidly spreading knowledge and technology. If present trends continue, we will look back at the Bush administration years as the death knell of American hegemony.”
Pape’s harsh verdict is rooted in his reading of history, that the “size of an economy relative to potential rivals ultimately determines the limits of power in international politics.”
In other words, when a great nation’s share of world product shrinks, the nation’s strategic position follows. Between 2000 and 2008, the U.S. share of world product plunged from 31 percent to 23 percent, and is expected to fall to 21 percent by 2013 — a decline of 32 percent in 13 years. China’s share of world product over the same period will more than double to 9 percent.
Pape went back to the 19th century to correlate the rise of the great powers like Britain and the commensurate growth in their share of world product. He found the Bush decline had no precedent.
“America’s relative decline since 2000 of some 30 percent represents a far greater loss of relative power in a shorter time than any power shift among European great powers roughly from the end of the Napoleonic Wars to World War II. It is one of the largest relative declines in modern history. Indeed, in size, it is clearly surpassed by only one other great-power decline, the unprecedented internal collapse of the Soviet Union in 1991.”
With an economy still three times that of China, America continues to be the world’s most powerful nation, fully capable of defending all of its vital interests. We can no longer, however, defend every ally to whom we made a commitment over the six decades since NATO was formed.
Obama’s assignment: Rebuild U.S. productive power, and execute a strategic withdrawal from non-vital commitments.

World defence developments

February 21, 2009

USAF considers a less ambitious F-22 proposal

The US Air Force’s (USAF’s) top general says the service needs more F-22 Raptor fighters but that he is not opposed to a scaled-back proposal to purchase just 60 additional aircraft beyond the 183 already ordered. USAF Chief of Staff General Norton Schwartz said at a 17 February press briefing in Washington that he would not dispute a proposal to buy a total of around 240 aircraft – considerably less than the USAF’s long-time requirement for 381

US accounts for 59% of BAE Systems sales

BAE Systems’ United States sales overtook those from the rest of the world combined in 2008: reflecting the UK group’s transatlantic acquisition strategy and Department of Defense (DoD) demand for wheeled land systems over the past 12 months. US sales accounted for 59 per cent of total turnover of GBP18.5 billion (USD26.7 billion): up from 47 per cent the previous year

US continues to support Taiwan as China builds up missiles

US Secretary of State Hillary Clinton reaffirmed Washington’s commitment to Taiwan’s defence on 17 February, saying that there would be no change in policy on arms sales to the island under the Obama administration. Speaking before her 16 February arrival in Japan, Clinton said that “under the Taiwan Relations Act, there is a clear provision that the US will provide support for Taiwan’s defence”

Iran lobbies Moscow for missiles to arm new air defence unit

Iran’s defence minister made a day-long official visit to Moscow on 16 February to press again for the sale of the S-300 surface-to-air missile system to Tehran to go forward, amid a restructuring of the Iranian military aimed at strengthening air defence capabilities. Iran signed a contract with Russia in 2005 to purchase 29 Tor-M1 low- to medium-altitude surface-to-air missiles under a USD700 million contract; they were delivered during 2006 and became operational in early 2007

Aero India 2009: Boeing looks to build on Poseidon success in India

Boeing is looking to capitalise on its recent success in selling the P-8I Poseidon multimission maritime aircraft to India with a series of bids for a variety of national competitions for combat aircraft, strategic transport aircraft, maritime patrol aircraft and attack and heavy-lift helicopters. Boeing Integrated Defense Systems Vice-President (India) Dr Vivek Lall told Jane’s on 13 February that the company is “trying to become part of the aerospace fabric in India”: a statement borne out by the fact that it has increased its presence in the country from one office in 2005 to nine in 2009

Source: Jane’s Defence Journal

Taliban forces students out of schools into madrasas

February 17, 2009

The closure of schools and continuing attacks on students in the southern Helmand Province forced Abdul Wakil’s parents to send him to a madrasa (Islamic school) in neighbouring Pakistan.

Almost two months later, Abdul Wakil [not his real name] quit the school outside Quetta, capital of Pakistan’s Baluchistan Province, and returned home.

“In the madrasa we were taught to sacrifice ourselves for Jihad in Afghanistan and were told to do suicide attacks,” the 14-year-old told IRIN in Lashkargah, centre of Afghanistan’s insurgency-torn Helmand Province.

“I don’t want to be a suicide attacker, because it’s forbidden in Islam, so I secretly quit the madrasa and returned home,” the teenager said.

Abdul’s parents are happy to have their son safe but are extremely concerned about his security.

“If the Taliban find out about him, they will kill him,” said his father, who requested anonymity. “We are also concerned about his education and his future,” he said.

His concerns are not unique in the volatile south, where attacks by insurgent groups have closed more than 630 schools, depriving 300,000 students of an education, according to the Ministry of Education (MoE).

 

 

 
Poor literacy rates

 

 

More than two decades of war have severely damaged education in Afghanistan, resulting in very low literacy rates: 12.6 percent among females and 43.1 percent among males, an average of 28.1 percent nationwide, according to aid agencies.
The insurgents’ anti-education activities – armed attacks, intimidation and negative propaganda – seek to shut down schools and deny students – girls and boys – a formal education that mixes modern scientific subjects with Islamic studies.

From January to October 2008, 256 school-related security incidents, with 30 deaths, were reported, against 213 incidents in the same period in 2007, according to the UN Children’s Fund (UNICEF).

As a result, going to school has become increasingly dangerous for students and teachers.

However, the insurgents have tacitly encouraged parents to send their sons to religious schools in neighbouring Pakistan for Islamic studies.

“Pakistani madrasas brainwash students and teach them religious extremism, armed Jihad and hatred against the government in Afghanistan and the West,” said Gulab Mangal, Helmand’s governor.

Almost all Taliban leaders, including their reclusive leader Mullah Mohammad Omar, were trained in Pakistani madrasas.

Madrasas not only offer immunity from Taliban attacks but also provide free board and lodging to students and are thus more attractive to poor families than modern schools.

Tens of thousands of Afghan citizens are enrolled in Pakistani madrasas, MoE officials estimate.

 

 

 

 

 
Compromise efforts
 
Of Afghanistan’s six million students, 35 percent are female, while more than 1.2 million school-age girls do not attend school

The government has recently enhanced efforts to protect schools and schoolchildren from Taliban action.

Asif Nang, a spokesman for the MoE, told IRIN the government was ready to negotiate with the opposition over schools and would be willing to accommodate their religious reservations.

“If they want to call schools ‘madrasa’ we will accept that, if they want to say Mullah to a teacher we have no problem with that. Whatever objections they [the Taliban] may have we are ready to talk to them,” Nang said.

The MoE also emphasised that its curriculum was entirely in accordance with Islamic values and girls were required to comply with Islamic dressing codes (including wearing the hijab) to school.

Owing to this appeasing approach, the government has reopened 24 schools in Helmand, Ghazni and Kandahar provinces previously shut by insurgents.

“We aim to reopen all the schools which are closed because of insecurity,” assured Farooq Wardak, the education minister, adding that hundreds of new schools would be built in 2009.

 

 

 

 
Girl students

 
However, none of the 16 schools reopened in Helmand over the past three months catered for girls, the MoE said, a severe blow for already low female literacy rates.

In addition to insecurity, conservative traditions and other prevalent gender inequity norms, particularly in the south and south-east, impede girls’ access to education.

 

 
Source: IRIN

US, EU, Russia: A Future “Northern Alliance”?

February 16, 2009

Chronicles: A Magazine of American Culture, February 2009 The North Worth Saving By Srdja Trifkovic “Defeat in detail” is a military concept that denotes the rout of an enemy by dividing and destroying segments of his forces one by one, instead of engaging his entire strength. A brilliant example was Stonewall Jackson’s 1862 Shenandoah Valley campaign, when his force of 17,000 beat three mutually unsupported Union commands almost four times his strength. The concept is as old as Sun Tzu (“if enemy forces are united, separate them”) and was more recently restated by Mao (“concentrate a superior force to destroy the enemy forces one by one”). It is highly relevant to the American interest because the civilization upon which this country is founded—usually described as “Western,” although “Northern” would be more accurate—is in danger of being defeated in detail by its enemies, internal and external. The problem was aptly summarized by Russia’s ambassador to NATO, Dmitry Rogozin, in an interview with Russia Today last November 18: There is a new civilization emerging in the Third World that thinks that the white, northern hemisphere has always oppressed it and must therefore fall at its feet now. . . . If the northern civilization wants to protect itself, it must be united: America, the European Union, and Russia. If they are not together, they will be defeated one by one. Rogozin’s statement reflects a profound understanding of the biological, cultural and spiritual commonalities shared by one billion Europeans and their overseas descendants in the “white, northern hemisphere”—an understanding as accurate as it is odious to the Western elite class. It indicates that, in some important respects, Russia is freer than the United States or the European Union: No American or Western European diplomat of his rank would dare make such a statement, even if he shared the sentiment—or hope to remain in his post after making it. And finally, it correctly diagnoses the attitude of the Third World to the northern civilization as inherently adversarial, based on the myth of the latter’s oppressiveness and on the expectation of its eventual collapse. Europe’s demographic self-annihilation is well advanced, from the Atlantic to the Urals and beyond, with Russia and the rest of the Old Continent sharing the same downward trend. Since the collapse of the Soviet Union, Russia’s population has fallen six percent, from around 150 million to just over 140 million. The combination of a low birthrate, an aging population, and a public-health crisis may result in the country’s population collapsing by one third, to around 100 million, by 2050. On current form, there will be a 40-percent drop in the size of the core (ages 14 to 25) group, ensuring a continued decline for the rest of the century. At the same time, the number of self-identified Muslims in Russia has risen by 40 percent in the last 15 years to 20 million, partly fueled by immigration from Central Asia and the Caucasus. In Metropolitan France, an ostensibly healthy birthrate of 12.2 per thousand conceals the fact that, of some 800,000 births in a nation of almost 60 million, Muslim immigrants (predominantly from North Africa) and their French-born descendants account for more than a quarter. Italy will plummet from today’s 57 million to a much older 40 million by 2050. By that time, the continent as a whole will face a net loss of some 150 million people. Europe’s population has aged to such a degree that it will continue to shrink even in the unlikely event that birthrates rebound to the replacement level. This “negative momentum” means that even if women in the future should have an unexpected fertility increase to two children on average, the population would be destined to continue shrinking. In the 1970’s, the U.S. birthrate not only dipped below replacement but fell below the European rate. In the years since, the American rate recovered modestly to just below replacement level. The fertility rate of white Americans slipped below the replacement rate in the early 1970’s, however, and it never recovered: Today it stands at about 1.8 babies per woman. Demographers say that the U.S. population will grow by 135 million in the next four decades—a stunning 44-percent increase—but that growth will be entirely the result of immigration (overwhelmingly from the Third World) and increases in the nonwhite population. In Russia, Rogozin’s thesis is disputed by two very different groups. The Westernizers—insignificant in numbers but influential in the country’s intelligentsia—reject the notion that Russia can be, or should aspire to be, an equal partner of Europe and America unless and until she is reformed in their image. The Eurasianists, by contrast, see Russia’s destiny in the great continental heartland and in strategic partnership with her southern and southeastern neighbors. They believe that Russia’s interests and those of the United States are inherently divergent. In their view, détente with Islam is more desirable than cooperation with the West. As Aleksandr Dugin says, the new Eurasian empire should be based on the rejection of Atlanticism and liberalism: “[T]his common civilizational impulse will be the basis of a political and strategic union” between Russia and the Heartland, the Slavs and the Turkic peoples of the Central Asian steppe. Continental conservatives—German Christian Democrats; French, Spanish, and Italian rightists—are natural Northerners even when they are squeamish about admitting it. Members of the dominant European left, however, are overwhelmingly enthusiastic about Barack Obama because they are ashamed of their own roots and looks. The sentiment is becoming all-pervasive: Even The Economist opined that Obama’s victory “would salve, if not close, the ugly wound left by America’s history.” The left flatly denies that a common Euro-Russo-American civilization exists, let alone that it is worth preserving or jointly defending. It is in the United States that the obstacles to a northern paradigm are the most formidable. Opponents are present, to some extent, in every influential segment of this country’s foreign-policy community. American exceptionalists believe that the United States differs qualitatively from Europe (not to mention Russia) by virtue of her “propositional credo,” which transcends the shackles of ethnicity, race, culture, and faith. Global hegemonists seek dominance over Europe and fragmentation of Russia, rather than partnership with them. Many hegemonists are also visceral Russophobes, owing to their own ethno-cultural baggage rather than any objective assessment of Moscow’s global position and impact on U.S. interests. Obama’s selection of Joe Biden as his Vice President, Hillary Clinton’s appointment to State, Robert Gates’ retention at the Pentagon, and General Jones’s management of the National Security Council point to the President’s willful blindness to the collapsing economic foundation of the American “hyperpower.” Multiculturalists oppose any notion of “our” physical or cultural space that does not belong to everyone. They deny that we should have a special affinity for any particular country, nation, race, or culture, but demand the imposition of our preferences upon the whole world. They are the mortal enemy of any notion that any shared legacy of the European family is worthy of preservation. These groups share the radical notion that America is not a real country, but a metaphysical concept or a tool for their own Will to Power—or both. They do not want this country to belong to the people whose ancestors created her and who have inhabited her for generations. They celebrate the resulting random mélange of mutually disconnected multitudes as somehow uniquely “American” and virtuous. Ideologues will deny it, but in the decades to come Europe, Russia, and America will be in similar mortal peril from those very multitudes. The magnitude of that threat will become clear as those nations age and the numbers of hostile aliens grow. In the end there will be no grand synthesis, no crossfertilization, and certainly no peaceful coexistence, between the North and the Third World. The short-term prospects for fostering a sense of unity among Europeans—Eastern, Western, and American—are dim and will remain so for as long as the regimes of all the major states of the West are controlled by an elite class hostile to its own biological roots and cultural fruits. In the longer term, however, it is at least conceivable that the ongoing financial and economic crisis will produce salutary political and cultural effects. In the face of diminished property values, rising unemployment, and collapsed retirement portfolios, our elites risk a comprehensive loss of credibility and authority comparable to that experienced by Europe’s ruling class in 1914-18. When the dust settles they may no longer be heeded as arbiters of who we are, what we are to think, and how we are to lead a good life. As the credibility of American global dominance tanks with the dollar, Europe may increasingly see its interests tracking with those of Russia, forcing Washington to acquiesce. No refocusing of international policy will matter if there is not a reversal of demographic and immigration trends. The richer the country, the emptier its cradles. A trend toward Third World living standards may lead to Third World birthrates. Increased scarcity may finally break the political taboo about addressing non-European immigration. Can we hope that a reminder of the harsher realities of life will revive the North’s sense of itself as a Christian civilization and resistance to the stealth jihad being waged in our midst? Sadly, the more likely result of the crisis we now face is deepening demoralization, increased demands for government solutions and services, and ever more inane adulation of such purveyors of political snake oil as our newly enthroned President Messiah. In the early eighth century the triumphant march of Islam into Christendom seemed unstoppable, until it was halted at the gates of Constantinople (718) and at Tours (732). Conversely, in July 1914, Europe was at the peak of every imaginable human achievement, only to be turned into a pale shadow of its former self a mere century later. Much of this depends on leadership. Can we find political leaders who will serve as catalysts for social regeneration? If there are any Dmitry Rogozins lurking in the corridors of American and European politics, this would be a good time for them to step forward. Rogozin’s position on the essential dilemma of our time coincides with what I have repeatedly advocated in these pages over the past decade: a paradigm shift in the West that would pave the way for a genuine Northern Alliance of Russia, Europe, and North America, as all three face similar existential threats in the decades ahead. In an uncertain and ever more brutal world, the Northerners may finally consider banding together, lest they be defeated in detail. I do not know if and when they will do so. I do know that, if they don’t, the best and greatest civilization the world has known will be finished for ever.

Global defence update

February 13, 2009

UAE requirement breathes new life into Raytheon’s LGR

 

The development of Raytheon’s 70 mm laser-guided rocket (LGR), originally proposed for the now-abandoned US Advanced Precision Kill Weapon System II (APKWS II) project, is continuing under a partnership with Emirates Advanced Investments (EAI), headquartered in Abu Dhabi. The semi-active LGR successfully completed a series of live fire trials in the US and has since completed three wind tunnel tests to produce high-fidelity flight simulations and data for tail fin design

 

 

 
BAE and Babcock win UK MoD support contracts

 

The UK Ministry of Defence (MoD) has awarded BAE Systems and Babcock Defence Services aircraft support and training contracts worth a combined value of GBP115 million (USD167 million), it announced on 6 February. The first contract, worth more than GBP100 million, awarded to BAE Systems is to support the electronic warning and defensive protection equipment fitted to Royal Air Force (RAF) Panavia Tornado GR.4 and Royal Navy (RN) and RAF BAE Systems Harrier aircraft

 

 

 

All eyes on cargo as Somali pirates release arms-laden tanker

 

Following the release after five months of the Ukrainian-owned MV Faina by Somalia-based pirates, all eyes were on the vessel’s cargo, confirmed by Ukrainian authorities to include weapons, ammunition and 33 T-72 main battle tanks (MBTs). A ransom reported at more than USD3 million was dropped on 4 February on to the vessel, seized in September some 200 miles off the coast of the Horn of Africa nation; Lieutenant Stephanie Murdock of the US Fifth Fleet, which has had ships monitoring the Faina since it was seized, said that US Navy personnel “saw the drop of what we believe is the ransom”

 

 

 

 

TARDEC and Oshkosh co-operate to advance convoy safety programme

 

The US Army’s Automotive Research, Development and Engineering Center (TARDEC) is expanding its work with robotic convoys to include new leader-follower technology and larger vehicles. TARDEC and Oshkosh Defense entered into a co-operative research and development agreement on 26 January to advance the centre’s Convoy Active Safety Technology (CAST) programme

 

 

 
Spain’s SCOMBA common core combat system prepares to take command
Navantia’s Sistemas FABA division has reached a critical point in the roll-out of the Spanish Navy’s new SCOMBA (Sistema de COMbate de los Buques de la Armada) combat management system (CMS). The first shipset was installed aboard the new Buque de Aprovisionamiento en Combate (BAC) auxiliary oiler replenishment vessel Cantabria in February

 

 

 

 

M-frigates to receive Thales Nederland surface surveillance sensors
New surface surveillance sensors are to be fitted to the Royal Netherlands Navy’s (RNLN’s) two remaining Karel Doorman-class M-frigates under the terms of a contract awarded to Thales Nederland by the Netherlands Defence Materiel Organisation (DMO). The contract, which includes an option for the similar modernisation of the two ex-RNLN M-frigates now in service with the Belgian Navy, covers the delivery of the company’s Seastar X-band fixed face active phased-array radar and the Gatekeeper 360-degree panoramic electro-optical (TV/infrared [IR]) surveillance and alert system for installation on board HrMs Van Amstel and HrMs Van Speijk

 

 

 
US ‘boarding school’ expands to East Africa
A US Navy (USN) frigate is in the vanguard of efforts by US Africa Command (AFRICOM) to expand its Africa Partnership Station (APS) initiative from the Gulf of Guinea across the continent to Kenya, Tanzania and Mozambique. The Oliver Hazard Perry-class frigate USS Robert G Bradley is performing visit, board, search and seizure (VBSS) training with Mozambique maritime forces, the USN 6th Fleet told Jane’s on 10 February

 

 

 
UK decommissions Type 42 destroyer
The Type 42 (Batch 2) destroyer HMS Southampton was decommissioned by the UK Royal Navy on 12 February at a ceremony in Portsmouth naval base. The 4,800-ton warship had been maintained in a state of reduced readiness since mid-2008, when it was effectively laid-up alongside with sister ships HMS Exeter and HMS Nottingham

 

 

 

 

Pakistan and US sign sonobuoys deal
The Pakistan Navy is to acquire three types of anti-submarine warfare (ASW) sonobuoy – totalling 445 units – under a USD346,000 Foreign Military Sales agreement with the United States. The deal represents a tiny fraction of two contracts, worth almost USD70 million in total, awarded by US Naval Air Systems Command to US-based manufacturers Undersea Sensor Systems and Sparton Electronics for the provision of ‘A’ size (91.4 cm long) sonobuoys to the Pakistan and US navies

 

 

 

Source: Jane’s Defence Journal

Kosovo economy bleak, year after independence move

February 13, 2009

By Ivana Sekularac -FORBES-

 

 

In the dusty Kosovo town of Malishevo, Avni Kafxhalli is one of the lucky ones — he has a job.

More than 50 percent of local people are unemployed and for them and Kafxhalli, who earns 10 euros ($13) a day as a builder, little has changed since the former Serbian province declared independence a year ago.

‘Salaries in Kosovo are low. It will take a long time before things improve,’ said the 29-year-old.

The global financial crisis and constant tensions between ethnic Albanians and Serbs have clouded the climate for investment in the economy, which officials say needs double-digit growth to make inroads into Kosovo’s 45 percent unemployment rate.

At best the fledgling state of 2 million people risks stagnation, at worst it faces a long spell in the economic wilderness outside the European mainstream.

It has no ties with its former Serbian masters and a handful of European Union members still do not recognise it, while the economic crisis in the richer West means millions of remittance euros that support many families may dry up as well.

‘Until a year ago, independence was a turning point. Everyone thought that everything will change after independence. Now it is obvious that nothing has changed,’ said Gerald Knaus, head of the European Stability Initiative, a think-tank.

‘If things don’t improve there will be protests directed both against international organisations and against the government. It is surprising how peaceful it has been so far.’

Several hundred members of a disbanded civil protection unit demonstrated in Pristina for new jobs in a new armed force made up mostly of former guerrillas.

Ethnic tensions are still high in the north, and there have been shootings and bomb attacks in the northern city off Mitrovica between ethnic Albanian Kosovars and the minority Serb population. Some officials are worried it could spread.

 

 
EXTREME POVERTY
The economy grew by 5.2 percent last year. The International Monetary Fund sees that rising to 6.6 percent this year, easily outperforming other countries suffering in the global crisis.

But that comes from an extremely low base, and most Kosovars from both the ethnic Albanian majority and Serb minority depend on aid or money sent home from countries such as Germany.

The World Bank says about 45 percent of Kosovo’s people live under the poverty line, and 15 percent are ‘extremely poor’. Salaries average around 220 euros a month.

‘It can lead to the social unrest, not in the short-term but give it a year,’ said Shpend Ahmeti of the GAP think-tank, adding the leadership must to raise living standards and fast.

But economists say Kosovo may be too small a market and has too much political uncertainty and institutional weakness to draw the big foreign investors that propelled other countries in the region into a convergence path with richer EU states.

And chances of banding together with other Western Balkan states are slim, as Serbia has rejected Kosovo’s secession and is vetoing its entry into the United Nations. It also blocks what little exports it has from passing through Serbia’s territory if they carry a ‘Kosovo Customs’ stamp.

The European Parliament has urged the five EU members — Cyprus, Greece, Slovakia, Spain and Romania — that have so far refused to recognise Kosovo to do so.

A donor conference raised 1.2 billion euros in donor pledges and there is the prospect of joining the World Bank and IMF later this year, but without domestic-driven growth, more aid or loans could just disguise the problem.

The country is hoping to privatise its two coal power plants and build a third, the latter of which could bring investment of 3.5 billion euros, according to independent experts. Among other projects, it also aims to sell its mobile operator, perhaps for another billion euros.

But attracting foreign investors during a financial crisis will be difficult and homegrown solutions are scarce, particularly for the jobless.

‘To be able to tackle unemployment, we would really need to have double-digit growth,’ said Hajdar Korbi, an advisor in the ministry of economy and finance.

Jan Bastian, an economist with the European Agency for Reconstruction, said that Kosovo needs working relations with Serbia to create a sustainable economy. It must also strengthen its institutions and better promote itself abroad.

‘This is not a solution for the coming four or five years, it will take a generation and longer,’ he said.

 

Source: Forbes
(Additional reporting by Fatos Bytyci; Editing by Michael Winfrey and Jon Boyle)