Bosnia collapsing?

Last week top level European politicians have awaken to reality concerning the state of Bosnia-Herzegovina, namely that this artificial creature made by Dayton agreement is starting to collapse. This in spite of hundreds of millions of euros which e.g. EU has thrown away to build some kind of multi-ethnical ideal.

Dayton Agreement was made 1995 after bloody war (1992-95) had almost finished ethnic cleansings/transfer of populations so that it was possible to draw administrative boundaries according ethnical groups. The agreement split Bosnia into two semi-independent entities – the Serb Republic and the Muslim-Croat Federation and three ethnic groups – Croats, Serbs and Bosniaks – are trying to lead state together and separately. Entities are unitedby weak central institutions, administration is quite heavy loaded with some 170 ministers and whole system is supervised by international presence. (Note: Dayton Agreement one may find from here.)

Dayton designer and former Bosnia administrator are worried

On 22nd Oct. 2008 the former United States diplomat Richard Holbrooke and former High Representative in Bosnia Paddy Ashdown published an article urging European Union and US leaders to reinforce their engagement in Bosnia and halt a new crisis which threatens to bring the country to collapse.

The two diplomats say that Bosnian Serb Prime Minister Milorad Dodik has taken advantage of the weakness of constitutional state structures, fatigue and the international community’s saturation, as well as the inability of the EU to meet its own conditions, and over the course of the last two years has succeeded in destroying the majority of the real progress made in Bosnia-Hercegovina in the last 13 years.”

On the other hand the two diplomats add that “Chairman of the Bosnian Presidency Haris Silajdžić has frequently made statement on the need to abolish the two entities that comprise Bosnia-Hercegovina, and the need to create an undivided country not made up of federal units.“ “Poisonous relations and clashes between the two of them are at the heart of the current crisis in Bosnia-Hercegovina,“ which is why “doubts and fears have revived that were the basis for the start of the war in 1992,“ states the text.

…as well EU and Nato

On 27th Oct. 2008 EU’s foreign policy chief Javier Solana said in Brussels that the EU has warned politicians in Bosnia they are jeopardising the country’s Euro-Atlantic integration with the heated nationalist rhetoric. “We are concerned about the rhetoric which is growing and this rhetoric cannot contribute to the objective of getting Bosnia and Herzegovina more engaged with the European Union and Euro-Atlantic institutions,”.

Solana met NATO Secretary General Jaap de Hoop Scheffer at the regular NATO-EU meeting, while the situation in Bosnia and Herzegovina was the main focus of discussions. The NATO chief expressed his concern about the heated statements by some politicians in the country. “The situation in Bosnia and Herzegovina is of course secure and stable but the political rhetoric leads to concern,” Scheffer said. “We will have to address and we will address,” he added.

Last week the EU Enlargement Commissioner, Olli Rehn, said Bosnia has made “a significant step forward” by signing a key pre-membership deal called the Stabilisation and Association Agreement on June 16. “The EU could initial the Stabilisation and Association Agreement last December and sign it in June because the country’s political leaders pulled together and reached consensus on the main conditions, particularly police reform. This proves that progress can be achieved and crises overcome, when the political will exists,”. “However, this consensus has since collapsed and reforms halted,” … “Nationalist rhetoric ahead of the October local elections was a factor in this deterioration. Yet, the country’s political problems run much deeper.” Rehn said in his speech.

Republica Srpska

A short news popped to my eyes from BalkanInsight.com which describes quite well political trends in Republica Srpska – one of the entities.  I quate (Source) :

The government of Bosnia’s Serb-dominated entity of Republika Srpska, has hired a US law firm to deal with the Office of the High Representative and upcoming key reforms. Republika Srpska Premier Milorad Dodik said that the firm, Dewey and LeBoeuf, will advise his government on relations with the international community and all other legal matters, including on a list of reforms required for closing the Office of the High Representative, OHR, local media reported on Monday.

The OHR was supposed to end its mandate in Bosnia by 2008, but because of the worsening political deadlock in the country over the past two years, it has set up a list of reforms which – once implemented – will enable its closure and transfer to a stronger European Union mission in the country. So far, the OHR was the ultimate interpreter of the Dayton peace accord and hence the main interpreter of its own mandate. But by hiring a United States law firm specialised in international law, Dodik’s is seen as moving his arguments against the OHR onto legal grounds.

In addition to hiring the US law firm, Dodik has recently confirmed that his government has hired a US lobbying company that was supposed to represent Republika Srpska in Washington and other western countries. Bosniak (Bosnian Muslim) officials complained that this, as well as the opening of Republika Srpska offices abroad, showed that Republika Srpska continue taking responsibilities which belong to the state.  Some Bosniak officials also complained that Dodik is strengthening its representation abroad as a part of lobbying that should soften world powers to the idea of Republika Srpska’s eventual declaration of independence.

So one entity is

• challenging international supervision also with legal grounds,
• opening own offices abroad to make its own foreign policy, and
• lobbying potential (separatist) independence declaration

5th November 2008 EU Commission will publish its “Progress report” about the road of western Balkan countries towards European integration/enlargement.  What I have seen in drafts is not very favorable to Bosnia-Herzegovina and actions cited above are not smoothing the road to EU.

My view

The recent past of Bosnia-Herzegovina is violent and there was not only one brutal side – there was three of them. This past has its impact today and real truth behind successful propaganda about events of war 1992-95 is still unclear. (Note: same remarks about this one may find from my previous article “Opening Bosnian X-files”, check my Archives:Blog).

The worries of top politicians have good base. It is not anymore dispute between Serbs and Bosniaks, this year has showed serious dissension between Bosniaks and Croats which may be related to rise of radical Islam in Balkans. (Note: I wrote a couple of articles about this earlier October, check my Archives:Blog).

One may have seen pictures where Bosnian Muslims (Bosniaks) and Bosnian Croats have been busy rioting again following the defeat of Croatia by Turkey in the Euro 2008 football match. The Bosniaks supported Turkey, the Croats Croatia. Meanwhile when Serbia plays Bosnia, Bosnian Serbs root for Serbia. This gives quite clear picture about national identity and multi-ethnic ideals – or lack of them. Can any country survive without some minimal mutual self-identification across its citizens as a whole? If the shared non-ethnic Bosnian identity is taking steps backwards does this not mean that this artificial western desk-drawer plan is doomed to fail? I am afraid so but maybe it is loss only for those top level designers not for local population.

Kosovo separatists are dreaming to occupy the north Kosovo

Former Kosovo PM Agim Ceku told reporters on Sunday 26th Oct. 2008, that the government in Priština should declare the northern part of Kosovo “a zone of special interest”.  “If this part of Kosovo is declared a zone of special interest, that means presence of state officials of Kosovo must be secured there. Those officials would work there and be the state authority of Kosovo,…, such measures in the Serb-dominated north which rejects Priština’s authority would be “temporary”.

Ceku, who is the leader of the Social Democratic Party, said the Thaci government has no concrete plan to spread its authority in the north. For his part, Ceku did no rule out using force to achieve this. “Use of force is the task of every security organ. I would not say use of violence, but of force, if necessary. The functioning of the state and government in every part of the country is the task of institutions, which have their instruments and powers. Force is one of those powers,” he elaborated.

Ceku’s wish is of course easy to understand in dreamworld he is living in.  The fact de jure however is that acording highest international law (UNSC 1244, UN Charter etc.) Kosovo still is under Serbia’s sovereignty, International Court of Justice is giving its opinion about province’s unilateral declaration of independence btw asked by UN General Assembly.

Whatever – depending point of view – status Kosovo has, the province is de facto administrated by international community.  However the administration is still in full chaos because there is administrators more than enough.  1st (not order of authority) we have European Union Special reparesentative (EUSR) who is douple hatted as chef of International Community Office;  2nd we have Head of EU Commission lianson office; 3rd we have EULEX mission; 4th there is KFOR troops including Europe’s second largest Nato base, 5th international administrator is from UN side – SRSG as Head of UNMIK mission.   All these administrators are playing in the same sandbox wondering who is doing what and where.  In addition in Kosovo is also local stakeholders like separatist governments institutions in areas habitated by Abanians and parallel Serb institutions in areas habitated by Serbs.

The fact on the ground is that northern part of Kosovo is integrated to Serbia like it always has been, as well those pats south of Ibar river, which are not ethnically cleansed by Kosovo Albanians.  Between ethnic groups a huge operation of international community is going on with its foggy ideas.

Coming back to original statements of ex-PM Ceku – who BTW before was wanted about his war crimes – they may reflect the frustration to present situation and this has some potential to escallate violence again. If this self-declared quasi-independent puppet-state wants to start again some new conflict in Balkans lets hope that international community does not go to the same trap than before.

More articles about Balkan and Caucasus politics one may find from my Archive:Blog

Serbia jumped to top ranking of attractive emerging markets

Recently I wrote here an article named ”Competitiveness of Balkans” where I sited a comprehensive annual survey “Global Economic Competitiveness Report 2008-2009” published by the World Economic Forum (Article and report may be found from here.). The report has calculated sc. “Global Competitiveness Index Rankings” (GCI) 134 countries poled.  Now I was reading a report of PricewaterhouseCoopers LLP about a ranking of attractive emerging markets, which approach some Balkan countries from different angle.

PricewaterhouseCoopers – one of the leading global companies on its field of activities – published now the second year of its  EM20 Index (‘the PwC EM20 Index’) generated by PwC’s innovative Risk & Reward Model.  The full report can be found from here.

PwC EM20

In order to be considered for inclusion in the PwC EM20 Index,  countries needed to meet certain criteria associated with emerging market status. These were as follows:

• GDP per capita in 2007 less than $13,500 at market exchange rates;
• population greater than 5m people in 2007; and
• GDP at purchasing power parity in 2007 greater than $50m.

These criteria were set to identify countries with populations and resources of sufficient size to meet the needs of inward investors, while also having an appropriately low cost base. The criteria yielded a list of 50 countries.

Bulgaria and Serbia top three in Manufacturing index

The results for Bulgaria and Serbia – the second- and third-placed countries in the Manufacturing Index – illustrate the impact that significant changes in country riskpremia can have on index rankings.

The two countries are similar in terms of wealth, population size and location –both being physically close to Germany. However, Serbia was placed 25th in 2004 whereas Bulgaria held the top ranking. At the time, Bulgaria was a candidate for membership of the European Union (which it joined in January 2007), while Serbia was emerging from a period of conflict and economic isolation. Thus Serbia’s move up the rankings to third place this year essentially reflects the fact that its political risk – an element contained within the country risk premium applied in the model – has more than halved over the intervening years. Another point to note is that Serbia’s corporation tax is set at a low level of 10%. For comparison, the corporation tax rate in Bulgaria is 15%.

Serbia jumped up 7^th in Services index

Serbia was ranked outside the top 20 in 2004, but achieved seventh place in 2008.  Its improvement largely reflects increasing GDP per capita, although its country risk premium remains relatively high. The country risk premium reduction reflects the improvements in political and economic stability as the country moves towards EU admission.

Surprising Serbia

PricewaterhouseCooper analyses the factors for Serbia’s success and concludes following:

One country that features prominently in this year’s PwC EM20 Index, both in the Manufacturing and Services Indices, is Serbia. This may be surprising given that the country is only starting to appear on many investors’ radars as it recovers from the conflicts of the 1990s. Nonetheless, GDP has grown by 5.5% on average since 2000 and FDI (Foreign Direct Investments) is growing as the government opens up the economy and international buyers overhaul recently privatised Communist-era manufacturing facilities. The level of annual FDI inflows has grown steadily in recent years.

PwC continues, that “one of the drivers behind Serbia’s growing potential attractiveness to foreign investors is the falling risk of investing in the country. Political risk is considerably lower than at the start of the decade, while improved legal and financial institutional frameworks make capital invested in Serbia more secure. As a result, investors are willing to accept lower returns on their capital, making viable greater numbers of potential Serbian investment opportunities. Of course, Serbia still experiences some underlying political uncertainty, its accession to the EU is not imminent and further investment in infrastructure is necessary, but many international investors show confidence in the market’s potential.

Different aspects of different reports

While reading different reports it is reasonable also think a little bit which are the motivations behind their statements. EU for example is making regularly their reports about development in western Balkan countries.  The point of view with these reports is, how non-member-states of EU are developing their institutions and practices towards better integration with EU practices.  So these political reports are same time reflecting the values, priorities, top level statements and ideals of EU.

Whit business orientated reports the angle is different.  Statements, ideals and other diplomatic small-talk is on background, the core of reports is the value for companies and potential investors.  When users of political reports are playing in their virtual sandbox the business is playing with their own hard currency and when making decisions they must rely so much as possible to real facts.

Regarding Serbia last year has showed increasing trust by investors to this country.  US Steel has put their money to metal processing, last Summer Fiat started to invest manufacturing of motor vehicles and Gazprom is investing oil and gas.  In service sector Telekom Austria is coming to telecommunications, Merrill Lynch real estate business and News Corporation to media sector.

Political development and events are catching many headlines but real progress can be found from the ground.  After many negative news and reports it is promising to see this development gaining speed in real world.

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500.000 bodies or sign!

Some of you may have been reading my earlier column “Do you hear Mr. Nobel rolling in his grave? on 12th Oct.2008.  Now I was reading an shocking article “How the Nobel Peace Prize Was Won” by Gregory Elich at CounterPunch. Original article can be found from here.

One of the main points highlights Ahtisaari’s mediator tactics when he is threatening President Milosevic that those whom Ahtisaari represented were willing to flatten Belgrade and to kill 500.000 people in a week unless President Milosevic does not sign his offer.

Sign or get 500.000 bodies!

“Ahtisaari opened the meeting by declaring, “We are not here to discuss or negotiate,” after which Chernomyrdin read aloud the text of the plan. Ahtisaari says that Milosevic asked about the possibility of modifying the plan, to which he replied, “No. This is the best that Viktor and I have managed to do. You have to agree to it in every part.” Ristic reports that as Milosevic listened to the reading of the text, he realized that the “Russians and the Europeans had put us in the hands of the British and the Americans.” Milosevic took the papers and asked, “What will happen if I do not sign?” In answer, “Ahtisaari made a gesture on the table,” and then moved aside the flower centerpiece. Then Ahtisaari said, “Belgrade will be like this table. We will immediately begin carpet-bombing Belgrade.” Repeating the gesture of sweeping the table, Ahtisaari threatened, “This is what we will do to Belgrade.” A moment of silence passed, and then he added, “There will be half a million dead within a week.” Chernomyrdin’s silence confirmed that the Russian government would do nothing to discourage carpet-bombing. The meaning was clear. To refuse the ultimatum would lead to the deaths of large numbers of civilians and total devastation. President Milosevic summoned the leaders of the parties in the governing coalition and explained the situation to them. “A few things are not logical, but the main thing is, we have no choice. I personally think we should accept…To reject the document means the destruction of our state and nation.”

True story

I originally found above mentioned article from a column by Dr. Jan Oberg, who is a Danish co-founder of Transnational Foundation for Peace and Future Research.  He also checked from a  Canadian lawyer Chistopher Black if the quotation was true.  The lawyer confirmed that it was exactly the same what President Milosevic had earlier told him in his cell in the Hague.

Dr. Oberg published also 22nd Oct. 2008 an article which headline “Peace Laureate Ahtisaari endorsed terrorism” tells quite a lot about content. I really recommend you read this analytical article yourself.  It can be found from here. If link does not open so copy/paste following address: http://www.transnational.org/Resources_Treasures/2008/Oberg_Ahtisaari_2.html

The bottom line

After reading articles mentioned above, having followed Kosovo conflict management on the ground as well from different reports and sources I would conclude, that

• methods to stop Nato bombings were not so sophisticated than maybe earlier assumed
• it is not anymore unclear, why Serbs had reservations for Ahtisaari and his impartiality as UN envoy/mediator
• it is easy to understand why there was not real negotiations – status talks – 2005-2006, why they failed and why the outcome – Ahtisaari plan/report – is what it is

The lesson learned could be that crisis management with using force to get imposed solutions without real negotiations between local stakeholders are not sustainable.

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Two Approaches from Balkans towards Europe

Countries in Western Balkans have all some European Perspective.  Slovenia is already in, Croatia is hoping to conclude its EU membership talks by the end of 2009, Macedonia has candidate status, membership applications from Montenegro, Albania and Bosnia-Herzegovina are in cue, Serbia (with or without Kosovo or part of that) has the Stabilization and Association Agreement (SAA) but not yet into force.  For me it is interesting to see two different approach – or aspects from Balkans towards Europe namely a political one and the technical one.

SAA agreement and implementation of integration program related to that are a huge administrative challenge including all sectors of society politics and law, which after implementation should be compatible with EU.  With this technical process maybe more important for EU membership is political trends and challenges both inside EU as well related to states of Western Balkans.

Croatia

The European Commission is set to give Croatia next month a conditional date for concluding EU membership talks by the end of 2009 despite French pressure against any new commitment on enlargement, EU sources say.  They said the French EU presidency had lobbied Brussels strongly against giving Zagreb even an indicative timetable after Commission President Jose Manuel Barroso made the pledge earlier this year to Prime Minister Ivo Sanader. (Reuters in National Post, Tue 21st Oct.2008)

Croatia hopes to actually join the European Union in 2010. But France and Germany insist there can be no further expansions of the 27-nation bloc until all member states ratify a reform treaty designed to strengthen its creaking institutions. According unnamed EU sources the EU Enlargement Commissioner Rehn the Commission will not give Macedonia, which has EU candidate status, green light to start accession talks next year and is also seeking to delay membership applications from Montenegro, Albania and Bosnia in hopes that Serbia, seen as central to Balkan stability, will arrest a key war crimes suspect and join its neighbours on the EU track.

Some EU officials, speaking on condition of anonymity, said they had misgivings about fast-tracking Croatia.  They argue that Zagreb faces on a lesser scale the same problems of corruption, organised crime and a weak justice system as Bulgaria, which many EU countries think was admitted prematurely in 2007.  If this were purely about how well Croatia is doing, it would take another two or three years,” the senior source said. “Sanader still doesn’t get it,” another EU source said. “He still thinks that a diplomatic offensive will achieve it without having to do all the painful reforms.” (Reuters in National Post, Tue 21st Oct.2008)

Serbia

Serbia’s Stabilisation and Association Agreement (SAA) was signed April 2008. Parallel to the SAA negotiations Serbia started its National Strategy for the whole process of European integration with goal to reach membership status by 2012. If/when Serbia gets status of an EU membership candidate the mentioned National Programme (NPI) is coming one of the key documents of the government for future. It serves as reform guide, base of Government’s annual work plans etc. but most of all well prepared and detailed information on planned reforms not for European Commission/EU but for the Serbian society.  (Both documents – SAA and NPI – can be found from Document library right).

EU Enlargement Commissioner Olli Rehn says that 2009 will be the year of the Balkans, even if the Lisbon Treaty blockage impedes further EU enlargement.  If Hague Chief Prosecutor Serge Brammertz gives a positive report on Serbia’s cooperation with the Tribunal, the Stabilization and Association Agreement (SAA) may come into force, and it would be realistic to work towards Serbia obtaining candidate status before the end of 2009, Rehn said. (B92, 21st Oct.2008)

EU has encouraged Serbia to start implementing its obligations from the Interim Trade Agreement – a part of the Stabilization and Association Agreement (SAA), so as to “with practical and concrete measures speed up the progress on Serbia’s European path”. However, the government in Belgrade has earlier announced its readiness to “unilaterally implement” the provisions of these deals.  Although the Council of Ministers has still to unblock the Interim Trade Agreement with Serbia, the government has decided to begin applying – unilaterally implement – it from January 1st 2009.

Benchmarking – Best Practice

Technically EU candidate can conclude accession talks when/if it meets several technical standards.  They include all social aspects and actions like e.g. judicial reform, stronger action against corruption and organised crime, and reform of big compensated factories in line with EU state aid rules.
This technical approach I would describe as “benchmarking” in which organizations evaluate various aspects of their processes in relation to sc. “Best Practice” within their own sector. This then allows organizations to develop plans on how to make improvements usually with the aim of increasing some aspect of performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which organizations continually seek to challenge their practices.

What makes the situation however political is, that term “Best Practice” is often a misused. It is frequently used to support politically correct ideals which, in reality take no account of individual need or circumstances. In this sense the ensuing practice is far from ‘best’ when the resulting effects are contrary to the real ideal situation. It is also used to prevent challenges to rules and systems that are, in reality, not best practice.

Technical vs. political Approach

Today it seems that Croatia has counted on previous good will of Catholic Germany, Austria and Italy who were backing its independence already early days 90s without having to do “those painful reforms”.  Serbia’s approach has been almost the opposite.  There has been minimal amount of good will in EU towards Serbia even technically the country maybe has been better prepared for EU than e.g. Bulgaria.  And as said Serbia is starting to implement Trade Agreement even unilaterally.

Which approach is better?  I would claim that in bottom line all is about politics.  It was political question to accept Bulgaria to EU with loose standards. It can be political question not to accept Serbia to EU on some excuse or other (Hague cooperation, border dispute, Kosovo etc.) despite how well they implement SAA. It can be also political question not to take Croatia to EU if all enlargement will be frozen due the economical reasons, the lack of money or creating a third way for EU wannabies (like new models to integrate Turkey).

Before mentioned Serbia’s National Programme is one of the key documents of the government for future. It serves as reform guide, base of Government’s annual work plans etc. but most of all well prepared and detailed information on planned reforms for EU.  From my point of view the key question is that Serbia should use this document for the Serbian society, not because of possible EU membership but even without that status, to improve living conditions of Serbs in or outside EU.

Powerplay behind the new Cold War

Georgia 08/08/08 is the date when headlines in Western mainstream media started to tell how big, bad aggressive Russia attacked to tiny, democratic, good Georgia. After that the West continued accusations about occupation a free sovereign state started rethink enforcing its frontlines around Russian border in new cold war era. Al this despite the fact, that day earlier 7^th August 2008 Georgia had started the moths before planned war against its separatist province (look my article “OSCE report fault Georgia – one trivial statement more from EU summit” 4^th Sept.2008 from my archives right). All this despite he fact, that USA had already showed the way how to break international law e.g. by bombing Kosovo and orchestrating the quasi-independence of that separatist province.

While speaking about new confrontation between East and West the (mostly western) political commentators have used first nice, warm words like freedom, democracy, sovereignty, humanitarian catastrophe to justify their planned harder actions to response Russia’s aggression. However if we scrub the soft spoke for dummies – sorry for public – we can find the hard reality and bigger game behind recent headlines of Caucasus or Balkan events. I try next to highlight few aspects with this power play.

Pipes

First element I would like to mention is energy. Georgia is part of a NATO military alliance (GUAM) signed in April 1999 at the very outset of the war on Yugoslavia. It also has a bilateral military cooperation agreement with the US. These underlying military agreements have served to protect Anglo-American oil interests in the Caspian Sea basin as well as pipeline routes. (The alliance was initially entitled GUUAM, Uzbekistan subsequently withdrew and the name was changed to GUAM: Georgia, Azerbaijan, Ukraine, and Moldova). More you may find from my article 9th Sep.2008 “War on Pipes: Transport corridors as core of US-Russia confrontation” where I write about GUUAM and SRS (Silk Road Strategy Act). Article one may find from my Archives right.

To reduce reliance on Persian Gulf oil, the Bush Administration has sought to strengthen relations with other non-OPEC, oil-rich countries. For example when (then) Defense Secretary Rumsfeld visited Kazakhstan, his main agenda was to promise security assistance for Kazakhstan’s oil pipelines and facilities on the Caspian Sea, where an estimated 7-9 billion barrels of oil were recently discovered (the largest oil discovery anywhere in 30 years). Azerbaijan, Georgia, and Turkey recently signed a U.S.-backed deal to build an oil pipeline to bring that oil to ports on the Mediterranean. The U.S. has military ties with each. U.S. oil demand is huge and increasing.

Today, the U.S. has less than 5 percent of the world’s population, yet it consumes more than 25 percent of global oil production-about 20 million barrels per day (mbd). Oil is the dominant fuel in the U.S. energy market, meeting almost 40 percent of total U.S. energy needs. Most of this is consumed by the transportation sector. If current U.S. oil demand trends continue, by 2025, the US. will be consuming over 29 mbd. More larger and heavier cars and trucks- with bigger engines, driven more miles each year- will account for most of this growth. All tolled, today, the world is consuming a little over 80 mbd (30 billion barrels per year). By 2030, global demand is expected to grow by 50 percent to 120 mbd (45 billion barrels per year).

After August events in Georgia everything did not happen according US plan. Russia could warm its relationship with Azerbaijan which was clearly to seen when Dick Cheney made his travel around Caucasia and came back empty hands. Also the situation in Ukraine developed away from US hopes.

Paul Goble concludes in his “Window on Eurasia” Sep. 5^th 2008 following: “With Iran’s declaration that it opposes the construction of any undersea pipelines in the Caspian on “ecological grounds” and thus will block any delimitation of the seabed that allows for them and Baku’s decision not to back the West’s push NABUCCO project, Moscow can claim its first major political victory from its invasion of Georgia.” (Source)

These actions mean that the Russian government will now have full and uncontested control over pipelines between the Caspian basin and the West which pass through Russian territory and will be able either directly or through its clients like the PKK to disrupt the only routes such as Baku-Tbilisi-Ceyhan that bypass the Russian Federation.

Military-industrial complex

Second let me mention “military-industrial complex”. When Russia’s invading forces choked roads into Georgia with columns of armoured vehicles and struck targets from the air, it instantly bolstered the case being made by some that the Defence Department isn’t taking the threat from Russia and China seriously enough. It was said that “Christmas Comes Early For the Military Industrial Complex”.

The Military-industrial Complex has been one of the biggest players in US foreign policy since President Eisenhower. Details about Iraq killing Iranians with US-supplied chemical and biological weapons significantly deepens our understanding of the current hypocrisy. It began with “Iraq-gate” — when US policy makers, financiers, arms-suppliers and makers, made massive profits from sales to Iraq of myriad chemical, biological, conventional weapons, and the equipment to make nuclear weapons. Reporter Russ Baker noted, for example, that, “on July 3, 1991, the Financial Times reported that a Florida company run by an Iraqi national had produced cyanide — some of which went to Iraq for use in chemical weapons — and had shipped it via a CIA contractor.” This was just the tip of a mountain of scandals.

A PBS Frontline episode, “The Arming of Iraq” (1990) detailed much of the conventional and so-called “dual-use” weapons sold to Iraq. The public learned from other sources that at least since mid-1980s the US was selling chemical and biological material for weapons to Iraq and orchestrating private sales. These sales began soon after current Secretary of State, Donald Rumsfeld travelled to Baghdad in 1985 and met with Saddam Hussein as a private businessman on behalf of the Reagan administration. In the last major battle of the Iran-Iraq war, some 65,000 Iranians were killed, many by gas.Coming back to present days one could easily find out how the US government borrows heavily to cover its off-the-charts defence spending—$587 billion this year. Spending in Iraq and Afghanistan is from 2.9 – 5.0 bn$ per week or 280.000 – 500.000 $ per minute.

The five largest American Defence contractors are Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. They are being followed by Honeywell, Halliburton, BAE Systems and thousands of smaller defence companies and subcontractors. Some, like Lockheed Martin in Bethesda (Maryland) and Raytheon in Waltham (Massachusetts) draw close to 100 percent of their business from defence contracts. Some others, like Honeywell in Morristown (New Jersey), have important consumer goods divisions. All, however, stand to profit when expenditures on weapons procurements increase. In fact, U.S. defence contractors have been enjoying big Pentagon budgets since March 2003, i.e. since the onset of the Iraq war. As a result, they have posted sizable increases in total shareholder returns, ranging from 68 percent (Northrop Grumman) to 164 percent (General Dynamics), from March ’03 to September ’06.

For war profiteers, soldiers returning maimed or in caskets, and an over $500 billion Pentagon budget paid for by the taxes of ordinary citizens, are externalities — costs and consequences borne by others.

NATO became even more threatening to Russia because, at the same time, the alliance shifted its mission from defending the soil of member countries to offensive missions outside the treaty area – for example, bombing Bosnia, Kosovo, and Serbia.

The trend toward autocracy in Russia is maybe horrible for some Russian interest groups, but it is little threat to the United States. Even autocracies have legitimate security concerns, and Russia has been invaded several times through Eastern Europe, which is why the Russians are worried about a hostile alliance on its borders. Empirical evidence shows that authoritarian regimes aren’t necessarily externally aggressive – for example, the dictators in Burma – and that democracies are no less belligerent than autocracies in their foreign policies. In fact, data show that the most aggressive nation on the planet after World War II has been the United States – not the Soviet Union – with more than 100 military or covert interventions in other countries.

If we make contrast to today’s’ financial turmoil one should remember following. Wall Street analysts concur that “war is good for business” particularly during a period of “economic slowdown”. The top five U.S. defence contractors generated almost $129 billion in revenues and $8 billion in profits in 2006, double the revenue and profits in 2000 when George Bush became President. I bet that they want this to continue.

Lobbyists

Third there are lobbyists. Their business turnover is minimal compared two above mentioned elements but they are important glue between business and public affairs. Lobbyists can channel business money as donations or bribes to political figures or parties who then can facilitate the needs of donors.

In Georgia case most famous is Randy Scheuneman. Top McCain foreign policy advisor, Randy Scheuneman, was paid $200,000 recently by Georgia for consulting services, about one day before McCain issued a policy statement backing and emboldening the Republic of Georgia in its grab for disputed regions. And it now appears that McCain may have signalled that the US would essentially have Georgia’s back if it tried to assert possession of the territories. Since 2004 Scheuneman got $900.000 from Georgia. Recently US promised over 1 bn$ taxpayers money to Georgia – god investment I must say, for Georgians.

In the mid-1990s at the stint of the Clinton administration the United States launched the process of involving “former Soviet satellite nations” into both the European Union and NATO with an eye at securing a more efficient control over their political activities. The rapid expansion of the North Atlantic alliance was a part of the strategy of a “new American age” worked out by R.Cheney and his team. In 1996, Bruce Jackson, one of Cheney’s close friends and a top manager of the military-industrial corporation “Lockheed–Martin” took the reins of the influential lobbyist organisation “American Committee on NATO Expansion”. Bruce Jackson was appointed as head of the US Committee on NATO by President Clinton and put in charge of integrating the Eastern European countries into NATO in spite of assurances that had been given to Soviet leader Mikhael Gorbachev that this would not be done. This integration involved selling US weapons systems to these countries so that they would be compatible with ours.

Lobbying can have also win-win effect to players. E.g. Bruce Jackson founded the Committee for the Liberation of Iraq in 2002, a few months after retiring from Lockheed Martin. One can image, as the war in Iraq grinds on at a cost of some $250-400 million per day, and another contractor-heavy organization, the Iran Policy Committee, calls for a pre-emptive strike against Iran, how US Foreign politics is guided.

The New Defence Agenda (NDA) is part of Brussels growing military-industrial complex. Set up in 2003, it is funded by arms producers Lockheed Martin and BAE Systems in order to promote higher European military spending. Others arms industry lobby groups include the European Association of Aerospace Industries (AECMA) and the European Defence Industries Group (EDIG). The arms industry is also using the Lisbon Agenda and competitiveness to argue their case for increasing the EU?s current defence spending of about 3 percent of GDP to the US level of 6 percent.

New and Old Europe

Discussing about transatlantic relationship with Russia I can see a triangle drama with “western” camp. US has found stalwart allies from “New Europe” Polish-Lithuanian tandem as its spearhead, who are serving as America’s watchmen on Europe’s periphery as well cannon fodder in demanding theatres. The tandem with some wingmen (Estonia, Latvia) have their role in expanding Western military ties to East Europe and checking Russia’s energy grip on Europe.

We have “Old Europe” like Germany, Italy some cases Spain and France also, who are more interesting about strategic political and business partnership with Russia. Old Europe countries are also developing bilateral cooperation with Russia when they see its advantages.

While some “New Europe” countries still have some post-Soviet trauma, US is tied to her self-caused conflicts and “Old Europe” is wondering how the Union will look in future, it is demanding task to find a common approach to relationship with Russia. While Russia also considers its options I can only hope that some neutral forum for dialogue could be found.

Yes I hope that one or more forums can accommodate different dialogs. Europe schizophrenia will be cured either in some common forum or with two rail development where new and old Europe maybe are going with different speeds and maybe also different directions – the trauma symptoms maybe are similar in new and old Europe countries but the cause/motivations differ. Post-Soviet new ones maybe have more emotional cause for their actions, US maybe have more economical priorities as well some old EU states.

High pressure to fabricate Racak reports

Forensic dentist Helena Ranta says that officials of the Ministry for Foreign Affairs had tried to influence the content of her reports in 2000, when Ranta was commissioned by the European Union to investigate the events of Racak in Kosovo. Ranta put forward her allegations on Wednesday October 15th at the publication of her biography in Helsinki.

More than 40 Albanians were killed in the village of Racak in January 1999. The investigation by Ranta’s working group was very charged from the beginning. It was commonly assumed that Serb forces had perpetrated a massacre, which helped persuade NATO to launch bombings of Yugoslavia in the spring of 1999.

According to Ranta, in the winter of 1999 William Walker, the head of the OSCE Kosovo monitoring mission, broke a pencil in two and threw the pieces at her when she was not willing to use sufficiently strong language about the Serbs. (Source HS 15/10/2008)

There is a widespread belief, that Walker’s role in Racak was to assist the KLA in fabricating a Serb massacre that could be used as an excuse for military action.  The theory was that the KLA had gathered their own dead after the battle, removed their uniforms, put them in civilian clothes, and then called in the observers.

Walker’s background

Walker was U.S. ambassador to El Salvador in November 1989 when six leading Jesuit priests, their housekeeper, and her daughter were dragged from their beds and murdered by the Salvadoran Army.  The killings were carried out by the Atlacatl Battalion, which was recruited, trained, and deployed by the U.S. military, supposedly in order to improve the Salvadoran Army’s human rights performance.  The Atlacatl was responsible for the worst atrocities of the entire war.

Walker first emerged in the Iran-Contra Scandal as the right-hand man of Oliver North and Elliott Abrams in illegal arms shipments to the Contras out of Ilopango airbase in El Salvador.  Before that, he was deputy chief of mission at the embassy in Honduras when U.S. authorities were recruiting officers from Somoza’s deposed National Guard to establish the Contras, and forming military death squads that murdered hundreds of Honduran workers, labor organizers and students. Information about Mr. Walker’s background one may find e.g. from article “Meet Mister Massacre” by Mark Ames and Matt Taibbi here.

Some remarks

Biography of Mrs. Ranta is one more example about political aspect in modern time’s information wars.  Similar examples from last year are interview of former Haague Tribunal spokeswoman Florence Hartmann (see my article “Opening Bosnian X-files” 12th Aug.2008 from my Archives right)   – as well the book of her former boss del Ponte describing e.g.  organ trafficking of Serb civils by Albanian mafia – are giving quite disgusting picture about “realpolitik” behind noble statements of international community.

With this kind of now public exposures I would like to draw quite clear conclusion which is that latest mid-90s the western powers had decided heir position against the Serbs.

First there was case of Srebrenica July 1995, which launched publicly US support to Bosnian Muslims with claims of massacre of 8000 civilians (later few thousand was found, some of them were died years before, some of those 8000 returned alive few years later etc).

Second they were silent about massive ethnic cleansing of Serbs from Krajina (more in my article “Operation Storm” 5th Aug.2008  here) .

Third there was Racak case which launched Nato bombings 1999.

The story – manipulation public by mainstream media with fabricated reports for political aims – continued later this decade in Iraq operation and partly Georgia case (stories started with Russian invasion 8th Aug.2008 when in reality Georgia made attack to civil targets 7th Aug.2008, also fabricated pictures of Reuters came soon pubic).

After all this it is hard to believe on the other hand to official reports of states/international organizations and on the other hand the neutral or investigative journalism in sc. free press. Especially alarming it is now to read reports about nuclear program of Iran – what is true and are big players again starting new unnecessary war with false evidence.

Competitiveness of Balkans

The World Economic Forum (WEF) published again a comprehensive annual survey “Global Economic Competitiveness Report 2008-2009”. Economic Forum together with its network of leading research institutes and business organisations in the countries covered by the report has calculated sc. “Global Competitiveness Index Rankings” (GCI) 134 countries poled.

The report takes into account a series of indicators in public and private institutions, macroeconomic stability, infrastructure, health, education, market and labour efficiency.  The survey is designed to capture a broad range of factors affecting an economy’s business climate. The report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.

The report is one of background information discussed in the first World Economic Forum on Europe and Central Asia will be held on 30 October – 1 November in Istanbul, Turkey.

Western Balkans

According mentioned report Slovenia has been ranked as the most competive economy in the Balkans. Slovenia’s GCI was 42 out of 134 countries polled followed Croatia (61), Greece (67), Romania (68), Bulgaria (76), Serbia (85), Macedonia (89), Bosnia-Herzegovina (107) and Albania (108). Other interesting rankings nearby Balkans are e.g. Czech Republic (33), Slovak Republic (46), Hungary (62), Georgia (90) and Moldova (95).

If compared to previous Competitiveness reports there is not dramatic changes during last five years. Only exception maybe is that both Slovenia and Croatia have passed Greece in these rankings. More information about Competitiveness and also about other WEF reports one may find from their weforum.

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Islamic terror in Bosnia – follow-up and some background

On September I wrote here an article “Radical islamist network spreading in Balkans” describing some actual events in Bosnia-Herzegivina. Now a Croatian NGO Libertas made public statement in which it says that Croatians in Bosnia are victims of Bosnian Muslim terror and are asking Bosnian Croat political leadership to initiate a plan that will break up the Bosnian Federation entity and form a Croatian one.

Serbianna news headline on 11^th Oct.2008 is quite informative – “Islamic terror victimizing Bosnian Croats”. The statement of Libertas claims that “After several denary terror attacks on Croatian returnees in central Bosnia, after several murders of children of which the last was in Sarajevo and after the latest murder of Croats in FIS Vitez and relentless attacks on Croatian property in Bosnia, why hasn’t anyone been held accountable,”.

Some background

The Former Canadian ambassador to Yugoslavia James Bissett told in his article  “War on terrorism skipped the KLA” (look it from my Document library) that Bin Laden and radical Muslim groups had been deeply involved in the Balkans since the civil wars in Bosnia from 1992 to 1995. It was reported that Muslim authorities had issued a Bosnian passport to Osama bin Laden at the Bosnian embassy in Vienna in 1993.

Shaul Shay, an officer in the military Late intelligence of the Israeli Defense Forces and expert on international and fundamentalist Islamic terrorism, analyzes in his book “Islamic Terror and the Balkans” the growth of radical Islam in the Balkans. He shows how the war in Bosnia and the war in Kosovo provided the historical opportunity for radical Islam to penetrate the Balkans.

“After 9/11, when the US started examining the financing of terror organizations, it discovered that many of the Islamic charities that operated during and after the war in the Balkans were channeling “terror” money . A big chunk of that money that was supposed to be used for humanitarian purposes went to finance those  [Islamic terror] infrastructures, ” Shay stated.

For background information I could also recommend book “Unholy Terror: Bosnia, Al-Qa’ida, and the Rise of Global Jihad” by John R. Schindler.

Lessons learned

Western mainstream media (MSM) and reports of international organizations and NGOs have told many stories about capacity building of new multi-ethnic state with European perspective. The events now and earlier are forcing to ask if the picture created by MSM is the right one. I do not have that kind of illusion. Few remarks for future:

• Are recent events describing wider ethnic intolerance in Bosnia-Herzegovina and maybe Kosovo too where Islamic terror has some potential?

• Can this situation give new perspective to one-sided (Serbs bad, others good ones) picture of Balkan wars?

• Has international community right priorities while making capacity building and police operations in Bosnia-Herzegovina?

• Has the artificial creature Bosnia-Herzegovina came to end of its road as federation?

• Do possible three entities have any reason to hang together in same state or are more alluring prospects other side of the borders?

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Do you hear Mr. Nobel rolling in his grave?

The criteria for Nobel peace prize outlined in Alfred Nobel’s will 1895 was “to contribute to fraternity in the world, to reduce armies and to establish peace congresses”. The choice of Martti Ahtisaari as this years winner undervalues – again – those original ideas. Ahtisaari got the prize probably about his actions as mediator in Namibia, Aceh and Kosovo. Namibia went according UN peace plan, Aceh was acceptable compromise and Kosovo everything else.

Norwegian founder of peace studies, Johan Galtung, has criticized heavily Ahtisaari’s way to handle peace processes. Galtung claims that “Ahtisaari does not solve conflicts but drives through a short-term solutions that please western countries”. He further says that Ahtisaari “let’s EU to abuse himself”. According to Galtung Ahtisaari does not hesitate to favour solutions that bypass United Nations and international law.

With Kosovo case I would see three serious – intentional or unintentional – mistakes of Ahtisaari with negotiation process lead by him namely implementation, attitude and outcome.

• The implementation of Kosovo negotiations already started wrong while Ahtisaari accepted limitations made by Contact Group, which created limitation of discussion option and image about solution tacitly predetermined from the start. This failure is clear when compared sc. Troika Talks, which were open-ended in principle and showed a lot of alternative solutions for Kosovo status.

• The attitude of Ahtisaari did not help neither success of his negotiation process. He drew precedented criticism from Serbian politicians for allegedly saying that “Serbs are guilty as people” and implying that they would have to pay for it, possibly by losing Kosovo which is seeking independence. Before Ahtisaari this kind of attitude in collective guild of the nations were made by Hitler. One can understand anger of Serbs who few years earlier had overthrow their undemocratic leader.

• The outcome of process was wretched. It was claimed solution was the only possible – it wasn’t, alternative solutions came during Troika talks. There was no need to continue negotiations – it was because there wasn’t an agreement between Belgrade and Pristina. Solution was described “unique case” and no precedent – false again at least if one asks from some thousand separatist movements on globe. Solution was intended to provide stability to whole region – it created only one frozen conflict and puppet state more.

One could say that Ahtisaari has more acted as spokesperson of US State Department and Nato than unbiased mediator. Besides Kosovo Ahtisaari also supported US propaganda about Iraq. Like in Kosovo one reason for attack was “humanitarian intervention” while in reality most of civil casualties were made when Saddam was an ally of USA. Like in Kosovo the attack to Iraq was made without UNSC approval against international law.

Meanwhile, the Swedish institute TFF (Transnational Foundation for Peace and Future Research) called the decision “scandalous”. Ahtisaari is a man who by his “mediations” fully endorses the “peace” brought about by militarist means and international law violations – rather than following the UN norm of “peace by peaceful means.”, TFF said.

P.S: My headline is a little bit provocative – Mr Nobel was cremated.

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