Kosovo in Transition

From November 2003

Dear Friends and Family:

As you saw from my earlier note, I arrived this evening in Ljubljana, Slovenia after four days in Prishtina, Kosovo. I feel as if I have crossed an ocean rather than just the Adriatic Sea.

You probably remember Kosovo from the NATO bombings of the June 1999. The bombings were the last stage in the Yugoslav War and the one that broke the back of then President of Yugoslavia, Milosevic. I had never before visited Kosovo but it has always been known as the most barren part of Yugoslavia. Indeed it was to Kosovo that the Croatian Serbs were sent in July 1995 when then President of Croatia Tudjman turfed them out of the mountain ranges of Croatia.

My assignment in Kosovo was to review the draft company law from a corporate governance perspective. But unlike other countries, my counterparts were not local officials but members of the international community. In 1999 after the Yugoslav Army gave up Kosovo, the UN sent in a civilian contingent to accompany the military force. The civil servants of the UN thus took over all the government functions of the Kosovo region—and they started to treat Kosovo as a separate country with its own set of government ministries, manned by staff of the United Nations and consultants hired by the European Union. Using a vague reference to “economic development” in a statement by the G-8 Ministers of Finance (which includes Canada), this group of international civil servants and European consultants drafted basic commercial legislation for Kosovo. It was rather necessary. The international community had deemed that all Yugoslav legislation enacted after 1989 was not applicable to Kosovo. Starting in 1999, the UN had established itself as a fully-functioning government with the ability to write regulations with the force of law. Now the UN and the European Union-funded consultants have drafted a law that would replace the UN regulation and provide a workable base for Kosovo’s enterprises and emerging corporations. My job was to give comments on the draft law.

It was amazing to me to see the Kosovars give up so much authority to the international community. After 1989, Milosevic had closed the Albanian-speaking schools in Kosovo and disbanded the Kosovar parliament. The Kosovars argued that they had lost at least a decade and were missing the intellectual capital to run their own corner of the world. They were so grateful to Clinton that they named the main street Bill Clinton Boulevard. Even Maria Theresa does not have such imposing street in Prishtina to her name.

It was fascinating to see how Kosovo has developed under the tutelage of the international community. At first blush, Kosovo looks like the classic post-Soviet place with potholes in the sidewalks and street-lights that don’t work at night. Electric service is off every night throughout the city, sometimes starting at midnight and sometimes at 8 pm in a series of rolling blackouts that are intended to reduce demand on the electric system. However I also noticed that cars slowed down for pedestrians, rather than speeding up or just maintaining a high speed as they do in other post-Soviet countries. Also I saw no prostitutes or thugs in my hotel and in general there was little evidence of corruption. Yet the UN estimated in 2001 that 40 percent of all heroin consumed in Europe and North America passed through Kosovo. I saw in our office a three-page list of bars and restaurants for which staff was prohibited from frequenting. It’s the first local office that I have visited where a list of prohibited bars and restaurants was given to visiting staff. There is clearly a strong criminal mafia in Kosovo but they haven’t been able to corrupt the local government—or at least not yet, not until the Kosovars take back their government.

So I spent my four days working till midnight every evening and trying to recover from a ferocious flu that I picked up as I was leaving Washington. One night I found the UN gym, which had a treadmill for my workout. Another evening I found an internet café (from whence I wrote the first note saying that I was in Prishtina). On my last day, I discovered a garden of landmines and unexploded ordnance—other places have rose gardens and museums. Kosovo has a manicured garden of landmines. I also wrote a 12 page report on ways in which the draft company law could be improved to strengthen corporate governance—and why transparency of ownership and control of companies was even more important in a place like Kosovo that in developed countries.

Sue