West stalls on aid for Kosovo

The world's richest nations are due to stump up hard cash this week. But is their enthusiasm waning? asks Stephen Castle in Brussels

JUST AFTER 9.30am on Wednesday, officials from the richest countries and financial institutions in the world will gather in a modern office block in central Brussels to be presented with a blank A4 sheet of paper.

After hearing an account of the devastation of Kosovo's housing stock, the high-level officials will be asked to pledge cash to help the war- ravaged province. Those with a generous offer will make a formal announcement; others will fill out their piece of paper and hand it back.

It could be a turning-point for a benighted region, but the event is more likely to mark another inconclusive chapter in a saga of half-delivered promises and fading ambitions.

When the Nato bombing campaign ended last month, the nations of Europe had seemed united in their determination to rebuild the Balkans. But governments have proved less interested in opening their chequebooks than in feuding over the diplomatic spoils of a bloody conflict.

While their officials have rushed to carve up the key international jobs and rowed over the siting of the reconstruction efforts, those on the ground see little evidence of a large-scale relief effort. "The refugees are paying for the rebuilding of their houses, if they are not constructing them themselves," said Laura Rozen, a political analyst for the International Crisis Group who visited Kosovo last week. "The Kosovo Liberation Army is organising the clearing of wells, most of which are polluted by animal or human remains."

Europe's most senior politicians are finally waking up to the fact that the international push to reconstruct the Balkans could collapse in disaster. "As each day passes," Romano Prodi, the incoming president of the European Commission, said last week, "I am increasingly worried that the capacity for organising war far outstrips our capacity to co-ordinate the reconstruction of people's shattered lives. More than enough time has been wasted on diplomatic wrangling about who should co-ordinate the reconstruction effort."

The squabbling reached farcical proportions when the EU agreed to split its new reconstruction agency into two locations, after the Greek government demanded that part of it at least should be sited in Thessaloniki. Not only does the EU have this new split office (the other half is in Pristina), it also has a "stability pact" for south-eastern Europe, run from Brussels. The UN, the World Bank and the aid agencies are other players in the struggle to come up with a coherent approach. More worrying still, the climate of generosity that emerged during the air war has evaporated.

It was Mr Prodi who gave one of the first and most generous estimates of the amount of cash needed to rebuild the region. Interviewed outside Cologne's Gothic cathedral during the EU summit in early June, Mr Prodi told CNN that the sums would be "enormous" - 5-6 billion euros (pounds 3.3bn- 4bn) a year for five years, 2 per cent of the EU's gross domestic product. The European Investment Bank was in the same ballpark, arguing that regional reconstruction costs would be about $25bn (pounds 15.8bn) over five years.

But with most Western nations determined to give no aid to Yugoslavia while Milosevic remains in power, the focus has narrowed to Kosovo. Wider ambitions, championed by the World Bank, to revive the regional economy have been put on the back burner.

Even on Kosovo there is little consensus. Earlier this month the World Bank argued that Kosovo's economic problems were worse than suspected, pointing out that even before the conflict the province was producing less wealth per head than Albania - Europe's poorest country.

By contrast, Yves-Thibault de Silguy, the acting European Commissioner, said that "the current standard of living in Kosovo is higher than reflected in the available statistics" - probably a reference to remittances from the large number of Kosovars working illegally abroad - "and it seems that the war damage is less than feared".

While the US bore the brunt of the military campaign, it expects Europe to fund the rebuilding, but the proportions have not been agreed. Brussels still remembers having bankrolled the reconstruction of the airport at Sarajevo, only to find itself relegated to the sidelines of an American- dominated opening ceremony.

Thus on Friday the European Commission announced modest plans to help reconstruction of the province, to the tune of just 150m euros this year, followed by 500m euros for each of the next three years. It assumes that this will cover around half the cost of reconstruction, excluding humanitarian aid. Worse, the EU's reaction has been to raise the cash by raiding sums set aside for existing aid work. Its proposals entail a 10 per cent reduction in all external spending and a 19 per cent cut in the humanitarian aid budget.

"Kosovo needs huge investment, but you cannot justify taking that funding from the urgent needs of Africa, including some of the world's poorest countries like Sierra Leone," said Glenys Kinnock, the Labour MEP who specialises in development issues. She condemns the wrangling over reconstruction, which has led to a plethora of agencies competing for the work in hand.

Her political adversary, Elmar Brok, chairman of the European Parliament's foreign affairs committee, concurs: "I have lost count of the number of people and agencies responsible."

The diplomats, meanwhile, have more important business on their minds. Friday will see a huge international conference in Sarajevo designed to give a "symbolic" launch to the Balkan reconstruction effort. Although organisers of the pounds 1m event concede it will have little practical content, preparations continue apace: the latest problem to tax the West's finest minds revolves around President Clinton's jet.

As one diplomat put it: "The leaders want to fly in and fly out, but Sarajevo airport can only handle a few flights an hour. Clinton's entourage alone may block it for half the morning."