Birth of a nation: But will Kosovo spark another Balkan crisis?

Kosovo stood on the brink of independenceyesterday, following the failure of talks todetermine its future. But with the international community now deadlocked, and its people more divided than ever, bloodshed threatens to return to the troubled region. Peter Popham reports

Rajko Denic came to the door of his little home in the Kosovo countryside. His eyes flickered in recognition, and he silently ushered us inside. We took off our boots on the porch. The bare, cream-painted parlour was hot as an oven. His wife, Miloradka, and cousins from a nearby village watched us steely-eyed as we entered.

Rajko is a Serbian, and his forebears have lived in Bablak, 40 minutes from the Kosovan capital Pristina, for 300 years. He has witnessed the transformation of his village by foreign aid throughout the eight years since the war. But with Kosovo's independence now a racing certainty, fellow members of the Serbian community here are not waiting for the event, he says: they are already clearing out.

"Serbians have a lot of land here, 250 hectares," he says. " But we have had bad experiences with the Albanians, so we cannot trust them. During the riots in March 2004, they attacked us by surprise. Now the Serbians are leaving. Many have already gone to Serbia. Of 25 families, we are down to eight. Some left 15 days ago, some two days ago."

Kosovo did not become independent yesterday. Serbia did not move its troops to the frontier. No violent incidents were reported within this strange Serbian province, with its population that is 90 per cent ethnic Albanian. The Nato troops who have been here in large numbers since June 1999, reportedly beefed up in recent days by a new American contingent, cruised the roads in their Humvees and armoured personnel carriers as usual, and as usual encountered no problems worth mentioning.

Yet nobody in Kosovo was in any doubt that Monday 10 December was an important day, a momentous day, in European history. Yesterday, Kosovo passed the point of no return.

Some six decades ago, when Josip Broz Tito took over as the strongman of Yugoslavia, Kosovo was almost arbitrarily attached to Serbia as province of that federal republic (before the Second World War, it had been a province within the Kingdom of the South Slavs). Being both linguistically and culturally distinct from all other peoples of Yugoslavia, and the only ones who were Albanian rather than Slav, Kosovo's Albanian population were treated roughly for most of the 20th century; their language was suppressed, their children deprived of schooling, and they were made to feel more like despised, colonised natives than fellow citizens.

Conditions improved during the 1960s and 1970s, only to worsen again in the late 1980s when Slobodan Milosevic visited the province to play the chauvinist Serbian card that brought him to power and eventually reduced Yugoslavia to smoking ruins.

And finally, after its own brutal war, the expulsion of more than one million ethnic Albanians by Serb forces and the humbling of Milosevic by Nato after all that, plus eight years of United Nations-supervised limbo Kosovo now stands only one or two months away (the experts are pretty sure) from following Slovenia, Croatia, Bosnia and Macedonia and becoming a sovereign state.

So are we going to witness the same cruel scenes of exodus and ethnic cleansing that have been the rites of passage for the rest of former Yugoslavia over the past 15 years?

If Rajko Denic's village is in trouble, it's a bad sign. Six months ago, Denic stood shoulder to shoulder with the Albanian headman of his village, Osman Cokli, to receive the plaudits of the world. The Serbians and ethnic Albanians of Kosovo, embittered by decades of conflict and a war that left 15,000 dead, are deeply estranged, but here in Bablak the two communities were doing things right. Co-operating closely, Denic and Cokli had induced aid agencies to shower them with goodies. This nondescript spot is one of the best-equipped villages in the country, with a new clinic, an elementary school, hard roads, street lamps and tiny brick houses, brand new and mostly empty, scattered across the plain all provided by foreign money.

But, six months on, Denic is smiling no more, and the co-operation with his Albanian neighbours appears to have vanished. "We don't know what will happen," he says. "The people are very worried. Agriculture has come to a stop. People have no work. Belgrade is offering enough compromises for a solution, but the Albanian negotiators didn't show any understanding. And the negotiators said nothing about us, about ensuring our security. If Albanian and Serbian citizens had been negotiating we would have come to an agreement, but the politicians can't, or they don't want to."

Denic's father told him that his family had lived in Bablak for 300 years "If I took you to the cemetery you would see what I mean" but this is only his fourth year back, having fled with his family during the Kosovo war.

The school, clinic and new houses were paid for by aid agencies such as Mercy Corps to tempt Bablak's other Serbians to return to the village, and to work to turn Kosovo back into a place where the two communities can live side by side in peace. But only 25 families took the bait, while another 20 stayed away. And now, even those who returned are drifting away.

And the Denics? "We can't leave," says Miloradka. "I have a son, a daughter and grandchildren here. Our grandchildren are both in high school."

"Some like us, who are stronger and more courageous, have a commitment to stay," Rajko says. "I myself will stay as long as I can live here."

An exodus of Serbians has long been anticipated at Kosovo's independence. If Denic is right, it is happening already. But Bablak's Kosovars show no sign of elation at this development.

In fact, Osman Cokli, the Albanian headman, flatly disbelieves it. "The only Serbian who left was a lady with mental problems," he insists. "And she was 92 when they came for her. The community's gone from 25 families to eight? Rajko must have got that wrong. If they've gone away to Serbia, I'm sure it's just temporarily, for a holiday. They have already received food aid and firewood for the winter. They'll be back."

It is the Serbians who fear that they will be the big losers when Kosovo finally stands alone, but the irony is that members of all communities in Kosovo are eager to get out including half of the province's young people, according to the United Nations Development Programme.

As Kosovo stands on the verge of the most tremendous decision in its history, it is beset by a plague of problems that could bring the most solidly established of nations to its knees.

The starkest and most intractable of them is unemployment. Rajko Denic's Albanian counterpart in Bablak, Osman Cokli, has had a brilliant career since he returned to the village after the Kosovo war from Switzerland. The rise of the village from miserable poverty to something approximating a European standard of comfort is thanks to him and Denic. When the British representative (read quasi-ambassador) in Pristina retired, he and Denic were the guests of honour at the farewell party. Yet Cokli is happy to confess: "Coming back here from Switzerland was the biggest mistake I ever made in my life."

He said yesterday: "My biggest problem is that I still don't have a job. As village headman, I get 10 [about 7] per month expenses. I set up a business growing mushrooms and selling mushrooms and tomato paste to restaurants. But the trouble is, when people are unemployed, they don't go to restaurants."

And the brutal fact, according to the UNDP, is that 40 per cent of the Kosovo population of all communities, and 70 per cent of young people, are unemployed.

Cokli hopes that this will soon begin to change. "Economic development is our biggest problem," he says. "But we hope that after the status of Kosovo is finally resolved, foreign investment will begin to arrive. The resolution of the status is the key to economic improvement, because at the moment there is too much uncertainty." He puts his hopes in the five-year plan "designed by an Israeli economist" and embraced by the PDK, the party that won the recent general election.

But Frode Mauring, the resident representative of the UNDP, which has been working to implement a huge range of institutional "capacity building" projects to enable Kosovo to stand on its own feet, has his doubts. " Status is no magic wand for Kosovo's development," Mauring warns. " In fact, to some extent the economy may be negatively affected, in the short term, by independence."

Kosovo was always the poorest and least developed corner of Yugoslavia, with the least of everything, from education to factories. Severing itself from Serbia, while cathartic and long overdue in the minds of the overwhelming majority of Kosovars, presents a new array of problems. For example, there is not a single sewage treatment plant in the region.

Then there's the justice system. During Yugoslavian times, only low-level court cases were heard in Kosovo; more important trials took place up north, in Serbia. So Kosovo lacked well-qualified judges, and many of the few that there were emigrated during the break-up of Yugoslavia. Kosovo's universities were essentially closed to Albanians for much of the 1990s. The degrees that were obtained during those years were often worth little but it was those graduates who had to take up the slack in the judicial system.

Kosovo has few natural resources beside lignite, with which filthy coal it expects to fuel a vast new power-station in the next few years. But if the worst imaginable thing happened and the concentration of Serbs in the northern city of Mitrovica were to counter a Kosovo declaration of independence by declaring independence themselves, they could deprive Kosovo of the only important source of fresh water for its power stations.

Over the decades, Yugoslavia had turned into an intricately symbiotic entity, and Kosovo is struggling to cope with the consequences of that. Most of its wheat, for example, is imported from Serbia a vindictive Serbian government could shut that down overnight. The fuel shortfall is partially filled by power imported via Serbia and even now it is far from sufficient. Darkness and the roar of generators are common in the towns and cities.

Then there are the new problems common to other new-minted miniature states in Europe, and in Kosovo's case made much worse by eight years of pseudo-independence and legal and administrative limbo. Transparency International places Kosovo fifth from last in its league table of the most corrupt states.

The odds would seem to be stacked against Kosovo. Yet there is no denying the energy of the Kosovars, the vast enthusiasm of many for the new challenges of independence, and the positive effects of the goodwill that has rained down from the international community.

"There will be a lot of expectations," says the UNDP's Frode Mauring, "and there will be a lot of disappointments. The turbulence will move from being political turbulence to turbulence caused by the gap between expectations and reality."

In short, as in the other independent Balkan states, things will get worse before they get better. And hope, as an Albanian man across the border in Albania proper pointed out to me, "makes a good breakfast but a bad dinner".

But Rajko Denic and Osman Cokli still live in the same village; they still speak well of each other; they pass the time of day and continue to co-operate. And they are not the only positive examples.

There will be more economic grief to be suffered, Mauring says, but if peace prevails it should be overcome and Kosovo should have a soft landing. Given good luck, clever diplomacy and immense forbearance, the hopes may not be in vain.

A history of the region: Troubled past... and a controversial present

By Anne Penketh

1389 Battle of Kosovo fought at Kosovo Polje ("Field of the Blackbirds"), in which Prince Lazar of Serbia is killed. The comprehensive defeat of the Byzantine empire by Turkish forces was immortalised in folklore as a manifestation of the Serbian nation, with Kosovo its cradle.

1974 As unrest mounts, Tito's Yugoslavia grants the Albanian-dominated province autonomy.

1989 In a speech at Kosovo Polje on the 600th anniversary of the battle, and amid escalating tensions, Slobodan Milosevic restates Serbia's claim to the territory and rescinds autonomy.

1990 Kosovo's Albanian leaders declare independence from Serbia, which responds by dissolving the government and sacking Kosovo Albanian workers.

1998 Serbs crack down on the separatist Kosovo Liberation Army (KLA), and hundreds of thousands of Albanian Kosovans begin to flee across the border. This prompts Nato to warn Milosevic on the treatment of Albanians.

1999 Nato air strikes begin against Yugoslavia. Milosevic finally withdraws troops from Kosovo. The United Nations takes over governance of the region, supported by Nato troops.

2002 Kosovan parliamentary elections take place and Albanian parties share power. Ibrahim Rugova is elected president.

2005 Rugova survives an attack in Pristina, and another explosion goes off near Kosovo's parliament.

2006 Rugova dies and is replaced by Fatmir Sejdiu. UN-sponsored peace talks begin between ethnic Serbian and Kosovan leaders. Serbia approves a new constitution, declaring Kosovo a part of the country.

2007 In the UN Security Council, Russia blocks an internationally-agreed peace plan for "supervised independence". International mediators are given a last chance to reach a negotiated solution by 10 December. They fail. Hashim Thaci, a former KLA leader, wins the general election in Kosovo in November and becomes prime minister-elect, but is persuaded to delay a declaration of independence in co-ordination with the US and EU.