24 October 2002

CONTENTS

• Steiner: No further negotiations with Serbs regarding participation in elections
• Dilemma - To vote: patriotism or an individual right? (Zëri Weekly)
• Central Authority is counting its days, what then…? (Kosova Sot)
• All the paths of cigarette smuggling (Koha Ditore)

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Steiner: No further negotiations with Serbs regarding participation in elections

Koha Ditore writes that three days before the elections, UNMIK chief Michael Steiner visited to Mitrovica, calling on Serbs to participate in municipal elections on Saturday. The dailies say that after northern Mitrovica Serb leaders had called for a boycott of the elections, Steiner visited Mitrovica to try to convince Serbs to vote.

"Serbs can decide for themselves whether to participate in the elections or not, but they must be aware of what would happen to them during the next four years if they don't vote," Steiner was quoted as saying in Koha Ditore.

"I told the citizens that what I am saying right now is humane; and I think that Serbs are understanding this and that they want to have a quiet and normal life just like the entire population of Kosovo," the SRSG was quoted as saying in Zëri.

Steiner also says there are no reasons for new negotiations since there is nothing to negotiate. "We have to create legitimate structures with all political entities and so we have invited all legitimate representatives elected by the vote of the people to join in discussions in order to have an approach where everybody will feel at home," he said.

The dailies also reported on the SRSG's visit to Mitrovica Municipal Assembly.

"I told Serbs that I consider that they have more solidarity and not divide Serbs into first and second classes, those where Serbs are in the majority and those where they are the minority. This is not solidarity and I think that each citizen in Kosovo should decide for himself whether to participate on elections or not," the dailies quote the UNMIK chief as saying.

He reportedly said that it is important to have qualitative participation from all ethnic groups on 26 October; and after discussions with ordinary people, he seemed convinced that there would be no general boycott of elections, according to Zëri.

Epoka e Re also reports on the SRSG's visit to Osojane. "As I promised, we have started to build your houses. I told you that we would arrest those who attacked the bus in Peja, and we started with the arrests last week. Yesterday, we arrested two suspects and we also identified two other persons who are at-large, but we will continue to search for them," the UNMIK chief told Osojane Serbs.

"I understand that it is difficult to live here, but we have made many efforts for you in a short period of time. Our aim is to make it possible for you to live here and to see your future here. You will also have a better life with decentralization. You will understand this after the 1 November meeting in Gjilan," the SRSG was quoted as saying in Epoka e Re.

Koha Ditore and Epoka e Re carried Rada Trajkoivic's announcement, released yesterday, regarding participation in local elections. She said that Michael Steiner's speech in Prishtina on Monday "had great importance on the decision on participation on elections," reports Epoka e Re.

"This is the best way for us to avoid being outvoted by the majority, and that is exactly what Mr. Steiner pointed out in the third point of his plan for Mitrovica," Trajkovic was quoted as saying in both dailies.

Dilemma - To vote: patriotism or an individual right? (Zëri Weekly)

Zëri Weekly carried a commentary, captioned Dilemma, by Blerim Latifi. He says that this electoral campaign has a different quality, compared to the previous two, which is obvious in the minds of Kosovars. At last year's parliamentary elections, 35 percent of Kosovar citizens were absent from the polls, even though the campaign had a strong nationalistic rhetoric. Latifi says the obvious reason was " too many political promises" and the voters felt disappointed with all the politicians. The number of non-voters is expected to be even higher this time around, he says, and, if so, then Kosovar politicians are going to face a crisis of trust.

How are the politicians reacting to this absent voter phenomenon?

The first argument is this: Albanian citizens of Kosovo must go out and vote, otherwise, the Serbs can gain more power mandates than they normally and realistically should do. Therefore, the argument is: vote for patriotism. A more clear statement of this argument is: Go vote in anger against the Serbs. Not for other reasons like a rational economic, social or cultural agenda, but only in anger against the Serbs.

The second argument politicians have is this: Dear citizens, go out and vote! You owe it to your country and to yourself as an individual. This argument can be misinterpreted, as what does democracy really stand for? It can be followed by questions such as, what is the purpose of voting? Is it an obligation, or what? If it is an obligation, logically speaking, all those who aren't respecting the obligations should then be sanctioned because in a legal state that's the way it should be. Thus for all those 35 % who were absent from the polls in the last parliamentary election should then be sanctioned, because they didn't fulfill their citizen's obligation.

Nevertheless, based on the criteria of the fundamental elements of democratic liberty, voting is not an obligation, but rather the individual right of a citizen. In other words, I can choose not to vote or to vote; that is my individual right. My legal right as an individual to vote is the same individual right to chose to shop or go to the market, to watch a movie or not.

This is the theory of the German philosopher Franc Newman, who has looked at reasons why people have a tendency to abstain from elections. Without a doubt, the voters of Kosovo are living through an important metamorphosis. The ever-lasting dream of the demagogue to influence the voters isn't achievable anymore in Kosovo.

Central Authority is counting its days, what then…? (Kosova Sot)

Kosova Sot carries an article by Xhavit Nura who says that CFA is counting down and its competencies are soon to pass to the Ministry of Economy and Finances. Nura considers that Kosovo's specific situation and its political status, as well as CFA's inability to provide an effective fiscal policy, have made for a difficult situation. Many consider that CFA was working to benefit neighboring countries and not Kosovo.

He says that after the customs affair, which was immediately hushed up, there was a complete centralization where the media was concerned. He says UNMIK and local institutions haven't demonstrated a readiness to create a differentiated fiscal policy, especially for customs on import of equipment and raw materials. He considers that an important step would be to reduce customs in general, from ten to six percent; however, he says this won't happen due to fear of making the budget smaller. Thus, Nura concludes, fiscal policy is still serving as a means of accumulating income and not as an inducement to economic development.

Nura says that the policy of the local banks should also change after the approval of the mortgage law. The number of loans has been very small so far, compared to deposits; and interest rates at the banks are too high.

He considers that inefficiency at border crossings causes very high losses, as some 30 to 50 percent of the goods that enter Kosovo are not subjected to customs duties.

Even though the Kosovo Government foresees gradually lowered customs rates, the reduction of donor money for Kosovo and emergency cases, such as the education workers, make this decision impossible for now. This could happen only if there was a possibility for immediately getting loans from WB and IMF. "The Government is making efforts to get past this barrier and is searching for creation of conditions which will allow it to get loans from WB and IMF, even before Kosovo's final status is resolved," Njiazi Selmani, senior advisor at Ministry of Economy and Finance, was quoted as saying in Kosova Sot.

All the paths of cigarette smuggling (Koha Ditore)

Of the three routes most often mentioned through which cigarettes are smuggled in the Balkans, two of them Koha Ditore learned about from Kosovar sources, while the third is only mentioned by Serb sources. All these routes pass through four countries in the region, one of which is Kosovo, but no matter the route, the final destinations are EU countries. The smuggling routes passing through the Baltic States and Asia have the same destination. The reason for smuggling is the high taxes on cigarettes in EU countries.

The published reports in the media are interested in reflecting the countries as being 'clean' of this illegal trade and also of blaming others for it. The competition uses this to fight each other. The paths drawn by Serb media aim to put the blame on the political opposition, where the main smugglers are "the ones that smuggled cigarettes five years ago" (Glas Javnosti) and in some cases this happens with new leaders, Zoran Djindjic being mentioned as one. Serb media link all cigarette smuggling to Albanians and Macedonians, however Slovenians are also included.

Based on Koha Ditore's research, cigarette smuggling is a multinational business and, as such, it is a problem for the whole region. The two smuggling paths from the Balkans to Europe pass through Serbia and also through Kosovo. One of them starts in Greece and the other at the Slovenian harbor of Kopar, but this doesn't mean that authorities in these two countries are mixed up in this business.

The path from Greece goes through Serbia and ends up in the Czech Republic, and from there the final destination is EU countries. Raw tobacco is produced in Greece. It enters Serbia and from there goes to Kosovo where it is packed and returned to Serbia and continues its route to the Czech Republic, according to sources in Kosovo.

It is said that the Customs Office in Kosovo is informed about these routes and is investigating who is profiting from them. Serb independent media and some internationals have accused the Serb Government and Serb Prime Minister Zoran Djindjic for being tied to cigarette smuggling.

The other path of cigarette smuggling starts at Kopar and passes through Montenegro to the harbor at Tivat. There it is loaded onto trucks and continues its path to Kosovo. The Montenegrin government receives 15% tax for the transit.

Trucks are stopped at Yugoslav Army checkpoints before the border crossing on the Montenegrin side. Every truck pays the Yugoslav Army another 5% tax and is allowed to continue into Kosovo. From there, hundreds of men are engaged to carry the cigarettes illegally into Kosovo. They are sent to Serbia and from there they continue their illegal path to Western Europe.

The Montenegrin government's license to move freely through Montenegro is considered as a possibility for smuggling, of which Montenegrin President Milo Djukanovic' government has been accused many times. Djukanovic refutes these accusations, saying that they were made for political gain. The Croatian magazine, Nacional, has published a series of articles on cigarette smuggling in which Djukanovic is accused for being implemented in organized crime.
Ekrem Lluka and the Slovenia- Bulgaria-Serbia triangle
The third path is the one written about in the Serb media. This path starts at Tivat harbor in Montenegro, passes through Bulgaria, Macedonia and Kosovo, where through Novi Pazar it crosses into Serbia and continues to Italy and Western Europe. All Serb media (BLIC, Glas Javnosti, Nedeljni Telegraf) mention Ekrem Lluka as the Kosovar tied to this net. The daily BLIC, which has close ties with the Serbian Police, describes as the main actors, the brothers Kosta and Zoran Jankovski from Skopje and Ekrem Lluka from Pejë/Pec. They smuggle around 500 tons of cigarettes a month into Serbia: Winston, Lucky Strike, Monte Carlo and Ronhill, said the Belgrade daily.

The two brothers from Skopje refuted these allegations in the same article, saying that they are legal businessmen and are authorized representatives of two biggest companies international the world, British American Tobacco and Japan Tobacco International (JTI).

Albatronics Company, registered by Ekrem Lluka's brother, imports Monte Carlo and Winston cigarettes, which are produced by Japan Tobacco International. A JTI senior official, Gintautas Dirgela, told Koha Ditore that his company has a representative in Serbia and that they pay all taxes and that they are not interested in competing with their own product through smuggling. To prevent this, JTI asks importers to show them all the necessary documentation that they have paid taxes so they can receive a new shipment, he said. He mentioned that Serb authorities have confiscated fake cigarettes of this company that were produced in Serbia.

Ekrem Lluka, who has now opened a factory in Zahaq, has been lobbying UNMIK authorities and Customs Office to institute excise stamps for cigarettes. Lluka doesn't bring his cigarettes through Montenegro or Serbia. He has also lobbied UNMIK to move the five-kilometer border with Montenegro to prevent smuggling.

"Partner" and Adria Airways
Sources say that Albatronics-Pejë uses Macedonia and Bulgaria to bring cigarettes legally into Kosovo. It is said that Lluka cut his ties with Montenegro in 1996 and that he is forbidden to enter Montenegro. Links to Macedonia were the basis of the accusations made against Lluka.

JTI Baltic has its own distributor in Macedonia. Business relations between Lluka and Macedonia are strengthened by the license for producing Partner and Makedonija Tabak 2000 cigarettes. According to a Macedonian source, Lluka has the license and also is given raw tobacco confiscated by illegal cigarette producers in Kumanovo.

BLIC says the Slovenian airline, Adria Airways, was implicated in smuggling cigarettes in the Slovenia-Bulgaria-Serbia triangle. An Adria Airways representative, Lerka Zupancic, told the Slovenian paper 24 UR that in their regular flights to Prishtina among other merchandise cigarettes are transported that have all the necessary documentation (www.24ur.com). Sources in Prishtina airport said that Adria Airways is the only company that has a license to transport commercial merchandise.

Prishtina Airport was used earlier for transporting cigarettes. Sources told the paper that cigarettes that passed through the airport were taken at the free trade zone in Amsterdam. A pack of cigarettes cost around 50 euro-cents, given the fact that cigarettes are light the people dealing in this business saw it was cheaper to transport them by planes rather than land routes. A businessman that used to deal in cigarettes told Koha Ditore that because of the low taxes on cigarettes in Kosovo, smuggling is not needed at all because a pack of Marlboro doesn't cost more than 80 cents while it is on sale for 1.50 euro.

Kosovo
The Kosovo Customs Service did not want not talk about cigarette smuggling in Kosovo, nor the people who might be implicated. Kosovo is a very important cigarette market because of the low excise tax, compared with other countries in the region. Sources within KCS say that more than 500 tons of cigarettes pay customs every month in Kosovo; and it is evaluated that another 50 tons enter illegally, mostly through Serbia and Montenegro.

Of this, around 300 tons are used in Kosovo, while 200-250 tons cannot be accounted for. They might be placed in warehouses or re-exported to Serbia through Novi Pazar. This amount is half the cigarettes that Serb media say enter Serbia through Kosovo. This amount shows how Kosovo participates in the smuggling net in the region, but it does not denote the primary role that it has been given. UNMIK does not allow for merchandise to pass as transit, as Montenegro does, and, as such, Kosovo is less susceptible to smugglers in the region.

All the countries in the region have differences in excise; for example, excise in Serbia is lower than in Slovenia. "The fight against cigarette smuggling would become more effective if the countries in the region harmonized cigarette excise," said JTI representative Gintautas Dirgela. The Stability Pact has a project for harmonizing taxes as a measure infighting organized crime.

Serbia
It seems that cigarette smuggling bosses in the Balkans are based in Serbia. The territory of former Yugoslavia was even used during communism as a transit for smuggling merchandise to western European countries. Some Serb media have said that the channels remained the same only the individuals that gained from it have changed. During communism, smuggling financed some secret state operations, while today individuals gain from it that are tied to politicians. The Russian magazine Verzija wrote about Serb smuggling bosses. According to this magazine, Pero Matic is the main smuggler of Ronhil cigarettes; and Dusan Zabunovic smuggles West and Davidoff. Serb media say that Marko Milosevic [Slobodan Milosevic's son] smuggles Lucky Strikes. According to Verzija, Matic uses the Slovenia-Bulgaria-Macedonia-Kosovo-Serbia corridor, while Zabunovic starts his path in China, where he prints his excise stamps, and through Bulgaria, Macedonia and Kosovo, brings the cigarettes to Serbia. Verzija wrote that the Ronhil boss has close ties with a former Prishtina Serb, Mirko Marjanovic, while Zabunovic has ties with Milorad Vucelic, who had Milosevic's support during his regime.
Producers stimulate smuggling
Koha Ditore concluded that all cigarette smuggling in the Balkans, Baltic States, Asia and Central Europe is directly tied with producers. In 2000, EU filed a suit with US tobacco companies, Philip Morris and R.J. Reynolds, accusing them of participating in smuggling cigarettes in 15 EU countries (AP).

R.J. Reynolds produces Camel and Winston cigarettes, which are distributed by JTI in Europe and Asia. Dirgela told Koha Ditore that his company does not profit from cigarette smuggling, that smuggling doesn't lower price of cigarettes. Thus the company doesn't gain anything, only the smugglers. The saving of the company's name and participation in the battle for making smokers understand the damages caused to their health are one of the mottos of this firm, he claims.

The British Government has announced the start of investigations of British American Tobacco (BAT) for smuggling cigarettes. BAT's Lucky Strike is one of the most preferred brands in the Balkans and for this reason it is the brand most smuggled. British group "Action on Smoking and Health" published a report earlier claiming that 350 billion cigarettes are smuggled every year. This is 30% of the full amount of cigarettes produced worldwide. Tobacco companies are accused for loss of billions of dollars because of cigarette smuggling since 1970. "BAT, Philip Morris and other tobacco companies have always raised the issue of smuggling if the price of cigarettes increases because of higher taxes. Taking in consideration these findings were used by the tobacco companies more as a threat than as a warning".

Belgrade Update

Serbian Government Announcement on the municipal elections in Kosovo

The Government of the Republic of Serbia at today's session called on Kosovo and Metohija Serbs to take part in the municipal elections in Kosovo and Metohija, scheduled for October 26, 2002.

Successful elections are a direct function of UNSCR 1244 implementation and of the creation of a multi-ethnic, multi-religious and multi-cultural Kosovo and Metohija. By participating in the elections, prerequisites will be met for organizing a decentralized local self-government, as well as the basic preconditions for a sustainable return of Serbs and other non-Albanians to Kosovo and Metohija.

The Republican Government adopted the decision to call on political parties, as well as all other participants in the political process, regardless of their political beliefs and standpoints concering participation in these elections, to be conscious that participation in these elections is in the interest of the Republic of Serbia and the Federal Republic of Yugoslavia.

In light of the fact that the Government of the Republic of Serbia is supporting both the organization and the Serb participation in these elections, all State bodies are obliged to ensure their unhindered realization through active prevention of any unlawful disturbance of these elections or of the rights of the citizens to freely and peacefully exercise their voting rights.

Belgrade, 24 October 2002

Kosovo ahead of local elections: Some Serbs will Vote (Beta analysis)

Having consulted with each other and the authorities in Belgrade, Kosovo Serbs decided to go to the October 26 polls, but only partially. They will cast ballots only in those municipalities in which they can win a majority. The decision was explained as "the lesser of two evils." The Serb discontent over the poor security conditions and their general status in the province resulted in a threat by their political representatives to boycott the election. On the other hand, the move was bound to exclude them from Kosovo's political life. The Kosovo Serb officials have accused the international administration of wanting Kosovo Serbs to run in Albanian-dominated areas just for the sake of having multi-ethnic elections. The purpose of the decision was to maintain control over Serb enclaves in which, as a dominant ethnic group, the Serbs can count on absolute power. At the same time, the Serbs would decline to join local government institutions in the areas in which ethnic Albanians make up a majority. The Serb community keeps insisting on its key demands -- freedom of movement, the right of refugees to return to their homes, and the right to employment. The decision on partial participation in the local vote was made at the recommendation of Yugoslav President Vojislav Kostunica and the head of the Coordinating Center for Kosovo and Metohija, Nebojsa Covic. The Serb voters were urged to vote in Strpce, Novo Brdo, Zvecan, Zubin Potok and Leposavic. The Serbs cannot fail to win a majority in all these towns, except Novo Brdo, where there are not as many of them as in other towns from the list. In the largest Serb enclave, the northern half of the divided town of Kosovska Mitrovica, the Serbs are not going to vote, because the elections were organized for Mitrovica as a whole. The Serb voters are outnumbered by ethnic Albanians.

Steiner's plan / Having learned from their one-year experience in the provincial assembly, where they have been regularly outvoted, Kosovo Serb political representatives sought written guarantees from UNMIK chief Michael Steiner that he would launch a decentralization process shortly after the election. They demand that the Serbs and other minorities could form their own municipalities wherever there are more than 1,000 of them. The maximum Steiner offered in his decentralization plan were municipal units, an administrative form below municipal assembly, which would be headed by councils and funded from budgets proportional to the size of any given unit. According to Steiner's concept for disempowering municipal structures, which was promoted five days before the local election, municipal units could include one or more villages, settlements and city quarters within a single municipality. The form of local units he has offered can be established for, as he put it, "larger non-majority communities." According to Steiner's plan, the municipal units could be established at the request of elected municipal assemblymen or on the basis of a petition submitted by the inhabitants of those areas in which the participation of the given community in municipal elections was "significant." These units have the right to govern primary and secondary education, primary health care, urban planning and the development of services and facilities in conformity with the municipal policy. They are also authorized to make decisions on local matters such as open markets, public areas, cultural activities and sports. Steiner's concept stipulates that the UNMIK chief, after the draft version is debated and different opinions taken into account, should promulgate the decentralization program as a legally binding document. After that, the councils of municipal units would be elected. Clearly resolved to do what he planned, Steiner invited leaders of all parties that participated in the elections to meet in Gnjilane, on Nov. 1, in order for a debate on the decentralization process to begin. In the long run, the municipalities are to be retailored for more efficiency. Hence the possibility for some Serb areas to become independent municipalities. It goes without saying that another public debate would precede the process. Steiner believes that it is of utmost importance that the Albanian community, being an ethnically dominant group, support the long-term decentralization project throughout Kosovo. Otherwise, the initiative is untenable.

Reactions / Three leading Albanian parties accepted Steiner's invitation for the Gnjilane convention. Ibrahim Rugova's Democratic Alliance of Kosovo commented on Steiner's plan in positive terms. The party said the project makes it possible for "power to come closer to citizens," also allowing the authorities "to look after their interests more efficiently." The parties originating from the former Kosovo Liberation Army -- Hashim Thaci's Democratic Party of Kosovo and Ramush Haradinaj's Alliance for the Future of Kosovo -- did not like the municipal reorganization concept the UNMIK chief had offered, warning that the plan would divide Kosovo along ethnic lines, and "send down the river" cooperation between Kosovo's government institutions and international missions in the province. Kosovo Serbs have described the initiative as a step forward, cautioning, however, that it contained no proper guarantees that it would actually get off the ground. The Serbs have pointed out that, according to the plan, the UNMIK chief would take into account the opinions expressed in a public debate, which means that a negative Albanian campaign could affect or postpone the decentralization effort. The local vote is not going to solve the problem of Mitrovica for either Kosovo Albanians or the international missions in Kosovo. The Albanians will form local government institutions independently, and the odds are high that they will try to impose their own solutions on the Serbs in the northern half of the town. There is no doubt that the Serbs will resist them, which will be another challenge that would require further international engagement in Mitrovica. While presenting his seven-point plan for Kosovska Mitrovica, Steiner gave his personal guarantees that Albanians would not be crossing into the northern, Serb part of the town. The post-election period will be a test for Steiner's promises.

US support decentralization of Kosovo (B92/SRNA)

The USA supports UNMIK chief Michael Steiner's Kosovo decentralization plan and its further development in order to ensure an essential degree of authority at the municipal level and preserve the political unity of Kosovo, the State Department announced in a statement. "Washington welcomes Steiner's efforts aimed at including non-majority communities in everyday decision-making, such as education, healthcare and other areas," reads the statement. The State Department pointed out that it was an obligation for all eligible voters to take part in the democratic institutions in Kosovo and to participate in the municipal elections on 26 October.

Regional Update

Macedonia

Against education in Albanian and beatings of Albanians in public

Kosovo dailies report that yesterday in Skopje more than 15,000 high-school students protested the murder of 18-year-old Vanco Josifovski in Tetovo on Saturday. Such protests took part all over Macedonia, and protesters demolished Albanian stores and brutally beat Albanians in front of police.

Koha Ditore says the demonstrations were transformed into a hunt for Albanians. Protesters beat every Albanian that they could identify in the streets. Zëri says that Macedonian students called for the "gas chamber" for Albanians.

Koha Ditore says that Macedonian students also protested against ex-NLA and BDI member, Aziz Pollozhani, for Minister of Education, saying that his appointment would lead to the "Albanization of education…in Macedonia".

Crvenkovski won't oppose Musa Xhaferi's appointment to Macedonian SC
Koha Ditore says that LSDM president Branko Crvenkovski used to say that "individuals involved in last year's conflict would not find room in the Macedonian executive". However, his attitude has recently changed and he no longer objects to BDI general secretary Musa Xhaferi becoming a member of the Macedonian National Security Council. BDI representatives say they agreed with LSDM on not one but two BDI representatives on the Security Council.

Albania

Queen Mother Geraldina dies at 87

All dailies report that Queen Geraldina of Albania died yesterday in Tirana, a few months after her return to the country where she married King Zog after 63 years in exile.