UNMIK/FR/015/01
FEATURE RELEASE - 16 February,
2001
UNMIK
perspective
Continuing Challenges: UNMIK's Report to Kosovo's Donors
By Bernard Salome*
Political developments apart, the vision of
Kosovo that UNMIK projects to the donor community highlights the need for
greater security and coexistence, strengthened rule of law, development of
the economy, consolidation of the budget, upgrading public utilities and
infrastructure, and organization of social safety nets. The Head of
UNMIK's Economic Policy Office elaborates here the issues identified for
consideration and better understanding at next week's Donors
Technical Meeting in Pristina.
Continuation of donors'
understanding and sympathy for Kosovo's social and economic recovery is
crucial-increasingly so in the context of competing development needs and
democratization efforts in neighbouring areas.
How UNMIK will report the progress and achievements
over the past eighteen months and how it sees the challenges ahead are
therefore an important element in the way many donors will assess their
past investments in Kosovo's rehabilitation and recovery, when they come
for their technical meeting in Pristina next week. Along with the TV
images of Kosovo-many of them not so favourable in recent times-such
reports significantly influence how donors allocate their aid and
development funding to Kosovo.
Much of the
necessary wooing of donors takes place at such meetings in private
discussions between the SRSG, his deputies and the international community
representatives. A more public glimpse of the substance of such talks will
shortly be possible in the form of a 40-page UNMIK report United Nations
and European Union Support to Peace and Reconstruction: a Year and a
Half in Kosovo, to be circulated at the meeting, and later throughout the
international community.
Kosovo's list of
attainments, UNMIK will tell donors, began with the completion of
emergency humanitarian assistance, the return to normalcy, and the
transition from emergency to development. Also completed were the creation
of the Joint Interim Administrative Structure (JIAS) and the successful
municipal elections of 28 October 2000. Other achievements, as we move
into a phase of sustainable reconstruction and recovery, are necessarily
still partial: building and maintaining of the rule of law, setting
up judicial systems, protection of minorities, setting up the consolidated
budget, establishing a revenue collection system, organizing consumer
payments for public utilities, creating a financial system and supervising
banks.
Kosovo is also revitalizing its economic environment,
modernizing it at the same time along the lines of donors' own economies.
At donors' request, their funds are solicited and used in an organized
manner according to the Public Reconstruction and Investment
programme-itself part of a financial and economic planning process that is
guided by the principles of the World Bank's Comprehensive Development
Framework. Most industrial and business recovery and development will flow
from arrangements now in place to develop the private sector, UNMIK will
remind donors.
That said, UNMIK is concerned
to convey to donors the nature of the
many challenges still ahead.
Security and Coexistence
For the international community peaceful coexistence
in Kosovo is paramount. But it also knows that even the first steps
towards rapprochement are impossible without better personal security.
Greater security is particularly crucial for encouraging more ethnic
minority refugees and displaced persons to return. The first immediate
challenge, therefore, is to stabilize security, particularly in Mitrovica
and in other areas where minority communities live, and especially where
security could deteriorate even further because of continued lack of
tolerance between ethnic groups. A deepening dialogue with all the
minorities is called for.
UNMIK itself remains
committed to full implementation of the Agenda for Coexistence, for which
securing freedom of movement remains an on-going challenge. The
UNHCR-sponsored bus lines between Serb communities are only a partial
answer. Targeted solutions are being found, donors will be assured.
Examples include a new "confidence area" in Mitrovica built around the
newly reconstructed bridge separating north and south, and the new
cultural centre there. Elsewhere, efforts are underway to improve
conditions for all minorities through better access to medical care,
development of income-generating opportunities, and execution of
development projects such as telephone repair and road rebuilding.
It is also to promote coexistence, as well
as to address the direct humanitarian need, that UNMIK continues to follow
the situation of missing persons and prisoners in Serbia. Now, in addition
to contacts with the Yugoslav authorities through the Joint Implementation
Committee (JIC) in Pristina, the Administration will work directly with
them through the new UNMIK Office being set up in Belgrade.
Rule of Law
The next challenge is to develop further and to
implement all aspects of the rule of law in Kosovo - from law enforcement
to judicial systems and penal detention centres. More police are still
required, both international and local, the latter through recruitment,
training and equipping of the Kosovo Police Service. Law enforcement also
needs more international police specialized in areas like organized crime,
forensic investigation and drug detection, donors will be told.
Donors
will be specifically urged to support measures that will enable the Kosovo
judicial system to hold speedy, effective and impartial trials. Funding is
needed to rebuild more court facilities and to continue training for local
judges. Many more Kosovo Serb judges are required in particular. The
successful provision of international judges must now extend to all
districts-in order to eradicate ethnic bias and intimidation in trials,
and to combat unwillingness of witnesses to testify. Alternative means
must be found to fund the Kosovo War and Ethnic Crimes Court (KWECC), made
up of local and international experts, which was intended to be a basis
for upholding the rule of law in Kosovo for serious war and ethnic crimes.
There is also a clear need for further increase in space for correctional
facilities and in the number and training of Kosovo Correctional Service
officers.
Economic development
Another priority with many donors is to have the
private sector as the main engine of growth for the Kosovo economy by the
end of 2003. A basic framework of law to facilitate private sector
development was completed with the recent regulation on foreign
investment. Efforts will continue to deepen the market-based economy,
including strengthening of economic and legal institutions, and to
encourage enterprise development. The broad policy aim is to draw in the
grey economy and create a workable environment for new business activity
and enterprise development. Stronger coordination of the resources
available to private enterprise will help maximize its impact.
Alongside, commercialization of State and socially
owned enterprises will grow in importance, increasing private sector
involvement in them. Anti-economic crimes regulations will also need to be
designed, implemented and enforced to avoid corruption in the long
term.
Meanwhile, unemployment remains a serious concern, UNMIK will
warn donors. Indeed, one of UNMIK's most important tasks is to find jobs
for an unemployed population now estimated at over 60 per cent. The JIAS
Department of Labour and Employment will encourage employment and
reemployment through targeted job creation and small and medium enterprise
development. UNMIK intends to promote conditions in which the maximum
number of people have opportunities to engage in productive work in order
to have the means to support their families. Efforts will continue to
upgrade technical and management skills in order to stimulate enterprise
development in Kosovo, and to make Kosovo and the Kosovo people
competitive abroad.
Balancing a sustainable
Budget
In line with donors' explicit
demands, UNMIK will explain its coherent budget strategy and expenditure
framework, emphasizing that they can be sustained in the longer term
without direct donor support. By the end of this year Kosovo's
consolidated current expenditures and internal revenues should be in
equilibrium.
This is important because next year the available donor
resources for the current budget are expected to fall dramatically,
necessitating private sector-driven increases in domestically-generated
revenue. UNMIK therefore continues to seek new ways to improve revenue
collection, including rates of payment for services.
On the expenditure side, staffing reductions will
be made in the municipalities and most departments, donors will be
assured. This will reduce the serious pressures on the budget stemming
from significant overstaffing in the public sector - part of the legacy
left by the former socialist system.
For 2001,
every effort possible was made to ensure consistency between the current
budget, investment projects, policy priorities and the overall programme.
In 2001, UNMIK is asking donors to give investment priority to five
areas:
· rehabilitation of public utilities-water supply,
waste disposal, electricity and heating services;
· housing
reconstruction for vulnerable families, durable housing for homeless
families;
· re-launching farm production and
agro-business;
· rehabilitation of the transport infrastructure,
including roads, railways, airports and public
transport;
· large-scale refurbishment of educational facilities
and systems.
Social Services and Safety
Nets
A Social Protection system in
Kosovo that is both effective and equitable is one of the key elements of
a successful transition and future for Kosovo. It is necessary to address
this as soon as possible, UNMIK will tell donors. This should include the
beginnings of a new pension system, the backbone of any social welfare and
protection system.
Since the phasing out of the humanitarian component
of UNMIK and World Food Programme food aid, UNMIK continues to give high
priority to the social assistance programme. It targets especially the
single parent families (greatly increased in number as a result of the
conflict), the elderly (over 70 years of age) and the handicapped. The
JIAS Department of Health and Social Welfare is developing a social
welfare system that provides safety nets for the most vulnerable families.
It is also establishing a framework for unemployment insurance, donors
will learn.
Self-sustainability guarantees
The overall picture of Kosovo thus presented to
donors will portray considerable joint achievement that reflects the donor
community's generous support.
Acknowledging that the
source of their funding is donor countries' own taxpayers, UNMIK aims to
coordinate efficient implementation of the resources it is given, ensuring
that they correspond to essential needs and requirements. Both the
Administration and the donors agree that the emphasis will switch
increasingly to long-term physical reconstruction and development. Only
this can guarantee Kosovo's long-term stability.
* Bernard Salome is Senior Economic Policy Adviser to the SRSG. Previously the Deputy Director of the G7 Support Implementation Group in the Russian Federation, he has worked in Kosovo since August 1999. In April, he is rejoining his mother organization, the World Bank in Washington.
Note for Editors
For a
selection of photographs, please contact Mr. Ky Chung
at 038 504-604 ext. 5467
Contact: P. Ellwood
(038) 504 604 Ext. 5471
E-mail: ellwood@un.org
UNMIK perspective