WITH KOSOVO WAR OVER, PEACE IS NEW TASK
Rebuilding Kosovo and the Balkans will top the agenda of the G8 heads of state when they meet in Cologne on Friday, reports the Wall Street Journal Europe (p.14). With their endorsement last week of a "Stability Pact for Southeastern Europe", leaders put their imprimatur on a sweeping regional plan aimed at shepherding Balkan countries into the West and erasing the sources of future conflicts.
As ambitious as the rebuilding effort is, it is also fraught with perils, policymakers acknowledge. As in the four-year-old effort to rebuild Bosnia, red tape, and turf battles in a still-evolving system could slow the flow of aid to the region. The carrot of Western largesse must be tempered with the stick of strict conditionality to avoid enriching elites and crowding out private investment, economists warn.
Kosovo is still formally a part of Yugoslavia, and the tie will complicate everything from the issue of currency to sovereign lending by the World Bank and the IMF, which never admitted the rump federation as a member. The Bank, says the story, plans to skirt the issue by setting up a special trust fund that can begin making loans and grants to the province.
In a separate report, the WSJE (p.1) quotes World Bank special representative Rory O'Sullivan as saying, "The big unknown in this business is Serbia. It's five times bigger than Kosovo and the most backward in Europe in terms of economic reforms."