Marshall plan? Oh, sorry, forgot

Michael Pollak mpollak at panix.com
Thu Oct 7 01:18:20 PDT 1999


Balkans trade bottled up by blown-up bridges

Copyright 1999 Christian Science Monitor Service

By LUCIAN KIM

NOVI SAD, Yugoslavia (October 7, 1999 12:24 a.m. EDT

http://www.nandotimes.com) - The three bridges that spanned the Danube

River in this northern Serbian city are little more than monuments to

the punishing 11-week NATO air campaign that the United States led

against Yugoslavia this spring.

Crumpled and collapsed from direct hits by NATO bombs, the now defunct

bridges hulk helplessly in the water, cutting off the two sides of the

city and blocking river trade on southeastern Europe's most important

waterway, which stretches more than 1,700 miles from Germany through

Austria and the Balkans to the Black Sea.

As a result, Hungarian and Slovak barges are stuck in Ukrainian and

Romanian ports, while Bulgarian ships idle at Budapest docks.

But it will take more than cranes and bulldozers to clear the logjam

at Novi Sad. It will take a major political breakthrough.

The bankrupt Yugoslav government insists that since NATO caused the

mess, it must help finance the cleanup and reconstruction of Novi

Sad's bridges. As long as Yugoslav President Slobodan Milosevic

remains in power, the West will neither commit aid to rebuilding the

bridges at Novi Sad nor include Yugoslavia in its "Balkan Stability

Pact" for the region.

For neighboring countries, the wait is bringing dire economic

consequences. "No regional development is possible without

Yugoslavia," says a Bulgarian diplomat based in Belgrade. "I'm not

optimistic about the regime here. But Yugoslavia has to be a member of

the Stability Pact and the process of European integration."

Last week, the transportation ministers of Bulgaria, Romania, and

Ukraine appealed to the European Union (EU) to fund the removal of

river debris. The Budapest-based Danube Commission estimates that

repairs could cost as much as $92 million and take as long as four

years.

For the poorer countries along the lower Danube, the river is the

cheapest transportation route to the markets of Western Europe. With

the Danube blocked at Novi Sad, their fragile economies are suffering

huge losses. Romania claims losses of $90 million, while Ukraine has

lost $70 million, and Bulgaria $100 million. An estimated 3,000

Romanian workers have been laid off, and Bulgaria's state shipping

company has had to fire 500 employees.

"Danube transportation accounts for one of the most important sources

of economic growth," says Aleksandar Kovacevic, an independent

economic analyst in Belgrade. "Gross national product in Serbia cannot

grow if transportation on the Danube is not increasing."

The same correlation between river trade and economic growth exists in

Bulgaria, Romania, and Ukraine, says Kovacevic.

A bypass canal around Novi Sad exists, but Yugoslavia says it is for

domestic use only. It has permitted Russian and Ukrainian barges to

use it; those countries opposed NATO airstrikes. But Romania, along

with Bulgaria and new NATO member Hungary, granted NATO use of their

airspace. Romanian shippers have retaliated by prohibiting Yugoslav

barges from traveling through the Danube-Black Sea channel.

Belgrade analyst Kovacevic, who has worked intensively on navigation

problems on the Danube, says for Western Europe - especially Germany -

the blockage of the river is actually a boon. For one, activity on the

Rhine River and at Atlantic ports increases. And the competitiveness

of central European industry, traditionally dependent on raw materials

transported up the Danube, decreases.

"The real problem of the Stability Pact is that it doesn't have

technical provisions," adds Kovacevic. Navigation on the river is

still governed by the antiquated Danube Convention, largely dictated

by the Soviet Union in the aftermath of World War II. "If you miss

this chance to set up regulations on the Danube, you won't have

regional stability," he says.

This is not the first time that turmoil in the Balkans has caused

economic hardship for the struggling economies of the lower Danube.

When sanctions were imposed on Belgrade in 1992 over its support for

Bosnia's Serbs, vital land and water routes through Yugoslavia were

strictly controlled, leading to a steep drop in trade. The embargo

also spawned a wide network of organized crime in the region - perhaps

the legacy of the Balkan wars that will last the longest.

"It's no secret that even during the embargo, fuel and other goods

went from Bulgaria and Romania to Yugoslavia," says the Bulgarian

diplomat. "The embargo was a catalyst for the appearance of organized

crime in Bulgaria."

While the West has pledged aid to the ailing southeast European

economies, many in the region remain skeptical about what help will

actually arrive.

There is a lingering bitterness in Romania and Bulgaria that losses

sustained from the Yugoslav embargo were never compensated fully. And

while Western-oriented governments supported the NATO airstrikes, both

are showing signs of frustration at the slow pace of investments and

of integration into European structures.

Last week, Bulgarian Prime Minister Ivan Kostov said at a meeting with

his Macedonian counterpart that "skepticism of the Bulgarian

government over the pact's actual implementation is growing," and that

"if there are no developments soon, skepticism will change into

disappointment."

(c) Copyright 1999. The Christian Science Publishing Society



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