Thursday, November 27, 2008

The price of ignoring Somaliland

In all the news about the piracy near Somalia journalists generally assume that the piracy is the product of the anarchy there. Yet one of the main harbours for the pirates is Somaliland - an area where it is quiet.

Somaliland is an area in the north of Somalia. The clan that lives there has more or less separated the area from the rest of Somalia and is in close control. As a consequence Somaliland has stayed quiet while the rest of Somalia fell in anarchy.

The international community has largely ignored Somaliland. After the 1999 Kosovo War the international community did its best to give Kosovo access to the rest of the world, so that it wouldn't be hurt by its lack of statehood. A similar effort has lacked in the case of Somaliland.

It now looks like the leaders of Somaliland have enough of it and have taken resort to piracy to fuel the local economy. One can criticize them for this. But at the same time one has to ask oneself whether it isn't immoral to keep an area excluded from the rest of the world in this era of globalization. It is very difficult to live in our world when one hasn't easy access to international banking, telephony, visa, air traffic, development aid, etc.

I believe that the international community should do more to engage Somaliland. This doesn't need to be some formal recognition. But just as with Kosovo one has to find practical solutions. This would also give us the leverage to ask Somaliland to do something about the piracy originating on its territory.

For those interested in Somalia, read also this article that claims that Somalia has been better off in its present anarchy than under the Siad Barre disctatorship. When reading this one should take in consideration that Somalia receives a lot of UN food aid.

Don't get me wrong. I do not advocate recognition of Somaliland's independence. I am aware that not all its clans support the independence and that Somaliland has territorial disputes with Puntland. But for lack of a central authority I think we should work together as good as possible with local authorities. And I think that when Somalia gets a new central government it will do go to give strong autonomy to the regions.

Postscript: Foreign Policy had an interesting article about Somalia. It is a kind of short history of Somalia in the last two decades - including the mistaken Western interventions. The article describes Indirectly they support my position in this post when they advocate an decentralised Somalia and the international community working with lower levels of government instead of imposing yet another central government.

Monday, November 17, 2008

Organized crime in Croatia

I don't follow Croatia very much, but I always thought it was a little closer to Europe than Serbia. So my surprise when I read this article:

Yet a Croatian panelist, Natasha Srdoc from the pro-free-market Adriatic Institute of Public Policy, denounced the "very soft report" published by the European Commission earlier this month on the progress of her country.

She criticised the perspective of concluding negotiations by the end of 2009 - a schedule suggested by enlargement commissioner Olli Rehn, and denounced the recent contract killings of critical journalists, and the "widespread corruption" noted in the commission report.

She also warned of the strength of organised crime in the country, saying there was a "much stronger underground network than in Serbia, [and this] includes the intelligence services."

"There is not enough pressure now to reform before accession to the EU and NATO. Once a country is in the EU, the chances for reforms are lost," Ms Srdoc said, demanding "international monitoring" of Croatia, as the authorities were, in her view, incapable of dealing with these challenges.

Is this just an extreme view? Let me know your opinion!

Friday, November 14, 2008

Optimistic about Kosovo???

New Kosova Report has a report from a discussion in London. It has an upbeat tone about the situation in Kosovo. I quote:

However one refreshing theme emerged. Daut Dauti's final word on the subject was 'hope'; Tim Judah elaborated. He reminded his listeners of the dire forecasts made this time last year of what the world could expect as a result of a declaration of independence: lines of Kosovo's Serbs on tractors heading for the border, enclaves wiped out, churches destroyed, and Serbian politics dominated by the far right. It hasn't happened.

The upbeat tone surprised me. When I had read Judah's book Kosovo: war and revenge I had found it a bleak analysis of the cycles of Serb and Albanian ascendancy in Kosovo and the apparent inevitability of these cycles. This view is perhaps another way of articulating Anna Di Lellio's concept of Kosovo's 'permanent transition'. I hadn't wanted to believe that these cycles and transitions would repeat endlessly.

But how could the last 10 years be considered different from any other period of Kosovo's bloody history? My optimistic answer would be because of this and that. This, the internet. That, the debate at LSE and what it represents. Through electronic media, widely if not universally available, and through other contact with people from beyond the Balkans, today's Kosovars - Serb, Albanian, and others - are more aware than any generation before them, of the world outside Kosovo. Kosovo has witnessed an unprecedented exchange of peoples and ideas in this decade, through the international community which has come to Kosovo and the experience of Kosovars and the countries where they sought asylum.

I don't share this optimism. I never shared the the expectation that Kosovo's Serbs would leave en masse on tractors. It was based on the belief that Serbs had left the Krajna and Sarajevo in 1995 without reason. In my view that was simply wrong. The Croats had a long track record about how they treated the Serbs in the areas that they conquered and Krajna's Serbs had no reason to believe that they would be treated differently. Bosnia's Muslims used different methods to make the Serbs feel unwanted but they were just as effective. In Kosovo this scenario that the "others" would take over and change everything at once isn't possible. The international peacekeepers guarantee against sudden changes for the worse.

But all reports point to a worsening of the situation of Kosovo's Serbs. The number of departures is increasing. Interethnic tensions is rising. And with Albanian cops in Serb villages we have a scenario that doesn't fit basic minority rights. It looks like the go-slow ethnic cleansing is continuing.

The idea that it is now quiet because of the internet is a misperception about how we got the violence in the first place. It was because the international community seemed totally unaware of how revolutionary it is to declare provinces independent without negotiations. Giving one side everything in an ethnic conflict is a sure way to inflame a conflict - even more so when the other side has the military means to resist. (For me Badinter is still the greatest war criminal of all in former Yugoslavia.) Nowadays the international community is doing everything very slow while it keeps a small army ready for the case that something goes wrong.

The expectations about the rise of Serbia's extreme right is based on misperceptions too. Nikolic had built the Radicals from a small racist party into the main opposition party. He had done this by paying attention to populair social-economic themes like corruption and poverty. When he recently broke with the Radicals and founded his own party the "old" Radicals went back to the 10% of the electorate they had under Seselj. So the belief that 30% of the Serb voters supported Seselj's extreme ideas was simply a misconception about the functioning of politics in Serbia.

But is there reason to optimism? I doubt it. The slow exodus keeps going. With one Serb family leaving at a time it doesn't get the headlines. But in the end it is just as much ethnic cleansing as the queue of tractors. And it will have long term effects on the relations between Kosovo and Serbia.

How it works? I think this quote from a report by Victoria Hayes gives the best impression:

I would like to see Kosovo less as a national Kosovo-Albanian state, but I understand that given the country’s past it is difficult for people, Albanian, Serbian, and others both in and out of the region, to refrain from viewing it as such. It seems that it will be impossible to ever view Kosovo as anything but an Albanian nation, despite attempts to include minorities in the country’s activities. I think a lot of these attempts are nothing more than words; in general, it did not appear that anyone was truly interested in including Serbians, or the Romas, Ashkalis, Egyptians, or any other minority group. I say this because many people, who claimed that they would really like to see a better representations of the Serbian population in the government, police, etc., would attribute the lack of Serbians in these areas to laziness, stubbornness, or some other undesirable characteristic of the Serbians. There is so much underlying anger on each side that even people who I considered extremely intelligent would make ethnically-biased comments about the Serbian population in Kosovo.

Saturday, November 08, 2008

Corruption in Kosovo

The American Chamber of Commerce in Kosovo has published a report about coruption in Kosovo and its impact of the busisness community. Unfortunately it is only the result of a questionnaire among businesses. It misses individual observations that would have given taste to the dry figures.

Most interesting I found the differences between Serb and Albanian businesses. Serb businesses have much more problems with the KEK (40%) and the Cadastre (30%), allthough the KEK is impopular with the Albanians too. But no institution get complaints of more than 15% of the Albanians.

Update: New Kosova Report has an elaborate interview with Avni Zogiani from the anti-corruption NGO COHU. He comments on the findings by saying that corruption is invisible because it is mainly in the political arena. All the checks and balances that should keep politics honest are simply not there.

Tuesday, November 04, 2008

International Monetary Fiddling

Tough times for developping economies. The Ukraine hass seen its currency sink 20%, it stock exchange fall 70% and seen its trade deficit explode because the demand for steel (a major export product) is falling fast. The government spent $2.9 billion buying hryvnas to support the currency in october alone.

Now the IMF has come to the "rescue" by lending $16.5 bln. The conditions are not yet clear but wil include a balanced budget and support for banks.

The question is whether this is any better than past IMF conditions that often nearly destroyed the economy of the receiving nations. I think not.

The Ukraine (and many other rising economies) had an economy driven by foreign investment. This foreign investment financed a hugh trade deficit that allowed a florishing consumer economy. It led to an artificially high currency that was detrimental to autonomous export-led growth.

Now foreign investment and foreign credit has stopped abruptly and the currency is falling fast. Many local companies that had lent in foreign currencies find themselves in trouble and put pressure on the government to support the local currency. The government is complying and spending a lot of money on this. I think it is wasted money.

Nonody knows how long the economic crisis will take. But very probably it will take years before foreign investment in the Ukraine and the other developping countries picks up again. There is no chance that the local governments can keep up supporting their currencies that long at levels that are untenable given the economic fundamentals like the trade balance. So for the local companies it is just a delay of the inevitable. In the mean time the government is wasting money by subsidizing speculators.

In my opinion it would be a much better option to drastically lower the currency at once and spend the money that would be spent on supporting the currency instead on supporting those local companies with foreign debts that get into trouble. It will be a shock for the local consumers, but it is the only way to position the economy for a fast recovery.

Unfortunately the IMF is supporting exactly the opposite policy.