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Nations Seek Money To Aid Balkans

July 13, 1999

BRUSSELS, Belgium (AP) _ The world’s richest nations and financial institutions, looking for ways to put the pieces back together in the Balkans after eight years of conflict, took the first step today toward rebuilding Kosovo and restoring stability to neighboring countries.

To find the money and coordinate its distribution, a high-level group of finance ministers, including U.S. Treasury Secretary Lawrence Summers, the president of the European Union, and representatives of the World Bank and the International Monetary Fund, gatherered here for an organizational meeting.

Nobody knows yet how much reconstructing Kosovo and stabilizing the Balkan region will cost. The European Union is talking of putting up $510 million for reconstruction. The World Bank said Monday it probably will commit $60 million to Kosovo.

The high-level steering group, as these officials are called, agreed to hold a donors’ conference July 28 in Brussels to start picking up pledges of money. At that time, they expect to have a first estimate of what the actual costs might be.

The immediate priority, said Yves de Silguy, the EU’s commissioner for economic affairs, is emergency assistance to support the return of refugees and establish a civil administration in Kosovo, the southern province of Serbia.

``It’s the launch of a process,″ said de Silguy. ``We need to give direction to the reconstruction of the entire region.″

Members of the steering group said they had reviewed progress in alleviating the short-term negative economic consequences of the crisis on Albania, Bosnia, Bulgaria, Croatia, Macedonia and Romania.

They insisted no aid would be provided to Serbia other than humanitarian aid ``which addresses the most essential human needs″ as long as Yugoslav President Slobodan Milosevic is in power. They said they would explore ways to mobilize support for Montenegro, which though part of the Yugoslav federation has distanced itself from the Belgrade government.

Rory O’Sullivan, the World Bank’s special representative for Southeast Europe, said once the initial crisis has eased, the emphasis will be on developing trade in the region.

``One thing is very striking,″ said O’Sullivan, just back from an initial assessment tour of the region. ``The infrastructure damage is not as heavy as we had been led to believe. Electricity, telephones and water are working in many of the villages.″

Leaders of the Group of Seven leading industrialized countries and Russia pledged at their summit last month to take ``vigorous measures″ to strengthen democracy and boost the economies of the Balkan nations, saying stabilization of the region was a major political and economic challenge.

The formation of the steering group, de Silguy said, ``is a concrete response to the need to provide Kosovo and its neighbors in the Western Balkans with financial assistance that is generous, transparent, effective, and tailored to meet their specific needs.″

James Wolfensohn, who co-chaired today’s meeting with de Silguy, said it was difficult for international institutions like the World Bank and the International Monetary Fund to provide funds to Kosovo or Montenegro because they are not member countries, though some discretionary funds are available. The institutions will focus on neighboring countries.

Wolfensohn said it was difficult to name a firm cost figure on Kosovo. ``In terms of scale, the problem looks manageable.″

Some tricky political issues still must be overcome.

Defining humanitarian aid and reconstruction assistance is not always easy. Rebuilding the bridges across the Danube River, for example, could be viewed as humanitarian, but also as aid to the Yugoslav infrastructure. Highway bridges blown up by NATO missiles and bombs also have military uses.

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