Doc. 8529

20 September 1999

Economic reconstruction and renewal in south-eastern Europe following the Kosovo conflict

Opinion

Committee on Agriculture and Rural Development

Rapporteur: Mr Daniel Goulet, France, EDG

Introduction

1.       The situation brought about by the war in Kosovo, after the Bosnia and Herzegovina conflict, is a new one for the international and the European community.

2.       The shilly-shallying which preceded armed intervention, and the host of do-gooders fussing about today, preaching pacification and eager to take charge of reconstruction, are unprecedented in contemporary history.

3.       Even more unusual, the fact that this war, with its ‘tribal’ overtones, is happening in the heart of Europe makes each of us more responsible, if not for having at the very least allowed the conflict to degenerate, for guaranteeing reconstruction today.

4.       The rapporteur for opinion of the Committee on Agriculture and Rural Development endorses the observations and proposals made by his colleagues in the other committees. Speaking in the debate on 28 April 1999, he called for an inventory of the population’s needs to be drawn up.

5.       That was the purpose of the mission of a delegation of the Assembly to Kosovo and neighbouring countries1 from 7 to 12 September 1999, in which your rapporteur took part.

6.       The special requirements of the countryside justify the Committee’s involvement in this mission, whose main focus is economic.

7.       Whatever figures have been put forward, the problem now is not how much money will be allocated to rebuilding the countries of the region, but how best to use it.

8.       While outside aid can alleviate the crisis to begin with, in the short term, it cannot replace direct investment and other revenue (eg from privatisation), which have the advantage over loans of stimulating growth without increasing debt.

9.       The example of Bosnia and Herzegovina shows that foreign aid, even amounting to billions of dollars, does not achieve sustainable growth unless it is accompanied by sufficient internal stability.

10.       Without that stability – in this case not only internally, but throughout the region – the result is more likely to be total dependence.

11.       From this point of view, all areas of the economy – including agriculture – need to be addressed.

12.       What to do about agriculture and its reconstruction depends on numerous criteria, depending on the country and the region concerned.

13.       This may involve, as the case may be:

- reconstruction of the whole sector, as in Kosovo, where it was already much weakened before the conflict,

- more specific aid, as may be the case in Croatia, whose economy has suffered indirectly from the conflict, but without being structurally affected,

- emergency aid, both structural and in the form of immediate food aid for the former Yugoslav Republic of Macedonia and Montenegro, which have had to cope with a massive influx of refugees and with collateral damage.

14.       From this patchwork situation, the rapporteur will attempt to extract some guidelines as a basis for further discussion in the committees, and not to describe the situation, country by country, because there is too little time between the above-mentioned mission and the autumn parliamentary session.

15.       Nothing has been left unsaid on the following points, particularly in relation to the stability pact for south-east Europe and in the many international conferences that have debated reconstruction.

16.       They are mentioned here only as a reminder. Any solution must:

- be exhaustive,

- plan and co-ordinate the resources deployed (concerted efforts by the various national agencies, financial organisations and NGOs at the different stages of reconstruction),

- evaluate needs.

17.       In addition to these criteria, this new situation calls for a degree of modesty:

- in the approach to historically and culturally complicated phenomena,

- in the solutions and recommendations put forward.

18.       The rapporteur has been more concerned with practical aspects, the efficiency and security of operations conducted under international agreements, than with the astronomical figures bandied about.

Method

19.       For the purpose of making an inventory of the situation in each of the countries and regions visited and in order to be able, if appropriate, to use the same criteria for a possible extension to the neighbouring countries (Romania, Bulgaria, Hungary, Bosnia and Herzegovina), the rapporteur submitted a questionnaire (Appendix 1) to officials in the countries visited, viz:

Croatia

Montenegro

Kosovo

former Yugoslav Republic of Macedonia.

20.       The replies will be analysed in the course of the Committee’s further work, but some conclusions can already be drawn concerning (a) immediate needs in terms of materials and manpower, and (b) the administrative measures and regulations that need to be taken straightaway.

1.       Immediate needs and proposals

1.1       Food aid and its management

21.       This primarily concerns Kosovo, Montenegro and the former Yugoslav Republic of Macedonia.

22.       It concerns both the resident and the refugee population (the latter are to be dealt with in a report by the responsible committee).

23.       We must identify the needs, the collection and distribution circuits, in order to have a coherent overall picture of the situation before making proposals. However, it is clear already that controls are essential in order to avoid aid being hi-jacked.

24.       The rapporteur proposes that the donors set up a kind of food bank. This has just been tried out with grain collection for Turkey. The donors collect the grain, which is stored and then transported as and when requirements are defined by the Turkish authorities and the Embassy.

25.       This method has several advantages:

-       security for the donors, who are under heavy demand pressure and often prey to doubt about the destination of the food collected

-       security for the recipients: the aid arrives regularly as and when it is needed and can be handled.

26.       For instance, it is difficult to receive certain foodstuffs without at least some storage and handling facilities. In this way, the risk of waste and poor handling is diminished.

27.       In addition, this system is not cumbersome as it consists simply of communication and organisation, allowing a better management of excess agricultural produce.

28.       If, for example, the grain collected for Turkey is in excess of the needs, it can be distributed to other regions in need.

1.2       Emergency measures

- Exemption from quota regulations

29.       Produce donated for humanitarian operations must be exempt from these provisions,

30.       It has emerged that certain essentials, such as milk, donated by farmers for humanitarian operations have been subjected to European Union restrictions and quota regulations.

31.       The application of quota regulations to milk collected for Kosovo in Normandy bewildered and demotivated donors and caused them considerable tax and administrative difficulties.

32.       The Council of Europe must endeavour, by means of recommendations and whatever other means it sees fit, to put a stop to this administrative absurdity.

1.3       Proposed back-up measures

- Establishment of preventive machinery

33.       With a view to better co-ordination of current measures, the rapporteur intends to emphasise the importance he believes should be attached to preventive machinery.

34.       The FAO has long since set up a so-called ‘Special Alert’ procedure.

35.       Under this procedure, on 20 March 1998, an explicitly-titled press release announced:

“Special alert warns of disruption to food supplies in Kosovo Province, Federal Republic of Yugoslavia” (full text in Appendix 2).

36.       Having analysed the impact of conflicts in the regional (deaths, abandoned farms, fleeing populations and breakdowns in distribution circuits), FAO deduced that agriculture was seriously jeopardised and advocated ‘appropriate contingency planning’.

37.       The rapporteur recommends setting up a small unit (office) in the region to centralise information and observations from the various countries, eg about farming problems, sick animals, product shortages, fertiliser, seed, and so to:

- try to regulate aid and intervention to keep pace with demand,

- anticipate certain difficulties,

- act promptly in a crisis, or pass word to the appropriate authorities.

2.       Other needs for reconstruction

2.1       General remarks

38.       On this point, the rapporteur advocates the application of local experiments in interregional co-operation implemented for many years by the Council of Europe and its Committee on Agriculture and Rural Development, tailor-made solutions according to a holistic method based on socio-cultural realities:

- training,

- assistance,

- restructuring by means of small units to restore the rural fabric,

- interregional co-operation,

- innovation in problem-solving (eg grouping local authorities together),

- mixed solutions (eg rural tourism).

39.       The main lines are known; they will be refined in due course according to the replies to the questionnaire and findings on the spot.

40.       As of now, the rapporteur advocates following up Recommendation 1174, Resolution 1039, Resolution 1161 and a procedure similar to that employed for

- co-operation between the region of Burgas (Bulgaria) and the Alsace Region,

- co-operation between the voϊvodie of Little Poland and the Burgundy Region.

41.       Certain regions of Council of Europe member countries could sponsor regions of the Balkans, help them and monitor their reconstruction.

2.2       The problem of anti-personnel mines

42.       Many of the areas visited in Croatia and Kosovo, especially in the countryside, cannot be used because of anti-personnel mines.

- in Croatia

43.       Over 5 years after the end of the conflict, there are still 1.2 million mines scattered over some 10% of the land area, making farming impossible.

44.       The cost of mine clearance is estimated at 2.5 million USD and experts say that in view of the funds earmarked for the purpose, it will take 10 years to clear the land.

45.       People wishing to reclaim their land face substantial risks. Apart from the danger of death or injury, this scourge jeopardises reconstruction of the agricultural economy.

46.       Our visit has afforded an opportunity to highlight this serious problem, which seems not to have captured international attention, which must be focussed on providing financing for mine clearance.

- in Kosovo

47.       The problem is posed in different terms in Kosovo. There are some 700 known sites, not counting fields of home-made mines. The Serbs left without leaving any plans. The Kosovars laid their home-made mines without any plans and cannot help destroy them.

Appendix 1

Questionnaire

1. Importance of the agricultural sector

1.1. Distribution of farmland

Distribution of farmland and cultivated land by crop type:

      arable land

      vines

      orchards

      meadows

      grazing

      cereals

      fodder

      vegetables

      industrial crops

1.2. Structure of farm ownership

Distribution of private farmland and any “social” or “collective” property

Description of farms:

      number

      number of fields/plots

      average size in ha

minimum fertiliser use

2. Agricultural regions

Brief description of any distinct agricultural regions

3. Farming sectors

3.1. Agriculture

Production by crop type (in tonnes)

      wheat

      barley

      oats

      maize

      lucerne

      sunflowers

      sugar beet

      soya

      tobacco

      potatoes

      beans

      olives

3.2. Fruit growing

3.3. Vegetable growing

3.4. Livestock

If, possible state the number of heads of livestock per farm

cattle

3.5. Forestry

3.6. Fishing and marine cultivation

4. External trade

Trade figures by agricultural sector

5. Agricultural machinery

What machinery is produced, if any?

Production figures

Name(s) of leading firm(s) in the sector

Appendix 2

United Nations Food and Agricultural Organization

press release

Special Alert warns of disruption to food supplies in Kosovo Province, Federal Republic of Yugoslavia

In a Special Alert issued 18 March, FAO has warned that if the recent violence in Kosovo Province, Federal Republic of Yugoslavia, continues, it could have severe implications for food output, supplies and availability. Several farms have been abandoned or destroyed and food distribution is severely constrained.

According to the Alert, "Even in normal years, Kosovo is a food-deficit area where output and productivity have been falling for several years due to conflict in the surrounding areas, difficult terrain, poor soils ... and a significant decline in the use of essential farm inputs." Official figures indicate that aggregate wheat and maize production in Kosovo fell by over 50 percent between 1991 and 1996. Livestock losses during the violence have been heavy. The loss of male family members in the fighting also hits subsistence farming units hard.

About 80 people have died due to recent violence and 10 000 more - mainly women and children - have fled from the worst affected Srbrica commune to neighbouring communes of Mitrovice, Obiliq, Vushtrri and Lipjan. Many others have fled to relatives in Montenegro.

About 2 million people live in Kosovo province and more than half of them are less than 15 years old. Some 500 000 are estimated to be economically active, although 25 percent of them are unemployed. This means that every working person supports a large number of

dependants. Agriculture in the province contributes 30 percent of the Gross Domestic Product, considerably more than the national average of 22 percent. These two facts combine to make agriculture vital to a large number of Kosovo's population.

Should the violence continue, there are fears that it could spread into the neighbouring countries of Albania, Macedonia and Bulgaria. This could result in a significant increase in the numbers of people internally displaced and in outmigration, thus putting further strain on the already vulnerable economies of these countries. There is an urgent need for appropriate contingency planning.

20 March 1998


1 Croatia, Montenegro and the former Yugoslav Republic of Macedonia.