Doc. 8538

21 September 1999

Economic reconstruction and renewal in South-Eastern Europe following the Kosovo conflict


Committee on the Environment, Regional Planning and Local Authorities

Rapporteur : Mr I. Ivanov, Bulgaria, EPP/CD


The following text is a contribution to the report of the Committee on Economic Affairs and Development regarding issues on the environment and land use planning. The Rapporteur participated in a fact-finding mission to the Republic of Croatia, the Republic of Montenegro, the region of Kosovo under the United Nations Interim Administration Mission (UNMIK) and The former Yugoslav Republic of Macedonia which took place from 7th - 11th of September 1999. Addendum to the main report outlines the findings of the mission. The opinion of the Committee on the Environment, Regional Planning and Local Authorities will be followed in due course by a separate detailed report.

1.       Introduction

1.1       Economic consequences of the Kosovo crisis in South-East Europe have been significant as a result of the large-scale movements of refugees, loss of commercial links, damage to infrastructure and sudden decrease of direct investment in the region.

1.2       The economic situation in the whole region of South-East Europe has progressively deteriorated in the aftermath of the many conflicts induced by the political regime of Mr Milosevic, frist in Croatia, then Bosnia and Herzegovina and finally in Kosovo.

1.3       The political crisis in the former Yugoslavia is certainly not the only reason explaining the current economic situation in the area. During approximately half a century, the centrally-planned industrialisation process lacked investments in new technologies, had little incentive for efficient productivity, and consequently had very little flexibility in adapting to rapidly changing market demands.

1.4       The Stability Pact demonstrated for the first time the determination of the international community, and in particular the European community, to act rapidly and facilitate coherent economic and political reintegration of the South-East region into Europe.

1.5       Initial group of actions have already been envisaged at the Sarajevo Summit which was held on 30th July 1999. Further concrete action will follow subsequently with the Regional Round Table to be held in October 1999 and the three Working Tables focusing on each pillar of the Stability Pact: democratisation and human rights; economic reconstruction, development and co-operation and security issues.

1.6       Political stability and mutual trust in the region of South-Eastern Europe will be effectively achieved if coherent action is undertaken in all three pillars simultaneously.

1.7       While in agreement with the points raised in the report of the Committee on Economic Affairs and Development, the Rapporteur considers that in general terms the process of economic reconstruction should be undertaken in such a way as to :

i) guarantee participation of the countries from the region at the level of decision making;

ii) contain a well-defined set of mechanisms that would stimulate or sanction parties concerned;

iii) take into account specificity of each country according to the level of European integration, degree of political stability and economic development;

iv) guarantee transparent procedures in order to prevent corruption;

v) give priority to transnational projects.

2.       Current state of the environment

2.1       The Rapporteur is of the opinion that the economic reconstruction in South-Eastern Europe should take into account the state of the environment and sustainable land use planning. The main findings of the mission to this regard are outlined below.

2.2       The Rapporteur supports the decision of the United Nations Environment Programme (UNEP) to set up a Balkan Task Force (BTF) in May 1999. Independent experts of the BTF were undertaking extensive field visits in order to make a full assessment of the effects of the Kosovo crisis on the state of the environment in the region.

2.3       The fact-finding mission on the ground has shown that the technical equipment for environmental monitoring was inadequate in most countries of the region, particularly Albania, Bosnia and Hercegovina, Bulgaria, Federal Republic of Yugoslavia, Romania, The former Yugoslav Republic of Macedonia (fYROM) and to a large extent Croatia and Hungary. It is therefore difficult to obtain coherent reference data, adequate to the reality on the ground, for the period preceding the Kosovo crisis.

2.4       Nevertheless, the initial assessments have shown serious damaging effects on the Danube river basin as a result of the Kosovo conflict and NATO air strikes on petrochemical and other industrial targets in the Federal Republic of Yugoslavia (FRY). The Danube River is of economic importance as a major inland waterway for the region of Central and South-Eastern Europe and, in addition, represents a major ecological resource intricately linked to the two fragile marine eco-systems – the Black Sea and the Mediterranean Sea basins. In the current context of political and economic co-operation fostered by the Stability Pact for South-Eastern Europe, the Rapporteur would like to draw the attention of the Assembly to the significance of the Recommendation 1330 (1997) on the draft European charter of the Danube basin.

2.5       Countries hosting large numbers of refugee camps and shelters, such as Albania, Republic of Montenegro and The former Yugoslav Republic of Macedonia, suffered significant environmental damage. Temporary refugee shelters were most often located on agricultural land without any adequate infrastructure and municipal services (e.g. drinking water, wastewater and waste management, etc.).

2.6       It is worth recalling that the region of South-Eastern Europe suffered pollution from centrally-planned industrialisation process in previous political regimes.

3.       Land use planning

3.1       A significant part of the housing supply was damaged and in some cases totally destroyed during the Kosovo conflict. According to the UNHCR estimates2, over 120 000 houses were damaged and 680 000 people were currently without adequate shelter.

3.2       Lack of adequate municipal waste treatment was another urgent problem in the Kosovo region. Demolition material from destroyed houses and municipal waste were deposited alongside roads and around 1 700 animal carcasses remained untouched in the fields. The current situation could pose significant threats to human health.

3.3       During the conflict, five Danube bridges and three other bridges were damaged. Navigation on the Danube River was currently suspended with significant economic loss due to diverted freight transport throughout the Danube basin. Ten countries in the region were directly affected.

3.4       In the Kosovo region, six bridges were destroyed during the conflict and some of them were being reconstructed by NATO forces. Reconstruction of the main infrastructure should precede the coming winter. There was only one railway link in Kosovo with connections to Skopje and Belgrade. It was partly damaged during the conflict and later interrupted by FRY forces at the town of Lešak preventing a connection to the north. Similar to other countries in South-Eastern Europe, the road infrastructure in Kosovo was poor and hindered the development of trade in the region. Postal services were suspended after the retreat of FRY forces as they took with them most of the equipment including vehicles.

3.5       The Kosovo region is energy-dependent. Energy supply is provided through two electrical power plants K-A (825 MW) and K-B (680 MW) and a small hydroelectric plant at Gazivode (2 x 16 MW). Most of the equipment was more than 30 years old and partially damaged during the retreat of FRY forces. Lack of energy supply would pose a significant problem during winter.

4.       Challenges

4.1       Following the findings of the mission on the ground, the Rapporteur is of the opinion that environmental protection should be an important part of measures to be envisaged for sustainable development in the region of South-Eastern Europe. Furthermore, the Rapporteur considers that a short, medium and long term Action Plan would need to be developed including following points :

4.1.1       develop a strict and transparent environmental monitoring system in all countries of South-Eastern Europe in order to provide necessary data which would give a clear state of the situation, facilitate harmonisation of environmental legislation and provide a common base for direct foreign investment;

4.1.2 develop regional projects such as sustainable management and environmental clean-up of transfrontier lakes and watercourses which could at the same time contribute to the process of reconciliation between ethnic groups and the restoration of mutual trust, political stability and peace in the region;

4.1.3 establish priority action to deal with urgent problems connected to the Danube River Basin, such as reconstruction of bridges and de-mining in order to restore navigation for freight transport and to secure environmental clean-up of the River;

4.1.4 eliminate negative consequences of the temporary refugee settlements by relocation of illegal waste deposits and environmental clean-up of the area allowing for recultivation of agricultural land;

4.1.5 eliminate remaining mines and unexploded bombs from conflicts in "Former-Yugoslavia".

4.2       The proposed Action Plan should be drafted and implemented by international organisations in co-operation with different levels of national authorities, private sector, scientific institutes and universities and local NGOs.

4.3       In the framework of the Stability Pact, Donors' Aid should include financial assistance to the countries of the South-Eastern Europe for the acquisition of monitoring equipment for compiling data on air, water and soil pollution, for protection of drinking water resources and water purification facilities. Regular and comprehensive environmental data would contribute to establishing a harmonious legal framework for foreign direct investment.

4.4       Renovation of damaged or poor infrastructure in the region of South-Eastern Europe was crucial for the economic reconstruction of the region and the European integration process. New technologies would not only increase productivity but also reduce negative impact on the state of the environment. Investments in infrastructure would directly reflect on the degree of economic development and creation of jobs in countries where unemployment was relatively high.

4.5       In agreement with the Rapporteurs of the Committee on Economic Affairs and Development, the Rapporteur considers that the construction of Trans European Networks (TENs) across the region of South-Eastern Europe should be accelerated since adequate transport and energy supply infrastructure will be indispensable for European integration of the countries concerned. It is important to underline that all project proposals should be subject to environmental impact assessment (EIA) procedures.

4.6       Finally, the findings of the mission have shown also that it was urgent to create transparent customs mechanism in order to facilitate trade in the region.

5.       Conclusions

5.1       Following the Kosovo crisis, the region of South-East Europe has finally become a political, humanitarian and economic priority. The Stability Pact for South-East Europe is an ideal framework to develop common action in order to establish a society based on democratisation, a rule of law and human rights. On the other hand, the international community could decisively contribute to economic reconstruction in the region that is crucial to peace, political stability and prosperity of the whole Europe.

5.2       In this context, the issue of environmental clean-up, protection of the environment and land use planning are intricately linked to an overall set of problems to be resolved. The Rapporteur therefore proposes to make an assessment of the current situation in these fields in South-East Europe and to envisage measures to remedy the consequences of the conflict while providing assistance to the economic reconstruction of the region.

5.3       The Rapporteur recommends that the following principles should be taken into account during reconstruction :

5.3.1       establish investment priorities according to project quality criteria and urgent needs in the region in order to foster quick development of sound projects;

5.3.2       give priority to regional, transfrontier, projects and thus allowing for the process of reconciliation between ethnic groups and contributing to the restoration of mutual trust, political stability and peace in the region;

5.3.3       allocate financial assistance directly to concrete projects established with corporate private sector in order to prevent fraud and train competent and responsible national staff to manage projects financed through foreign investments;

5.3.4       establish transparent public tender procedures and apply environmental impact assessment (EIA) procedures.

Proposed amendments to the recommendation :

Amendment 1 :

In the draft Recommendation of the Committee on Economic Affairs and Development, after paragraph 5 iii, insert a new point as follows :

"the technical and financial assistance to local authorities in order to overcome urgent needs following the conflict, such as        disposal of rubble and treatment of municipal waste, water purification for drinking water supply, wastewater treatment, etc."

Amendment 2 :

After the paragraph 5 iv, insert a new point as follows :

"the establishment of a land ownership system and a regional land register, as a precondition for land use planning and economic development in Kosovo;"

Amendment 3 :

After the paragraph 5 iv, insert a new point as follows :

"the renewal of infrastructure, in particular road network, telecommunications network and postal service, production and distribution of electricity;"

Amendment 4 :

Before the paragraph 7 i, insert a new point as follows :

"to envisage urgent measures to re-establish international navigation on the Danube River, given its importance as the major waterway and transport link used for economic development and trade in Central and South-Eastern Europe;"

Amendment 5:

Amend the paragraph 7 ii as follows :

after the wording "repair and renewal of trans-European transport links and other infrastructure" insert the wording "in accordance with TINA3" and at the end of the paragraph add the wording "and strictly applying procedures of environmental impact assessment."

Amendment 6:

After the paragraph 7 iv, insert a new point as follows :

"to make a comprehensive damage assessment on the state of the environment and to provide financial and technical assistance to the countries in the region in order to establish a strict and transparent environmental monitoring system notably for compiling data on water quality in the Danube basin."


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Committee for report: Committee on Economic Affairs and Development

Committee for opinion: Committee on the Environment, Regional Planning and Local Authorities

Opinion approved by the committee on 21 September 1999

1 See Doc. 8503

2 document dated 1st September 1999

3 Transport Infrastructure Needs Assessment in Central and Eastern Europe established by the European Union