Serbia and Kosovo: the Balkan powder-keg could flare up again

The process of capitalist restoration in Serbia has been brutal. Hundreds of thousands of workers in the old industries have lost their jobs. The old social buffers provided by the planned economy have been dismantled. In this atmosphere a sombre mood dominates the working class. The only outlet the ruling class can offer is to keep whipping up nationalist sentiment.

After 15 years of conflict and hundreds of thousands dead, wounded and refugees the national question in the Balkans remains unresolved. It is now clear how far from reality was the idea that a multitude of "clean" bourgeois nation states could resolve this historical issue. After an initial euphoria over the newly gained independent territories, the ruling classes are now discovering that development along capitalist lines is impossible without stepping on the toes of one's neighbours.

The present situation bears a striking resemblance to the atmosphere at the beginning of the 20th century. The contradictions created by the capitalist system in those days lead to a series of Balkan wars, followed by the First World War and an attempt to put the situation under control with the formation of bourgeois Yugoslavia under the Serbian crown.

The Second World War again unleashed an unprecedented level of carnage and ethnic cleansing coming to an end only after a social revolution brought about by the multiethnic Partisan movement. We can frankly state that under capitalism the Balkans have known no peace, only periods of frozen conflict. The present period fits this description perfectly.

Serbia represents the central and most important piece of the Balkan puzzle. Landlocked and surrounded by smaller states with considerable Serbian populations, the Serbian ruling class historically had big ambitions in dominating the scattered Balkan mini-states under its military might behind the retreating imperial powers (Turkey and Austro-Hungary).

Today, Serbia remains the biggest country to come out of the former Yugoslavia and a potential local power. Even with the Serbian population purged in the 1990's, from the territories they historically inhabited in the Krajina region of Croatia, Republika Srpska still remains a constituent part of the imperialist controlled Bosnia and Herzegovina and half of the population of recently independent Montenegro remains oriented towards Belgrade. Kosovo is inhabited by some 150.000 Serbs with a further 200,000 living as refugees inside Serbia itself.

Relative stability, despite the uneasy ethnic set up of newly created Balkan (semi) states, was made possible through the interference of imperialist powers who managed to find a compromise between each other's interests in the region under strong American domination at the end of the last century.

Today, with Russia coming back into the world political arena and the EU trying to formulate its own foreign policy independent from its Atlantic ally and the US speeding up its militarism, rumours and tension are in the air again. The Balkans are heating up once again before they have even had a chance to cool down.

Inside Serbia

GDP growth in Serbia has averaged 6.8% over the last three years, after the period of sluggish recovery following the NATO bombings and the regime change. Some government officials now refer to the country as a "Balkan Tiger" to describe this phenomenon.

The older generations, however, are able to testify just how different this new capitalist growth is from the one experienced after the Second World War under the planned economy. While the latter was based on the unprecedented development of the productive forces in all areas of life, this new one is based on the dismantling and selling off of the very substance created in the period of planned economy. Furthermore, the effects of the growth are concentrated geographically and socially to limited areas and to a tiny privileged layer of the population.

No matter which coalition has been in government since Milosevic, one thing has remained certain in Serbia since 2000. Economic power remains in the hands of a group of economists from the "G17 Plus", a think-tank under Milosevic which evolved into a political party led by economic "experts" sacrificing their well-paid positions in global multinationals to work for a state bureaucrat's wage and "help" their country in need.

Their leader and Minister of Economy and Regional Development in the current Serbian government, Mladjan Dinkic, has recently been awarded the prestigious "Financial Minister of the Year" award by the Euromoney magazine. In explaining its decision, Euromoney states that Dinkic conducted "the most shocking of shock therapy tactics" in the financial sector by simply taking away operating licenses of 25 domestic banks and laying-off its employees; thus clearing the way for foreign banks to enter the market. This move gives one an idea of Dinkic's economic philosophy!

A strict "neo-liberal" growth model has been followed in the last couple of years. The government is proud of the fact that Serbia, along with Bulgaria, has the lowest flat corporate profit tax in Europe of only 10%. After the saturation of Eastern European markets, multinationals now find uncovered gems in Serbia's late transition. In 2006, a record $4,387billion of foreign direct investment was achieved, almost one half of total foreign investment recorded in the previous five years.

Most of the investment is obtained through privatizations and acquisitions of sure shot profit making enterprises in banking, telecommunications, the alcohol and tobacco industry and the energy sector. Countries with the biggest interest in the Serbian economy so far have been Austria, Germany, Greece and Slovenia. The state energy monopoly, oil and gas industry and the airline carrier-JAT, are among the last top-ranking assets expected to be privatized in the future. The process is entering its final phase, as all the major state owned enterprises are planned to be sold off by the end of next year.

A good "investment climate" is maintained through tight monetary policy. Inflation is kept down to single digits (6.6%). Taxation and social insurance contributions for potential investors are among the lowest in Central and Eastern Europe and growth of real wages is kept under strict control with planned increases to account only for inflation despite the positive growth figures. Public spending was completely covered in 2006 and the state budget ended up with a surplus. At the same time, 10% of the population lives below the poverty line with minimal social handouts. Access to social care has been made much harder, the retirement age has been prolonged and school fees have been introduced. The official unemployment rate stands at 20.8%. Since privatization started to gain momentum in 2002 until present, more than 350,000 workers have been sacked.

The layer most hit by economic restructuring is the traditional working class employed in the productive sector through large-scale state owned companies. New jobs being created are mostly opened in small-scale firms in the service sectors, finance and telecommunications. The opening of new workplaces created up to 60,000 jobs in the last four years, not nearly enough to compensate for the previously lost jobs.

Many former industrial cities are turning into ghost towns. Growth is concentrated mostly in Belgrade and a few other areas in the north with good infrastructure and geographical position. Unemployment in Southeast Serbia is more than three times higher than in Belgrade. Poverty levels can reach up to 23% in the south while it remains around 4% capital.

Last month, an epidemic of jaundice broke out in the southern city of Nis. So far, 700 people have caught the virus resulting from poor living conditions and inadequate water supply.

Working Class in Transition

Despite unprecedented neo-liberal attacks from above, so far there seems to be no organized response from the masses. We have witnessed a stabilization of ruling structures, strike figures are at the lowest in years and there is no political articulation of the majority of the "losers" from the transition to capitalism. How is this to be explained?

The old Yugoslav working class is deep into the process of dissolution. The present wave of privatizations comes after a turbulent decade of economic meltdown, international sanctions and war, which had already atomized and disoriented the working class. There is no trade union presence in the private service sector. New generations of workers are finding themselves in small scale, privately owned firms of up to 50 people, cut off from one another and from any organizing traditions from the past, under the strict discipline of ruthless domestic petty capitalists formed in the war years. The older workers, who managed to keep their places in the restructured companies, are kept in check by the army of unemployed below them. They may not be satisfied with their position but it is still better than being in the street.

The rest have worked out different ways of surviving during the nineties such as the existence of black markets and the informal sector. Serbia is experiencing a trend of de-urbanization where a section of the working class is returning to the countryside. The Titoist regime gave up forced mass collectivization in the countryside relatively early on, thus leaving many privately owned small land plots which have served as a social safety net over the last decade. This property structure is changing fast now as capitalist landowners are buying up fertile land, as the economy is re-orienting from industry back to agriculture and export of raw materials.

A similar market exists in the cities where living patterns are changing fast. During the 1990's, in a quest for quick money, the Milosevic regime enabled the workers to buy their state flats, leading to a situation where many own their real estate. This fact, along with the entrance of foreign banks and credit lines, paved the way for a huge real estate boom. Prices of flats in Belgrade range from 1,000 to 2,5000 euros per square metre in the more trendy areas. Once socially mixed, Belgrade neighbourhoods are witnessing families selling their flats in more central areas or leasing them and moving to the suburbs instead.

The financial market, kept virgin during the war years, has offered great opportunities for foreign banking corporations such as Austrian Raiffeisen to make juicy profits and offer credit spending to the public. Unlike Croatia or Hungary, indebtedness of the Serbian public has been relatively low thanks to isolation. In the last couple of years credit to the value of around 2.5 billion euros has been extended to 874,885 clients. Access to easy credit has meant a short-term relief for many families but also represents a time bomb waiting to explode. It seems as if the money pumped into the economy disappears into thin air. Production has not been re-established, export growth is modest, while the foreign trade deficit increases. Total Serbian debt currently stands at 22 billion dollars and is rising fast.

The government has been trying to gather public support for the privatisation process by issuing certain percentage of the shares of sold companies to the workers in a voucher-type privatisation scheme. The social programme for those laid off in the restructuring process also consists of pay outs, in accordance with the years worked. Those who willingly resign from their jobs are also encouraged to do so, in the form of monetary compensations. Everything must go and the workers are promised crumbs form the table if they do not obstruct the process.

The government's official tactic to combat unemployment is to encourage workers to use this money to set up their own small private businesses. Stories about a few lucky workers from the top ranking privatised companies buying new houses and cars after selling their shares are hyped up. Most of the trade union discussions recently have been focused on the issue of what percentage should the workers receive from the total number of shares put up for sale. A new programme of voucher privatisation was announced a few days ago through which all the citizens will receive their share of the remaining big privatisations in stocks. These manipulating tactics have placed the workers in a very difficult situation, contributing to a further deterioration of the old class-consciousness and solidarity.

Former Yugoslav car producing giant Crvena Zastava, from the city of Kragujevac, provides a good example of this. In August this year, the government decided to liquidate the social programme set up for the workers of Zastava after NATO bombed the factory in 1999 which preserved their jobs and a minimum level of wages even though they were out of work. Around 4,400 workers, still left on this programme, were offered compensation of 250 euros for each year spent in the factory in exchange for terminating their work contracts. The Trade Union rejected the offer, families and workers from neighbouring Kragujevac plants joined in solidarity protests and for a few days it seemed the city was ready for resistance. The government however called the bluff and stated that anyone who failed to show up before the deadline the next day for registration would simply be sacked without any compensation money. Next day, the whole nation witnessed humiliating scenes of people standing in queues, pushing each other not to be left behind the closed door of the registration office.

The pride that was once felt thanks to the unique situation in the world, where workers "owned" their own factories under Titoist "self-management" is gone. Of course, few people have any illusion that they will be able start up a small business with the money they receive. But faced with the alternatives of either retaining "ownership" of a rusty old factory that has not been functioning for years or giving it up for a few thousand euros after a decade of starvation, it is not hard to guess what the choice will be. The only companies who have started production up again seem to be the privatised ones. The feeling is that there is no alternative. It is not uncommon that even after the experience of a shady privatisation deal, the workers occupy the factory and demand a repeated privatisation, but this time a "fair one". That is how far the process has gone.

Then, there are those right at the bottom, who have nothing to hustle on the side or offer to the market, those with no possession to sell, no land, no flats, no left-over jobs for which to be compensated ‑ workers or unemployed in constant threat of falling below the poverty line and being forgotten.

This situation has given birth to a relatively new phenomenon of a series of hunger strikes. The most common form of strike in Serbia today is the one in which workers lock themselves up in the factory and start hunger strikes demanding to speak with the authorities. These are not tactics of an offensive strike in a heated class struggle, but desperate acts of people trying to draw attention to themselves.

Suicide rates have also increased. A case of a 50-year-old metal worker Dragica Simic caught the media attention in April. After hearing the news that she would be fired along with 190 of her colleagues labelled as "labour surplus", she desperately tried to talk with the boss. The boss denied all her appeals to talk with him. The morning after, fellow workers found her body hanging inside the plant. A few years earlier, Dragica has been commended as one of the best workers in the city. Her recognition diploma was found lying next to her corpse!

The bitter experience of the last 15 years and the general demoralisation has lead to scepticism towards any kind of political agenda, a questioning of the motives behind calls to organise and a lack of confidence in the prospects of collective action. Workers are looking for individual solutions the best way they can in order to feed their families. "Solidarity" is a word rarely heard in Serbia today. It is the war of all against all, the bare face of capitalism where only the strong manage to survive.

The new infrastructure being built has little to do with the general benefit of the population but everything to do with the interests of foreign investors. Highway routes for international trade are being constructed while many neighbourhoods still do not have paved streets; city centres are turned into exclusive business areas of steel and glass while working class neighbourhoods still rot in the infrastructure inherited from the 1970's. No sound foundations are being laid for the continuing growth in the future. The nature of the capital entering the country is mostly speculative and parasitic. What will happen once there is nothing left to sell? This is the uncomfortable question nobody is posing for now.

The people are going through a paradox of economic boom in which they can participate only superficially and in the short term. It is becoming obvious that economic growth does not automatically produce better general living standards. For years the official line was that everyone must make sacrifices in order to attract foreign capital and investment which will then trickle down to the rest. This is obviously not happening for the majority.

Current economic growth is not based on the continuing advance of infrastructure of the productive forces, built during the decades of planned economy, which enabled the general emancipation of society but, quite the opposite, on the anarchic destruction of these foundations, the transfer of capital outside of the country and limited new investment in privileged niche sectors and monopolies which can be turned into milch cows for foreign capitalists. If the growth continues at this present pace, it will take at least seven more years for Serbia to reach the GDP level it had before the introduction of capitalism in 1991.

Political Scene

However, there is a layer of the population that seems to be benefiting from the transition. The coming in of foreign capital is creating new customs. People in business suits working late hours in glass towers seem to be omnipresent. Illusions in capitalism are probably the highest among the youth. Young educated people with foreign language skills find it easier to find jobs now than ever before. Foreign companies find highly qualified people ready to work long hours for a few hundred euros and the prospect of advancement in their careers.

State university fees have increased significantly in the last few years, and may now go up to 2.000 euros per year, not to mention the books and living expenses. Those who cannot afford this end up in lower paid jobs in services such as cashiers and security guards. Others, with enough money to study, see the school fees as a cost they are willing to pay to gain access to the upper echelons of employment.

This up-and-coming social layer is on the offensive. It found political expression in the Liberal Democratic Party (LDP), a splinter from the main reformist party - the Democratic Party (DS) of the assassinated Prime Minister Zoran Djindjic. The LDP ran an aggressive campaign accusing the Democratic Party of making compromises with the nationalists and the elements of the former regime not willing to pull Serbia faster towards the EU. It entered parliament attracting a number of disappointed voters and youth in the urban centres.

Apart form this, there have not been any significant changes in the Serbian political scene in the last few years. The most striking feature is still the fact that no organized political force exists left of centre. The losers from transition have nobody to vote for. The Democratic Party has established contacts with the European Social Democracy, but it remains a centre party with a clear anti-working class orientation. The Serbian Radical Party has managed to exploit this vacuum for quite some time, with its populist anti-reform messages, until they became the biggest force in the country and started being more cautious. They are stagnating and will explode as an overblown balloon the moment they are forced to take office. Their sole purpose is to cushion domestic dissatisfaction and play the role of ultra-nationalist threat for the Serbian ruling class in its negotiations with the West.

In the absence of any movement form below, the political parties are constantly switching coalitions at the top while the essence of the regime remains the same. The Democratic Party is currently ruling in a coalition with the "G17 Plus" and Prime Minister Vojislav Kostunica's conservative Democratic Party of Serbia. After a few rough years of battle for positions before the process of privatisation started, everybody seems to have found their place and is ready to share the cake now.

In this general atmosphere, the ideological offensive from the right that seemed so threatening in the 1990's became the norm. The Orthodox Church is occupying an important place in the media and the state. It was allowed to enter the schools and the armed forces. How far things have been rolled back can be seen by the fact that the royal family has been given back its possessions in Belgrade and its members parade as prominent public figures.

The history of the Partisan movement and the Second World War has been completely re-written. Unlike in Zagreb, where a section of the ruling class is trying to incorporate the partisan movement into an ideology of independent capitalist Croatia, the Serbian ruling class has chosen to erase this chapter from the history books completely and bases itself on the legacy of the pre- war Serbian bourgeoisie.

The names associated with communism and the partisans have been removed from all institutions and streets and new monuments have been built along with fresh symbols and a new anthem. Culturally the country is back where it was at the beginning of the last century. The ground is now being prepared ideologically for a turbulent future in which the Serbian ruling class must push its way through and impose itself as an imperialist partner in the region just like it did after the First World War, when it was rewarded with domination over the old bourgeois Yugoslavia for sacrificing a quarter of its population.

This is preparing the ground for a new belligerent stance of the Serbian ruling elite over the question of the status of Kosovo, which we will look at in Part Two. What is also being prepared is an almighty explosion of the class struggle in Serbia at some point in the future. They have managed to tighten the lid on working class struggles. In this a section of the population is suffering terribly, while another is beginning to reap some material benefit from capitalism. What we have is social polarisation, with wealth being extremely unevenly distributed.

However, if we look at Slovenia we see the future of Serbia too. With capitalist development comes a strengthening of the working class and with this also class struggle. The strike going on at present at the Ford plant in St. Petersburg in Russia, after 12 years of almost total silence on the part of the Russian working class is also an indication of what the working class is capable of. In many respects the situation in Serbia resembles that of Russia until the recent past. As class struggle is coming back onto the agenda in Russia, so will it return to Serbia, when the workers will rediscover the glorious traditions of their own past. For now all that is like the embers of a fire that seems almost to have gone out. It will flare up with a vengeance in the future.

The atmosphere on the streets of Belgrade has changed significantly over the last few months. After blending into the general attitude of depoliticisation and apathy, at the beginning of the drawn-out negotiations, the media frenzy and the backing of Russia, have brought Kosovo back into the spotlight. There is a general feeling of uneasiness and rumours of a war are circulating.

The tough stance the Serbian government has taken on Kosovo has been a surprise for many. It was naïve to think these post-Milosevic politicians in suits would behave any differently when it comes to "national interests". After all, when they were the "democratic opposition", most of them never criticized Milosevic for his national policy in the former republics. Their "opposition" was to his reluctance to privatise the economy as fast as the imperialists would have liked.

The Serbian ruling class is tired of having "behaved properly" for seven years straight and still being pushed and kicked around by imperialism. Since the big powers decided not to keep intact the former Yugoslavia in Tito's borders as a geo-political entity, the Serbian ruling class lost its historical role and became an obstacle in the region. Its current status of humiliated state to be chopped and bitten by everyone is in stark opposition to its objective potential and ambitions.

As if the loss of Macedonia, Krajina in Croatia and Bosnia in the 1990's was not enough, Belgrade has been rewarded for overthrowing Milosevic and opening up its economy with the loss of Montenegro and now Kosovo is demanded as well. The Serbian ruling class is fulfilling all its international "duties" and the only thing it wants in return is a chance to gain back at least a piece of its former role in the area. As the largest state in the region with great militaristic traditions, Belgrade sees itself as the natural local client. Like the oldest child being ignored by the parents occupied by many newborns, Belgrade is now ready to throw a fit and Russia is happy to provide space for it.

Russian influence

The failure of seemingly never-ending talks over the final status of Kosovo is blamed on the inability of Belgrade and Pristina to reach an agreement. This is of course nonsense. Belgrade would not be in a position to negotiate over anything if it was not for Russia, and the Kosovo ruling class would not exist in the face of the Serbian military if it were not for the United States and its troops on the ground.

A drawn out negotiation process was set up as a stage behind which the big powers would have enough time to settle this issue among themselves. Since September 11, it has become quite hard for the imperialists to act as a unified "international community". The United States are now pushing for independence at any price. The EU follows the American line, as it would like to use independent Kosovo as a pretext for taking more initiative in its common foreign and security policy. However, it has difficulties with members such as Spain, Romania and Slovakia - all of which have minorities in their territories - and Greece which has its own interests in the region. Russia on the other side is fiercely opposed to Kosovo's independence.

Just a few months ago both the Western and Serbian press were pretty much convinced that Putin's stand on Kosovo was just another bargaining chip and that compromise would be reached at a certain point. This is not the case now. The Russians have clearly gone beyond the mere bargaining, which was the modus operandi of Yeltsin in the 1990's.

Moscow is in a similar situation like Serbia in many respects. Since the fall of the "iron curtain", despite Russia's integration into the "international community", the US basically kept its cold war policy of military expansion and encircling of Russia. The spread of NATO eastwards is something Russia cannot tolerate any longer. The entry of Georgia and the Ukraine and the setting up of the missile defence system in Eastern Europe would be one step too close as far as Moscow is concerned. Russia must speak out now or forever remain silent.

Moreover, Moscow has already proved once before that it takes the Kosovo issue very seriously. Some might remember the Pristina airport takeover incident in the summer of 1999. Parallel with the peace agreement between Belgrade and NATO in 1999, Milosevic made a deal with the Russians behind closed doors. Russian troops stormed the airport behind the retreating Serbian forces and prevented the NATO commander Michael Jackson from entering the premises. This was a serious incident at the time with shots exchanged between the NATO and Russian troops. Moscow was demanding its own control sector in Kosovo. Yeltsin finally backed off and agreed to put the Russian contingent under NATO control. This move infuriated the Russian generals and Milosevic.

The whole area of the southern Balkans has become a centre of geopolitical interest in the face of the rising importance of oil and gas supplies. Russia's comeback on the international scene has been based on its energy policy and now it is trying hard to prevent the construction of the Nabucco pipeline by Washington and Europe. This ambitious joint venture of Royal Dutch Shell, Bechtel and General Electric, would bypass Russia and provide an alternative supply stream for the EU market from the Middle East and the Caspian through Turkey and Southern Europe, moving exclusively through NATO member states.

An independent Kosovo and the gigantic US military base Bond Steel built on its territory are seen as a part of this scheme by many. Russia has answered with the plans for a South Stream pipeline which would go around the Ukraine and Belarus and reach Hungary by going under the Black Sea and coming ashore in Bulgaria leading through Serbia and Croatia. So far Russian Lukoil has invested over 1.5 billion euros in Romania, Bulgaria, Macedonia and Serbia. At the recent South-eastern Europe Energy summit held in Zagreb this summer, Putin was quite open about the intention of buying up Serbian and Croatian state oil monopolies.

Back in May, Serbian pro-western media and the Democratic Party raised much dust over the statement made by the Serbian Radical Party leader Tomislav Nikolic in parliament responding to the accusation that the Radicals are trying to turn Serbia into a Russian province. Nikolic answered that he would much rather see Serbia as a Russian province than as a European colony. This was interpreted as an attack on the sovereignty of a country by dark forces of the past trying to stop Serbia's modernization process. A few months later, the leader of the Democratic Party and Serbian president, Boris Tadic, had this to say to the Czech press over the consequences of the potential break up of Kosovo:

"In case the EU countries support the independence of Kosovo, we will have great problems with European integration. The final consequence will be Serbia as an isolated country or the scenario under which we will have much better relations with other countries in the world".

Leon Kojen, a member of the Serbian negotiating team, stated recently that as long as the West has a feeling that the path of Euro-Atlantic integration is a done deal for Serbia, they will consider independent Kosovo as a the optimal solution. The Serbian Foreign Ministry is threatening to sever diplomatic ties with any country that recognizes independence of the province. Recent meetings of Serbian top officials with representatives of Russian gas monopoly Gazprom are a clear indication that the course taken till now can easily change and the last and probably the juiciest parts of Serbian privatisation might be offered to Russia. How far will Belgrade take this present flirting with Moscow remains to be seen?

The EU is obviously taking the signals seriously. A few days ago it promised one billion euros of non-refundable pre-accession assistance to Serbia over the next five years as well as seemingly faster prospects of signing the Stabilization and Association Agreement which would open the door for yet more EU funding.

The Serbian ruling class is split on this issue. One part is quite open towards Russia while the other is playing hardball over Kosovo; together they are trying to play geo-political poker once again in the best traditions of Milosevic. This approach is already giving results. The problem is that if you gamble, constant bluffing will force you to go all in at a certain point. Just ask the former Milosevic government about that.

"Independent Kosovo"

It is becoming apparent that Kosovo will play the role of Cyprus for the region in the future. The negotiations are at a dead end, with the imperialist powers unable to reach a compromise and Belgrade ready to stick to its claims over the territory no matter what. Independence will probably be proclaimed by Pristina followed by bilateral recognition from Washington and the majority of the EU but without a Security Council resolution and continuing opposition of Moscow and its allies.

An independent Kosovo will become a constant source of instability and a scapegoat for whipping up Serbian nationalism when needed. However, let us be clear about what we refer to when we use the term "independent Kosovo". A fully sovereign and independent territory is on nobody's agenda, not even the ruling clique in Pristina.

What the current "Ahtisaari plan" is offering to the people of Kosovo is a "supervised independence" with foreign control embodied in the position of International Civilian Representative, who would also act as the EU's special representative, with political powers similar to those practiced by the High Representative in Bosnia and Herzegovina. In reality, this is a protectorate status with limited political sovereignty and the presence of foreign troops on the ground. We are facing yet another imperialist satellite state in the region ‑ a tiny former Yugoslav province, stuck with the 360,000 square metre American army base on its ground.

Furthermore, Kosovo will also fall short of escaping the grip of Serbia. In an attempt to persuade Belgrade, the Ahtisaari plan decentralizes Kosovo fully, offering Serbia backdoor influence through the Serbian minority in the north of the province where Pristina has no effective authority. Even if this were not the case, impoverished Kosovo remains de facto dependent on the economic might of Belgrade. Encircled by seven times larger Serbia as its main infrastructural communication westwards, Kosovo is an easy target. Some 70 percent of Kosovo's goods come from Serbia and it is heavily dependent for its electricity supply. Belgrade is already making it clear that it will impose economic sanctions and make life as complicated as possible for the province if it dares to declare independence.

As if life were not already hard enough for the local population! Approximately 37 percent of Kosovars live in poverty, with 15 percent reported in extreme poverty. Unemployment stands at some 40-50 percent. GDP per capita is the lowest in Europe at around 1200 euros. The budget depends heavily on international assistance (34%) and remittances of Albanians working abroad (20%). The foreign trade deficit is running rampant with exports standing at 78 million euros against 1.3 billion euros in imports in 2006. Electricity blackouts are a common occurrence in Pristina. Industrial production has not been renewed and people have seen little benefit form over 3 billion euros that have entered the province as foreign aid since 1999. Accusations of corruption are widespread in Kosovo's media against the UN run mission and its foreign contractors doing business in the province. According to a UN bulletin from October 2006, only 30 percent of Kosovars have faith in the present UN administration. At the same time, the local political elite is an archetype of the mafia ruling class produced by the wars in the former Yugoslavia. The poorest party leader at the recent elections reported a personal wealth of 250,000 euros; the richest candidate's wealth is estimated to be 420 million.

No wonder that more than half of the citizens of Kosovo decided not to bother to go out and vote at the recent elections in November. The turnout dropped from 80 percent in the first elections after the war to only 43 percent today. All of the candidates ran on the same platform of independence from Serbia with, former Kosovo Liberation Army CIA sponsored leader, Hashim "The Snake" Tachi, collecting a majority of the votes. These hypocrites are running a nationalist hyped campaign against Belgrade, while they simultaneously consciously push Kosovo in the direction of a semi-colony of world imperialism.

Kosovars are becoming aware of the trap these politicians are pushing them into. Independence on a capitalist basis offers no concrete prospect for the raising of living standards in this underdeveloped territory, nor does it offer a real end to the influence of the Serbian bourgeoisie as we have seen. Because of this halfway solution, they are forced to pay the high price of becoming imperialist puppets dependent on the good will and inner dealings of the big powers.

The social situation inside Kosovo is unbearable, while the political parties' programmes do not correspond to the demands of the masses. Widespread dissatisfaction has pushed the activist organization called "Self determination" (VETEVENDOSJE!) to the front of the struggle. Lead by the former student leader Albin Kurti, this group demands unconditional independence and refusal of negotiations with Serbia on the one hand and retains a strong anti-imperialist rhetoric on the other, with a mix of anti-corruption and social demands as well.

The true nature of the foreign administration was revealed in February of this year when the UN forces killed two demonstrators at a protest organized by Kurti who was soon arrested. At his court hearing speech, Kurti correctly pointed out that the Ahtisaari plan will only bring renewed conflicts and large scale crime to Kosovo. Unfortunately, what Kurti does not realize is that independent Kosovo inside the capitalist Balkans remains a pipe dream with or without the presence of international forces.

The Call for "Self Determination"

Appeals for "self determination" in the case of Kosovo must be put into the present historical context. Self-determination is not an abstract demand outside space and time, but must be considered according to its concrete contribution to the advancement of the class struggle on the ground. The break-up of Tito's Yugoslavia is inherently connected with the re-introduction of capitalist social relations in the region and the strengthening of the pro-capitalist political forces in each republic.

As the case of Serbia illustrates, it has crippled the working class, which has still not recovered form this historical defeat. There is no reason why it should prove to be any different in the case of Kosovo. Left on its own, isolated on all sides, with a shattered economy and the imperialist boot on its soil, the chances for the development of a successful social movement in the short-term are slim. A declaration of independence would simply offer the local ruling class more breathing space to continue the privatisation and looting, and strengthen the position of imperialism in the region.

Marxists inside Serbia must first and foremost voraciously raise their voice against the domestic bourgeoisie that preys on this southern territory. However, at the same time we have the responsibility not to help nurture the illusions, spread by imperialism and its goons in Prisitina, that an independent Kosovo will bring freedom to the Albanian masses. Any Marxist pushing to the front Kosovo's right for self-determination at the moment when the masses themselves are finally starting to realize the native ruling class is not able to deliver this promise is missing the point to say the least.

Kosovo's independence will not only fail to solve the Albanian national question but it is making the more general issue of national conflict in the Balkans much more complicated. Should Marxists start defending the right for self-determination for Kosovo Serbs the morning after the independence of Kosovo is recognized? What about Republika Srpska and Bosnia?

The Kosovo status negotiations have awaken the biggest crises in Bosnia and Herzegovina since the end of the war in 1995. The Bosnian Serb leadership also blows into the horn of "the right of self-determination" whenever they feel their autonomy is being undercut by the centralization tendency enforced by the EU inside the country. The potential reunification of Republika Srpska with Serbia, on which Belgrade is insisting as the minimum compensation for the loss of Kosovo, would pull Croatia right back into the whirlwind and leave the Bosnian Muslims strung out in the middle again. An independent Kosovo also puts the status of the Albanian speaking population in Macedonia into question. Then there is the Albanian minority in Presevo Valley in the South of Serbia which already witnessed the uprising in 2001 as an echo of the Kosovo war and the crisis in Macedonia. The list goes on and on...

The situation we are facing is not a new one. As we have explained already, in many respects, the region is back to the year 1913. Fortunately, the Balkans has a rich socialist tradition on which we can lean on. We have the privilege of learning from how the socialists tackled these same issues almost 100 years ago. The resolution drafted by the first Balkan Social Democratic Conference held in Belgrade in January 1910 had this to say:

"Under the enforced guardianship and the preponderating influence of European diplomacy, the instrument of the political expansion of European capitalism, territorial and national relations have been created in the historical past of south-east Europe, and especially on the Balkan peninsula which hinder modern economic and cultural development of the peoples, and are most sharply opposed to their interests and their needs. From this contradiction arise all those crises, perturbations and events which serve as pretexts for European diplomacy and its monarchist-reactionary agents in the Balkans, to uphold their policy of interference, guardianship, conquest and reaction...All the progressive forces of the nation must strive to liberate themselves from the particularism and insularity...the borders that frequently divide up either peoples of the same language, same nationality and culture or regions that are economically and politically interdependent...Recognizing the necessity and legitimacy of the aspirations of the nations of southeastern Europe, the First Balkans Social Democratic Conference takes the position that these can be realized only by combining their economic forces into one whole, abolishing artificially drawn borders and enabling them to live together in full reciprocity and in united defense against common danger." [My emphasis]

This platform was later crystallized in the idea of a Balkan Socialist Federation as the only possible answer to the ethnic diversity and economic backwardness of the region. Today, this slogan is applicable more than ever before. To those who claim it is too abstract or idealistic we can only point out to the experiences in the last 15 years, brought about by the insistence on the right of self-determination on a capitalist basis. The biggest idealist is the one who believes the national question in the Balkans could be resolved by going further down this path.

The realness and concreteness of our alternative depends primarily on one factor - that is the return of the regional working classes into the political arena. Looking at the situation on the ground in Serbia and Kosovo it becomes clear that an attempt by the Serbian working class to fill the political vacuum inside the country by building its own independent political organization, with an internationalist position on Kosovo, would necessarily find an echo inside the province. In the situation of isolation and hopelessness this type of extended open hand would be wholeheartedly accepted. The same applies for al former Yugoslav republics.

As we stated in Part One, the recent movement in Slovenia shows us the way forward. The media in the region, who are usually fast as lightning to publish any petty incident or statement from the neighbouring countries that might contribute to chauvinist inflammation, chose to ignore it. In a manifestation of working class strength, 70,000 trade unionists and students poured onto the streets of Ljubljana, among them a number of workers and youth of different nationalities from the former republics, all gathered under one colour ion defence of their social demands.

Once we see similar scenes on the streets of Belgrade, Pristina, Skoplje, Zagreb or Sarajevo we will look back at the present difficult times with a smile on our face because we will know the class struggle in the Balkans will be back on the agenda. We are certain that from then on it will not waste any time as it has a lot of unsettled bills to sort out.

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