SKOPJE, Macedonia, Sept. 12 (UPI) -- The ancient Greek philosopher Heraclitus spoke of the world as a place of constant flux. Heraclitus lived in the Balkans -- a land that continues to be plagued by economic uncertainty and erratic progress.
This is the second part of an analysis of Balkan infrastructure; part 1 appeared Wednesday.
In matters of infrastructure especially, the region depends not only on local governments, but also on the whims of powerful foreign governments and international financiers. This effect reverberates in a myriad of ways.
The United States and European Union are, for all intents and purposes, in charge of the Balkans. The U.S. Trade and Development Agency, United States Agency for International Development, the European Agency for Reconstruction, and a bevy of development banks, like the European Bank for Reconstruction and Development are the main players, together with the IMF and World Bank.
By and large, major infrastructure programs in 2002 are coordinated by foreign governmental agencies and international financiers, and farmed out to massive private corporations. The region is, therefore, at the mercy of global foreign policies. When they change, so does the pace of work.
For example, the USTDA in 1995 set up the South Balkan Development Initiative. This 4-year, $30-million project had the stated purpose of "developing and integrating" the east-west transportation infrastructure connecting Bulgaria, Macedonia and Albania. The initiative, long on feasibility studies and procurement, tasted suspiciously of oil. Indeed, the SBDI provided $200,000 towards a east-west feasibility study, carried out by Bechtel. This cross-Balkan route had been targeted for a AMBO (Albania-Macedonia-Bulgaria) oil pipeline.
Yet last year's terrorist attack suddenly turned U.S. attention from the Balkans, and into Central Asia and the Caucasus. Bechtel is providing logistics for the Baku-Ceyhan pipeline, and American oil interests have turned eastward. With the AMBO idea in limbo -- and the United States rapidly tiring of Balkan peacekeeping missions -- enthusiasm for Balkan infrastructure projects also wanes.
In all cases, Balkan states are hampered or helped by their relationship with international creditors. In July, RFE/RL reported that Serbia will complete its north-south highway to Greece by 2004, rather than an east-west highway to the Bulgarian border. While $500 million for the latter had been requested from the EU's Stability Pact for Southeastern Europe, "Belgrade is currently unable to provide the necessary guarantees for such a credit."
Building Balkan infrastructure has also been characterized by the political character of international aid procurement.
NATO's 1999 Kosovo war destroyed key infrastructure like the Novi Sad oil refinery, Radio Television Serbia, roads, bridges and more. The subsequent imposition of Western politics in the reconstruction plans was neither unexpected nor short-lived.
The EAR, which administers a portfolio of more than $1.6 billion, has been a major economic catalyst. Its efforts aim to support the thesis that Kosovo is better off after the bombing than before. To this end, the EAR has poured a huge amount of money into Kosovo infrastructure projects -- by 2001, $47 million for highways, roads and bridges, $38 million for water supply and sanitation, and $273 million for energy supply. An official agency document of April, stated that an additional $55 million is to be budgeted for the energy sector this year. However, that was before the unfortunate mishap in July, when lightning struck the Pristina power plant.
The EAR has been less liberal with its funds, and more exacting with its demands, when it comes to Serbia. Rebuilding RTS, for example, has proved to be conditional on the station's adoption of Western-style editorial practices (ensured by a $500,000 management audit in February 2002). EAR assistance to Serbia from 1999 worked on a municipality-by-municipality basis. Local political reform was highly encouraged, and major funds were held up until certain political changes occurred.
Thus, after the fall of former Serbian leader Slobodan Milosevic in October 2000, straightaway began a $99 million "energy for democracy" program in all of Serbia's 160 municipalities, followed by a $25 million "schools for democracy" initiative. Although they didn't say it in so many words, the Western benefactors promised these things "in exchange for" democracy.
There are more extreme examples of selective international funding. When Macedonia's IMF talks broke down in June, the country was left in a state of suspended animation. According to Minister of Finance Nikola Gruevski, "they stopped even those projects which cannot (legally) be stopped." The only international projects that were allowed to continue were those directly linked to the implementation of the Framework Agreement between the Macedonian government and Albanian insurgents. The West has staked its credibility on this controversial peace treaty.
Recovering costs of building transport infrastructure are often accomplished through toll collecting. Yet this is susceptible to external factors. In the above-mentioned Framework Agreement, Macedonia's Albanians won increased economic support from the West. The Tetovo-Gostivar highway (Macedonia's best) is just one example of substantial international investment in the heavily Albanian west of the country.
Ironically, this road has also acquired a reputation for being the most dangerous in Macedonia.
Numerous robberies, kidnappings and murders -- including a recent drive-by shooting of two Macedonian police officers -- continue to plague the Tetovo-Gostivar highway. Lately, it has been prone to sudden closure by armed bands of Albanians.
The highway's beleaguered toll booth has been shot at, robbed, and blown up several times in the past few months. Ironically, all of these attacks have been carried out by the very people (Albanians) the road was meant to benefit most. As with freak lightning storms, unpredictable Balkan extremism can make infrastructure an unguaranteed investment.