Yugoslavia and Macedonia

Opening the Door to Good Neighborly Relations

AIM Belgrade, November 17, 2000

"Macedonia is the country with which Yugoslavia has the least number of open issues, although the border has not been fully determined yet. Almost 90 percent of the problems concerning the border, however, have been resolved, and the matter should be closed soon." These were the words Yugoslav Foreign Minister Goran Svilanovic used to bid farewell to his Macedonian counterpart, Aleksandar Dimitrov, at the end of his one-day visit to Belgrade. Dimitrov was the first foreign minister from a former Yugoslav republic to come to the Federal Republic of Yugoslavia after the democratic change in the country. The cordial meeting and open talks between the two foreign ministers indicated that speedy changes should be expected in relations between the two neighboring countries, which established diplomatic ties as early as April 1996.

Since then, however, there has been no visible progress in the two countries' relations. To the contrary. Over time they kept deteriorating, dropping to the lowest level on the eve of the September elections in Yugoslavia when the authorities in Belgrade denied permission to an airplane carrying a Macedonian delegation, led by Dimitrov and headed for Montenegro, to use Yugoslav air space.

Four years ago Milan Milutinovic and Ljubomir Frekovski, the then foreign ministers of Yugoslavia and Macedonia, respectively, signed an agreement on the normalization of relations between the two countries. The Yugoslav government, headed then by Radoje Kontic, said on the occasion that "a full normalization of relations between the two countries is a factor of general stability in the region." Government representatives also said that the first step after the establishment of full diplomatic ties must be the determination of the border between the two countries. Officials on both sides kept reiterating that the issue "should not raise any major problems, because neither of the two countries have territorial aspirations towards the other's land."

This is why no one ever noticed that it was awkward that the officials speaking of the border issue took special care not to mention the border as a matter of dispute, but as an issue that required only an official agreement to be resolved once and for all.

It turned out, however, that the former, 231 kilometer-long administrative border could not so smoothly be changed into a demarcation line separating two sovereign states. Four years have passed in futile, occasional meetings of inter-state commissions that, as Svilanovic stressed, "used to end their encounters by adopting the minutes from the preceding meeting." News leaked to the public that both sides kept making "new demands." The Yugoslav side mentioned several forests and a village with three hamlets with some 505 inhabitants altogether, mostly elderly people. The Macedonian side raised the issue of its anti-fascist movement's memorial room in the monastery of Prohor Pcinjski. But it was clear that neither side cited any real reasons for keeping the issue open. According to certain analysts, time has shown that the chief obstacle was the desire of official Belgrade to "keep Macedonia in check," that is, to "use the border question as its trump card in some future deals." There are observers who even claim that Yugoslavia decided to normalize relations under pressure from the European Union after the signing of the Dayton agreement, to prove itself capable of normalizing relations with its neighbors and thus with the EU as well. Macedonia was chosen as an "easy case," a neighbor with which, as Milan Milutinovic then put it, Yugoslavia "has only to legalize what de facto exists." It should be kept in mind that throughout Yugoslavia's international isolation due to the wars in Croatia and Bosnia-Herzegovina, Macedonia was the country's gate to the world. Most business deals were made via Macedonia or Serbian companies based there, and much needed oil kept arriving through it.

Particularly stressing that their relations were never severed despite the breakup of the former common country, five months after they exchanged ambassadors and during a visit of Radoje Kontic to Skopje, Yugoslavia and Macedonia signed a free trade agreement amid much pomp. The deal specified that trade would be subject to an only 1 percent registration fee, quotas for a very limited number of ferrous metals and agriculture products and permits in the area of transportation. These limitations, however, were supposed to be lifted gradually, and finally removed in 1999. How this worked out in practice is shown by data on trade. Before relations were normalized, that is, while the international sanctions were in effect, trade between the two countries was US$2.5 billion. It dropped to US$1.2 billion in the year relations were normalized, and last year it stood at less than US$500 million. At this point, trade worth US$1 billion seems beyond everybody's wildest dreams, because as businessmen, especially those from Macedonia put it, "the meddling of politics into the economy has had, and still has, devastating consequences." Despite the agreement, whenever it faced internal economic difficulties, Yugoslavia imposed new restrictions on its Macedonian partners. With trainloads of wheat and truckloads of other perishable goods that rotted while awaiting permission to enter Yugoslavia, business contacts deteriorated as well. Uncertainty became the biggest obstacle in economic cooperation. There was also the problem of payment transactions, frequent change of regulations, obligation for Yugoslav exporters to deposit a portion of their hard currency proceeds with the National Bank of Yugoslavia, big difference between the official and black market foreign currency exchange rates, and other forms of red tape. Politicians, however, failed to take any notice. It came as no surprise, therefore, that in the January-September period of this year Yugoslavia's exports to Macedonia amounted to only US$155 million, and imports to US$95.3 million. Although this is a 24.9 percent increase compared with the same period last year, it is clear that neither side can be pleased with such trade results. The situation is even worse given that the FRY does not include in its trade figures Macedonian import and export deals with Kosovo and Montenegro.

The fact that Macedonians, especially those in the construction and transportation sector, are increasingly turning to business with Kosovo, and farm producers with Montenegro, coupled with certain statements made by Macedonian Prime Minister Ljupco Georgijevski, cast a big shadow of doubt on relations between Yugoslavia and Macedonia over the past several months. This, however, has not prevented Serbian businessmen from continuing to view Macedonia as a fertile ground for their shady deals, especially after the EU decided to enact black and white lists of Serbian companies, that is, those banned or allowed to do business with EU countries. In order to avoid the EU ban, the black-listed companies transferred their seats and assets to Skopje, which added much to the already high tensions on the Macedonian political scene.

For the ruling VMRO-DPMNE party and the opposition bloc gathered around the SDM, such Serbian companies became bargaining chips of sort. The Macedonian Interior Ministry compiled a list of 28 companies that were said to have done money laundering operations for companies linked to the former Yugoslav president, Slobodan Milosevic. They included companies such as Balkanstil, Skopska Pivara, OHIS, Fersped, Makedonija Tabak and all Macedonian banks. The assassination of Serbian businessman Vanja Bokan in Athens, caused a great deal of turmoil in Macedonia. His name was linked to the smuggling of Macedonian and foreign cigarettes into Serbia, allegedly on orders from companies owned by Milosevic's son, Marko. Compared with these scandals, the recent arrest of the financial director of the Bujanovac-based facility of the Duvanska Industrija Vranje tobacco factory, Bogoljub Milosavljevic, for an attempt to smuggle DM150,000 into Macedonia caused little consternation. Much more interesting were the transactions of the son of the former Serbian deputy premier, Dragan Tomic, who bought a majority stake in the Skopje steel mill, scandals tied to the sale of a piping factory in Kumanovo, the involvement of an MP in the Macedonian Parliament in the sale of Yugoslav copper, and the like.

When all this is added to the difficulties Yugoslav Ambassador Zoran Janackovic used to cause Macedonia, prompting the public to demand on several occasions that he be declared a persona non grata, the way in which Macedonian President Boris Trajkovski portrayed relations between the two countries comes as no surprise. In describing them, he did not hide that “there are practically no official contacts between the FRY and Macedonia, except for occasional meetings of the inter-state commissions and a note of protest exchanged here and there." Many details confirm this statement as true. To make the Free Trade Agreement work, 36 additional agreements had to be signed. In the four years after the two countries' relations were normalized not one bilateral agreement was signed dealing with everyday problems of the Serbs in Macedonia (some 40,000, according to official data), and the Macedonians in Serbia (whose number some sources even put at more than 40,000). Neither of the two countries was in a hurry to make accords on welfare and pension insurance, or to regulate ownership rights. That the statement of the Macedonian president was indeed true is further corroborated by the fact that the last high-level official contact was a return visit of the then Macedonian premier, Branko Crvenkovski, to Belgrade, in July of 1997.

The arrival of Alekandar Dimitrovski in Belgrade has marked the return of Yugoslav-Macedonian relations to where they left off four years ago. If what Dimitrov and Svilanovic announced turns out to be true, all that was missed can easily be made up for. If there are no open issues concerning the border, then it can finally be drawn, maybe even by the end of the year. When this happens, a surge in cooperation in other sectors will immediately follow. "The door to good neighborly relations has been wide open," the two ministers said. The opportunity to make use of this should not be passed over, and no hidden agendas should stand in the way.

Tatjana Stankovic

(AIM)