REVIVAL OF THE CORPSE

Ownership Transformation in Kosovo

AIM Pristina, 11 November, 1997

Regardless of the fact that the Serbian Government included only eleven enterprises from Kosovo in its "special program of transformation", indirectly the entire economy of the province is involved, since it had been merged with similar plants in Serbia by administrative measures applied earlier. Kosovo Albanians do not participate in the process, because they do not accept any law adopted, or rather imposed, by the Serbian establishment, but nevertheless, fear is present that their production plants will be sold at outrageously low prices.

That is the reason why the just adopted law on ownership transformation is not passing unobserved in Kosovo. Although Kosovo Albanians experience it like any other law of a foreign state, it was nevertheless analyzed at various professional and political gatherings. The very fact that Dr Ibrahim Rugova said in his regular encounter with the journalists that "the Serbian regime has put on sale the major economic facilities of Kosovo, like Trepca, the Electric Company, Feronikl, etc., which is just a form of economic pressure on Kosovo and its citizens", illustrates well the severity and concern of the Albanian establishment about this problem. Then Rugova added: "We appeal at the international community and the professional agencies of the UN to exert pressure on Belgrade to terminate this process. Legitimate institutions of the Republic of Kosovo avail themselves of the opportunity to warn foreign companies that every contract signed with this intention, as the Greek company Mytilinios did, will be null and void and that we will appeal to the international Tribunal in the Hague", Rugova warned.

The Kosovo government in exile also reacted to this law and qualified it as harmful and intended to destroy the already devastated Kosovo economy. At various panel discussions, economists, lawyers and other professional groups stated their opinions which do not differ much from what was determined by Kosovo political and party leadership.

Among all the forms of transformation, the one implemented by the "special program of the government of Serbia" caused the largest number of comments. Not only because it is believed to be a trap prepared in advance, but because it was not explained well enough what this form of transformation meant, which were the relevant criteria for reaching such a decision, why this form of transformation, directly or indirectly, included almost the entire economy of Kosovo, and why the hurry to complete this business when there are not even the very fundamental preconditions for realization of the program of ownership transformation in Kosovo?

Although the Albanians had no opportunity to have their say about it, the government of Serbia is already taking all the necessary measures to start the transformation even in places where they form the enormous majority. The fact that the previously agreed trade arrangements with foreign companies can transform into a higher form of cooperation or their participation in transformation show this. Out of the total of 75 enterprises which the Serbian government will transform with its "special program", eleven which are located in Kosovo are the following: Feronikal, Trepca, Strezovce in Kosovska Kamenica, Sar in Djeneral Janjkovic, paper mill in Lipljane, Balkan in Siva Reka, Prizren Progres and Printeks, tobacco industries in Gnjilane, wood combine in Urosevac and Pristina aeroport. However, if one takes into account enterprises in Kosovo which became part of corporations, holding companies and cencerns in Serbia by administrative measures introduced in 1990 and 1991m, the list of enterprises which will be transformed by the special program will become much longer. Just a few examples. Factory of galvanized metal plates from Vucitrn, the tube factory in Urosevac and the Jugoterm radiator factory in Gnjilane all operate as part of the iron works Sartrid 1913 in Smederevo. A member of the DMB holding corporation in Rakovica is Metalac from Janjevo, Zastava from Kragujevc has its factory of spare parts in Pec, Minel Holding from Belgrade has integrated Pristina Energoinvest, Vineks in Vitina forms part of ILR corporation from Belgrade, and a large number of agricultural complexes in Kosovo are just part of the Belgrade combine. There is no doubt that this list is much longer, because six to seven years ago one of the numerous "patriotic duties" of those who were at the head of the receiverships was integration of Kosovo companies in the Serbian economy.

There are also other forms in which one enterprise included in the special program draws others into it. It is an established fact that along with mines and metallurgy, Trepca combine has its factory of batteries and fertilizers in Kosovska Mitrovica, but also the factory of industrial batteries in Pec, Famir from Prizren and the factory of hunting ammunition in Srbica.

Just before passing of the law on transformation, Sar from Djeneral Jankovic was transformed into a holding company which includes the cement works, the lime-kiln, factory of asbestos-cement panels and tubes, Silkapor and Kosovoplast, so that the program includes not only one factory but five.

If public enterprises and infrastructure are excluded (electric company, railroad, roads, PTT, hydro-electric system, etc.) about which nothing has been said - whether they would be included in the transformation of not - it is impossible to say which enterprises in Kosovo will really be transformed by purchase and distribution of shares or by simply capitalizing them?

The social, political and global situation in Kosovo still does not provide the conditions necessary for business operation or life in general, which would mobilize all relevant factors which would contribute to transformation. For overcoming such a situation, big steps are needed, especially in politics, in order to create the global ambience for further activities. However, the situation shows that nothing similar should be expected in the foreseeable future.

The latest in the row of futile attempts to revitalize the economy in Kosovo and for it to restart operation after the collapse of several years was made in the beginning of this year. The institute for development of Serbia had made a program of economic and financial consolidation of the economy of Kosovo. Only eight enterprises were chosen by that program. However, due to unrealistic insight into the situation, the planned resources were not allocated, so the program was abandoned. It is obvious that there was not a serious intention to activate and promote the economy of Kosovo. This implies that the announced "special program" will in fact "transform" dead capital, or more precisely offer the economy of Kosovo on sale for trifles.

Muharem Ismaili, the last Albanian manager of Kosovo Bank, expressed his opinion about this law by saying that what made the procedure of transformation of the economy of Kosovo absurd is the unresolved question of bankruptcy of the Kosovo Bank. Indeed, the enterprises which will be transformed by the program of the government of Serbia are the biggest debtors of this bank.

Their enormous debts will considerably decrease their total value in the evaluation. This could be avoided if their obligations would be transformed into bonds. But in this case, as the main creditor, the Bank is in bankruptcy, so that it is impossible to get rid of the debt by means of selling bonds, even if the market of capital operated. This practically means that the value of enterprises in Kosovo will be significantly reduced by long years of idleness, but also due to outstanding debts on the basis of foreign loans.

AIM Pristina

Ibrahim REXHEPI