Time blurs West's vision of a stable Balkans

By Philippa Fletcher

SARAJEVO (Reuters): A year ago this week, world leaders gathered in Sarajevo among buildings damaged by shells and gunfire and pledged to banish war from Europe forever.

They outlined a Stability Pact for the Balkans, an echo of the Marshall Plan that helped the continent recover from World War II, and agreed that long term peace in this particular corner required democracy in what remains of Yugoslavia, shattered by 10 years of disintegration and the Kosovo war last year.

One year on, it is clear the political will and funding that drove the Marshall Plan are missing from the Stability Pact.

It is also clear that Yugoslav President Slobodan Milosevic's idea of democracy is far from that of the West and does not appear to include him stepping down any time soon.

This makes an underlying goal of the pact, at least as far as Sarajevo's most exalted guest U.S. President Bill Clinton was concerned, as elusive as ever.

Officially, the pact was aimed at encouraging economic reform, democratization and cooperation across the volatile Balkans by coordinating international efforts and backing them with funding to those countries which got the message.

Things started to go wrong early on.

When the delegates left Bosnia, which suffered the worst damage in the violent break-up of Yugoslavia, they also left a 1.5 million German mark (US$716,300) bill for their stay in Sarajevo.

Bosnian officials say it remained unpaid for months. The European Commission this week dismissed their allegations, saying it was paid "many months ago".

James Lyon, director of the International Crisis Group think tank in Sarajevo, noted that it took eight months to arrange the first donor conference and said even then the pledging was essentially a repetition of existing promises.

"The Stability Pact has got off to a very slow start and there are doubts as to whether it can achieve what it set out to do," said Lyon.

Even the coordinator of the pact, Germany's Bodo Hombach, has admitted its shortcomings.

"The general disappointment is the slowness of the bureaucratic process that creates a lot of impatience," he told Reuters last week, sending a warning to the European Union and Group of Seven leading industrialized nations plus Russia.

"I see in southeastern Europe an upward spiral of hope for a new era and the EU and the G8 must now watch out that this does not become a downward spiral of disappointment," he said.

Coupled with that disappointment is the knowledge that, with internationally isolated and volatile Yugoslavia in the middle of the Balkans, prosperity and peace are distant prospects.

"Milosevic is the biggest cause of instability in the region, he's blocking development and trade," said a senior Western diplomat, expressing a view that crystallized with Milosevic's indictment by a UN war crimes tribunal last year.

Even with 20,000 NATO-led troops keeping the peace in Bosnia and more than that in Kosovo, a new outbreak of violence cannot be ruled out. Montenegro, the last republic left in Yugoslavia with Serbia, is the main cause of concern.

"We get the feeling that Milosevic is trying to pick a fight with Montenegro," said the diplomat, who has wide experience of the Balkans.

He said Milosevic and Montenegro's pro-Western President Milo Djukanovic were shadow-boxing over what remained of Yugoslavia -- a situation that could get out of hand any time.

If Milosevic moved against Montenegro the West would respond, he said, but stopped short of saying how.

Mladjan Dinkic, a dissident Serbian economist and one of those recently allowed to sit in on Stability Pact meetings that exclude official Yugoslavia, believes time is running out and that if the Stability Pact is to work at all, it must work fast.

"Time is measured in a different way in the developed world, in countries where people plan next year's summer holiday before they've started this one. In southeastern Europe things change from day to day," he said by telephone.

He and other Serbian opposition leaders have asked the Stability Pact's 40-plus members to outline international help for a post-Milosevic era in September, thereby giving them something to offer voters due at the polls by early November.

"They say there will be a working group but it hasn't got anywhere -- maybe because of summer holidays. The pace is very slow," he said.

With skepticism in the West over whether the bickering opposition could win elections even with funding pledges, so far the only regional summit on the horizon has been planned to take place after they are due.

France, as current president of the European Union, has proposed a summit for Croatia at the end of November.

A Bosnian official who has dealt with Stability Pact issues in the war-torn former Yugoslav republic, divided into Muslim-Croat and Serb entities, said this was part of the West's plan for one country to take the lead in the pact.

"Western countries see the pact as a way to encourage the countries to get together to lobby for their interests and they think there should be someone leading the group," he said.

The West sees Croatia as a model because its people turned their backs on nationalism in this year's elections. But its new Western-looking leaders are still wary of being put in the "Balkan" context.

Lyon said that while the November meeting seemed to broadly mirror the Stability Pact, it was not clear if it would be part of the same organization, which was in danger of losing its way.

"We don't know what its role is, we don't know what it is supposed to be doing," he said.