Vol 1, No 2, 5 July 1999

A   B A L K A N   E N C O U N T E R:
The Treasure Trove of Kosovo
The pigs push in at the trough

Dr Sam Vaknin

Nothing like a juicy, photogenic human catastrophe to enrich corrupt politicians and bottom-line-orientated, stock-option-motivated corporate executives. The Balkan is teeming with both these sad days.

This little piggy went to market...

Even as the war was raging, shortages of food and other supplies led to the dispensation of political favours (in the form of import licences, for instance) to the chosen few. Bulgarian, Greek and Albanian firms, owned by ruthless criminals and criminals-turned-politicians benefited mightily. Millions were made and shared as artificially high prices were maintained by various means, while cronies and crime-controlled firms shared the spoils. This orgiastic intercourse between the corrupt and the criminal, robbing the most impoverished populations in Europe by "legal" means, was not confined to one country: it was ubiquitous in the Balkans.

Their more refined and well-perfumed Western brethren were never far behind in taking advantage of American largesse on the one hand and re-emerging alarmist tendencies on the other. Thus, American, German, Greek, French and Italian firms enjoyed funds allocated to international humanitarian aid by the likes of the US government, the United Nations, the World Bank, the IMF and other long arms of the American octopus.

Defence contractors and the dubious characters known as "weapons intermediaries" stoked the atavistic fires of war in securing defence contracts. Aid workers resided in six star hotels, driving the latest sports utility vehicles and brandishing futuristic laptop computers as they went about the business of dispensing aid. Aid rations were freely available in Macedonian, Albanian, Greek and Bulgarian markets. Upon my visits to the camps, I could plainly see that the refugees had never been given mattresses and were short of blankets, water, showers and toilets. Only bread was abundant.

Next trough ready

Now that the war is over, some people are counting their dead - while others are counting their blessings. But this has all been a prelude. It is the next wave of aid which is the main course in this bacchanalia.

Outlandishly feverish numbers are tossed around. Kosovo's immediate reconstruction (housing and infrastructure) will require well over two billion US dollars over the next two years. Of this, 1.5 billion dollars has already been raised. A further two billion USD are slated as direct aid to the shattered economies of Macedonia and Albania.

But the real booty lies in Serbia proper. A minimum of 10-13 billion dollars will be required simply to restore Serbia's infrastructure to its former, inglorious self. To resuscitate the whole languishing area, a staggering 30 billion dollars is touted as the minimum bill.

Rest assured that a good chunk of this generous cornucopia will end up lining the pockets of the rich and mighty. Perhaps as much as one billion dollars will end up festering in Swiss, Cypriot, South African and Israeli bank accounts. The politicians know it, as do the grupirovki (business cartels controlled by mafia-style organisations). Western governments know it, as well. This is the REAL stability pact. Financially inebriated politicians are better motivated to maintain peace and stability, or so the thinking goes.

Pig in the middle

The history of the Balkans will play a major role in determining the topography and geography of this flood of cronyism, nepotism, criminality and vice. The Balkan Peninsula is composed of states run by crime organisations and crime organisations run by states. Here old alliances last long (as opposed to in the Middle East where alliances, dune-like, shift with the winds). Bulgaria and Macedonia, for instance. Serbia and Greece. Albania and Kosovo. And now Albania and Macedonia.

Meetings of regional leaders in the Balkans have traditionally been reminiscent of scenes from The Godfather. The dons, uncomfortably clad in expensive business suits and wearing gaudy gold rings, decide life and death in a jovial yet vaguely menacing atmosphere.

The leaders of the New Balkans are much younger, less experienced, more prone to superstition, extremism and moodiness. The old tensions are bound to re-emerge, this time in the employ of business interests.

Expect a flare up of animosity between Greece and Macedonia. Despite the Bulgarophile regime in Skopje, expect uneasy moments between Bulgaria and Macedonia. And expect an unholy alliance of business interests between KLA political leader Hashim Thaci, with his sprawling business empire, and the governments of Albania and Macedonia. If not assassinated before his time, Thaci is definitely the Man to Watch. Young, well educated, ruthless, involved in business (read: corrupt to the core) - an aptly dangerous man in dangerous times.

The problem is that everyone holds high expectations. This is a poor recipe for an amicable carving of the cake of international funding. Macedonia expects to lead the reconstruction effort of Kosovo. It was offended greatly by the decision to base the Kosovo reconstruction agency in Kosovo (in Pristina). Greek and Italian firms expect to snatch profits from the jaws of their near treacherous behaviour during the war. Turkish firms expect to be rewarded for the loyalty of Turkey during the same. American and German firms expect to exclude others in gaining access to American and German (EU) funds as they have done in Bosnia. These all are mutually incompatible expectations, and they will lead to mutually exclusive behaviour. Expect some very ugly scenes, including spilt doses of that cheap, red liquid.

This little piggy had roast beef...

Albania, already governed by the ungovernable crime gangs it has spawned over the last few years, has formed an alliance with the KLA, never a moral standard-bearer. This expanded amusement park of drug trafficking, prostitution, weapons smuggling, contraband and much worse is now threatening to take over its more virtuous (though by no means virginal) neighbour, Macedonia.

A flare-up of hitherto unimaginable brotherly love has indicated a sacrilegious rapprochement. The Macedonian Prime Minister - encumbered by a demanding Albanian coalition partner - has met Thaci and the encounter had all the trappings of a state visit. Soon after, senior Albanian politicians started talking about Macedonian recognition of an independent state of Kosovo and an Albanian language university in Macedonia (the reason for student riots just two years ago).

To a large extent, the Kosovo war was gang warfare. The Serb criminal organisation known as Yugoslavia against the Albanian gang known as the KLA. It was a war over turf and lucrative businesses. In what used to be the Third World and more so in the post-Communist countries in transition, criminal activities often accompany "wars of liberation". In Congo, in Sierra Leone, in Chechnya, in Kashmir - wars are as much about diamonds, oil and opium poppies as about national aspirations. Kosovo is no exception but it was here that the West was duped into intervention. NATO was called upon to arbiter between two criminal gangs. There is no end to the mischievous irony of history.

Perhaps the following incidents, however, are more telling than any learned analysis:

In late April, the Albanian telecom switched off the roaming facility of cellular phones in Albania. Foreigners - including aid workers - had to pay the company 1000 US dollars for a special roaming-enabled chip.

Some Albanian families charged refugee families an average of 500 DM a month for their accommodation in sub-human conditions. Refugees who could not pay - or who had no relatives in Germany and Switzerland to pay for them - were evicted, often cruelly.

As Serbs were murdering their supposed brothers in Kosovo, Albanian crime gangs ran oil by pipeline and by boat across Lake Shkoder to Serbia and supplied the Serb army with the oil it was deprived of by NATO.

Welcome to the Balkans.

Dr Sam Vaknin, 27 June 1999

The author is General Manager of Capital Markets Institute Ltd, a consultancy firm with operations in Macedonia and Russia. He has recently been appointed Economic Advisor to the Government of Macedonia.

DISCLAIMER: The views presented in this article represent only the personal opinions and judgements of the author.

Dr Vaknin's website is here.


For more information on oil smuggling, look at the US Department of Energy's Energy Information Association page on the subject here.

For more on oil smuggling and corruption in general in and around Albania, see Fabian Schmidt's article in Transitions here.

The June 1999 edition of Jane's Intelligence Review has also reported on the oil smuggling, the mobile phone roaming chip scandal and the fact that Albanians have been charging refugees for accommodation.



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New Minority
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Czech Law School
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Corruption Revealed


The Reburial of
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Hungary Returns
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Treasure Trove in Kosovo

The Big Czech Question

Romanian Minorities


The Partitioning of
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in Mitrovica


Baltic States
Czech Republic


Last Train to

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The Legacy of
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Music Shop


Central European
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Karel Kachyna's Krava

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