Loukas Christodoulou

Since the 1999 NATO intervention the former Yugoslav province of Kosovo/Kosova* has been administered by a series of international agencies. During this period the area has been subject to economic re-structuring, so as to transform socially-owned property into private businesses. The British government has been active in this area, providing privatisation consultants in a role strikingly similar to their role in Iraq.

The United Nations Interim Administration Mission in Kosovo (UNMIK), which runs Kosovo, pending a final decision on the area's status, has the aim of handing over power to local politicians, after setting up viable government mechanisms. Linked to this aim is the UNMIK project of creating a viable Kosovan economy: 'Supporting the reconstruction of key infrastructure and other economic reconstruction' as UN resolution 1244(1999) put it when it set up the interim administration. UNMIK has expanded this to a mission to 'promote economic prosperity in Kosovo and the welfare of its people through the development of a market economy'.

There is an urgent need for development of the economy in Kosovo. Unemployment is estimated at 50% and the 2 billion Euros in aid received since 1999 is the main source of foreign funds for the area. However, the introduction of mass privatisation and other neo-liberal measures, such as deregulation, do not seem designed to help the local population. Rather, they suggest that the aims of UNMIK are to pave the way for Kosovo's integration into the European economy under the very worst terms for its people.

For example, the Euro was set by UNMIK as the local currency, without local consultation and the World Bank has noted approvingly that 'Kosovo is one of the most liberal trading regimes in the world with a zero and 10 percent tariff rate and no quantitative barriers.' The Bank also went on to set out exactly why integration of Kosovo into the global market is in the interests of European governments and corporations:

The mining and energy sectors are potential key sources of future growth. Kosovo has abundant resources of lignite, lead, zinc, ferronickel, magnesite, and crushed stone, as well as relatively low transportation costs to the Western European markets.'

So far only a small fraction of Kosovo's mining industry has been set in motion again, to the understandable frustration of the Kosovan miners themselves, who would prefer privatisation with jobs to pit disuse and unemployment. The relatively large exception to this has been the sale of the Feronikeli mines to mining giant International Mineral Resources (IMR)/Alferon. Hailed as 'One of the most important events in the privatisation process in Kosovo' by the Kosovan Minister for Trade and Industry, the investment of 30 million euros by IMR represents a success for the UNMIK plan. It also represents a success for IMR, which is part of Eurasian Natural Resources, one of the biggest mining groups in the world. IMR's boss, Alexander Mashkevich, who lives in the UK, is close to the Labour party - in 2003 Labour peer Lord Levy, currently involved in the 'cash for honours scandal' met with Mashkevich during a trip to Khazakstan. Mashkevich is also close to other pro-Labour corporate chiefs, such as Lakshmi Mittal. The man who made the deal for Feronikeli, IMR chair Johannes Sittard, was Mittal's second in command during 1995-2001. It is likely that Mashkevich, who made his fortune as a corporate raider during the chaotic privatisation of the former USSR's industry, spies similar bargain basement prices for rich resources in the case of Kosovo.

Meanwhile the UK Department for International Development (DfID) has been sponsoring privatisation consultants' work in Kosovo. Money paid so far is as follows: £340,980 to Enterplan; £171,730 to Birks Sinclair and Associates; £1,269,127 to Atos Origin and £1,622,350 to WYG International. As the talks over the province's political future move on, the UK government is working to make sure that any future Kosovan state will be run along neo-liberal lines.

Future Corporate Watch investigations will look more in depth at the privatisation process, and the role of UK consultants in this. If you have any information relating to corporations in Kosovo, please get in touch.

* The choice between using Serb 'Kosovo' or the Albanian 'Kosova' for this area is politically loaded. In this article we use, 'Kosovo', as it is the standard international usage. This is not to take any position on the question of the rightful ownership of the area, nor to attempt to deny the very real suffering of the Albanian Kosovars under the Yugoslav state.