Global Policy Forum

By Stefan Armbruster

Kosovo's UN-run administration is preparing the first privatisation of the protectorate's assets, but admits that it does not know their worth. The sales, which have been opposed by Serbia and local trade unions, are described by the UN Interim Administration Mission in Kosovo (UNMIK) as vital for restarting the economy.

"We need to move the economy on, and the sales are covered by (UN) resolution number 1244," UNMIK spokeswoman Sarah Hackaj told BBC News Online. Of about 350 socially-owned enterprises (SOEs) - a type of social ownership unique to the Communist-era Yugoslavia - 50 will be sold and another 300 shut down, Ms Hackaj said. She said the UN had no valuations for the assets, which would be "left up to the market". Kosovo is one of the poorest regions of Europe, the majority of the working population is unemployed and foreign donor support has dwindled in recent years.

Belgrade's opposition

Western analysts say the privatisation is vital for attracting investment to reinvigorate the economy after years of neglect by the former Yugoslav government. In June last year, Serbia asked the UN Security Council to suspend the privatisation programme in Kosovo because of lack of consultation with Belgrade. Legally, Kosovo remains a part of Serbia.

Belgrade has said it does not oppose privatisations but wants Serbian interests to be protected. The Serbian Government is particularly concerned about $1.4bn in international debts it has guaranteed but are owed by Kosovo's businesses. A special chamber of the Kosovo Supreme Court will deal with any outstanding claims and ownership disputes. "They (Serbia) would have to go through the special chamber," Ms Hackaj said.

Land rights

The sale of six companies, which were to have been advertised this week, have been delayed because the UN in New York has not passed special "land use" regulations covering disputed or unclear titles. "The regulation will allow people to use land, but if there is no clear law which allow us to sell to private businesses, then the whole process is pointless," Ms Hackaj said.

"Once the regulation has been approved, it will be full-steam ahead with the advertisements." The six businesses are described as medium-size businesses, with about 100 employees, in sectors ranging from brickworks to refrigeration.

Kosovo became a UN protectorate in June 1999 after an 11 week bombing campaign by Nato led to a Serbian withdrawal. While the province remains part of the union of Serbia and Montenegro, its majority-Albanian population is seeking independence. More companies are expected to be offered for sale later this year.

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