To: The Record Date: January 29, 2003
From: Henry H. Perritt, Jr. Subject: Pristina, Kosovo,
6 January through 20 January 2003
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I visited Pristina Kosovo from 6 January to 19 January 2003 under sponsorship of the American Bar Association/Central and East European Law Initiative, in cooperation with the Kosovo Law Center. I was accompanied by Chicago-Kent law students Nicole Thibodeau and Ricky Drezek. Our primary assignment was to work with the KLC and the faculty at the University of Pristina to develop ways for educational program at the law faculty to be more oriented toward practical skills to practice, to expand the use of information technology, and to improve access to legal information through law libraries and otherwise. In addition, I followed up on initiatives begun earlier with respect to political, economic, legal-system development.
Substantial progress has been made in reforming the legal profession. Less progress has been made in reforming the law faculty.
ABA/CEELI, working with the Kosovo Law Center and the indigenous Chamber of Advocates, has instituted a western style Bar exam for practicing lawyers and judges, made a good beginning on publishing relevant law through the KLC “compendium,” and rationalizing the overall preparation for practice.
The law faculty has been resistant to many of these reforms and the reforms have been forced upon the faculty to a considerable extent.
Under the new system, would be lawyers must complete a three-year Bachelor’s program and a two-year Master’s program at the law faculty, taking a curriculum designed to reflect the “Bologna Declaration.” The Bologna Declaration is a mutually agreed framework for professional education in Europe. The University of Pristina, working with representatives of the Council of Europe, decided to adopt this for the entire university. A resolution adopting the new curriculum passed the “scientific council” of the law faculty (the highest policymaking body of the faculty), and the University Senate.
After completing the Master’s program, a candidate must then complete a two-year praktikant. A praktikant is a post-graduate internship in a legal institution. The Chamber of Advocates serves as a clearinghouse for praktikants. There is some concern about finding enough placements for all of those who graduate.
After completing a praktikant, a candidate then is eligible to take the Bar exam. Upon completing the Bar exam, the candidate is licensed to practice. There is no explicit tracking of candidates into separate pathways or examinations for private practice, work as a prosecutor or a judge, or becoming a professor. Traditional distinctions among “civil law,” “administrative and constitutional law,” “criminal law,” “international law,” and “financial law,” are strongly preserved in the Master’s program. These specialties are like majors.
The legal profession definitely is functioning, at least in part under this new system, although it is entirely unclear the degree to which the new system has actually been implemented. Signs for lawyers offices—“advokat”—are visible on almost every street corner of Pristina. The District Court of Pristina is bustling with litigants, lawyers, prosecutors, and judges, and the wheels of justice also were turning at the Commercial Court of Pristina and the Municipal Court of Ferazaj, both of which we visited.
We were informed that some of the local lawyers are quite good, in both the litigation and the transactional fields. Several serious problems of legal culture and economics remain, however. Too many lawyers think in terms of finding the right person to talk to to get the desired result rather than doing legal research and formulating a reasoned argument as to rights or as to an appropriate plan for a legal transaction. A dramatic problem also exists with respect to an imbalance of supply and demand for lawyers. The demand for lawyers is modest. The supply is huge: Some 5,000 students in the Bachelor’s program at the law faculty, almost all of whom aspire to become professional lawyers.
The long run goal for the Law Faculty has to become, not only to producing law graduates that are qualified for practice as it will exist in Kosovo, but also to produce a number of law graduates more closely approximating the demand. Overproduction of young professionals with no realistic prospect of realizing their aspirations is a recipe for social unrest and political turmoil.
Resentment of KLC exists at the Law Faculty. The KLC, its sponsors, and the Ministry of Education were very aggressive in forcing reform. They completely revamped the law curriculum, changing the Bachelor’s program from four years to three and imposed new examination and teaching requirements. This “Bologna Agreement” was approved by the top policy body of the law faculty, the scientific council, and by the university senate. It has not, however, been implemented, and there is some question whether it will be.
A vacancy in the directorship of the KLC provides an opportunity to forge closer relationships between KLC and the law faculty.
The law faculty itself is confronted by a myriad of problems. Salaries are too low, forcing professors to undertake side jobs that distract them from their teaching and other faculty responsibilities. The teaching tradition is continental and communist, with the professor expected to give a lecture in the form of a monologue to hundreds of students who sit passively (or do not attend). Evaluation is limited to an oral examination, administered at the end of the year. Some students take their studies seriously; many do not. The content of the instructional program is highly theoretical: The philosophy of the relationship between law and state is more important in the current curriculum than how the legal system functions in a unique state like Kosovo, where power is shared between international organizations and local institutions.
The faculty and the students are skeptical of the UNMIK regulations. Rather than studying them, they are inclined to wait for independence and then focus on developing uniquely Kosovar law. When I asked, “Why not get started now on developing Kosovar law?” The answer was that the faculty tried to do that. A team went to Germany to get started on writing a civil code, but the effort was blocked by UNMIK with no explanation.
It may be that teaching workshops should be organized rather than simply arranging exchange visits where observation may or may not occur and there is much discussions of teaching methods without making sure people know how to teach in different ways.
The externship program should be implemented quickly. Now is the time that internationals need young legally trained professionals, which provides additional externship placements. If properly organized, the externship program also can help draw the faculty more into the activities of the internationals which the faculty wants. Kuci is very enthusiastic about a scheme to institutionalize faculty member consulting through the law faculty, and this could be a step in that direction.
There is a need for greater faculty reference to Internet-based legal research in the classroom. There also is a need to emphasize research to law students and practitioners.
The Americans should help organize a basic legal research and writing course, which could be taught substantially through distance learning. It already is a standard course at the University of Tirana in Albania which could be adapted.
Such a course would be attractive to almost everyone because of the desire of everyone to learn English.
There are reformers within the law faculty and many of the more senior group also say that they want to change their approach to legal education to include more emphasis on skills, and practical application of legal subject matter. Reinforcing the possibility of reform is the great affection and admiration almost all Kosovars hold for everything American, certainly extending to American law schools. The exposure of many law faculty to American law schools through visits to Arizona State, the University of Pittsburgh, and Chicago-Kent are certainly helpful.
A big part of the problem is the pervasive instinct that nothing actually can be implemented until some elaborate formal and expensive infrastructure is erected to manage a new program. Almost every discussion of possibilities for clinical instruction becomes diffuse as one and then other people at the table will opine that clinical instruction cannot be introduced until the culture of the university is changed, until Kosovo gains independence, until UNMIK becomes more respectful of local institutions, until law salaries are increased, and until administrative practices are reformed. Obviously, this way of thinking produces complete paralysis.
The key is to enlist one or two senior faculty, with the power actually to implement a pilot program, and then to define that pilot program so that it can begin without large infusions of money and without setting off a reaction from the keepers of formal prerogatives.
It also is necessary to make sure people understand what is intended by “clinical education” and by “externships.” Many of those involved think that inviting a practicing judge to give a single guest lecture in a law class constitutes “co-teaching” the class and also is a form of clinical instruction. It also is widely believed that a more dramatic form of clinical instruction is relatively modest in-class simulation, in some cases amounting little more to a practical hypothetical introduced to frame class discussion. No doubt both of these reforms are desirable, and both introduce practice and practical elements to the program. But it is essential to be clear that other forms of practice-oriented instruction are contemplated and needed, including what American law schools would call in house clinics and American style externships. Many of those involved in Kosovo believe that an exchange program in which students attend other law schools constitutes an externship. It is important for internationals to be clear that we contemplate student placements in operational legal institutions in Kosovo (or elsewhere).
Some practice elements can be introduced easily. For example French law students see actual files from the Supreme Court. The Chief Judge of the Commercial Court reports that when he was in law school, the students in criminal law used to visit trials. To some extent, the KLC has introduced the practice of having judges and practitioners visit and give guest lectures.
Out of approximately 5,000 current law students, about 60% work in some jobs, including those in the informal economy. About 20% work in registered employment, and about 5% work in legally related jobs. By that estimate, on the order of 250 law students work in legally related jobs, for prosecutors, judges, UNMIK, NGOs, and foreign missions.
To that end, the Chicago-Kent students, the KLC, CEELI, and junior faculty and students from the Kosovo law faculty and I formulated a proposal for an experimental externship program that could be implemented as quickly as the Spring semester of this year. I presented that program to a meeting of senior university officials on 10 January, including the vice rector, the dean, Professor Kuci, Professor Murati, and other senior officials of the university and the law faculty. I reviewed the broad commitment to more practically oriented education, noted the university’s acceptance of the Bologna Framework which includes three credit hours per semester for practical exercises, and walked the group through each item on the attachment. Murati expressed strong support, noting that the proposal is well within the ambit of the original Pristina Law Faculty/Chicago-Kent agreement as well as the more recent ABA/CEELI undertaking. The dean then expressed his support, asking me whether I would maintain my personal involvement with the law faculty. I said that I certainly would and that one reason I was in a hurry to get agreement on the externship proposal was so I could proceed to help with early implementation during the remainder of my visit. The vice rector looked around the table and, seeing no expression of opposition, expressed his support.
I suggested we all initial the documents. After some discussion whether we should instead do a formal protocol, I said we should do both, and that an initialed document would be helpful to me in discussions next week. After some discussion Kuci promised that a formal agreement would be signed no later than Monday, 13 January.
At 2:00 on Monday, 13 January, we met again. Kuci produced the agreement in Albanian and English, after tinkering with it a bit on the PC. I teased him and took his picture while he was using the keyboard of the PC. The only changes were the linkage with Chicago-Kent’s 13 October 2000 agreement, and the deletion of the concluding points arguing why this was a good place to start. The new dean and I signed it. We shook hands all around, and took photographs.
On 16 January, we completed most of the documents necessary to implement the externship program, a sample one page proposal for an externship, the post externship faculty approval and granting of credit, the host institution evaluation of the extern, and a student evaluation of the host institution. After we returned to Chicago, I sent a complete package of documents to Bekim.
There are some 248 licensed lawyers, and 82 praktikants. The Chamber of Advocates is in charge of licensing; the Ministry of Justice is in charge of the Bar exam. The chamber estimates 600-700 practicing lawyers are needed. If the ratio of lawyers to population were to be the same as in the U.S., the number would be substantially larger. There are several problems not yet under control. Many law graduates have never worked as lawyers for ten years because of the Milosevic-imposed apartheid. Against the better judgment of the chamber, the Ministry of Justice gave these people and people from the villages priority on taking the Bar exam. For those of this group that passed the Bar exam, their book learning is stale and they have never had any practice experience.
There never has been a system of law firms in Kosovo. Young lawyers tend to work for courts to get experience before they break out on their own. Most lawyers do everything, including they do not really know how to do. The chamber is pushing specialization in continuing legal education. It also is pushing the ministry to allow the best young praktikants to have priority for taking the Bar exam. Otherwise the problem with the long hiatus before licensure perpetuates itself because the young potential entrants have to wait behind those who already have waited.
UNMIK makes reform harder. Its Department of Justice will not let—or makes it more difficult—for law students to visit courts and prisons. It has proceeded with substantive legal reform in a manner that produces unnecessary confusion. It has undertaken piecemeal reform of aspects of property and criminal law, with resulting SRSG regulations reflecting a mixed common-law and civil-law approach. These legal texts clash with underlying and broader applicable law from pre 1989 Yugoslavia. It is left to poorly trained practitioners and judges to reconcile conflicts on their own. More fundamental reform, as with the draft criminal code, languishes. It has been ready for assembly action and SRSG signature for more than a year. And nothing seems to be happening. Some of the problems could be alleviated if UNMIK released draft regulations for comment before promulgating them, as it did with the press and media regulation.
The utility of the Internet for legal research in Kosovo could be significantly increased by a serious effort to publish the Kosovo Legal Center compendium on the Web. The compendium is a series of several volumes of paper versions of applicable law in Kosovo. Volumes 1-3 contain applicable law from Yugoslavia. The volumes after that contain the text of the UNMIK regulations. There is no need for a special effort focused on the UNMIK regulations, because they are already available in electronic form on the Web. Nicole Thibodeau undertook to develop an inventory of the Yugoslav laws in the first three volumes, eight in Volume 2, five in Volume 1, and 11 in Volume 3. The inventory is meant to identify which of these laws exist in electronic form, and which do not. As to those that do not, efforts must be undertaken either to key them or scan them. KLC already has a Web site, and this would be the logical place to publish the electronic compendium. The first priority should be to publish on the Web whatever exists now in electronic form. Ultimately, versions in English and Albanian should at least be available.
On 13 January, we visited the Ferazaj Municipal Court. Ferazaj is located about two thirds of the way from Pristina to Skopje, in area close to camp Bonsted. Because of all the jobs for Kosovars, the place is flourishing. We began by meeting with the chief judge, Rifat Abdullahu.
The judge was judge of the district court for eight years, was fired along with all the other Albanians in 1990, and just selected to head the Municipal Court of Ferazaj when it was restarted in 2000. The court now, in his opinion, is fully functioning at a high level, although there are some vacancies to be filled. Geographically, the court covered the municipalities of Ferazaj, Shtime, and (maybe) Lipjan). The court has jurisdiction over minor civil and criminal cases. More than half of its caseload is criminal, but the civil caseload is growing as villagers have increasing trust in the court system and take their disputes to court rather than adjusting them in the village as they did when they mistrusted the Serb courts. Many of the civil cases are real estate cases, some 700 including simple registrations of real estate contracts, and another 5-600 involving controversies over real estate, debts, and contracts. Other reports suggest that divorce and inheritance cases make up an increasing part of the civil caseload. The judge showed us a copy of the 1981 court procedure rules which Arben promised to get us a copy of.
Apparently the basic structure of decision making is similar as between criminal and civil cases. He described the procedure for criminal cases in detail. In cases where the maximum penalty is one year or less, one professional judge decides. In more serious cases a “college of judges” decides, comprising a president judge (the professional judge) and two lay judges in cases involving penalties up to two years. In cases involving more than five to ten years potential punishment (the boundary is somewhat complicated depending on the offense charged), two professional and three lay judges decide in the district court. Lay judges are selected just like professional judges except that there is no requirement for legal education or passage of a Bar exam. They were selected for four years before the war. Now, they are selected indefinitely, pending devolution of power from UNMIK to local institutions. The chief judge is paid 440 Euros per month; regular judges are paid 400 Euros per month. The low salaries are a real problem in attracting good people and thwarting corruption.
As to basic criminal procedure: An accused may be detained up to one month during an investigation unless a court authorizes detention of another two months. After three months detention, if no charges have been filed, the accused must be released unless the Supreme Court authorizes further detention up to one year. This is referred to as the “investigative detention.” After the defendant is charged, the Judicial College decides on the detention pending trial. Detention is “extraordinary,” justified only by (1) risk of flight, (2) possibility of interference with the investigation, or (3) the possibility the defendant will commit the crime again. These criteria for pretrial detention are satisfied in about 30% of all cases. Apparently there is no quantitative limit on how long post charged, pretrial detention can continue.
We sat in on a trial. The trial was scheduled to start at 10 am. It did not start until about 11:15 because of delays in bringing the defendant from a jail in Gjilani. Ferazaj itself has no detention facilities. Ordinarily this trial would have occurred in the judge’s offices, but because we were there, they moved it to a small courtroom. The courtroom had a bench across the front of the room behind which sat the three judges, the president judge (the professional judge) in the middle, and the lay judges on either side. Behind the bench, stage right, was a partially obscured U.N. flag. Two short tables protruded from the bench toward the audience. The table at stage right had chairs for the prosecutor and a praktikant sitting to the prosecutor’s right. The table at stage left had a chair for the defense counsel. Between the two tables and delimited by a kind of wooden fence (resembling a trellis for roses) stood the defendant and the witnesses. Along the wall at stage right were three or four chairs, three of which were occupied by praktikants. Toward the rear were three rows of about eights chairs each separated by a central aisle.
Two armed Kosovo Protection Service (“KPS”) police were present. The three of us, our ABA/CEELI interpreter, an older man, and a younger man who apparently were related to the defendant also were present. After witnesses testified, they also took seats in this area.
The defendant, a man in his late 30s or early 40s was charged with burglary in the first degree, accused of breaking and entering to steal a cow and a bull which he subsequently sold to another individual. The defendant had been in detention for three months before 13 January. The president judge asked most of the questions. One lay judge asked a few questions. The prosecutor challenged the defendant’s explanation—which was that he bought the livestock from a person that he could not find, despite the police having released him for one day to attempt finding him.
The interaction between the prosecutor and the defendant was more like an argument than formal question and answer. The defense counsel had no questions of the defendant. The complaining witness appeared next, and then another witness—the man who bought the livestock from the defendant. The complaining witness said that he heard no noises, that the livestock were not locked up. The second witness said that the defendant owed him money for work the witness had done for the defendant at his house, and that he paid part of the amount due by transferring the livestock. He knew the defendant to be engaged occasionally in selling livestock, but not in selling other goods such as automobiles.
After the testimony of each witness, the president judge allowed the lay judges, the prosecutor, and defense counsel the opportunity to ask questions, and then he summarized the testimony for the court reporter who was sitting at a PC keyboard. Obviously, she was not making a verbatim record, but summarizing what the president judge told her. Occasionally, the prosecutor or defense counsel would interrupt the president’s judge summary, apparently to suggest an amendment to the summary.
After all this was complete for the second witness, the president judge announced the proofs closed and allowed the prosecutor to present his closing argument, which took about ten minutes. Then the president judge recalled the complaining witness and severed a civil claim for compensation for the bull. The cow had been returned, but not the bull.
Defense counsel closed in about five minutes. The president judge asked the defendant for any last words. After the defendant made a short speech, the father of the complaining witness tried to speak, and the president judge silenced him.
Then the Judicial College adjourned to deliberate. It returned in 30 minutes, announced a conviction for simple theft, the elements of burglary not having been proven, and sentenced the defendant to seven months, with credit for time served.
After the proceedings were concluded, we met with all three judges. The president judge said the lawyers were weak. We ourselves noticed that the defense counsel seemed slovenly dressed, not very energetic, and apparently ineffective in her argument. The president judge also noted that the prosecutor should not have charged first degree burglary when he had no evidence whatsoever of the elements of burglary.
On the way out, I talked to one of the policemen who had been in the courtroom. He was about 28 years old, and graduated from KPSS in 2000. He was a law student before that and is a law student now. Responding to my question, he said that many of his classmates and others in KPSS are former KLA.
My impressions were that the professional judge was highly professional and highly motivated. The prosecutor seemed highly motivated and professional in demeanor (I could not assess the quality of his argument because I did not understand the language). The defense counsel seemed incompetent. The atmosphere of the courthouse was like a better U.S. courthouse in a small city—a fair amount of hustle and bustle, people of various stripes waiting on benches, court administrative personnel, more or less courteous, and the whole place tidy and clean.
As I said to several people, “the wheels of justice in Kosova are turning, and the rule of law is visible.”
Substantial development of local political institutions has occurred. As on previous trips, I met with Hasim Thaçi, the President of the Democratic Party of Kosovo (“PDK”), the second party (about 25-30% of the vote), Ramush Haradanaj, the President of the Alliance for the Future of Kosovo (“AAK”) (8-10% of the vote), and lower level officials of the Democratic League of Kosovo (“LDK”), the most popular party (about 60% of the vote). The leadership of the PDK and the AAK are very focused on action and on recruiting and training a younger generation of Kosovars for effective political leadership. They not only say this, but their success in recruiting some of the best and brightest in the generation in its late 20s and early 30s is evident in the economic, legal, and political spheres. The LDK is more passive, but enjoys support and participation from significant parts of the intellectual and professional elite in the more senior generation. The parliament, the governments, and the court are functioning. I visited a session of the Kosovo Assembly, and the experience was like visiting any one of hundreds of legislative bodies around the world.
There is, however, huge and growing frustration at the slow pace at which power is being devolved from UNMIK to local institutions. Experiences such as the failure of the Special Representative of the Secretary General (“SRSG”) to sign an education law passed nearly a year ago, and the failure to sign or declare his intention to sign a new telecommunications law passed more recently, the unilateral promulgation of a U.N. regulation setting up the Kosova Trust Agency to supervise privatization in the middle of an assembly debate on the subject without waiting another day for the debate to end, all are considerable irritants.
The resistance to devolving authority to local institutions comes not from national governments but from U.N. bureaucrats, especially U.N. lawyers. The U.N. Legal Advisor’s Office is a particular problem. Stronger pressure from the members of the Security Council would be both feasible and effective.
On the one hand pressure for real self government grows because there are now popular political institutions. On the other hand, there is not much direct democracy. Although members of the Kosovo Assembly credibly claim to represent the people of Kosovo, they really represent the parties of Kosovo. Under the constitutional framework[1] the 120 members of the Assembly are elected on a proportional basis to represent a single multimember electoral district for all of Kosovo.[2] The political parties developed their own slates of candidates. Only the names of the parties, not the names of the individual candidates, appear on the ballot for the Assembly of Kosovo[3] and for municipal assemblies.[4]
Accordingly, the real power lies with the political parties. The Special Representative understands this. Dr. Steiner consults with local institutions more than his two predecessors. He consults with Rugova, Thaçi, and Haradanaj, the heads of the three major political parties, and not with the ministers of government or leaders or individuals members of the assembly. This practice adds to the frustration of senior officials of the government in the assembly.
Given the realities of the allocation of political power among local actors and institutions, however, it is hard to fault this tendency. It does mean, however, that one interested in promoting further political reform in Kosovo needs to pay careful attention to the political parties and the quality of their leadership and the human resources that they can place on their slates for the assembly and into those ministries allocated to them as a government gets put together.
Almost every Kosovar Albanian I talked to says that final status for Kosovo must be resolved sooner rather than later. They perceive U.N. staff as the greatest barriers both to final status resolution and to devolution of power to local institutions because, they believe, the U.N. staff likes their jobs and likes the power associated with being part of a vice regency. They perceive the USG as consistently pushing for faster devolution and the Europeans usually not objecting to it.
When U.N. lawyers impede devolution and resist privatization and other mechanisms for economic development, they reinforce local pressure to resolve final status. Anytime an international organization refuses to do something on the grounds that Kosovo is not a state, whenever an investor experiences difficulties because Kosovo is not a state, whenever a U.N. lawyer or policymaker withholds authority to take some governmental or commercial action on the grounds that such action is inconsistent with Resolution 1244, the experience reinforces the Kosovar belief that the only way to make progress is to become independent and formally acquire statehood.
I detect absolutely no willingness even to consider reassimilation into Serbia. Mistrust of Serbs is pervasive. The new Serb political leadership is perceived as being little different from Milosevic, although some of the younger people express respect for the G17 Party that unsuccessfully sought to form a government in Serbia.
On the other hand, no one really has a concrete formula for independence. No one seems to believe that likely that the UNMIK writ can be made to run practically into the areas north of Mitrovica and if UNMIK and KFOR cannot or will not do it now an independent Kosovo cannot do it and UNMIK and KFOR will not help when independent Kosovo do it. So even if the international community could be induce to accept an independent, unified Kosovo, pragmatically, the northern part would be a Serb enclave controlled more by Serbia than by any central government in Pristina. So a simple approach to independence, which is what the Kosovar Albanians say they want is pragmatically a recipe for partition, which the Kosovar Albanians say is unacceptable.
When confronted with this conundrum, every Kosovar Albanian I talked to said maybe a land swap would work, exchanging the Serb communities in northern Kosovo, northwest of Mitrovica for Albanian communities in southeastern Serbia.
The Kosovar Institute for Policy Research and Development (“KIPRED”) has done high quality research and training focused on the political parties and on the political system. KIPRED report, “Administration and Governance in Kosovo,” is one of the best analysis I have read. KIPRED is run by Lulzim Peci (executive director) and Leon Malazogu (program director), and a distinguished “professional council.” A particularly promising possibility is to forge a close alliance—or maybe even a merger—between KIPRED and other groups.
The trends in voting do not favor LDK. In two years, it has seen a 73,000 vote falloff while the PDK has seen a 16,000 vote increase, and AAK has seen a 9,000 vote increase. The difference is reduced turnout, evidencing diminishing public confidence in all three political parties.
One reason the LDK polls so much better than the PDK and the AAK in the first three elections was that it had a ten year head start on building a political party. In June of 1999, neither the PDK nor the AAK really existed as parties. They were simply names used by Thaçi and Haradanaj. They had no grassroots organization, and no experience or capacity to formulate a program or run campaigns. Now, especially for the PDK, that has all changed. Both Thaçi and Haradanaj get high marks from almost everyone on having grown greatly.
Some knowledgeable observers and participants in public life believe that progress toward independence must take place in two steps. The first step would be to replace UNMIK with another trustee. One person said the European Union or Germany carried another suggested a “condominium” comprising the contact group. Such a step would respond to building criticism and frustration with UNMIK, and might also result in more competent administration, because it would avoid what tends to be a U.N. quota system, finding jobs for personnel whose national experience adds little value for the effort to rebuild Kosova. On the other hand, some responded with horror to the suggestion that the European Union would be in charge of Kosovo, opining that it is a worst bureaucracy and less action oriented even than UNMIK. It certainly has not done a good job with Pillar 4—economic development.
There is enormous interest in seeing as much continued U.S. involvement as is possible.
An underlying problem with any responsible movement toward final status is that the general public has inflated expectations about movement toward complete independence in a single step. Almost any responsible plan to move toward final status will come as a shock.
Some people think that UNMIK must begin to reshape expectations by encouraging a more open discussion of the possibilities for final status. On the other hand, Kosovars are perhaps too focused on politics already rather than economic development and other concrete action in opening up a broad debate on final status which surely make this problem worse.
Some report that post war euphoria, which resulted in managers and workers at socially owned enterprises donating their time to clean up the facilities and restart the machinery, is fading, being replaced by a growing frustration and antipathy for UNMIK as an imperial authority more intrusive in some ways than the Serbs. Much of the frustration is unnecessary, and could be reduced by more transparency, greater promptness in making decisions and greater willingness to consult.
Not only is the absence some kind of statement on final status frustrating for the Kosovar population, it represents a degree of political uncertainty that discourages investors. When the international community is silent about final status, Kosovars aggressively state their commitment to it, foreign investors fear a renewal of violence during the terms of their investment. A commitment not only to a process, but also to the status of independence is necessary.
KTA and DTI have done investors conferences in New York and Frankfurt. Other smaller conferences have been held in the region. Investor interest has been strong, although every press report on controversy over final status and every widely reported outbreak of violence is seized upon by investors as a reason to drag their feet. The privatization process cannnot begin without a regulation on real property. This is so because many of the enterprises under the administration of KTA had few assets besides land. A draft real property regulation is on the desk of the SRSG. An early draft allowed a reorganized enterprise to keep and transfer use rights, while ownership was sorted out by the KTA. This is consistent with the conclusion that social ownership carried with it, “the right to private ownership over the building and the right to permanent use of the land on which the building stood.”[5] This approach was rejected by the board of KTA. The draft before the SRSG contemplates the 99 year lease to the transferee of socially owned property in a KTA-supervised reorganization in privatization.
The KTA contemplates privatization of 60 or so SOEs in 2003, with the process beginning as soon as operating rules are adopted by the board in February or March.
Philosophical differences remain. Some within the board are pushing for an independent appraisal of the value of SOE property before privatization begins. Others oppose this and prefer to the let the market decide on the value. What point is there in getting an appraisal of 1 million dollars if no one will bid 1 million dollars? There also is debate over the degree to which conditions should be imposed on assets transferred to investors or whether the investor should be free to do whatever the investor wants once the bid price has been paid. One way to resolve this is to designate certain facilities as “special cases,” justifying negotiation over terms of the transfer, with all other facilities handled on the simple basis that once the price is paid the new owner can do anything he wants, including shutting the facility down and transferring the interest in the land (which presumably would be an 99 year lease but not fee simple ownership. Interestingly, if the use right had prevailed, the use right might be extinguished by cessation of operations).
KTA has a Web site (but there’s nothing there; it’s “under construction”) and is working with DTI, the Chamber of Commerce, and with the Stability Pact to ensure most effective advertising and promotion within very limited resources. One minor controversy in this regard involves the claim by the Chamber of Commerce to have mandatory membership by SOEs, which would generate revenue enabling the chamber to do more promotion. The chamber has requested mandatory imposition of dues payments on SOEs. One way to resolve this is through an order saying that the chamber is entitled to whatever it was entitled to under applicable law, and that SOEs must comply with applicable law. This would result in mandatory dues payments, because the applicable Yugoslav law made membership in the Chamber of Commerce mandatory for all enterprises.
Amidst all of the complaints and concerns about KTA, two alternative ideas are expressed. One is to give the employees of socially owned enterprises first option, either to invest additional money for a certain number of shares, or to receive, say 20%, of total shares in exchange for surrendering their claims. That way the employees get to decide whether the enterprise gets restarted at all and may be less resentful if they do not dominate a restarted enterprise. Another is to extend the commercialization approach because it permitted imposition of conditions on the investor.
OPIC has agreed to cover investments in Kosovo, and there is hope that the Germans and others will follow.
One vision for economic prosperity in Kosovo relegates socially owned enterprises to the background. Many—perhaps most—of them are not viable economically and the pain of slimming them down and transforming them may be so great that it is politically intolerable.
One vision makes Kosovo the India of Europe or, one might say the Ireland of Southern Europe. Kosovars are energetic, have good language skills because so many of the younger generation spent time out of the country and now have returned, and no information technology. Kosovo is different from Bosnia, where no one is returning and many who did return are now leaving because of little opportunity. Albanian national pride will continue to sustain Kosovo and permit it to draw upon resources from Albanian communities elsewhere in the region and around the world. The best strategy for realizing this vision is a higher education system that emphasizes English and information technology (as in SEEU) and an economic policy that emphasizes the organization of human resources for sale of services across Kosovo’s borders.
I had a visit from a Kosovar, which illustrated the impediments to economic development in the private sector. The Kosovar’s brother brother works for an international organization as a sign language interpreter, but realizes his job will be disappearing and he wants to start a small business. The first thing he did to realize his ambition was to build a house with space in the basement and on the first floor for a business. The problem is he has no idea what kind of business he wants to start. After discussion of the possibility of a doctor’s office or some sort of medical lab, because the house is near the hospital and the medical school of the University of Pristina, I suggested that the brother visit the hospital and talk to the physicians about whether they need additional office space. My visitor did not seem to understand why this would be a useful thing to do, although when I pressed the suggestion, she promised to pass it on to her brother. I also suggested that the brother talk to the Kosovo Chamber of Commerce, and ask their advice on what sort of business to start and how he would go about it. I asked my visitor to inform me of the results, when he visits and asks those questions.
What is needed in addition to intermediation in the mortgage banker and job fair sense is the availability of very simple advice on how to start a business. The Chamber of Commerce should be doing this, but I bet it won’t. Alternatives include translating some publications that surely are available from the U.S. Small Business Administration with title such as, “How to Start a Business,” published on the Web site and made available in paper form in Pristina and the other towns of Kosovo. In addition, it would be interesting to explore the possibility of a donor to fund a small business/transactional lawyers office in Pristina and or some other town, which would advise entrepreneurs of what kind of business to start, and how to go about it. Such an initiative would have long term utility only if the westerner presumably American—who runs it immediately hires Kosovar Albanian staff with promise—perhaps relatively recent, English speaking, graduates of the economics faculty or the law faculty and teaches them the trades of business consulting and transactional lawyering.
Kosovo’s economic future may be as a kind of “hub.” IPKO is taking care of the telecommunications infrastructure necessary for that role, but there also must be a transportation infrastructure. The road to Dures is absolutely crucial. Everyone knows it, but the local politicians won’t build it. This is as much a failure of assertiveness by Kosovars as it is short sided instructionism by the internationals.
The highly educated workforce, and energy of young Kosovars, allow Kosovo to become a center of post-production, back office architectural design, and IT activities delivered to the rest of the world.
Two things are necessary, however, because right now its hard to find a database designer and programmer and an imaginative transactional lawyer among Kosovars. The first prerequisite is a national educational strategy that focuses on technology in English.
The second thing is one or more high tech incubators. IPKO is prepared, apparently, to provide the incubators.
“The Internet is a revolution here. When there were 40 Internet cafes in Pristina everyone said they would all go broke. Now there are 70, and they are flourishing. People are hungry for education. Parents will go without food to ensure that their kids get an education that will connect with the West—especially the U.S.—and get them good jobs in Kosovo. One should look at India’s experience. Kosovo can do the same thing.” A partnership between AUK and IIT could accelerate appropriate educational programs in technology.
Entrepreneurial energy is abundant in Kosova, but Kosovars, like everyone, lack imagination. After one person puts up a filling station, everybody else puts up filling stations. The need is for some leadership, especially in the high tech area. I suspect that there also is a strong need for labor market intermediation as well as capital market intermediation. Not only can investors and entrepreneurs not find each other; skilled professionals wanting work, and enterprises wanting skilled professionals have a hard time finding each other.
Businesses have a hard time finding good transactional lawyers to help them with corporate governance. An American law firm office, employing younger generation Kosovar lawyers could make a real difference and make a real profit—much on the model of early American law firm presence in China.
The SEEU and AUK are mirror images of each other. The SEEU was built with American money and is being run by Albanians. AUK will be built with Albanian money and run by Americans. The business concept for AUK works. The child of Diaspora parents can get an American (RIT) degree for $5,000, while meeting an Albanian spouse and strengthening Albanian language skills and cultural attachments. Enough tuition dollars will flow from the U.S. and Germany into Kosovo for these students to allow scholarships and other subsidies for poor Kosovar students.
On 14 January, I gave a lecture through a Contracts Law class at the Southeastern European University of Tetovo (“SEEU”). SEEU is in its second year of operation under a three year grant from the state department to SEEU in Indiana University. The university is private and emphasizes English competence as a way of tying ethnic groups together and facilitating success by young Albanians in public affairs and business. The University of Tetovo, established in 1994 still lacks full accreditation, although it is a public university. The rector of SEEU, Alajdin Abazi, former dean of engineering at the University of Pristina, hopes that SEEU and the University of Tetovo will form a close cooperative relationship over time, possibly with complimentary programs. The SEEU academic program emphasizes compatibility with the Bologna Agreement, easy transfer of credit back and forth among European universities and SEEU, student-centered learning, distance learning, and a curriculum that emphasizes basic skills in information technology.
The university has about 2,000 students now, and is expected to have 5,000 by 2005. Tuition is 900 U.S. Dollars per year, with outside support for work study in student scholarships, accounting for about 60% of the total tuition. Currently, the university offers Bachelor’s Degrees in legal studies, public administration, business administration, communication sciences and technology and offers diplomas in eight teacher training tracks.
The rector would like to expand the curriculum to include life sciences. I encouraged him to consider engineering as well. The rector has proposed a “Balkan network” of universities, comprising SEEU, and universities at Sophia, Pristina, Tirana, Skopje, Thessalonica, and the American University of Kosova. Such a network would permit complimentary curricula offerings, distance learning, and faculty exchange. The problem, of course, is that cross border student involvement can be difficult. The proposed budget for the Balkan network is 5 million dollars. The rector reports the budget for the three year partnership among SEEU and Indiana University is 2.2 million dollars (at other points I got the impression it is 2.2 million per year), and tuition revenue is about 1.8 million dollars per year. The rector is inclined to seek public financing for the difference while hoping to avoid state control. I encouraged him to press instead for state funded scholarships which could be used at SEEU.
The three year partnership emphasizes computer science and computer literacy, and English. SEEU just received a “video conferencing machine,” which uses the school satellite Internet connection (1 meg down; 500 KBTS up) to transmit video images between SEEU and IU. The intended pattern is that an IU professor comes to Tetovo for two weeks or so, teaches, gets to know the students, and prepares two teaching assistants. After these two weeks, the IU professor goes back to Indiana and continues the course via videoconferencing with the assistance of the assistants. The IU professor comes again at the end of the semester to wrap things up and administer examinations. Asynchronous Web based distance instruction currently is aimed at training graduate assistants. There are 12 students now taking an asynchronous course in computer science, and courses in English are expected to begin in the next semester. This course content, in computer science and English, already exists, and already is offered through the IU distance learning Web site. What is contemplated for SEEU is simply enrollment in these existing courses.
I suggested to the rector the possibility of an IIT/SEEU partnership to develop engineering courses. Another possibility, of course, is a broader IIT engagement including public administration and leadership training.
At the end of the group meeting with the rector, a fair amount of enthusiasm was expressed for the possibility of having U.S. visiting faculty visit a number of different universities in the Balkans, certainly including SEEU and the University of Pristina. Later, at lunch, the rector told me he has trouble getting U.S. faculty, especially in business administration.
I had a favorable impression of the students in the class I taught. They were attentive, enthusiastic about the subject matter, and asked a number of good questions. Afterwards, most of them that I interacted with exhibited good English skills although they seemed embarrassed to use their English in the larger class (80-100 students). The University of Pristina faculty that I traveled to Tetovo with (Kuci, Murati, Aliu, and Bektashi) remarked that the teaching style at SEEU has been, from the beginning, highly interactive. So, for me to teach the class more or less socratically was nothing new.
On 13 January I had dinner with Andrew Gridinsky, Acting CEO and Director of Academic Planning for the American University in Kosova Foundation. The foundation has received 2.2 million dollars from Kosova Foundation (the remnants of the 3% fund), and expects to receive another $3 million or so. The foundation’s mission is to establish the American University in Kosova, and raise more money to support it. The university will give instruction in English, and will have a faculty comprised 40% of Americans and third country internationals, and 60% Kosovar. Initially, in a partnership with Rochester Institute of Technology (which is not quite finalized yet), the university will offer two year degrees in “business for the economy,” and “social sciences for the society.” The two-year beginning is intended as a fail safe mechanism so that if the university cannot be established for the long term, the students can transfer their credits to another institution. RIT is involved with an American university in Dubrovnik, and is committed to allow AUK students to transfer their credits there if necessary.
AUK must concentrate now on getting his English programs started in the Spring, his associate program started in the Fall, and on finding a CEO and manager for the foundation. One possibility is a series of continuing professional education “certificates” that might be stitched together for an LL.M. degree, a Master in Financial Markets degree, or a Masters Degree in engineering. This would be a way of starting programs in these areas without having to commit to Bachelor’s degrees.
Over the longer term, the university expects to build a campus on a site in the suburbs of Pristina already donated by the municipality, and to develop a four year Bachelor’s curriculum organized into a school of business, a school of government and public policy, a school of mass communication and a school of new technologies. The university also would continue to emphasize adult continuing education.
To create a revenue stream and gain visibility, the university will begin offering instruction as early as the spring of 2003 in advanced English. The plan is to charge $5,000 annual tuition and to have 1,000 students.
He has strong support from the U.S. office and from the reformers on the University of Pristina law faculty. Kuci, particularly, is quite enthusiastic about the AUK proposal.
IPKO is the biggest Internet Service Provider in Kosovo, and was established in September, 1999, originally as an NGO. More recently, the NGO non profit was separated as IPKO Institute, and the current IPKO established as a profit-seeking corporation, registered in Kosova. The network comprises a backbone with five nodes on key mountain tops throughout Kosova. The backbone is an STM1 wireless network in the 18 giga hertz and, point to point, with bandwidth of 155 mega bits per second. Each of these nodes redistributes bandwidth through a 3.5 gigahertz point to point wireless network with variable bandwidth, approaching multi megabit per second when configured appropriately. The 3.5 gigahertz network provides reliable links of 30 kilometers. When that is not enough, two transceivers easily can be configured back to back with the receive and transmit channels flip as a kind of low cost relay. The cost of the transceiver/antenna combination is about $300. The network is linked to the Internet with an E3, 34 megabit per second wireless link through Albania to Slovenian telecom point of presence in Montenegro. IPKO is in the process of switching to Deutscha Telecom to which it will connect through the same link.
IPKO has partnered with Andrew, which in turn, uses cable modems from an Israeli company called DYJO (?) and California Amplifier, which provides the 3.5 transceivers built into a 13" x 13" antenna, with power fed through the coaxial connection. The antenna provides 24 db gain with a 30 degree beam. The 3.5 giga hertz length is from 12.5 to 20 watts at the backbone side and one watt from the transceiver. Currently, a “truck roll is necessary to configure the transceivers for a customer, but set up requires only a few minutes. A conventional coaxial jack on the transceiver links to an ordinary cable modem. Musa envisions lands or campus networks linked to the transceivers. For example, IPKO currently is wiring apartment buildings so that every apartment can have Internet access through a single transceiver mounted somewhere on the building.
The network is the biggest point to point broadband wireless network in the world. The basic design concepts and much of the hardware is the same that Sprint used in Phoenix and Chicago.
IPKO still has in operation some 2.4 giga hertz unlicensed links, but it finds 2.4 unsatisfactory for a serious network because of the potential for interference.
The greatest prospect for near term growth is through VPN for banks and other financial institutions in Kosova. That’s why the intra country bandwidth is so much greater than the bandwidth to the Internet. IPKO is actively signing up customers for its data services, and has a box that provides DES3 VPN tunnels (the cable modems provide DES1 encryption).
IPKO also is or will soon offer voice over IP through the network and generally will offer network connections to anyone without regard to what they want to send through the network.
IPKO consistently has obtained licenses for everything it wants to do—even for the 2.4 gig unlicensed spectrum. It has licenses for 85 megahertz of spectrum in the 3.5 gigahertz band, which will become permanent under the new telecommunications law.
IPKO has received capital from NEB, and other European sources totaling about 1 million Euros, all in debt. Musa elected to go with debt instead of equity because he did not believe he could sell such a novel business concept to private investors. He does, however, plan to seek private capital for bidding on the tender for a new GSM cell phone provider and for free dial up plans. IPKO has about 60 employees, and experienced a 250% growth in revenue in the last year. It has 6,000 dial up modem subscribers.
On 17 January, we visited the Kosovo Police Service School (“KPSS”). We received a briefing by its very impressive director, Steve Bennett, who has had a career in the Marine Corps and then directed correctional training in New Mexico, and training for the Oregon State Police. The KPSS is a great success story. It has graduated more that 5,000 police officers, with a good interethnic and gender mix. By all accounts, the members of the KPS are better trained than members of U.N. MIK Police. The main problems have to do with the fact that early apprenticeships for newly graduated KPS officers had to occur under tutelage of U.N. CIVPOL, and the experiences were non uniform at best, and counterproductive in those circumstances where CIVPOL officers were corrupt or did not respect basic human rights. Gradually, as more KPSS officers and “trainers” are available in the field, new graduates can be assigned to these trainers.
KPSS officers must undergo 12 weeks of training at KPSS, and another 15 weeks tutelage in the field. Initially, half of KPSS recruits had to come from KLA, as a way of demobilizing KLA. Now, the figure is about 35%. Former KLA are neither better nor worse than non KLA recruits. Bennett expressed considerable interest in partnering with IIT on forensics, a community policing program for the Balkans, or on legal training for police officers.
On 17 January a student from the Pristina law faculty, Admir Salihu (stary102@hotmail.com; 44-224-464) and Haki Abazi a student in the technical faculty drove me to Farazaj, where I gave an invited lecture to about 75 local students from various disciplines, the vice mayor, the head of the library, the heads of a couple of local socially owned enterprises, and others. Local TV and radio covered the lecture and did interviews afterwards. I was invited to talk about privatization, Security Council Resolution 1244, and final status. The following is a summary of my message:
Security Council Resolution 1244 has always provided sufficient authority for political development and economic development in Kosovo. It explicitly contemplates autonomy and the transfer of power from the U.N. to local institutions. It allows ample room for privatization and economic development. Its only troublesome provision is the phrase that reserves ultimate sovereign in Serbia, but that has no immediate concrete application or importance.
Anyone who says that Resolution 1244 stand in the way of transfer of competency to local institutions or in the way of privatization or economic development is misinterpreting it.
Privatization is but one aspect of economic development. There are many encouraging signs with respect to economic development: filling stations, restaurants, and Internet cafes have popped up all over the place, and IPKO is one of the most advanced Internet backbones and service providers in the world. All of this has occurred in the private sector, with private entrepreneurial energy and private investment.[6] On the other hand, very little has happened with respect to privatization or the creation of capital market and labor market institutions necessary to accelerate economic development.
It is important to accelerate the privatization process. Conceptually, there is only one way for privatization to occur: liabilities associated with assets must be separated from the assets before they are transferred to private investors; otherwise the private investors will not invest. (I drew the usual KTA diagram on a whiteboard to illustrate the “wall” that must exist between the liabilities, including those held by former employees, and the assets.) This basic concept has been used by every former socialist country that has privatized, certainly including Poland, the Czech Republic, and Macedonia. This concept is at the center of the KTA regulation, and in that sense, the KTA regulation is sound. There are, of course, details that can vary. For example, outright ownership of real property maybe excluded from the asset side if there is a concern that investors may buy an enterprise only to shut it down and sell the real property. To reduce the chances of this, the assets may include only a 99 year lease, conditioned on continued operation of certain transferred facilities. That is the approach KTA is taking, and I support it. Two other features of privatization approaches have been used in other countries, but I oppose them and hope that KTA will as well. One is do an appraisal or evaluation of the property before a tender is opened for bid. An appraisal of 2 million Euros does no good if no one will bid more that $500,000. It also interposes delay and adds to controversy. There should be no independent appraisal. Another feature often found and utilized in the Czech Republic and Macedonia is to give former employees a special position in the ownership of the assets or in controlling the privatization process. This is a bad idea as well, because it frightens potential investors away and delays the process. What is urgent for Kosovo is to get the privatization process moving as quickly as possible. This also is the reason why privatization should begin with the most successful enterprises; not the least successful.
Of course, the hope is that an investor will not only pay money to KTA for the asset, but also put additional money into revitalizing the assets, hiring a substantial part of the previous workforce, in building a competitive enterprise with future job creation potential.
But it is important for Kosovo not to be completely distracted by privatization. As important is private entrepreneurship in the new business sector. In many cases, the future of new business will be brighter than the future of privatized socially owned enterprises. Developed economies are shifting toward the services sector and away from the manufacturing sector. Most of the socially owned enterprises are in the manufacturing sector; most of new businesses and new business opportunities are in the service or trade sectors.
Ultimately, everyone must understand that Kosovo will not have a viable economy unless it has an economy that generates foreign exchange after the international community financial inflows are gone or substantially reduced.
Regarding final status, there is growing realization, at least in the United States, that the only acceptable final status is independence for Kosovo. I am unable to assess the degree to which this perception is taking root in western Europe let alone in Serbia. But independence has little meaning unless it is accompanied by realization of two other goals—economic viability and security. Neither of these goals can be satisfied if Kosovo is completely isolated. Kosovo is too small to be self sustaining economically and in the attractive standard of living. It is too small to be militarily secure on its own even if it put half its male population under arms. So final status implies a geographic, political, and economic context within which Kosovo has relationships with other states that sustain its economy and assure its security. The question is how do we get there. What will Kosovars accept? What will the Serbs accept? What will the international community accept, and what will the United States accept? It is not in your interest to insist on a course of action that causes the international community and the United States simply to walk away and withdraw its support. The absence of a resolution of final status is an impediment to political and economic development but it is not a complete block. People are willing to invest despite uncertainty about final status. Consider the Sharr Cement Plant, and IPKO and the commercialization of eleven enterprises.
The best guarantee of eventual independence is a track record of concrete success in political development and economic development. If you develop a modern viable economy, if you develop political institutions that make a difference in the lives of ordinary people and are democratic and transparent, no one will be able to take that away from you. If, on the other hand, municipal governments fail to use their existing power, which surely is broad enough to allow them to pick up the garbage and remove the snow; if the parliament and other local institutions spend all their energy complaining that they do not have more competence and that UNMIK is too slow in transferring authority to them, and do not do anything with their existing authority, people will lose hope and eventually the international community will simply walk away. If you are impatient with the SRSG’s failure to sign the education law in six months, the best response is to accelerate the pace with which the assembly passes good laws. Let them pile up on the SRSG’s desk, until he is embarrassed by his failure to do his part in allowing local institutions to govern. If, as many people say a road to Dures is necessary to assure Kosovo’s economic future, build it; do not wait for the internationals to build it.
For the many young people in the room, don’t wait for UNMIK; don’t wait for final status; start a business. Don’t wait for UNMIK; don’t wait for final status; tell Kosovo’s story as a way of attracting foreign investment. You do not have to wait for anyone. All of you know people outside of Kosovo. Send them email. Tell them that investors should be interested in business opportunities in Kosovo. Don’t wait for UNMIK; don’t wait for final status; do something on your own.
[1] UNMIK Reg. No. 2001/9 (15 May 2001).
[2] Constitutional Framework § 9.1.2, 9.1.3.
[3] UNMIK Reg. No. 2001/33 (on elections for the Assembly of Kosova) (15 November 2001) § 4.1.
[4] UNMIK Reg. No. 2002/11 (on the municipal elections in Kosovo) (10 June 2002) § 5.3.
[5] Professor Dr. Abdulla Aliu, Social Property in Kosova: A Special Approach on Legal Status of Construction and Farmland at 18 (English version (Dec. 13, 2002) (manuscript available from Professor Aliu, University of Pristina Law Faculty).
[6] IPKO has received substantial capital from international community public infrastructure development entities.