Letter to the Chairman of the Committee
from the Minister for Europe, Foreign and Commonwealth Office,
20 December 2004
FAC INQUIRY INTO
UK POLICY TOWARDS
THE WESTERN
BALKANS
During my appearance in front of the Foreign
Affairs Committee on 30 November I agreed to provide further information
on a number of points raised by members. These are set out below
and in the attached annexes. I hope the Committee finds this supplementary
information useful and I look forward to reading your report in
due course.
KOSOVO SERB
POPULATION MOVEMENTS
IN KOSOVO
IN 2004
The UN Secretary General's report of 17 November
2004 reported that more minority community members have been displaced
in 2004 than have successfully returned to their homes. As at
10 December 2004, 1,951 people (of whom 1,628 are Serbs) who had
been displaced in the March violence had not yet returned to their
homes. The office in Kosovo of the United Nations High Commissioner
for Refugees has told us that the number of returns to Kosovo
from internal and external displacement so far in 2004 is 2,165,
of which 733 are Serb, 361 Roma, 501 Ashkalia/Egypt, 429 Bosniak,
133 Gorani and eight Albanian. A full breakdown of the figures
as at 30 November is attached at Annex A[24].
I would, however, draw your attention to the caveats given by
UNHCR, which include the following: All presented figures are
based on the information collected monthly from the field, received
from various and credible sources. Information is updated accordingly.
Due to the complexity of information gathering, this set of information
does not necessarily reflect all return movements at the time
of reporting.
The United Nations Mission in Kosovo (UNMIK)
has stated that there is no mechanism in place to monitor departures
from Kosovo, in part due to the complexities inherent in doing
so, for example identifying those who had left for good, or those
who had left on holiday or for schooling.
What is the UK doing to raise the issue of human
trafficking with the Governments of Moldova, Ukraine and Romania
and does the FCO intend to support the proposal of a shelter for
trafficked women in Kosovo?
We have already provided information on the
UK Government's efforts to tackle organised crime in the Western
Balkans, and in particular, human trafficking in Kosovo. The attachment
at Annex B answers the Committee's specific queries.
Which UK officials attended the conference in
Kosovo on 16 November and why was there no UK Minister present?
The meeting to which the Committee refers was
held by the Special Representative of the Secretary General, Mr
Soren-Jessen Petersen, with the aim of forming a constructive
dialogue with European countries on the issue of forced returns
to Kosovo. The UK delegation was led by senior officials from
the Home Office. Austria, Belgium, Denmark, Finland, France, Luxembourg,
Germany, the Netherlands and Switzerland were also represented
at official level. As the meeting had been timed to coincide with
a visit that the Swedish and Norwegian Ministers were making,
their Ministers were able to attend.
Why has the UK contribution to policing in Kosovo
been reduced, what is the current UK contribution to policing
in Kosovo and what is the policy on deploying retired officers
in Kosovo?
The UK continues to contribute a substantial
number of police officers in Kosovo, meeting in full its requirement
as requested by UNMIK. Of the 15 EU members deploying police to
the mission, the UK is the third largest contributor.
Currently the UK has 80 serving and 20 retired
police officers in Kosovo. These include:
— 64 serving (62 from Ministry of Defence
Police and two from other UK forces) and 20 retired officers are
with UNMIK Civpol.
— Eight serving officers from other
UK forces serve in the Kosovo Central Intelligence Unit (CIU),
— Two serving and two retired officers
are posted to the OSCE-run Kosovo Police Service School (KPSS)
UK officers occupy key positions in the mission,
including Deputy Commissioner of Police Crime Pillar in UNMIK
Civpol, the Head of the Kosovo Central Intelligence Unit, Directors
in all three (Operations, Administration and Crime) pillars of
UNMIK Civpol Headquarters, Head of various operational and special
units, and Commanders, or Deputy Commanders, across the five Regions.
Overall, UK police occupy 55% of the identified key posts in UNMIK
Civpol. At the Kosovo Police Service School, British officers
occupy two of the four senior management posts.
The UK currently has retired officers serving
in Kosovo, Macedonia, Jordan and Iraq. Retired officers can often
provide specialised skills and experience of high value to missions
as well as increasing the pool of potential secondees above that
which can be sourced from serving officers alone. The FCO has
a special unit responsible for placing UK officers to police missions
overseas, called the International Policing and Civilian Placements
Team. They recruit both officers who are already retired, and
officers who are due to retire imminently from active service.
They do not recruit officers who have been retired for such a
period of time as would make the skills and experience out-dated.
Serving officers are seconded to the FCO during their deployment
to a mission and the FCO reimburses forces for each officer's
salary and other deployment costs (for example, accommodation
allowances). Retired officers are contracted to the FCO for their
deployment and the FCO pays their salaries direct.
Would the current draft of the EU Constitutional
Treaty allow the UK to recognise Montenegro independence unilaterally
if such a situation arose in the future?
The situation under the Constitutional Treaty
would be the same as under the current Treaties. Recognition of
a third state remains the prerogative of national governments.
However, for wider political reasons, EU member states may wish
to do so in unison ie through adoption of a common policy. But
the UK or any other Member State could prevent the adoption of
a common policy which had the effect of recognising the independence
of a third country, because we have retained our veto for primary
policy decisions in foreign policy. The Constitutional Treaty
introduces only one new area of decision making by Qualified Majority
Vote (QMV) in Common Foreign and Security Policy (CFSP). (In addition
to implementing measures and the appointment of Special Representatives,
where the Council is acting on a proposal from the EU Foreign
Minister, which he has made on the specific request of the European
Council, which acts by consensus). A decision on recognition of
a third country would not fall into any of the categories listed
for QMV in Article III-300 in the Constitutional Treaty. So there
could be no question of the EU position over-riding the UK's position.
This would not prevent other EU Member States bilaterally recognising
the third state if they so wished. If the UK wished to recognise
Montenegro, we could still do so without an EU common policy.
What further practical steps could the UK Government
take to assist Bosnia and Herzegovina's EU accession?
Many of the most important elements of practical
support for Bosnia and Herzegovina's (BiH) integration with the
EU necessarily are provided by multilateral and international
organisations, given the scale of reform. The British Ambassador
in Sarajevo, UK Government Ministers and officials support the
efforts of the Commission and the Office of the High Representative
and lobby the BiH authorities on their behalf. The UK Government
also provides substantial support for the reform processes in
BiH through a range of activities. We continue to look for further
opportunities to contribute to this process where our resources
allow.
The UK already provides significant financial
(over £750,000 in the financial year 2003-04) and other support
to the High Representative in BiH, whose Mission Implementation
Plan (MIP) closely reflects the 16 priority areas for action identified
in the EU Feasibility Study published in November 2003. The MIP
focuses on entrenching the rule of law, reforming the economy,
and strengthening the capacity of BiH's governing institutions,
especially at State level, which are all key to helping BiH meet
the conditions for the opening of negotiations on a Stabilisation
and Association Agreement with the EU.
The UK also contributes 19% of the EU's CARDS
(Community Assistance for Reconstruction, Development and Stabilisation)
programme in the Western Balkans, including in BiH. CARDS provided
65 million to projects in BiH in 2004.
In addition to these multilateral and international
funds and initiatives, the UK also funds a number of bilateral
projects designed to deliver reform in areas key for progress
towards EU standards—in particular Civil Service and public
broadcasting reform. The UK also contributes to the EU Police
Mission working on police reform, another initiative that is helping
the BiH authorities to meet EU norms in key areas.
Kosovo-Macedonia border delineation issue
The delineation of the border between Macedonia
and then Federal Republic of Yugoslavia (FRY), now Serbia and
Montenegro (SaM), was agreed in February 2001. The agreement meant
an area of land was transferred to Macedonia from SaM (including
Kosovo) of about 2,500 hectares, with the aim that the administrative
arrangements would better reflect the geography on the ground,
ie the border would follow a river. Although this was accepted
by the UN and the EU, the Provisional Institutions of Self Government
(PISG) in Kosovo did and does not accept the validity of the 2001
delineation agreement.
Locals (mainly on the Kosovo side of the border)
involved in agriculture and wood cutting have objected to this
at a local level. And the various people involved in or affected
by this issue talk about different areas of land in dispute. For
example, a group of Kosovar (Albanian) farmers in August 2004
said that the land that they owned and wanted back from Macedonia
was about 150 hectares. There are many other references to an
area of land of about 500 hectares and one claim that it is 2,700
hectares. It is difficult to establish what the Kosovo side think
is the amount of land in dispute as there is no Kosovo body with
locus to make a formal claim. However, we understand from the
constitutional framework, that the SRSG should lead on this. In
November 2004, UNMIK agreed to set up a working Commission, which
representatives from Macedonia, Pristina and Belgrade (Serbia
and Montenegro) have agreed to attend. This is welcome progress
on this sensitive issue.
How is the UK is supporting judicial reform in
Macedonia?
Judicial reform is a major priority for the
international community in Macedonia. A year ago the European
Agency for Reconstruction (EAR) produced a matrix highlighting
areas of judicial reform which need to be tackled, with a list
of possible projects for donors to consider. The major donors
such as the EU (CARDS), OSCE (to which the UK contributes funds)
and USAID tend to take on the larger projects. On a bilateral
basis, individual countries tackle smaller issues. The UK, through
the British Association for Central and Eastern Europe, has contributed
through the organisation of a series of seminars on Alternative
Dispute Resolution. Working with a local NGO, Polio Plus, the
UK has also successfully lobbied for a change in laws ensuring
better rights for the disabled. We also supported a project monitoring
corruption in criminal cases.
When will Macedonia (and Albania and Croatia)
join NATO?
There is no clear date for accession for Macedonia,
Albania or Croatia. NATO considers membership only when Allies
assess that aspirant countries have made sufficient progress in
implementing the reforms covered by NATO's Membership Action Plan.
Membership for these countries depends on further progress across
all areas of reform, including political and defence reform, regional
cooperation, and fully co-operating with the International Criminal
Tribunal for the former Yugoslavia (ICTY).
How is the UK supporting privatisation in Macedonia
and the Western Balkans more widely, and the protection of assets?
Notes are attached at Annexes C and D, using
information provided by the FCO and the Department for International
Development.
Denis MacShane
Minister for Europe
20 December 2004
Annex B
HUMAN TRAFFICKING
IN SOUTH
EASTERN EUROPE
The UK is committed to fighting the serious
crime of trafficking in human beings, particularly in the key
area of South Eastern Europe. The FCO is a member of Reflex, the
multi-agency taskforce set up in 2000 to tackle organised immigration
crime. Through Reflex we have established a network of Immigration
Liaison Officers (ILOs) covering 22 key source and transit countries
in Europe, including Bulgaria, Romania (also covering Moldova)
and Ukraine. Their role is to work with host governments and their
law enforcement agencies to disrupt and dismantle criminal groups
involved in trafficking in human beings. Examples of this work
include Reflex Romania and Reflex Bulgaria. The aim of these projects
was to establish central intelligence units to focus on organised
immigration crime originating in and transiting through Romania
and Bulgaria. The UK provided specialist intelligence training
and equipment as well as attaching senior UK police and immigration
officers in an advisory capacity.
Reflex has also funded projects to provide specialised
immigration training and advice to border guards in Bosnia and
Herzegovina and Serbia and Montenegro.
Tackling trafficking in human beings is a key
part of the FCO's Strategic Priority 2. As such, our Posts throughout
the world, and in South Eastern Europe in particular, engage regularly
with host governments on these issues. We also provide practical
assistance to help address this problem. For example, in November
2004, the Balkans Global Conflict Prevention Fund (GCPP) agreed
to fund a Save the Children Fund project which aims to build capacity
to fight child trafficking in Serbia and Montenegro. This work
is due to start in January 2005.
Sir John Stanley asked about a project to fund
a shelter for trafficked women in Kosovo. The shelter is being
funded by the Swedish government. We are, however, in consultation
with the organisation that runs the shelter about funding an awareness
raising project in Kosovo. We hope to receive their project proposal
soon.
We are also involved in the region on a multilateral
level. This includes through the OSCE whose Ministerial Council
endorsed an Action Plan on Trafficking in Human Beings in December
2003. To implement the Action Plan, the OSCE appointed Helga Konrad,
as its Special Representative on the Prevention of Trafficking
in Human Beings, in spring 2004. She is a former Austrian Minister
for Womens' Affairs.
Helga Konrad heads the "Alliance Against
Trafficking in Persons" formed by the OSCE on 23 July 2004.
Her remit covers the whole OSCE area, covering countries of origin,
transit and destination.
We also work closely with our EU partners, NATO,
international organisations such as the United Nations Office
on Drugs and Crime, and NGOs such as the International Organisation
for Migration.
Annex C
PRIVATISATION IN
THE WESTERN
BALKANS
This note provides information on the present
situation regarding privatisation in selected countries of the
Western Balkans. It demonstrates, by country, the work being done
by the UK Government in supporting the privatisation effort. Principally,
this has been via the Department for International Development
(DFID), although they have only been directly involved in the
privatisation process in Serbia and Montenegro (SaM) and Bosnia
and Herzegovina (BiH). The UK has also provided support to the
privatisation process through selected lobbying activity and indirectly
in each country through the activities of the World Bank, International
Monetary Fund (IMF) and the European Bank for Reconstruction and
Development (EBRD).
OVERVIEW
The EBRD assesses the progress with privatisation
across the Western Balkans annually[25].
Figure 1 shows the aggregate progress each country has made in
comparison with selected Eastern European countries at different
stages of transition. Whilst Croatia and Macedonia have relatively
advanced privatisation efforts, particularly for the less politically
sensitive "small-scale privatisations", SaM and BiH
are have clearly made less significant progress. Figure 2 suggests
some of the consequences of this. Compared with the more advanced
transition countries, the private sector contributes relatively
little to GDP in BiH and SaM.
This differential performance reflects several
factors. Firstly, BiH and SaM embarked upon privatisation later
than most other countries of Central and Eastern Europe, so it
is not surprising that they are behind. Secondly, the Former Yugoslavia
had a large "socially-owned" sector in addition to the
state-owned sector. Whilst nominally owned by the firms' employees,
in practice, establishing the precise ownership of these firms
was an additional complication in the privatisation process.
SERBIA & MONTENEGRO
(SAM)
Although some privatisation was attempted in
the early 1990s, the sale of socially-owned and state assets on
a large scale only started when the liberal Serbian administration
was elected in late 2000. DFID was in at the earliest stages of
this, advising the authorities on strategy, the status of the
many socially and state-owned enterprises, the required legislation,
and the establishment of the institutions required to progress
the various components of the nation's privatisation strategy.
These inputs were closely co-ordinated with a range of multilateral
and bilateral donors.
For two and a half years dramatic progress was
achieved, particularly in the privatisation of "attractive
enterprises". However, political instability during 2004
and the new government's decision to revise their predecessors'
privatisations (abandoned later in the year), significantly reduced
the pace of privatisation and the appetite of potential investors.
However, momentum seems to be growing again and recent changes
to the law, including the facility to write-off firms' state debts
in advance of privatisation, will help. The Government hopes to
realise some value from privatisation to contribute to its 2005
budget.
DFID has supported the Serbia Privatisation
Agency since April 2002 with a targeted package of technical assistance.
The support to the Privatisation Agency came in two forms: a small
project to recruit appropriately qualified local staff and remunerate
them for an initial period to get the institution off the ground,
and assistance provided through a DFID-funded consultancy contract
with Deloitte & Touche. The total value of support to date
is around £1.4 million.
The Deloitte & Touche advisers funded by
DFID focused on activities not covered by other donors and included:
— A part time strategic privatisation
policy adviser for the Minister.
— A full time expert working within
the Restructuring Department of the Agency.
— Part time advisers working on the
restructuring of enterprises selected as a priority for restructuring.
DFID's current package of support will continue
until the end of 2004. It is envisaged that further advice to
the Privatisation Agency will then be provided by the European
Agency for Reconstruction (EAR) through the CARDS programme.
KOSOVO
The privatisation process in Kosovo has been
contentious and, as a result, slow. In late 2000, a process of
"commercialisation" for the socially owned enterprises
(SOEs) was started as an interim measure before a privatisation
strategy could be agreed. This involved the leasing of companies
for a fixed period. In mid-2002, a privatisation strategy was
agreed which, amongst other rules, stipulated that a fee of 20%
of the sales price would be distributed to current workers and
that all privatisation proceeds would be held in trust pending
resolution of Kosovo's final status.
The Kosovo Trust Agency (KTA) was established
in June 2002 to manage the privatisation process. It adopted a
"spin-off" model whereby the shares of new corporations
would be sold off and the proceeds held in trust. A Special Chamber
of the Supreme Court was established to process claims from the
former owners. Initial waves of privatisation were successful,
with the first and second rounds raising
29 million. However, the third wave was cancelled
in October 2003 to consider legal questions associated with the
process. One aspect of this was the legal risk to the managers
of the KTA.
After long delays, the process was relaunched
in July 2004 with the Kosovo Trust Agency (KTA) beginning a third
wave of tenders. This round was successful, raising over
16 million. In October 2004, a fourth wave was launched.
DFID have not been involved in Kosovo's privatisation
process. Initially, USAID had a large influence, but more recently
the European Agency for Reconstruction (EAR) has been most heavily
involved. However, throughout this process, HMG has remained engaged,
lobbying for the privatisation momentum to continue. The British
Office in Pristina has been lobbying Pillar IV (the EU led reconstruction
and economic development component of UNMIK activity in Kosovo)
and UNMIK (including the SRSG), encouraging them to press ahead
with privatisation. This has been supplemented by discussions
with UNMIK to clarify the legal issues related to privatisation
and through liaison with local stakeholders (including the Government
and Trade Unions) to explain the benefits of privatisation and
encourage compromise. Additional lobbying has also taken place
in New York (to the UN) and Brussels (to the European Union) to
push the process forward.
BOSNIA AND
HERZEGOVINA (BIH)
Both the Republika Srpska (RS) and the Federation
(FBiH) privatise in accordance with their Entity laws. To date,
the privatisation of small, former state-owned companies has been
relatively successful. Some 74% have been sold in the FBiH and
51% in the RS by the end of 2003. These have been bought mainly
by private investment funds or management/employee buy-outs. Nevertheless,
neither have they created appreciable cash in the longer term
nor have they produced any notable new markets.
There is a need for restructuring PIFs to have
a positive impact on strengthening corporate governance in privatised
enterprises. But progress in privatising the large, state-owned
companies (companies with assets of over £180 k or employing
more than 50 staff) has been patchy. Only a quarter of the companies
in the FBiH have been fully privatised and only about one third
of those in the RS. And whilst voucher privatisation has taken
place in both Entities, this had little impact on the economy
as a whole. Indeed there have been a number of notable past privatisation
failures, particularly in the RS such as Banja Luka Brewery and
the Fruktona fruit juice company. The paucity of privatisation
experience, the unwillingness on the part of politicians and the
inflexible existing legislation have all contributed to such failures.
From 1998 to 2001, DFID was involved in providing
some technical advice to BiH on privatisation. However, the voucher
privatisation that has been implemented has not been successful
and the attempts by a range of donors to sell over 50 "strategic"
enterprises by tender to individual investors has to date been
highly unsuccessful. Over the last year DFID has been working
with a range of donors, in particular the World Bank, to agree
a range of corporate restructuring initiatives to help complete
a privatisation programme, and, more importantly, rehabilitate
or close down the many voucher-privatised companies which struggle
to survive.
MACEDONIA
After independence in the early 1990s the first
round of Macedonian "privatisations" took place whereby
workers were granted shares of the companies they worked for according
to their years of service. The former managers often returned
to their previous positions and poor corporate governance as well
as limited access to capital meant that few such firms became
profitable. As a result, the shares were frequently used to settle
debts (for example to utilities companies), and in many companies,
the Government returned to its position as majority shareholder,
which meant a further round of privatisation. However, few of
the previous share transactions were registered, generating uncertainties
over legal ownership during the subsequent privatisation process.
The UK has provided indirect support to this
process, through the World Bank's programme. When the World Bank
stepped in to advise on selling off the remaining 22 ex-state
owned industries in 2002, UK consultants were appointed to advise
on the second round of privatisations on a highest price bid basis
only. Eventually all 22 were sold to the highest bidders, with
no strings attached.
Privatisation in Macedonia is now largely considered
complete. The Agency for Privatisation will be officially closed
on 31 March 2005 (it was supposed to close at the end of this
year). Since the process began 10 years ago, 1,687 state owned
companies have been privatised and
2.2 billion realised, whilst only 79 companies are
considered as not privatised. However, some large "strategic"
Public Enterprises and Utilities (eg the Water Companies, ESM
(Electric Power), the Railway, MK Forest) remain in state hands.
A new law on the Transformation of Public Enterprises should be
adopted next year and this will clarify the future of these enterprises.
The near-completion of the privatisation process
means that a significant drain on the Government's budget has
been eliminated. However, in mid-2004, the IMF noted[26]
that the boost to efficiency and foreign investment from privatisation
had been smaller than hoped. Their report concluded that the mechanism
chosen for privatisation, combined with inconsistent application
of International Accounting Standards and continued indirect subsidy
from the Government, generated poor incentives to restructure
and invest in the newly privatised companies.
CROATIA
Croatia is probably the most advanced amongst
those considered here in terms of its progress with privatisation.
The Croatian Privatisation Fund (CPF) anticipates that small-scale
privatisation will be completed by June 2005. This ambitious privatisation
programme is proving difficult to meet, hampered by slow progress,
lower than expected revenues and lawsuits. Some large-scale privatisation
has now taken place, including most of Croatia Telecom and part
of Ina (Croatia's oil company), but the expected privatisation
of HEP (Croatia's power company) continues to be delayed. The
Government is being urged by the IMF to step up the privatisation
process through the CPF and to accelerate the privatisation of
habitually insolvent companies - particularly the shipyards and
steel companies, which do not form part of the CPF portfolio.
Whilst the CPF complains that no international
bidders are coming forward and that they have difficulty packaging
deals which the market will accept, a lack of transparency explains
some of this difficulty. Potential investors from the UK and elsewhere
are frequently put off by the time and money involved in conducting
due diligence and in producing bids which are rejected on minor
technicalities, or the entire process is voided, amid allegations
of corruption or mishandling, and a new tender issued. Investors
are also deterred by a lack of confidence in the judicial system
and the land registry.
The UK is not directly assisting Croatia's privatisation,
although various consultants have worked with the government at
times on preparations for the privatisation of large state companies.
Additionally, the UK has supported World Bank projects aimed at
enterprise restructuring.
Annex D
PROTECTION OF
ASSETS
Summary
The ability of a company to protect its assets
depends on several factors. Investment Promotion and Protection
Agreements (IPPAs) and the Multilateral Investment Guarantee Agency
(MIGA—part of the World Bank Group) can provide foreign
investors with some protection, but domestic investment is affected
by the domestic legislation. Where domestic legislation exists
to a sufficient standard, its implementation, and a company's
ability to enforce it through legal proceedings can vary widely.
Investment (both domestic and foreign) would likely be deterred
by the absence of legislation, but a more serious deterrent in
the Western Balkans is the slow or biased application of legislation.
IPPAS
The UK has IPPAs with some of the countries
of the Western Balkans. These bilateral treaties are designed
to encourage investment between States by giving investors confidence
that their investments will not be subject to unfair treatment
or discrimination by the government in the other country. The
IPPA provides a legal framework for the investor to seek redress
from the foreign government for alleged discrimination. The IPPA
also provides a de-politicised dispute resolution process without
the need for Governments to become directly involved.
Macedonia
The English text of the UK/Macedonia Investment
Promotion and Protection Agreement (IPPA) was agreed in October
1999. Since then there have been further negotiations with the
Macedonian Government over the Macedonian translation of the IPPA.
We are currently finalising some amendments to the text and hope
to be able to conclude the Agreement shortly.
Bosnia and Herzegovina
An IPPA was signed in October 2002 and came
into force in July 2003.
Croatia
An IPPA was signed in March 1997 and came into
force in April 1998.
Serbia and Montenegro (including Kosovo)
No negotiations for an IPPA have been instigated.
MIGA
MIGA provides insurance services to private
investors in order to promote foreign direct investment into developing
countries. Part of the World Bank Group, it pays particular attention
to post-conflict and extremely poor countries, applying strict
social, environmental and governance standards to the investments
it works with.
The insurance is provided on non-commercial
insurance to foreign investors. This provides protection against
the risks of, inter alia, expropriation, war and civil disturbance,
and breach of contract. MIGA also provides technical assistance
to developing countries and operates an arbitration process in
the event of dispute between investors and host governments.
Bosnia & Herzegovina, Serbia & Montenegro,
Croatia and Macedonia are all members of MIGA, and foreign investors
considering investing in these countries are therefore eligible
to apply for MIGA insurance.
Domestic Legislation
Although many countries of the region possess
legislation regarding the protection of assets, the ability to
enforce these laws through the courts is often difficult. A slightly
different, but nonetheless relevant, measure of this is the ability
to enforce contracts. The World Bank "Doing Business Report"[27]
gives information on the costs associated with enforcing a contractual
agreement in countries of the Western Balkans. The table below
shows this with comparison to selected Central and Eastern European
transition countries:
| Data from 2004 Survey
| Enforcing Contracts |
| Number of
procedures
| Time (days)
| Cost
(% of debt)
|
| Serbia and Montenegro | 36 |
1,028 | 23 |
| Bosnia and Herzegovina | 36
| 330 | 19.6 |
| Croatia | 22 | 415
| 10 |
| Macedonia | 27 | 509
| 32.8 |
| Bulgaria | 34 | 440
| 14 |
| Romania | 43 | 335
| 12.4 |
| Hungary | 21 | 365
| 8.1 |
| Czech Republic | 22 | 300
| 9.6 |
| | |
|
Whereas the number of procedures and time taken (with the
exception of SaM) is broadly similar to the selected Eastern European
countries, the significant difference is in the cost involved
in enforcing the contract. Whilst Croatia is comparable, Macedonia,
SaM and BiH all involve costs of enforcement which are significantly
higher than comparative countries.
Although the countries of the Western Balkans often do have
laws on asset protection, there are some for which better legislation
is needed, all where better implementation is needed (and programmes
for judicial reform are underway in many countries), and some
which deter foreign companies from markets. Where necessary, we
are lobbying for the necessary changes to be made. For instance,
in Croatia, the UK, together with the US, France and the European
Commission has lobbied intensely for a change in the Drugs Law,
enacted in July 2003, which would remove the poor protection of
intellectual property rights which act as a deterrent to foreign
pharmaceutical companies. Legislative amendments are currently
before the Croatian parliament.
24
Please refer to the UNHCR website-Table 2-Minority Returns by
Municipality of Return. Back
25
EBRD Transition Report 2004. Back
26
SM/04/263:FYROM-Ex Post Assessment of Longer-Term Programme Engagement,
22 July 2004. Back
27
http://rru.worldbank.org/DoingBusiness/ Back
| 
