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Baroness Jay of Paddington: My Lords, I am grateful to my noble friend. As I understand it, there was no specific discussion at the summit of the issue he mentioned in relation to the USA. I believe that many of these issues were deferred for the WTO ministerial meeting in December in Seattle, to which the Statement referred. My noble friend also mentioned the involvement of the private sector. I think that he may have assumed that this related to the trade issues when, in fact, it was more concerned with trying to involve the private sector in the international financial stability forum, in which attempts are being made to enable the global markets to resist some of the tidal waves of instability which affected them last year; in which, naturally, the private sector was very important and where simply the decisions of individual governments on public sector finance would not be sufficient to contain the problems that were seen last year and which people are trying to prevent for the future.

The Earl of Lauderdale: My Lords, perhaps the noble Baroness could clarify one or two points for me about the very interesting Statement that she has just repeated, which we all welcome. My first question is about the KLA. The noble Baroness used the word "demilitarisation" at one stage and later referred to "disarming". In so far as the KLA is able to keep its side arms, or small arms, that is, from its point of view, an important step toward becoming the shadow administration. Are we quite certain that that will be avoided, with no pre-empting of the future?

Secondly, are we to understand that the international aid for the reconstruction of Yugoslavia, where the infrastructure has been enormously damaged by NATO, will now be held up unless or until there is a change of government in Belgrade? Is it not the case that there is no simple means within Yugoslavia for changing the government, let alone getting rid of Milosevic? Are we to take it that so long as Milosevic is there, there will be no help toward reconstructing all the bridges and railways that have been damaged, or rebuilding the precious bridges across the Danube that have been destroyed, affecting east European trade in a big way? Must we wait until there is some new upsurge within Serbia that throws Milosevic out, of which there has

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been no sign as yet? Indeed, rather the reverse. Finally, perhaps I may join other speakers in thanking the noble Baroness for repeating the Statement, not least its encouraging reference to third world debt.

Baroness Jay of Paddington: My Lords, I am especially grateful to the noble Earl for the points he made about third world debt. I know of his concern in that area. However, on the question of the KLA, the distinction as I understand between "disarm" and "demilitarise" is that the latter is a broader word which includes the matters to which I referred when repeating the Statement; for example, not wearing uniforms and insignia, and dispersing from the assembly areas in which those soldiers will be gathered for the next few weeks.

As regards the KLA's small arms, it is true that the Statement simply refers to automatic small arms. I am sure that there will be attempts to ensure that the military activity, even if it involves simply side arms, is greatly reduced under the terms of the agreement. The noble Earl will recall that the KLA did sign, and was prepared to agree to, the Rambouillet agreement on additional autonomy for Kosovo in the earlier months of this year. Therefore, the military situation having been resolved to some extent, we have to hope that the KLA will return to those principles, although the noble Earl is right to point out that the situation there is extremely delicate and could become unstable.

On the question of reconstruction aid for Serbia, I can say that, yes, it is true that the G8 leaders were agreed that while Milosevic was in power they did not intend to contribute to reconstruction of the type mentioned by the noble Earl, such as bridges and similar infrastructure. However, there is no denial of humanitarian aid to the Serbian people. Clearly, there will have to be international involvement in that respect to ensure that that humanitarian aid was being appropriately handled and was going to the people most in need. The noble Earl said that there is no sign of any kind of upsurge of anti-Milosevic feeling within Serbia. However, as he pointed out in our previous debates on the subject, that has been because many people, especially in Belgrade, have simply not had the information about what has been happening in Kosovo--

The Earl of Lauderdale: My Lords, there is no machinery. There is plenty of feeling there, but no constitutional machinery for a change of government.

Baroness Jay of Paddington: My Lords, three or four years ago I believe that there was almost a sense, if I may so describe it, of a revolution of popular opinion and certainly a great deal of anger against the regime. There must be a system for getting rid of Milosevic in the way that the Statement suggests is appropriate before any kind of reconstruction aid will be delivered to the Serbian people.

Lord Tordoff: My Lords, I revert to the question of the bridges over the Danube. One of the problems with

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the destruction in that area has been the impact on other countries in the Balkans and the effect on trade and transport along the Danube. In using this leverage against Milosevic, can we be sure that we are not damaging other friendly nations in that area?

Baroness Jay of Paddington: My Lords, the noble Lord is right to say that a delicate balance has to be struck by the international agencies, and, indeed, by the international and financial institutions in this area, in organising a genuine reconstruction plan with the use of the Balkan stability pact to provide an umbrella to achieve such reconstruction and economic renewal in that area. I repeat: it is not the case that the G8 agreed to contribute any reconstruction aid to Serbia. However, we recognise the problem of the interdependence of economies within that region. That is something that I know the international financial institutions and the broader alliance will be taking forward.

Lord Kennet: My Lord, can we go a little further into the question of the KLA? Can my noble friend the Minister say what the KLA is supposed to do within the next few months? At the end of that time the KLA will emerge as a force armed with machine guns--presumably, every single man--in what is still one province of the sovereign state of Yugoslavia, where there will also be an allied occupation army. What are the relationships to be between those three powers; namely, the KLA, NATO and the Yugoslav Government? Is it not time for broad, strategic political planning on these relationships?

Baroness Jay of Paddington: My Lords, I have to say to my noble friend that it might have been more appropriate to congratulate General John Reith who has negotiated this extremely difficult and sensitive arrangement for demilitarising the KLA over the next few weeks, and to be grateful for such a arrangement which will at least enable some stability to be achieved in the locality. As I said in reply to the noble Earl, Lord Lauderdale, we recognise that the KLA was a partner to the Rambouillet agreement, which took forward a political settlement that could at least have produced a solution over a three-year period to achieve greater autonomy for Kosovo. We have to hope that the political responsibility which led them to that positive position at the negotiating table at Rambouillet will continue.

Lord Biffen: My Lords, I join those Tories who have congratulated the noble Baroness and the Government on the skill and the success with which the whole enterprise against Serb aggression has been conducted. I take up a point that was made earlier about the proposed embargo of trade and assistance to Serbia as long as Milosevic is leader. Does the noble Baroness agree that in those circumstances there will be continuing hardship, and perhaps severe hardship, in Serbia, making it into something of a sink economy in a part of Europe which needs reconciliation and revival? What are the circumstances which lead her to think that there can be an early demise of Milosevic, because that cannot be other than just an act of faith if he stays on for

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a week or a month--who knows?--while the country, including the many who have no sympathy with him, is trapped by the military power that he still has which enables him to have authority?

Baroness Jay of Paddington: My Lords, I am grateful to the noble Lord for the kind comments he made about the skill of the Government. I shall certainly pass those comments to my right honourable friends in another place and to other colleagues. On the question of the balance between the need for humanitarian aid--which, as I hope I made clear in earlier responses, is understood by the international community--and the reconstruction aid, as I said in my earlier reply, it is a difficult balance to achieve but it is one which the international community feels is appropriate. Although it could not, of course, countenance a situation in which there was great humanitarian suffering in Serbia, and would provide humanitarian relief in that situation along the lines which I discussed in response to the noble Earl, it does not feel it is appropriate to put international financial resources into the infrastructure and general economic reconstruction of Serbia while Mr Milosevic is in power. That is why my right honourable friend included in the Statement the words which he addressed directly to the Serbian people when he asked them to consider the international community's view of them as members of a civilised community in the light of the extent of the atrocities which have now been revealed. I repeat his words. Addressing the Serbian people he said that they could not,

    "just turn a blind eye to the truth, and pretend it is nothing to do with you. This is your country". That, I think, is the answer to this issue. I take the point which was raised about the structures for democratic change within Serbia and the difficulties associated with that but I re-emphasise the point I made earlier; namely, that three or four years ago we saw an uprising of popular feeling against President Milosevic. We have to hope that we see that again and that it produces a political change.

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