JOINT COMMITTEE ON FOREIGN AFFAIRS díospóireacht -
Tuesday, 6 Mar 2007

Discussion with Director of American Chamber of Commerce in Kosovo.

Chairman

Apologies have been received from Deputies Bernard Allen and Liz O'Donnell, as well as Senators David Norris, Paschal Mooney and Paul Bradford.

The minutes of the previous meeting, held on 27 February 2007, have been circulated. Are the minutes agreed? Agreed.

I remind everybody, including those in the public Gallery, to ensure their mobile phones are switched off completely for the duration of the meeting as they cause interference, even if in silent mode, with the recording equipment in committee rooms.

Before we commence, I would like to advise witnesses that whereas Members of the Houses enjoy absolute privilege in respect of utterances made before the committee, witnesses do not enjoy absolute privilege. Accordingly caution will be exercised, particularly with regard to references of a personal nature.

The witnesses are all very welcome to this afternoon's meeting and I especially welcome Ms Mimoza Kusari-Lila, executive director of the American chamber of commerce in Kosovo. She will speak to us about the situation there, which is entering a critical phase.

Kosovo remains an issue of considerable concern to everyone in Europe and beyond. Members of this committee are aware of the ongoing efforts of the international community, especially the European Union and United Nations to assist Kosovo in reaching a peaceful solution to the issues it faces. Ireland contributes 215 personnel to the UN peacekeeping mission in Kosovo and we are familiar with what has been happening there.

Today we will get a first-hand perspective on what is being done now to bring about this resolution. The EU has a special responsibility towards the countries of the western Balkans and I am sure we will be interested to hear of the role the EU is playing and will play in helping Kosovo.

Ms Kusari-Lila is a prominent member of the community in Kosovo and is particularly well known in the business community through her professional background and work with the American chamber of commerce. Over the past decade she has played an active role in the business life of Kosovo and has held a number of important positions in Government and in academic life. She has been particularly active in promoting entrepreneurship among the women of Kosovo.

Kosovo faces considerable economic challenges and these have not been helped by the continuing political uncertainty over its final status. Nonetheless, there have been some economic reforms. Privatisation has moved ahead, most notably with the introduction of business-friendly measures. However, foreign direct investment is minimal and the enlarged private sector has been the driving force behind economic growth in recent years. Notwithstanding this positive trend, Kosovo has a large structural trade deficit and is highly dependent on international donors and remittances from Kosovar migrants working abroad.

I now call on Ms Kusari-Lila to make her presentation.

Ms Mimiza Kusari-Lila

I thank the Chairman and it is my honour and pleasure to speak before the committee today. This presentation will last about 12 to 13 minutes and I will be more than happy to hear any questions, comments or remarks members might have afterwards. The presentation includes an overview of the background to the current situation and some of the recommendations I would like to put forward. What I will be presenting today is the reality of the Kosovar situation, the way forward and the assistance we need in order to achieve EU integration.

As members might be aware, the political process to determine Kosovo's future status was launched in November 2005. Under the auspices of the UN envoy Mr Martti Ahtisaari, talks between Pristina and Belgrade are ongoing with particular focus on decentralisation, community rights, religious and cultural heritage and economic issues. Kosovo is in an historical moment that Kosovars have been awaiting for decades.

The outcome of the status talks will, hopefully, be independence after which we will face challenges, the main one being to initiate economic growth and sustain economic development in line with other countries in the region. When I mention countries in the region, I believe strongly that no reform, aid or assistance to any of the countries in the western Balkans can and will succeed separately. The stability or instability of any country will have a mirror effect on others and this is why it is so important to have the Kosovo issue at the top of the agenda of the western Balkans. It is the last region that is lacking status definition.

When a final peace is settled in the western Balkans we can integrate easily regionally and across Europe. The European Union is a very good example of functioning systems multiplying themselves, particularly Ireland, which has benefitted from the system.

I want to elaborate on the reality in Kosovo. Kosovo is now politically stable but is still lacking major developments. The entire situation is the result of the following factors.

There is a lack of status definition which has extended the life of the United Nations Mission in Kosovo, UNMIK. Dealing with two governing bodies with split responsibilities and a third one functioning north of Kosovo has proved an inefficient method of government, especially as this has suffocated the democratic responsibility of elected authorities. Rule of law is an area that was and still is, to a large extent, under the management of the UN administration in Kosovo. It is the area that most lacks and needs serious reform and hard work.

Due to the young age of our civil administration we need more reforms and guidelines on institution building showing how to make the system function better and have the administration address the needs of Kosovo's people. A lack of economic perspective and development is also a major factor.

As I mentioned earlier, the focus of my presentation today will be the challenge of economic development after the status resolution, which is one of the main challenges Kosovo will face. It will always have an impact on the stability of the future of Kosovo.

Before we come to the future, I will briefly mention the history of EU assistance to Kosovo. From 1998 to 1999, EU assistance to Kosovo was provided through a variety of instruments including regular technical assistance, humanitarian aid, exceptional financial support and financing to the fourth pillar of UNMIK. Since 2000 the Community assistance for reconstruction, development and stabilisation, CARDS, programme has been the main financial instrument for Kosovo. To date, European Union assistance, including assistance from the EU member states, amounts to €2.6 billion. Of this figure, European Community assistance accounts for only €1.8 billion.

The stabilisation association process, SAP, under the tracking mechanism, established by the Commission with local and international authorities, provides a high level forum for policy and technical dialogue. Reports, under the SAP, on the progress of Kosovo have the same timeline as other countries in the region.

The future of Kosovo is seen by the majority of Kosovars, without doubt, to be European integration. Kosovo is currently a part of the tracking mechanism for stabilisation association and will hopefully sign a stabilisation association agreement. The EU will have the leading role in Kosovo during the next international administration and that is why it is very important to have Ireland, one of the fastest growing economies in the EU, informed of the situation there. This is a major opportunity for the EU to make a difference as the UN administration had been in control to this point. The EU will hold responsibility for running the international civilian office in Kosovo.

Kosovo has many advantages in its favour including the young age of its population. Around 70% of Kosovo's population is under 30 years of age, which gives the country a huge advantage but also presents a threat if there is no plan to engage the work force.

Other advantages include the determination of its people for progress, European integration and Euro-Atlantic integration — there is no doubt the Kosovo population sees European integration as its future. Other positive factors are its location in the heart of Balkans, proximity to other countries in the region and its natural resources, a great asset that has not been utilised, including lignite, copper, zinc and lead. Challenges to economic development include a lack of proper infrastructure, the lack of a stable power supply and a lack of job opportunities for more than 20,000 Kosovars who enter the labour market each year.

Advantages and challenges to Kosovo can be balanced easily if an appropriate plan is in place accompanied with practical assistance from the EU and US. As stated in the multiannual indicative planning document for Kosovo:

Sustainable stability can only be achieved if Kosovo's economy develops and offers opportunities to all communities. Support to economic growth will be another key objective for EU assistance to give inhabitants of Kosovo better possibilities of work and to ensure good living conditions for their families.

Currently the notion of EU accession is very popular in Kosovo and, as previously mentioned, the EU administration will soon take the lead in the international administration in Kosovo. The EU has a real chance to make a success story out of Kosovo. Kosovo's territory covers 10,000 sq. km, it has a population of over 2 million western oriented people and it is located in the heart of Europe. Since the end of the war in Kosovo the EU has been the major donor to the country, initially through emergency donations and later infrastructural donations

However, the results are far from satisfactory. Most of the serious donations were granted for technical assistance, which is not what is needed the most. Major concentration should be given for future instrument of pre-accession assistance to job creation and strengthening the rule of law.

In the meantime, countries of the EU, in this case Ireland, can assist Kosovo by seeking more accountability for implemented projects in Kosovo from governing institutions, attracting foreign direct investment and providing know how with recommendations based on experience. Kosovo can also be assisted through the relaxation of the current visa regime as most visa policy changes approved by the EU for south-eastern European countries either exclude Kosovo or do not take it into consideration.

One can argue that while similarities exist between Kosovo and other accession countries, they are not the same and therefore the results cannot be the same. However, if we examine the history of the existing EU countries, we find that most of the less developed ones share the same history and grew rapidly following EU accession. Political will is needed, along with support from the Union. On the 50th anniversary of the Treaty of Rome, it is important that the news from Brussels for the western Balkans should become more encouraging. Working towards EU membership means working for a better life for ourselves, involving greater European harmonisation.

Chairman

I thank Ms Kusari-Lila for her informative presentation on the current situation in Kosovo. We have all learned more about Kosovo from her contribution. I am aware that a period of intensive consultations will unfold later this month among all interested parties. I hope the efforts of the UN special envoy, Mr. Ahtisaari, will bear fruit and that in a short time the broad outlines of a peaceful solution to the Kosovo situation will be agreed.

Last week, I met Mr. Ahtisaari at the EU Presidency meeting of foreign affairs chairpersons in Berlin. The issue of Kosovo figured prominently on the agenda and I clearly outlined Ireland's strong support for his proposals. I informed Mr. Ahtisaari that we welcomed the proposals as reflecting Ireland's view that the future of Kosovo must be based on multi-ethnicity, democracy, the rule of law and full respect for human rights to ensure the protection of minorities. We note that the question of independence has yet to be resolved and we assume that will be a major issue when Mr. Ahtisaari reports to the United Nations.

Deputy M. Higgins

I join with the Chairman in welcoming our distinguished visitors. I appreciate Ms Kusari-Lila's valuable presentation, including the description of Kosovo's potential for fulfilling the conditions of freedom and good co-operation for the European Union. I have some fundamental questions about the EU's relationship with Kosovo, however, as well as about the Irish Government's view on this issue. The briefing document from the Europe section of the Department of Foreign Affairs includes the following:

The EU is responsible through the Kosovo trust agency for privatising the socially owned and public enterprises. The first rounds of privatisation took place in 2003 and several further rounds have taken place. The private sector has been an engine for growth and there are many indicators of a business-friendly environment. These include a stable financial system, a modern regulatory framework, and the absence of currency risk. Kosovo also has significant natural resources — coal and sizeable deposits of lignite, lead, zinc, gold and silver.

I wish the people of Kosovo well in resolving the status issue, but I find that paragraph in an Irish foreign policy document to be completely repugnant to the Lisbon Accord.

There is a debate going on in the right-wing press in Europe as to whether we should have changes in Europe on the basis of freer markets or a social economy. It is clear that if one has 70% of the population under the age of 30 and if — as Mr. Ahtisaari's report suggests — there are specific problems in bonding a multi-ethnic society together, the widest possible participation in growth is what will create the greatest capacity for social peace. However, there is no mandate in Europe, including Ireland, for what might be regarded as bald, virulent and uninhibited privatisation mechanisms. I am concerned about this development and a stop should be put to it straightforwardly because it is provocative. For example, the question of transferring aid from Europe should be for the benefit of all of the society and not for gearing up private ownership of the natural resources of an area without necessarily benefitting its people. That is a fact and there is no point in playing around with words.

I had a certain amount of sympathy — although tinged with reflective anger — for my colleagues from the time I attended meetings in Europe as a Minister. I remember the Kosovan aspirations for independence, which have also come through in today's presentation. It will be a difficult process, which is why everything should be done to assist that community to come to terms with its historical, ethnic and political differences.

The presentation's stress on the need for reforms in the civil administration was valuable. In many cases, though, it depends on where one begins. If one wants to strengthen civil society one must have a strategy of inclusive citizenship, which in turn carries with it all the issues that are being addressed in the most recent UN report. I have the greatest respect for that report, central to which is the proposal for a rights-based approach incorporating respect for fundamental rights.

At the risk of labouring this point, but doing so consciously because it is important, extreme privatisation models in Kosovo or anywhere else are not consistent with a rights-based approach. This is so whether such an approach is basic and universal, or based on the convention on economic, social and cultural rights. I am declaring my own position as a friend. I am not at all suggesting that one could, with any credibility, gear up the private sector, have foreign direct investment, receive aid and then, as some kind of residuum, begin to include people in a type of rights' perspective. The latter perspective is either there at the beginning or it is not. There must be a clear indication that the structure of the relationship between the European Union and Kosovo is with the population, not with a tiny elite willing to offer resources for sale. It is disappointing to see the glowing, uncritical and badly informed terms in which the Department of Foreign Affairs prepares briefing documents, offering and justifying an untenable, extreme and unhelpful view.

Having said that, it is positive to hear of a young population that is anxious to get going. They should, and always will, have the support of all of us. It is certainly forthcoming from me but it would be a dishonest relationship if I did not express how I felt on this matter.

Chairman

Deputy Michael D. Higgins has raised a number of challenging questions. It is interesting to note that not many years ago, 50% of our population was under the age of 25. I do not know what the percentage of under 30s was at the time, but it would have been higher than 50%. It turned out to be a great asset which has been part of our economic development.

Deputy Michael D. Higgins stressed that the aid should be for all. In that context, Ireland provides a good example in that we pursued the path of social partnership, which provided the opportunity for everybody to become involved, with diverse views. It might be interesting to pursue that idea in our discussion today.

Deputy Carey

The issue of Kosovo and the western Balkans continues to baffle me. I do not pretend that I am able to understand what is happening. The presentation made by our guest was extremely informative.

The future of the western Balkans depends to a large extent on how the EU deals with its enlargement process. I have long held the view that instead of concentrating our energies on trying to find a mechanism to entice people to accept the accession of Turkey, we should concentrate our efforts on deciding how the various western Balkans can be assisted and incorporated into the EU. I would like Ms Kusari-Lila to indicate what, outside of the Ahtisaari plan — which seems to contain a large degree of Mom's apple pie as well as some fairly tangible objectives — the European Union can do to assist Kosovo to become a member state. What is her view of the suggestion that the EU could usefully concentrate its efforts for some time to come on trying to bring about stability in the western Balkans region and on encouraging the various countries there, and not just a select few, to become member states?

Deputy Costello

I thank the delegation for coming before the committee and making such a fine presentation. Over the years, we have all heard a great deal about the suffering experienced in Kosovo and there are a number of Kosovan refugees in Ireland. I presume the latter is the case in many other European Union countries. What is the Kosovan point of view on what the future might hold for these refugees, either here or back in Kosovo? It must be noted that there are 215 Irish peacekeepers serving with the KFOR mission in Kosovo.

I agree strongly with the comments by Deputy Michael D. Higgins that the substantial amount of European Union aid — €2.6 billion — should be used for the benefit of all Kosovan citizens and to repair the infrastructure there. Such moneys should not be the subject of any agenda or policy that promotes privatisation.

I also agree with Deputy Carey that the western Balkans should be to the fore in respect of the European Union's enlargement project. Ms Kusari-Lila quite rightly stated that Kosovo is the last area in the western Balkans which lacks a definition in respect of its status. It is important that this matter should be resolved because little progress can be made until this happens.

Kosovo is a multiethnic society. The vast majority of those living there are Kosovan Albanians, with a small minority of Serbians. A large proportion of the latter did not participate in the recent elections. Will Ms Kusari-Lila comment on the position regarding the Serbian minority in Kosovo?

How does the American Chamber of Commerce, Kosovo, and the EU see the Kosovan economy developing in the future? Will it be entirely linked to European Union and American funding? What is the position as regards expatriate Kosovans? How are they linked to the country in terms of their ability to participate outside its borders, the likelihood that they will eventually return and their financial contribution to its economy?

Chairman

At the Conference of EU Foreign Affairs Committee Chairpersons last week, President Athisaari stated that a resolution of the problem of Kosovo and bringing about stability is imperative for the European Union. While there was widespread support among delegates at the conference for President Ahtisaari's proposals, the two official observers from Serbia described the process as rigid. They stated "Serbia wants to preserve its own territory and will not tolerate losing 15% if its territory as would be the case under these proposals" and also that "Independence for Kosovo would create a dangerous precedent affecting neighbouring countries, particularly Bosnia-Herzegovina. Serbia will never accept an independent state of Kosovo whatever it means". This indicates the enormity of the difficulties involved. President Athisaari indicated there is no plan B and that the plan he outlined would be submitted to the UN Security Council.

At the conference, I urged both parties to engage in dialogue and make full use of the period for consultations and compromise before the finalisation of proposals later this month. Most of those present expressed the view that a compromise should be found. The special envoy will be working on arriving at such a compromise before the meeting at the UN.

Ms Kusari-Lila has heard members' views and is aware that they cover a broad spectrum. The question regarding comparisons with Ireland is interesting, particularly if the stability to allow progress can be brought about. Everyone hopes that the latter can be achieved through the UN.

Ms Kusari-Lila

I will try to address the points raised. The first of these related to private ownership and EU funds for the Kosovo Trust Agency, which deals with the privatisation and which operates under pillar IV of the UN administration. There was a great deal of discussion on this matter in Kosovo even before privatisation began. However, Kosovo remains the only place in eastern Europe in which workers protested in favour of privatisation rather than against it. As a result of claims from Serbia that socially-owned enterprises in Kosovo are the property of Serbia, Kosovan workers desperately wanted ownership to be transferred to the private sector in order that they could proceed with their business. A number of matters arose in this regard and the UN finally decided that there would be no permanent sale but that a system of 99-year leases will apply until the question of status is resolved and the issue of ownership cleared.

Kosovo's resources include lead, zinc, gold and silver. The largest mining company, Trepca, operating in northern and southern Mitrovicia will not, despite political problems, be privatised until after the status issue is resolved. Despite the political problems and the status issue, the companies are not be to be privatised until after the status issue is resolved. In that regard, our natural resources will be undefined until there is a status resolution.

There is a definite need for reforms in civil administration and there has been progress in that regard. A project was financed by the British Government on the immediate reforms and a proposition is ready. If that goes on the Government's political agenda, we will face good reforms in civil administration.

The accession of western Balkan countries should not be linked with Turkey's accession because they would be easier to integrate in terms of territory and society and the reforms would be introduced quicker than in Turkey because of its culture and size.

On the question of what the EU can do to speed up Kosovo's accession, the Union has a crucial role in supervising the status settlement because it will run the international civilian office. I completely agree with Deputy Higgins that anything that goes into Kosovo should directly benefit the people. Kosovars are happy with the implementation. Most of the EU funding is used for technical assistance and infrastructure. That includes bringing in highly paid consultants from member states but no one can evaluate their performance in the civil administration and when they leave, we do not know how Kosovo benefitted from their work. EU assistance can definitely be directed to deal with the rule of law because it has been under UN administration, which did not perform well. Kosovars are wonderful people and we have the lowest crime rate in the world. If the same circumstances were imposed elsewhere, much worse scenarios would have been experienced.

Job creation is another area that needs funding. Development of projects to create jobs is essential because young Kosovars need to be engaged in their country. Regarding further employment, the EU can also assist by having a medium term plan, which can enable seasonal or temporary working contracts for Kosovars who are currently in the EU or who would like to enter the EU on a work permit at least until a sound economic development plan is in place. When we have that, we can match the needs of the workers who must travel. Italy took an initiative in 2004 on temporary work permits, which was not implemented correctly but EU member states can assist Kosovars.

Kosovo is a multiethnic society. Approximately 92% of the population is Albanian, 5% is Serbian and remainder comprises Turks, Muslims, Roma, Egyptians and others. Anywhere there is a majority and a minority, the majority should take care of the minority. Kosovar Albanians are working at full speed to assist Serbs but we only have received rejection to enter Kosovar institutions. Minorities are fully integrated in our society and we can proudly say that so soon after the war, the country has opened up its institutions and has set quotas for minorities. A minority community working group is part of the unity team, which deals with the status issue, and it made a series of recommendations for the further integration of minorities. However, the great obstacle all the time was the Serbian Government's involvement in financing the Serb minority not to integrate into Kosovar society. A number of Serbs work in the Kosovar institutions but Serbs do not participate in the Kosovo Parliament, although they have a guaranteed seat. They will still not appoint a Minister, even though they only comprise 5% of the population, they have two ministerial seats. They have the returns ministry and the party that won the agricultural ministry has still not appointed a Minister. They are still rejecting these posts as they await the outcome of the status talks to become part of Kosovo's institutions.

It is difficult for Kosovar Albanians because we keep getting rejections from the Serbian community on integration. Serbians only want to the a constituent part of Kosovo without being directed as a minority. They want to be directed as a nation and they strongly oppose Kosovar independence. The will of the majority of the people is to seek independence and there is no way back. We will only regret it heavily if Serbs do not accept Kosovo's independence.

I was asked about the future development of Kosovo's economy from the chamber's perspective and assistance from expatriate Kosovars. The economy has developed and our report highlights major development in the private sector only because we had skilled entrepreneurs who moved forward. We do not have much support from government through its policies but that should be addressed soon. If proper policies are put in place by the Government, the economy will move into fast forward because I have seen business people begin with a small project and turn it into a sustainable development. The chamber tries to do a great deal of matchmaking with western European and American companies. As we are the American Chamber of Commerce, our mandate is to initiate more interest by American companies in Kosovo and we organise many US business trips. To minimise the risk to US companies, we try to find local partners and that is what we do most of our work on.

Expatriate Kosovars contributed greatly before and after the war through remittances to Kosovar families, although they have not made a substantial investment yet because they are waiting for a more stable economic and political environment. Remittances to families has made a huge difference in the life of Kosovars. However, we have not utilised expatriates to the extent we could to make a substantial investment, considering their numbers.

Kosovar Albanians have been accepted very well in Ireland and I thank the Government and its officials for accepting them. They are happy with everything that has happened since 1999. The only concern raised by this community during my trip to Ireland relates to humanitarian visas and families being able to reunite here. For example, many of them cannot even obtain a tourist visa to visit loved ones in Ireland. That is a serious issue from a humanitarian point of vie, as sometimes the applications are made before family members are sick or families were separated. If Ireland has invested so much in taking in Kosovar refugees who have settled well, it would not be much to ask the State's institutions to assist them.

Deputy M. Higgins

That would be worth nothing for future action because a number of these cases have been in train for more than two years with the Department of Justice, Equality and Law Reform repeatedly issuing the same two line reply on an annual basis.

Chairman

We could write to the Minister regarding the points made by Ms Kusara-Lila.

Deputy Costello

A large number of cases has come to our attention and, as Deputy Higgins said, the Department is extraordinarily slow in responding to the visa requests.

Deputy M. Higgins

It is not even engaging in this regard.

Deputy Costello

It is not even engaging in a serious fashion. A suggestion that came from the committee would have a greater bearing on the matter.

Chairman

I should point out that Deputy Michael D. Higgins is foreign affairs spokesperson for the Labour Party and Deputy Costello is spokesperson for European affairs and was previously justice spokesperson.

Deputy Gregory

I thank the delegation for its informative presentation. We received some documentation and representations from the Kosovo-Ireland solidarity movement with regard to specific cases. Will the committee seek a report from the Department of Justice, Equality and Law Reform on those cases as there is not much progress on them? Deputy Michael Higgins referred to two-line replies from the Department in that regard.

I expect the committee secretariat has received the details on those cases. If not, I can forward the details to it. I would like the committee to take up these cases, which are just a few in number. These people seek leave to remain here on humanitarian grounds. At the least, we should seek a detailed response from the Department on each case.

Chairman

We will take up the general point. The Deputy should provide the details of particular cases to the clerk and secretariat of the committee.

The delegation is aware of the committee's interest in the issues. This interest was reflected at the meeting of all 27 chairpersons of the European Union countries where more than 20 people spoke at the session dealing with Kosovo and the special envoy's report. We are listening and will do what we can to assist in this matter. We will follow up the humanitarian issue.

I thank Ms Mimoza Kusari-Lila and her colleague, Ms Valerie Hughes, for attending our meeting. We wish them well in their work and wish Kosovo well for the future.

The joint committee went into private session at 3.55 p.m and adjourned at 4.05 p.m. until 3 p.m. on Tuesday, 20 March 2007.