WASHINGTON -- Even as NATO bombs wreak havoc on Yugoslavia, the West is considering ways to rebuild the region at a cost of tens of billions of dollars.
The reconstruction won't be just with bricks and concrete.
It will be a generation-long drive to change how Balkan countries deal with each other and the rest of Europe, with the idea of preventing future crises that would require NATO military intervention.
So, in theory, it would depend on a Yugoslavia without Slobodan Milosevic in a position of power.
Planning is still in the early stages, and no serious cost estimates have been published.
But the European commissioner for economic and monetary affairs, Yves Thibault de Silguy, calculated recently that reconstruction costs for the region could reach $30 billion, with most of that being spent in war-wrecked Yugoslavia.
Surrounding countries that have been hurt by the conflict include Albania, Macedonia, Bulgaria, Bosnia and Croatia.
The money would go to rebuild the towns and villages in Kosovo that were entirely or partially destroyed by the Serbs in their campaign of "ethnic cleansing" and to replace the roads, bridges and buildings in the rest of Yugoslavia destroyed by NATO bombs and missiles.
Funding sources
Europe would shoulder much of the cost, but some of the aid would flow through the World Bank and International Monetary Fund, in which the United States has a big investment.
"We expect to play a major role, if only through the IFIs [international financial institutions]," a State Department official said.
The reconstruction plan, rooted in a Stability Pact for Southeastern Europe created by Germany, will be pulled together at a high-level meeting of major nations in Bonn, Germany, at the end of the month.
A donor conference of wealthy countries to help the region is also planned.
In a speech about Kosovo on Thursday, President Clinton pledged: "We will work with the European Union, the World Bank, the IMF and others to ease the immediate economic strains, to relieve debt burden, to speed reconstruction, to advance economic reforms and regional trade."
He added, "We will promote political freedom and tolerance of minorities."
Likened to Marshall Plan
Officials have likened the effort to the post-World War II European reconstruction plan named after then-Secretary of State George C. Marshall, which helped to rebuild the continent and enabled it to produce durable, prosperous democracies.
The theory is that only through development of the entire region can individual countries there prosper and successfully link up with Western Europe.
"Some see their future in the West as an escape from the region," a European official said. "We are arguing they have a future in the West with the region."
The reason for the Marshall Plan's success was that it made a priority of European integration, said a State Department official.
Even in this aftermath, Milosevic looms as a large problem.
As long as he holds power, say European and U.S. officials, the part of Yugoslavia he controls won't get Western aid -- even if he accepts NATO's conditions for ending the war and allows an international security force into Kosovo to guarantee the safe return of refugees.
Excluding the sizable Serbian economy would leave a large void in the scheme and likely prevent long-term stability, the officials acknowledge.
Economic vise
The threat to keep Yugoslavia in an economic vise while Milosevic remains in power increases the incentive for the Serbs -- particularly their business and mili- tary elite -- to unseat him and allow democracy to spread in the region.
"In the long run, we can't solve the problem without solving the problem in Belgrade," a European diplomat said last week.
"Milosevic has to go one way or the other," the diplomat said, and until he does, "the long-term stabilization of the region is practically impossible to achieve."
Plans are being drawn up as though all of the Federal Republic of Yugoslavia (FRY) would participate, including not only Kosovo and the West-leaning republic of Montenegro, but Serbia.
"When you talk about bringing stability to the area, you're obviously talking about including the FRY," said a State Department official.
Virtually impossible
Officially, the Clinton administration doesn't rule out including a Milosevic-led Serbia in the reconstruction plan, but the steps required for its participation make that virtually impossible.
For one thing, Yugoslavia was pushed out of the World Bank and IMF in the early 1990s and is unlikely to get back in without a change of regime.
"Serbia, unfortunately, is the odd man out," State Department spokesman James P. Rubin said last week.
"Until there are changes in the policies of the Serbian government, we cannot see them being reintegrated into the Western community of nations, into Western institutions.
"So long as Serbia does not play a constructive role in the world -- and Serbia's lack of democracy prevents that -- there will be barriers to Serbia's re-entry into the community of nations," said Rubin.
Another condition is cooperation with the war crimes tribunal, he said.
The requirement that Serbia move toward democracy and respect the rights of minorities "virtually implies getting rid of Milosevic," a European official said. "It's unimaginable that we could get to that level of progress with Milosevic."
Aid to Kosovo
If Serbia is cut out of the reconstruction effort, the aid would go to Kosovo, which NATO wants to be turned into a United Nations protectorate free of direct rule by Belgrade, and Montenegro, which is striving to become democratic.
This could mean that roads and bridges that now lead to Belgrade would be replaced with a transportation grid leading to surrounding countries.
Other countries in the region, formerly ruled by Communist dictatorships need to sell off state enterprises, ease government control of the markets and crack down on rampant corruption, according to an IMF official.
But the official said a failure to integrate Yugoslavia into the region's reconstruction and development would cause problems for its neighbors.
When sanctions were tightened on Serbia between 1993 and 1995, smuggling flourished in Albania to the point that it worsened governance and played a part in a pyramid scheme scandal, the official noted.
Without Yugoslavia as a trading partner or route to Western Europe, Macedonia could lose substantial trade and Bulgaria might have to invest heavily in new infrastructure, the official said.
, Taking a harder line
Clinton suggested 10 days ago that Milosevic could be a partner in a peace agreement, but the president took a much harder line against him last week, comparing the Serbian campaign in Kosovo to the Holocaust and holding Milosevic personally responsible.
Critics say that without Western determination to topple Milosevic, any regional stabilization plan would be a hollow one.
"You have to defeat someone to have a Marshall Plan," said John Fox, a former State Department Eastern Europe specialist. "A Marshall Plan can only happen in a peaceful environment."
"They can basically try to stanch the hemorrhage, but you're not going to have investors show up. People are going to have their eye on Belgrade," Fox said.
Programs for economic and political reform in the region, he said, "will be built on quicksand."
Pub Date: 5/16/99