BALKAN REGIONAL PROFILE:

I. Introduction

The region-building priorities in South-East Europe are dominated by the need for stability and by the further enlargement of the EU towards the Balkans. The security agenda for the region is dominated by the fight against terrorism and by NATO's enlargement to include South-East Europe. Ethnic strife, which the democratic governments of the FRY and of Macedonia are still incapable of quelling permanently, is becoming a nuisance for the rest of the region. Despite the continuing post-conflict arrangements in Kosovo and the implementation of the Ohrid agreement of August 2001 in Macedonia, both issues demand the attention and efforts of the countries in the region and their external partners in creating stability and resolving controversial issues. The favorable milieu that these conflicts create for various forms of terrorism calls for their regulation and comprehensive resolution. However, labeling as "terrorist" all factors obstructing the settlement of ethnic conflicts – a widespread practice among the official institutions in Belgrade and Skopje – is a simplification of the complex issue, and suits the interests of the leadership in the two capitals. This approach favors terrorists and extremist elements among the people of these two countries. In their case, it is not enough to simply declare a "state of democracy", but the concept must be assimilated and internalized before it becomes an integral part of the social fabric of both the FRY and Macedonia. It is not enough to be more fluent in the discourse with the West, while exploiting and abusing the West’s need for more stability in the Balkans. Real domestic political and psychological change is needed to cope with ethnic intolerance in the two Western Balkan states. It would be counter-productive for the broader region of South-East Europe, and for Europe in general, if the improved relations between Belgrade and Skopje led to the formation of an “anti-terrorist front” as a pretext for a united front against Albanian rebels. Such a development would preclude all prospects of achieving tolerant relations with the Albanians in both countries. The citizens in both countries should not be misled by nostalgia for the common Yugoslav past. This project is over and any effort to find a kind of a substitute would clash with the longer-term interests of the people of these countries and the rest of the Balkans to live together in the EU and in the common Euro-Atlantic security space. The Euro-Atlantic future of the Balkans and the need to create a civil and democratic zone in the region requires small, but decisive steps towards re-creating confidence and tolerance in Kosovo and Macedonia. To ignore this fact or to overemphasize the clash of ethnic interests, and to continuously treat ethnic groups as antagonistic, is a recipe for disaster in the Western Balkans and would postpone their peoples’ Euro-Atlantic integration indefinitely.

This is our reading of both the EU's and NATO's diligent efforts during the last month to press for deeper and more effective relations with the Balkan countries. NATO experts visited all MAP countries of South-Eastern Europe for a review in January, and the EU extended financial support to Belgrade. Russia, and, to a lesser extent, China, also tried to promote their economic and political interests in the Balkan region.

The changes to the security agenda in the aftermath of the 11 September terrorist attacks must finally be perceived by the leaders in the Western Balkan countries and allow the region as a whole to join in the struggle with the post-Cold War world's number one security risk in a more effective way.

II. Security Threats, Conflicts and Post-Conflict Developments in the Balkans

1. Security Threats: Terrorism

a) Preparation for the ISAF Mission. Preparations for participating in the International Security Assistance Force (ISAF), a multinational peacekeeping force in war-torn Afghanistan, are being made in some Balkan countries:

(1) In the first days of January, a 25-strong team from 12 nations contributing to a British-led foreign security force in Kabul began surveying the shattered Afghan capital. Intelligence experts from Greece and Romania were part of the team. (2) The Romanian Defense Ministry announced on 8 January that Romania would send 48 troops and a C-130 Hercules transport aircraft to Afghanistan by the end of the month. The cost of the operation is US$6 million and is covered by the Romanian military budget. The initial Romanian offer was significantly larger, but the international forces accepted only a part of the services made available by Romania. Pending the approval of the ISAF commanders, a second Romanian force of 70 chemical weapons specialists, 170 mountain troops and 15 military doctors may join the first group later. (3) The defense ministry of Bulgaria announced on 9 January that it had received a request from Britain to take part in the UN-mandated ISAF. The Bulgarian government and parliament decided to provide a unit for chemical protection made up of 40-46 troops with the appropriate armament and facilities. (4) Turkey sent 20 soldiers to Afghanistan on 18 January in advance of the peacekeeping contingent of 261 soldiers. The advance unit will secure the Turkish peacekeepers’ arrival in Kabul, scheduled for February. Turkey is expected to take over the command of ISAF after the three-months' term of the current British command expires. Turkey has pledged to provide aid and training to help build an Afghan police force and national army. Ankara believes its secular democratic state could serve as a model for rebuilding Afghanistan. Turkey enjoys a very close relationship with the deputy minister of defense in Afghanistan’s transitional government, the ethnic Uzbek General Abdul Rashid Dostum. The general spent several years in exile in Turkey and his family lives in Ankara. On the weekend of 19-20 January, General Dostum visited Ankara; he also met with Prime Minister Bulent Ecevit, Foreign Minister Ismail Cem and other officials on 22 January.

b) US-Greek Cooperation in the Fight Against Terrorism. US Secretary of Defense Donald Rumsfeld met with the prime minister of Greece, Costas Simitis, on 10 January in Washington, D. C. and discussed the war against terrorism. They also discussed the upcoming Olympics in Greece and the security implications for the Games.

c) US-Turkish Cooperation in the Fight Against Terrorism. (1) A nine-member bi-partisan US Senate delegation visited Ankara on 4 January and discussed the fight against terrorism with Turkish leaders. Senators Joseph Lieberman and John McCain thanked Turkey for its critical support in the war on terrorism. (2) Turkish Prime Minister Bulent Ecevit met with President George Bush in Washington on 16 January. The US president said his country was grateful that Turkey has been steadfast in its support for the international campaign against terrorism.

d) Bulgarian Humanitarian and Financial Aid to Afghanistan. Bulgarian diplomatic and financial officials reported that Bulgaria – a donor for Afghanistan since the 1980s - was ready to provide US$2 million in humanitarian aid to the conflict-torn country. The Afghan debt to Bulgaria will amount to US$45 million by 2003, and Sofia is ready to restructure it and forgive half or even the whole of this debt. Afghan diplomats noted on 16 January that Bulgaria was the first Eastern European country to send a diplomatic envoy to Kabul after the military campaign against the Taliban regime. Technoexport, Elektroimpex, Agrocomplex, Bulgartabac, and many other pharmaceutical and construction companies have already expressed their willingness to return to the Afghan market and contribute to the country’s reconstruction.

e) Bulgaria to Head the UN Committee on Somalia and Vice-Chair the UN Sanctions Committee Against Iraq and Libya. Bulgaria, a temporary member of the UN Security Council from 1 January, will lead the work of the UN Committee on Somalia. This failed African state is suspected of hiding al-Qaida terrorists. The work in the Sanctions Committee against Iraq will not be easy due to the clandestine production of chemical and biological weapons by Saddam Hussein.

2. The Conflict in Macedonia and Post-Conflict Issues in Kosovo and Bosnia and Herzegovina

a) Macedonia. (1) The Albanian National Army (ANA), a clandestine extremist organization, on 13 January issued a threat to the official institutions of Macedonia that it would retaliate if the army and police continued their return to ethnically mixed regions. ANA called the Ohrid agreement of August last year “a knife in the Albanians' back”. The return of the Macedonian armed forces and police was hindered temporarily by the harsh winter conditions, but will proceed. EU Special Envoy to Macedonia Alain Le Roy firmly condemned the ANA's declaration and its preparations for possible renewed conflict. (2) According to media sources, the US National Intelligence Council has concluded that the conflict between Albanians and Macedonians may grow into a civil war with a destabilizing effect on the whole region of South-East Europe. According to the Austrian journal “Kurier”, Erhard Buzek, the new coordinator of the EU-led Stability Pact for South-East Europe, believes there is a 50-50 risk of war in Macedonia. (3) General Metodi Stambolisky, Chief of General Staff of the Army of the Republic of Macedonia, held intensive talks in Kiev with Ukrainian political and military officials on 14 January, including the ministers of defense, foreign affairs and the Ukrainian Chief of the General Staff, General Petro Shulyak. The two sides officially announced they aimed to intensify their military and military-technological cooperation. Ukraine will set up a plant in Macedonia to service and modernize the country’s armored vehicle and tank force. The agreement reached in Kiev provides for the supply of 31 T-72 tanks, 8 Mi-24 and Mi-8 helicopters, 4 Su-25 ground-attack jets, ammunitions and spare parts to the Balkan state. Last year, after Western pressure, Ukraine stopped arms shipments during the Albanian rebellion. After the peace agreement of August 2001 in Ohrid, the two countries resumed their arms trade. The military leadership of Macedonia plans to supply the paramilitary units of the country’s interior ministry with Mi-24 K helicopters. (4) A visit by NATO Secretary-General Lord George Robertson to Skopje, planned for 18 January, was cancelled due to heavy fog over the Macedonian capital. The visit was postponed. The secretary-general intended to discuss NATO’s Amber Fox peacekeeping mission and the internationally mediated amnesty for former ethnic Albanian rebels. Some developments in Macedonia are unacceptable for NATO: the delay in the implementation of the Ohrid peace agreements, in completing the process of granting pardon and amnesty to Albanian rebels, in passing a law on local self-government, and in the return of multiethnic police forces to former conflict areas, as well as the continued presence of the “Lions”, paramilitary formations of former police officers, and the purchase of Mi-4 “flying tank” helicopters from Ukraine. Macedonia is one of the nine applicant countries for membership in NATO. During his visit to Skopje on 24 January, Javier Solana, the High Representative of the EU for Foreign and Security Policy, underlined the EU's desire to see the Ohrid agreement implemented, including the provision of amnesty to Albanian rebels. As soon as the parliament in Skopje passes the local self-government law, support from the World Bank and the European Commission Donors’ Conference might be expected.

b) Kosovo

Moderate Albanian political leader Ibrahim Rugova failed to win enough support in the new legislature of Kosovo in the presidential elections of the province on 10 January. Only 50 out of the required 80 deputies in the 120-seat parliament of Kosovo backed Rugova. In the first round of voting on 13 December last year, Rugova received the support of 49 deputies. The next round of elections will require a simple majority of 61 votes for electing the president of Kosovo. Rugova's Democratic League of Kosovo won the parliamentary elections on 17 November 2001, designed to give the province self-government under a UN umbrella. However, the support of other parties is needed for the election of Rugova for president. This development does not prove that the elected representatives in the parliament of Kosovo are ready to face the real challenge of governing the war-torn province and its traumatized people – be they Albanians and Serbs.

c) Bosnia and Herzegovina

(1) According to media sources in the Republika Srpska, American reconnaissance troops have arrived in Bosnia and Herzegovina. Their mission is reported to be the arrest of Radovan Karadzic, the former Bosnian Serb leader, wanted for war crimes by the ICTY in The Hague. (2) US President Bush sent a letter to the Speaker of the House of Representatives and the President of the Senate on 21 January to inform Congress that there are currently 3'100 US servicemen serving with SFOR – 18 per cent of the total number of soldiers in Bosnia-Herzegovina from 19 NATO and 17 other nations. The president reported that in the last 6 months, US forces there had not sustained any combat-related fatalities.

III. The National Perspectives of the Balkan Countries: Specific Issues

1. Bulgaria

The new President of Bulgaria, Georgi Parvanov took office on 22 January after winning last November's elections. He vowed to continue to work for Bulgaria’s integration into the EU and NATO. Greek Prime Minister Costas Simitis and Turkish Deputy Prime Minister Mesut Yilmaz attended a ceremony marking the start of 44-year old Parvanov’s five year mandate. Parvanov is the former leader of the Bulgarian Socialist Party (BSP), and during the ceremony in parliament on 19 January he underlined that his strategic objectives are joining the EU and NATO. The new president pledged to work for accelerating the EU accession negotiations so that Bulgaria can catch up with other EU membership candidates from Central and Eastern Europe.

2. Romania

Prime Minister Adrian Nastase told the county prefects on 11 January that Romania's priorities for 2002 are the country’s accession to NATO, the consolidation of economic growth, the development of agriculture, the fight against corruption, the fight against poverty and the acceleration of the EU accession process. Political and social stability are indispensable prerequisites for reaching these goals. The prime minister said 2002 was the time for a frontal attack against corruption and incompetence.

3. Croatia

(1) Croatian Justice Minister Ingrid Marinovic said on 4 January that judiciary reform is one of the strategic goals of the government to ensure the judiciary stops serving politics. Croatia, a country of 4.5 million people, has around 1.3 million unsolved criminal cases, some of them dating back to almost 10 years ago when the country became independent. (2) On 12 January, Croatia marked the 10th anniversary of its international recognition, while regretting the bloodshed of the past decade. However, ending the Yugoslav communist rule and seeking independence was a right cause, President Stipe Mesic said at the special session of the parliament to mark the event. (3) Croatian government officials on 22 January announced plans to return all Serb houses now occupied by refugees from Croatia and Bosnia to their original occupants by the end of 2002. This act would not require reciprocal steps by neighboring countries. Government officials will work to accelerate the processing of more than 27'000 Serbian claims for return of houses.

4. FRY

Javier Solana, the EU High Representative for Foreign and Security Policy, urged the leaders of Serbia and Montenegro on 25 January to reach an agreement on the required constitutional changes to preserve the existence of the Yugoslav Federation. He met both with FRY President Vojislav Kostunica and with the president of Montenegro, Milo Djukanovic.

IV. The Bilateral and Multilateral Relations in the Balkans. The State of the Regional Initiatives

1. Bilateral Relations

a) Bulgaria-Turkey. Bulgarian National Border Police Directorate authorities urged Turkey on 4 January to reinforce its northern border to stem a rising flow of illegal immigrants from the Middle East and Asia. There has been a serious rise in migrant flows since the start of the war in Afghanistan and this tendency is expected to continue. The Bulgarian border police detained 11'000 people in 2001, mainly from Iraq, Afghanistan and Pakistan, who attempted to cross illegally from Turkey to Bulgaria on their way to Western European countries. The number of detainees in 2000 was 380. A first group of 80 Bulgarian police officers was sent to the border with Turkey to confront a new wave of Kurd and Afghan refugees. Sofia sent a diplomatic note requesting the Turkish government to take the necessary steps to keep down the number of illegal crossings. The Bulgarian consular service has introduced the world's best-protected visa permit in its consulates – a product of high technological value that is to be introduced in the EU from 2003.

b) Slovenia-Croatia. The Slovenian government approved an initiative on defense cooperation with Croatia on 10 January. The main part of the initiative is concerned with the cooperation between the two countries in the contexts of the OSCE and the UNis. The future agreement between the two countries will provide for courses, seminars, and military meetings between the armed forces of the two countries. Both are NATO candidates and the Alliance expects the two countries to have solved all open issues between themselves by the time they can be considered for membership. Croatia and Slovenia have not yet ratified the agreement aimed at solving a border dispute that was signed last summer by Prime Ministers Ivica Racan of Croatia and Janez Drnovsek of Slovenia.

c) Romania-Croatia. According to Croatian ministry of defense sources, the Croatian government approved a deal with Romania to start upgrading 28 MiG-21 jets produced some 15-20 years ago. This is the first large order received by the Romanian Aerostar company in recent years. Aerostar is situated in Eastern Romania and it has had a certificate since 1999 for providing repair and upgrades for former Soviet military aircraft.

d) Bulgaria-Greece. (1) Greek Prime Minister Costas Simitis made a one-day official visit to Sofia on 22 January. The prime minister was accompanied by the minister of foreign affairs, George Papandreou and met with Bulgarian Prime Minister Simeon Saxkoburggotsky in Sofia. The visit of the Greek prime minister was part of a series of upcoming meetings with Balkan leaders focused on reinforcing bilateral and regional relations. The prime ministers of the two countries discussed bilateral economic ties and the Sofia's preparations for joining NATO and the EU. The future of the Kozloduy nuclear plant and a trilateral Greek-Bulgarian-Russian oil-pipeline project, to connect Bourgas and Alexandroupolis, were also discussed.

The foreign minister of Greece launched an initiative in Sofia for drafting a joint position by Greece, Turkey, Bulgaria and Romania on the issue of the applicant countries’ NATO entry. An appropriate opportunity for Greece and Turkey to boost Bulgaria’s and Romania’s cases ahead of the Prague summit this autumn could be the 12 February Istanbul International Conference, with the participation of the EU foreign ministers and the Organization of Islamic Conferences. (2) The chiefs of the general staffs of Greece and Bulgaria, General M. Paraudakis and General M. Mihov, signed a bilateral program for cooperation in the military field for 2002 on 23 January in Thessaloniki, northern Greece.

2. Regional Initiatives: the Pact of Stability for South East Europe

Erhard Buzek, the new coordinator for the Stability Pact for South-East Europe, made his first visit to the region in this new capacity to Sofia, Bulgaria on 15-16 January. Buzek met Prime Minister Saxkoburggotsky and Foreign Minister Solomon Passy and was decorated by former president Petar Stoyanov with the Order of the Stara Planina, First Class – one of the highest Bulgarian distinctions for both nationals and foreigners. Buzek was clear in stating the Stability Pact’s intention to construct a free trade zone in South-East Europe by the end of this year. Buzek will visit Sofia again at the beginning of February and discuss in greater detail the Bulgarian proposal to construct a council for economic growth that will stimulate and guide the region’s economic progress.

V. THE ECONOMIC SITUATION OF THE BALKAN COUNTRIES AND THE REGION

1. Bulgaria. The First International Tourist Conference “Bulgaria – a Country of Dreams” was held on 10-11 January in Sofia. The Bulgarian prime minister participated in the conference together with the former governor of Nevada, Bob Miller. Former US President Bill Clinton greeted the conference with a video address. Bulgaria's income from tourism in 2001 was US$1.3 billion, and 2.8 million tourists visited Bulgaria. The World Organization of Tourism predicts 10.8 million tourists will visit Bulgaria in 2020.

2. Croatia. Croatia’s government lifted a disputed ban on the road transport of oil derivatives on 24 January after protests by neighboring Slovenia and Bosnia and Herzegovina, who threatened to retaliate by banning Croatian transits. Croatia declared on 20 January that it wanted to curb illegal sales and insisted such products could pass through its territory only by ship, rail or pipeline. Many Slovenian truckers carry oil to Bosnia through Croatia, and so their government threatened to retaliate against Croatian truckers passing through its territory. Bosnia in turn said it would stop importing Croatian oil products worth US$100 million per year. After diplomatic protests and warnings from the neighbors that they might report Croatia’s decision to international organizations, Zagreb conceded to lift the imposed ban.

3. US-Turkey. The US State Department Under-Secretary for Economic, Business, and Agricultural Affairs Alan Larson led a high-level delegation to the first US-Turkey Economic Partnership Commission on 26-27 January. According to US State Department sources, the US and Turkey have long maintained a close strategic partnership. Now the two sides have agreed to upgrade their economic partnership to the same level. The first initiative of this new chapter in their relations is the convening of the first US-Turkey Economic Partnership Commission. The new forum will allow the broadening of the economic dialogue to focus on enhancing trade and commercial relations, increasing investment flows and supporting the successful implementation of Turkey’s economic reform program.

VI. THE PROCESS OF DIFFERENTIATED INTEGRATION OF SOUTH EAST EUROPE IN EU AND IN NATO

1. EU

a) EU-Bulgaria. (1) Bulgaria will fight to delay the closure of two of the older reactors at its Kozloduy nuclear power plant beyond the EU deadline of 2006. Energy Minister Milko Kovachev said on 10 January that reactors number three and four would be decommissioned by 2008 and 2010, respectively. By the end of this year, reactors number one and two will be decommissioned. An earlier closure of reactors three and four would affect the whole of South-East Europe, because now Bulgaria covers 50 per cent of the region's power requirements. Bulgaria’s main energy customers in 2001 were Turkey with 3.8 billion kWh, followed by Greece, Romania, Serbia, Kosovo, Albania, Macedonia and Montenegro. Kozloduy now has six nuclear reactors and supplies 44 per cent of Bulgaria’s electric power. Bulgaria is currently negotiating on the energy chapter with the EU, and all Bulgarian EU partners should be aware of the fact that Bulgaria substantially contributes to the stability of South-East Europe by providing electric energy to the region. The Kozloduy nuclear plant is probably the world’s most inspected and internationally monitored power station. No serious malfunction has been detected over its 28 years of existence. Its security has even been improved in the last decade with EU and North American expertise and support, and the personnel has always been of highest technical efficiency. Should this local provider of cheap and accessible electric power disappear from the market, no foreign or domestic source would be able to fill the resulting economic, social, security and political gap at such a low cost. None of the neighboring countries, nor the EU can provide enough energy to cover all needs. Russia is the only provider of electric energy that could fill the gap, with all the obvious geopolitical consequences for South-East Europe, but Russia is interested for economic reasons in preserving its current relations with Bulgaria with regard to nuclear energy. (2) Bulgarian foreign ministry sources announced on 21 January the EU's expectations that the staff of the current Bulgarian administration be increased by 20 per cent. The Bulgarian government only recently completed a 10 per cent personnel cut in the country’s administration.

b) EU-FRY. In the first days of January, the European Commission announced it had adopted a five-year strategy to regulate its financial aid to FRY. An initial payment of €960 million will be allocated between 2002 and 2004.

2. NATO

a) NATO-Bulgaria. (1) The preparations of the Bulgarian armed forces for NATO membership include the removal of obsolete light armament – mainly infantry armament and ammunitions. These will be sold or destroyed to release huge storage space. This press announcement was made on 9 January. The Bulgarian government on 10 January approved changes to the military doctrine and the law on defense and the armed forces, providing for a reduction of the wartime army from 250'000 to 100'000 soldiers. In peacetime, Bulgaria will have an army of 45'000 soldiers, some 41'000 of whom will be in military units. The National Intelligence Service and the National Security Service will no longer be part of the armed forces. The threat of terrorism was added as a primary issue of concern in the new military doctrine of Bulgaria. The changes in the law on defense and the armed forces, as well as in the military doctrine, are expected to be debated and passed by parliament and become effective by mid-February. During the coming year, 7'500 Bulgarian soldiers will leave the army due to the on-going cuts; their social adaptation and integration in civilian life has been well planned in economic and logistical terms. (3) Towards the end of January, a special US committee was convened to work on the destruction of Bulgarian Scud and SS-23 missiles. It is expected to arrive in Bulgaria for talks soon. The deadline for destroying the missiles, as set by the Bulgarian authorities, is 30 October 2002. (4) British General Jeremy MacKenzie, former deputy Allied commander for Europe and consultant on the Bulgarian Plan 2004, said in Sofia on 11 January, after meetings with both the former and the new president, that Bulgaria was doing well in its preparations for NATO entry and army reforms under the plan.

b) NATO-Romania. (1) The Romanian defense minister said on 12 January that by 2003, 75 per cent of the Romanian armed forces would be composed of professionals, and only 25 per cent by conscripts. A new bill in Romania will soon provide for a shorter conscription period as well as for an alternative service. (2) General Joseph Ralston, SACEUR visited Bucharest on 21-22 January. He discussed the progress made in fulfilling the provisions of the Romanian National Membership Program (MAP). He also discussed Romania’s participation in the campaign against terrorism and the political-military situation in the Balkans.

c) NATO-Slovenia. (1) President Milan Kucan of Slovenia called for a national referendum on NATO entry on 15 January, ahead of NATO’s Prague summit in November this year, when invitations to applicant countries are expected. In December 2001, the number of supporters for NATO entry dropped by more than two points to 53.2 per cent, while the number of opponents rose by more than four points to 27.5 per cent. (2) A ten-member NATO commission, together with Slovenian defense ministry representatives, on 16 January began a three-day visit to Maribor airport to evaluate the infrastructure for an eventual use by NATO. The airports at Brnik and Cerklje ob Krki will also be evaluated.

d) NATO-Albania. (1) Commanders of the Albanian ground forces told Defense Minister Pandeli Majko on 10 January that the obligations resulting from the NATO MAP process were successfully implemented during 2001. The armed forces were re-organized and underwent maintenance at all levels as well as experiencing improvements in their working conditions. An analysis of these forces' activities shows positive achievements in conducting bilateral and multilateral exercises. (2) NATO Secretary-General Lord George Robertson arrived in Tirana on 17 January for an official visit. He met with Foreign Minister Arta Dade and Prime Minister Ilir Meta. Lord Robertson said that the Albanian government and people had done a lot for the stability of the Balkan region, but it appears this gratitude will not be enough to secure Albania's NATO accession. Major changes are still required in the armed forces and civil society. He also said that political stability in the country was indispensable for membership in the Alliance.

e) NATO-Bosnia and Herzegovina. Leading representatives of the Bosnia-Herzegovina parliament and government met with a NATO delegation, headed by the NATO director for the Balkans, Robert Serry, in Sarajevo on 23 January. On 24 January, the NATO delegation talked with the representatives of the Bosnian Serb Republic in Banja Luka. In Sarajevo the NATO experts talked about the reorganization of the armed forces, employment opportunities for demobilized army members, and about meeting the conditions for the country’s admittance to the PfP program. The leaders of the federation said that NATO assistance is crucial in implementing the military reforms. The modernization of the armed forces and the care for the demobilized soldiers would be an impossible task for Bosnia-Herzegovina on its own. On the NATO side, it was emphasized that much more action is required from Sarajevo before it is admitted to the PfP program. It is especially important that the armed forces of Bosnia-Herzegovina have a recognizable identity. Reducing the armed forces and creating a joint plan and organized system of command and control at the state level are priority tasks. An acceptable level of civilian democratic control over the armed forces is also a fundamental prerequisite for admittance in the PfP. A major obstacle in this direction would be the Republika Srpska’s insistence on preserving two armies – that of the federation and that of the Republika Srpska.

VII. THE INFLUENCE OF OTHER EXTERNAL FACTORS ON THE REGION: NATIONAL GREAT POWERS AND INTERNATIONAL INSTITUTIONS

1. US

a) US-South-East Europe. Ambassador James H. Holmes, who previously served as US ambassador to Latvia and as coordinator for assistance to Central and Eastern Europe, took up his duties at the State Department as special advisor on South-East Europe on 11 January.

b) USA-Turkey. The prime minister of Turkey, Bulent Ecevit, visited the US from 14-18 January and met with President Bush on 16 January. The Turkish delegation included 100 business executives. Turkey, a traditional US ally, has a major role in the campaign against terrorism in Afghanistan and Central Asia.

c) US-Bulgaria. (1) The US ambassador to Bulgaria, Richard Miles, opened the Center for Fighting Illegal Trafficking and Trade in Human Beings together with the Bulgarian Interior Minister in Sofia on 4 January . US equipment worth US$90'000 was donated to the center. The US government highly values the Bulgarian special forces' efficient measures against illegal human trafficking, according to the US embassy’s press service. (2) On 15 January, Miles informed Foreign Minister Solomon Passy that he had participated in a meeting of the US diplomatic representatives to the region of South-East Europe that was held in Washington, D. C. Though no official statement of US support for Bulgaria’s entry in NATO is to be issued soon, the Ambassador pointed out that Bulgaria’s stance during the Kosovo crisis and the anti-terrorist campaign had been highly appreciated by the US.

2. Russia

a) Russia-Bulgaria. Bulgarian Deputy Prime Minister Nikolay Vassilev, made an official visit to Moscow from 21-23 January. He met with Russian Vice Prime Minister and Finance Minister of the Russian Federation Alexey Kudrin. The Russian side declared it was prepared to pay back its US$100 million debt to Bulgaria. The two leaders agreed to convene a bilateral inter-governmental commission on 21-22 February in Sofia. A crucial agreement stipulates that the paying of the debt will not be linked to the contentious issue of Russian and Ukrainian property in Bulgaria – a problem that Bulgaria insisted be resolved between Moscow and Kiev. A visit by the Bulgarian foreign minister in Moscow will be followed by a visit by the country’s prime minister, Simeon Saxkoburggotsky. Russia confirmed its engagements with the construction of the trilateral Russian-Bulgarian-Greek project of the oil pipeline Bourgas-Alexandroupolis. The Russian oil giant Lukoil impressed on the Bulgarian vice prime minister its intention to participate in the privatization of the Bulgarian energy sector. An agreement on easing the bilateral visa regime will be signed on 31 January. Russia intends to invest more than US$1 billion in the Bulgarian economy over the next four years, Vassilev said upon his return from Moscow.

b) Russia-Slovenia. In the first days of the new year, Slovenian Prime Minister Janez Drnovsek visited Moscow and met with Russian Prime Minister Mikhail Kassyanov. The two countries' trade volume was US$600 million in 2001 and may soon reach US$1 billion, according to the two leaders. The prime minister of the Russian Federation wished Slovenia a successful future in the EU.

3. China

China-FRY. The visit of FRY President Vojislav Kostunica in Beijing, China ended on 11 January. The joint declaration on the occasion of the visit acknowledged the huge support provided by China for the reconstruction of the FRY's economy. The declaration also rejected “double standards” in fighting terrorism – a statement that clears the way for Belgrade to deal with the Albanian issue within the framework of the “fight against terrorism”, in the country’s terminology.

VIII. CONCLUSIONS: THE SECURITY SITUATION AND THE EVOLUTION OF REGION-BUILDING