BALKAN REGIONAL PROFILE:

(A Background and October 2002 Issue in Brief)

Research Study 42, 2002

I. INTRODUCTION
October 2002 saw the continuation of two fundamentally contradictory tendencies witnessed in the region in the last few years: first, region-building in the context of the EU and NATO enlargement processes and national democratic developments, and second, opposing the processes of normalisation aimed towards bringing the Balkan region closer to Europe. Two additional tendencies were seen again this month, more than one year after the 9/11 events: first, the focusing of energy in individual Balkan countries to fight terrorism, and second, the involvement of citizens and societies in the activities or the consequences of present terrorism.

The most disturbing indicators of efforts to slow down and stop the progress of the region towards stability, democracy, and effective market economy were the elections and their results in Serbia (presidential), in Bosnia and Herzegovina (parliamentary) and in Kosovo (municipal). Regardless of the particular outcomes of the elections, they were all were marked by a drive towards nationalism: in Serbia, although the low turnout for the second round led to the annulment of the election results, the main features of this election were the victory of nationalist Yugoslav President Vojislav Kostunica and the appeal by ultra-nationalist Vojislav Sesilij for Serbs to abstain from voting. Negative nationalism is still poisoning the national soul of the Serbian people, mainly due to the dominating political elite. In Bosnia and Herzegovina, as well as in Republika Srpska, nationalists came back into power. In Kosovo, most Serbs simply did not show up for elections. These electoral inclinations on the part of the Serbian community can be easily linked to nationalist arguments that lead to nowhere, but as analysts and police services in the broader region have said, these nationalist tendencies are closely linked to organized crime. There is still no hard evidence that this alignment of interests of destructive nationalists and organized crime is opportunistically linked to UN Security Council Resolutions and the Resolutions that ban trade of arms with Iraq by Republika Srpska authorities and Yugoslav state companies in the course of the last year. What cannot be doubted, however, is that these violations of UN sanctions are encouraged by the deep-rooted aggressive nationalism that has been deterred effectively since the end of the Kosovo crisis by the international community.

Political efforts to overcome a similar state of social affairs by peaceful means were made in the Former Yugoslav Republic Of Macedonia (FYROM) by the new government that will include the most successful Albanian party, which was created on the basis of Ali Ahmeti's disbanded ANL, which brought Macedonia to civil war in 2001. The extension of NATO's Operation Amber Fox will definitely bring stability to bear on these new political developments in Skopje.

The enlargement processes of the EU and NATO in Southeastern Europe had a specific importance in October and the following weeks. Slovenia will be invited to join the EU in 2004 at the Union's December summit in Copenhagen, and Bulgaria and Romania will receive specific "road maps" from the EU to accelerate their integration by 2007. Though Turkey will most probably not get a date for starting negotiations for EU membership, and although much national work is needed to implement the Copenhagen criteria for EU membership, Turkey is on the right political course, and the EU will not deny the tremendous progress of this Balkan regional power. A new cooperative mood is evolving among EU applicants Turkey, Romania, and Bulgaria as well as the only local EU member, Greece, and this will definitely have positive results on the general political and security situation in Southeastern Europe. The EU's decision to allow its 15 member states to exempt US troops from prosecution for war crimes by the ICC allowed the EU applicant countries to do the same. Preparations for the November NATO Prague summit continue in these three countries alongside the preparatory work to cover the remaining conditions, set by the Membership Action Plans agreed between these states and NATO. In Prague, most are expected to receive invitations to join NATO. In October, the chiefs of the general staffs of the armed forces of Bulgaria, Romania, Greece, and Turkey held a long-expected meeting in Sofia and agreed on practical cooperation between the NATO-member states and the NATO-applicants in Southeastern Europe. The multiplying effect of these enlargements has historic proportions and will strengthen the region-building and modernization tendencies throughout the peninsula.

The mark that terrorism left in the Balkans this month has three aspects: first, concerning the environment that continues to provide an appropriate milieu for terrorist activities, second, concerning new victims of global terrorism from Balkan countries, and lastly, the organized counter-terrorist activity. The integration of Romania and Bulgaria will accelerate the counter-terrorist efforts of these two countries.

In October, important bilateral contacts in the region facilitated the general stabilization of the security situation in the area alongside similar bilateral contacts with external influential powers, mainly the US and Russia.

II. SECURITY THREATS, CONFLICTS AND POST-CONFLICT DEVELOPMENTS IN THE BALKANS

1. Security Threats: Terrorism

1) Bulgaria
(1) During the past month, a Bulgarian citizen and a Bulgarian national were killed in two separate terrorist acts. On 6 October, 38-year-old Bulgarian sailor Atanas Atanasov was the only casualty in the terrorist attack against the French tanker "Limburg" off the coast of Yemen. All evidence pointed to al-Qaida style of terrorist acts, although the direct attack was carried out by the Aden-Abyan Army (an extremist Muslim organization linked to al-Qaida). The Aden-Abyan Islamic Army is the same Muslim extremist organization that claimed responsibility for the attack on the USS Cole in 1998. Another Bulgarian citizen that also held Austrian citizenship, Emilia Uzunova (43), was among the victims of the hostage crisis of 24-26 October precipitated by Chechen terrorists in a Moscow theatre,. Two other Bulgarians were held hostage, but survived the tragedy. These first Bulgarian victims in the fight against terrorism demonstrate clearly the universal character of the terrorist threat and Bulgaria's joining the counter-terrorist coalition of states in September 2001 was a nationally responsible act. Those in Bulgarian society who doubted the risk of terrorist attacks against Bulgarian interests received shocking proofs for that. (2) Bulgarian Foreign Minister Solomon Passy paid a two-day visit to Afghanistan from 20-22 October. The Foreign Minister met with the Bulgarian chemical and radiation defense squad in Kabul, which is part of ISAF, and brought with him 29 tons of humanitarian aid. Passy also met with Afghan President Hamid Karzai. The Afghan president asked for Bulgarian reconstruction support. (3) According to an agreement reached in early October between Bulgarian and NATO military medical staff, NATO will open three laboratories for researching dangerous infections in Bulgaria, no matter whether Sofia joins the pact or not. The visit of the NATO medical officials was in preparation for an international conference on bioterrorism in Varna next year. The main laboratory will be in Varna, and two auxiliary laboratories will be established in Veliko Tirnovo (Northern Bulgaria) and Smolyan (Southern Bulgaria). (4) The first class of the international center for aviation security - a unique education institution in Eastern Europe - graduated on 23 October in Sofia. The trainees are supposed to be able to deal with crisis situations, including hostage-takings, negotiating with terrorists, etc.

2) US-Bulgaria
The chief of the European and Balkan branches of the US Secret Service, Tony Chapa, met on 1 October with high-level Bulgarian Ministry of Interior officials. They discussed cooperation and joint fight against organized crime and terrorism.

3) US-Romania-Bulgaria-Turkey
Bulgaria and Romania declared in the beginning of October that they would allow US and allied forces to use their countries for logistical and other support if the UN authorized an attack on Iraq. US formally asked Turkey to provide support in the event of a strike against Baghdad.

4) US-Greece
Greek Minister of Public Order Mikhail Chrysochoides met with US Deputy Secretary of State Richard Armitage on 22 October in Washington, D.C.,. Armitage expressed the US' appreciation of Greece's contribution to the 'war on terrorism'. Armitage commended Chrysochoides for Greece's successful efforts regarding the 17 November terrorist group. They discussed a series of issues related to regional and global security, including the upcoming Olympics.

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

a) Macedonia
(1) A new government coalition was formed in Macedonia this month. It includes the Social-Democratic Union of Macedonia (SDUM) and the Albanian Democratic Union for Integration (DUI). Prime Minister Branko Chervenkovsky will have Mussa Xhaferi of the DUI as Deputy Prime Minister. He is a former ANL commander, and was responsible for political representation abroad during the civil war in 2001. The DUI will also get the ministries for justice, health, education, transport, and communication. The DUI will also hold four deputy posts in the ministries of defense, agriculture, economics, and the interior. (2) Skopje formally asked NATO on 8 October to extend the mandate of its peacekeeping mission until 15 December to maintain stability one year after Macedonia was shaken by an Albanian rebellion. The mandate of NATO's operation Amber Fox expired on 26 October. A dispute between Greece and Turkey over a deal guaranteeing the bloc access to NATO assets for crisis management operations derailed the implementation of the EU plan to take over the peacekeeping operation. The proposal was made by Macedonian President Boris Traikovsky in a letter to NATO Secretary-General Lord George Robertson. According to Macedonian leaders, the NATO mission should be replaced in January next year by a mostly civilian taskforce for "regional integration". It could include support for military reform across the Balkans, anti-terrorism, intelligence-sharing, and border monitoring. The North Atlantic Council decided on 11 October to extend its peacekeeping mission in Macedonia from 27 October until 15 December, after the Netherlands had agreed to carry on leading the force for the extra seven weeks.

b) Kosovo
(1) In the first days of October it was reported that the Swiss "Swisscoy" peacekeeping contingent will be issued with assault rifles, pistols, submachine guns, and pepper spray, but may only use them for personal defense and not to enforce the peacekeeping mission. This is the first time Switzerland has deployed armed peacekeepers abroad. (2) The Council of Europe's Commissioner for Human Rights, Alvaro Gil-Robles, said that while the majority of the 850'000 displaced Kosovo Albanians who fled Kosovo have returned, only a few thousand of the 230'000 internally displaced Serbs have been able to do the same. (3) Municipal elections were held in 30 Kosovo communities on 26 October. 5'700 candidates vied for 920 seats. A typical election slogan of the Albanian parties was: "A strong local assembly is a nucleus for a future independent Kosovo". The Democratic League of Kosovo, led by Ibrahim Rugova, announced that it had won most of the votes. Fourteen out of the 30 local councils will be dominated by the party of Rugova. Radicalized and perceiving itself as neglected, the Serbian community did not show up on election day - a sad indicator of continuing antagonisms in the formally Serbian province.

c) Bosnia and Herzegovina
(1) The former Vice President of Bosnia and Herzegovina, Biljana Plavsic, pleaded guilty to one count of crimes against humanity committed during 1992-95 war. Plavsic spoke to The Hague-based ICC by video-link from Yugoslavia and pleaded guilty to the crime of persecution. When Plavsic surrendered to the UN Tribunal in 2001, she pleaded not guilty to eight counts of war crimes, including genocide. After the war in Bosnia and Herzegovina, Plavsic served as president of the Republika Srpska. (2) The fourth parliamentary elections in Bosnia and Herzegovina since the Dayton Agreement were held on 5 October. Turnout was very low and the nationalist parties representing the rival Serbian, Muslim, and Croatian communities made a strong comeback. The general elections of 5 October were the first self-organized vote without international observers after 1995. Despite the Western appeals to Bosnians to elect moderates committed to reforms and inter-ethnic cooperation, the nationalist blocs gained the most votes.

III. THE NATIONAL PERSPECTIVES OF THE BALKAN COUNTRIES: SPECIFIC ISSUES

1. Albania
On 4 October, Albanian Deputy Minister of the Interior Buxhar Himci and the country's chief of police, Veli Muftari, were arrested on charges of embezzling more than US$ 2 million and abuse of power.

2. Bulgaria
The Paris-based organization "Reporters without frontiers" rated Bulgaria 38th in the world for freedom of the press. The first four are Finland, Iceland, Norway, and the Netherlands. The US is 17th, Italy is 40th, the Czech Republic is 41st, and Romania is 45th.

3. Serbia and Montenegro
(1) The Parliamentary Assembly of the Council of Europe (PACE) agreed to let the Federal Republic of Yugoslavia join the CE. The FRY became the 45th member of the CE upon the hope that Serbia and Montenegro will find an agreement on the Constitutional Charter that will govern relations between the two republics. (2) The first round of the presidential elections in Serbia of 29 September had no conclusive outcome: 31 per cent of the vote was won by Vojislav Kostunica, the current president of Yugoslavia, 28 per cent went to Miroljub Labos, the Deputy Prime Minister of Yugoslavia. Third place, with 22 per cent of the votes, went to radical nationalist Vojislav Seselj, who was supported by Milosevic. The second round was held on 13 October and ended with an annulment of the poll. Presidential elections in Yugoslavia are only valid under the constitution if voter turnout is 50 per cent or more. The new elections are expected to be held on 5 December, one month before current president Milan Milutinovic's mandate expires. Notwithstanding the void poll, Vojislav Kostunica claimed victory. More importantly, Kostunica is seeking a new job in politics after the changes in the relations between Serbia and Montenegro enter into force. The 50 per cent voter turnout threshold was set by Milosevic when he was still president. (3) On 20 October, the independence-leaning coalition of President Milo Djukanovic's Democratic Party of Socialists and its Social Democrat allies won the parliamentary elections in the republic and gained 39 seats in the 75-strong parliament. These election results are indicative of a growing trend in Montenegro towards independence from Serbia. The turnout was 77.2 per cent of the voters - much higher than in the elections in Serbia and in Bosnia. The pro-confederation bloc, which advocates closer ties with Serbia, won 30 seats. The early parliamentary elections were a test of confidence in President Djukanovic after he conceded to Western pressure and agreed in March this year to give up independence plans and change the federation into a union. The present election results will empower Djukanovic to claim larger autonomy within the union of Serbia and Montenegro and even to seek future independence. The main political arguments of the pro-Serbian party in Montenegro are the historical ties with Serbia and the size of Montenegro as factors limiting the feasibility of independence.

4. Croatia
Croatia has rejected the indictment of the chief of staff of the armed forces during the country's war with Serbia, General Janko Bobetko (83), because to extradite him would question the general consensus on the country's war for independence. Any criminalization of the homeland war is unacceptable to the ruling Social Democratic Party in Zagreb. This is the position of the Croatian government regarding the demands of the ICC in The Hague. The military operations during the conflict with Serbs, according to the Croatian government, were a case of national liberation and there was no ethnic cleansing, killing of civilians, or looting of property. Under the constitution, General Bobetko was obliged to liberate the territory of Croatia from foreign occupation. Both EU and NATO officials have urged Zagreb to hand over General Bobetko to the ICC in The Hague.

IV. THE BILATERAL AND MULTILATERAL RELATIONS IN THE BALKANS. THE STATE OF THE REGIONAL INITIATIVES

1. Bilateral Relations

a) Bulgaria-Romania
(1) A joint Bulgarian-Romanian command-staff exercise began on 1 October at the Charalitsa training ground in Bulgaria. 150 Bulgarian and Romanian servicemen participated in the exercise, monitored by the ministers of defense and the chiefs of the general staffs of the armed forces of the two neighbors and NATO applicants. (2) Romanian Prime Minister Adrian Nastase paid a one-day official visit to Bulgaria on 29 October and met with his counterpart Simeon Coburgotski. The Romanian prime minister had three propositions: first, that Bulgaria and Romania should coordinate their progress towards future EU membership; second, that Bucharest become the region's energy stock exchange in exchange for Bulgaria's bid to serve as the electric energy center of the Balkan region; and third, that the governments of the two countries protect the respective minorities in the two countries - the Bulgarians in Romania and the Romanians in Bulgaria. The tandem formula for EU membership suggested by the Romanian prime minister must overcome a major deficiency: while Bulgaria has closed 22 out of 30 negotiation chapters with the Union, Bucharest has closed only 13. The question of Sofia as an energy center is due to the fact that 40 per cent of the region's electric energy are distributed by Bulgaria. Romania needs more capability before it can become the regional trading leader of electricity and establish a stock exchange. As for the Romanian national minority in Bulgaria, 1'088 Bulgarian citizens described themselves at the last census in 2001 as being of Romanian origin, and 10'566 as Wallachians. There is no doubt that hundreds of thousands of Bulgarians have lived on the present Romanian territory for centuries, and Bulgaria has not accused Romania of ill-treatment of this national minority. The two prime ministers need to meet more often and draft a working agenda on practical issues that could boost bilateral economic relations.

b) Turkey-Bulgaria
(1) Bulgarian Prime Minister Simeon Coburgotski paid an official visit to Turkey from 3-5 October and met with Prime Minister Bülent Ecevit and Turkish President Ahmet Sezer. This visit highlighted the good relationship between the states, despite the changes expected in Turkey during the upcoming in November early elections. (2) The Chief of the General Staff of the Turkish armed forces, General Hilmi Özkök, visited Bulgaria from 7-8 October and met with the Chief of the General Staff of the Bulgarian armed forces, General Nikola Kolev. This was the new Turkish military leader's first official visit abroad. General Özkök also met with Defense Minister Nikolay Svinarov, Prime Minister Coburgotski, and President Georgi Parvanov.

c) Albania-Italy
Italian Defense Minister Antonio Martino and the chief of the General Staff of the Italian armed forces, Rolando Moschini, visited Tirana on 1 October and met with Albanian Minister of Defense Pandeli Majko, Albanian Prime Minister Fatos Nano, and Albanian President Alfred Moisiu. The delegations of the two countries agreed to cooperate in restructuring the Marine Academy in Vlore and building an airfield in Pishporo - both projects being located in Albania.

d) Croatia-Serbia and Montenegro
The UN Security Council voted on 11 October to close its mission in the Prevlaka peninsula. According to a report presented by UN Secretary-General Kofi Annan, Zagreb and Belgrade have agreed to settle all remaining details concerning their relations on the strategically important peninsula by 15 December. The 27-strong UN mission will end its activity on 15 December after 10 years of monitoring the demilitarized zone in the Kotor gulf in the Adriatic Sea.

2. Multilateral Relations

a) Trilateral Relations
Macedonia-Bulgaria-Serbia. The mayors of Skopje, Sofia, and Nis in Serbia on 27 October launched a Euro-region called "The Soul of the Balkans" that is sponsored by the Council of Europe. The three neighboring communal regions will work top improve the economic, cultural, and educational relations. Working together will facilitate the overcoming of administrative and historic differences. The driving actor in this effort was the mayor of Sofia and former interim prime minister of Bulgaria, Stefan Sofiansky.

b) Quadrilateral Relations: Bulgaria-Romania-Turkey-Greece
The chiefs of staff of the armed forces of the four countries met in Sofia on 24 October for a unique and historic meeting, pledging to improve military and intelligence cooperation and to prevent terrorist attacks. General Nikola Kolev of Bulgaria, General Mihail Popescu of Romania, General Özkök of Turkey, and General Georgios Antonakopoulos of Greece signed a joint statement on these topics. The meeting also reiterated the support of Greece and Turkey for the NATO membership bids of Bulgaria and Romania.

3. Regional Initiatives: SEEBRIG
The Southeastern European Brigade for Military Cooperation (SEEBRIG) will move headquarters from Plovdiv, Bulgaria to Constantia, Romania in 2003. Romania has announced the allocation of US$ 7 million for the construction of the SEEBRIG headquarters according to NATO standards. On 14 October, the deputy defense ministers of the participating countries met in Bucharest to discuss security issues and attended a SEEBRIG exercise in Plovdiv.

V. THE ECONOMIC SITUATION OF THE BALKAN COUNTRIES AND THE REGION: BULGARIA
(1) The Japan Credit Rating Agency gave Bulgaria a BB+ rating on 4 October, with a positive perspective for Bulgaria's long-term foreign currency debt. The new rating is two levels above the rating issued by "Standard and Poors" and three levels above the rating issued by "Moody's" rating agencies. The Japanese rating is due to the assessment that the foreign debt is well-managed, and that the financial reform and the economic growth of Bulgaria are progressing well. (2) "Standard and Poors" credit rating agency raised Bulgaria's rating: the long-term state-guaranteed credit rating in local currency jumped from BB to BB+ with a positive perspective; the non-guaranteed foreign currency debt rating rose from BB- to BB, and the short-term debt remained at B rating. If privatization goes well in 2003 and if political support for the reform is maintained, the country's credit rating may be further improved. (3) The number of tourists in Bulgaria grew by 9 per cent during the first nine months of 2002. The income from tourism is expected to reach US$ 1.5 billion in 2002, compared to US$1.2 billion in 2001. The number of German tourists increased by 27.5 per cent, reaching a total of 454'176 by September. The number of British tourists is growing, reaching a total of 103'000 by the end of September, an increase of 64 per cent over 2001. The bad organization of tourist firms of Russia and Ukraine has led to a drop of 25 per cent in Russian tourists in Bulgaria, and a reduction of 45 per cent in tourism from Ukraine. According to Yannis Evangelou, chief of the organization of Greek tour operators, Bulgaria is the leader in tourism in the region, after Greece registered a 10 per cent drop of tourists this year caused by high prices.

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

1. EU

a) EU Enlargement towards Southeastern Europe
The last EC Report on Enlargement was confirmed by the European Council summit in Brussels from 24-25 October. Slovenia will complete its negotiation process by December this year, and will join the Union in 2004. Bulgaria and Romania have been provided with special "road maps" for integration and additional funds to complete the accession negotiations as soon as possible and join the EU as full members in 2007. Turkey was commended for the bold legal reforms that will bring closer the Union's acquis to Turkey's legal practice. Additional tasks were set to continue Turkey's preparation for accession negotiations.
Turkey insists on a date for opening negotiations and is threatening to let its relations with the EU deteriorate if it does not receive this clear signal. The foreign minister of Greece, George Papandreou, said there was no reason why the EU could not announce a starting date for Turkey's accession negotiations during the next European Council meeting from 14-15 December.

b) EU-Bulgaria
(1) Bulgaria on 1 October closed negotiation chapter 22 of its accession negotiations with the EU, entitled "Financial Control". Eight more chapters remain to be completed. (2) The Bulgarian parliament intervened on 2 October to clarify the country's negotiation position with the EU on the already closed chapter "Energy". The parliament said the 3d and 4th nuclear reactors of Kozloduy nuclear plant would only be shut down upon Bulgaria's EU entry in 2007. This clarification was adopted unanimously by all political factions in the national parliament. Bulgarian MPs have received substantial political support for this clear position by their counterparts of the European Parliament. (3) According to the last version of the Bulgarian Defense Ministry's White Paper on Defense published in October, Bulgaria plans to set up one mechanized and one engineer battalion as well as a chemical warfare monitoring unit to join EU rapid reaction force currently in preparation. A helicopter squadron and a military transport unit will also be part of the force. Bulgaria is also preparing units that will be ready to act within the framework of NATO.

c) EU-Turkey
The European Investment Bank (EIB) on 28 October granted  50 million for information technology and communications equipment in the Turkish education system. The project will include 6'800 IT classes in 5'100 primary education establishments across Turkey.

2. NATO
Bulgaria, Romania, and Slovenia continued their preparations for the NATO summit in Prague from 21-22 November, expecting invitations to join NATO as full members. Even in Slovenia, public opinion is beginning to favor this step; in Bulgaria and Romania, traditionally strong public backing continued. During the last tours of the three candidate countries, US NATO officials generally approved the present state of preparedness. British Prime Minister Tony Blair backed Sofia's NATO bid during Bulgarian Prime Minister Simeon Coburgotski's visit to London earlier in October. Romania concentrated on plans that would follow the Prague summit. This is a crucial period for the regional security situation, because after the three countries have joined, part of their activity within NATO will be to bring Albania, Croatia, and Macedonia closer to NATO membership, and Bosnia and Herzegovina and Serbia and Montenegro closer to the PfP program.

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

1. US

a) US-Romania
Romania offered the US logistical support for a possible attack against Iraq on 1 October. The offer includes the use of air corridors, air bases, and ports if the US asks for them.

b) US-Croatia
The military exercise "Phiblex 02" took place along the central Croatian coast from 2-6 October and involved 2'000 US and 200 Croatian troops. The exercise was aimed at training naval crisis-response planning.

c) US- Turkey
The US Department of State issued a clear statement in support of Turkey's efforts to join the EU on 9 October. The State Department considers the EC report, especially the recommendations to the EU to enhance its pre-accession assistance to Turkey, to be a positive step in this direction. The State Department hopes the EU will begin accession talks with Turkey as soon as possible.

2. Russia

* Russia-Bulgaria
The Bulgarian cabinet on 21 October approved a military technical cooperation agreement with Russia. The agreement, signed last month in Moscow, covers equipment sales, the exchange of military experts, and training. It will be valid for five years with an option for automatic renewals.

3. United Nations

* UN-Serbia and Montenegro, Bosnia and Herzegovina
SFOR troops in Republika Srpska on 23 October found evidence that the Orao company had exported military equipment to Iraq through Yugoslavia. On 23 October, Yugoslav Deputy Defense Minister Ivan Djokic was fired following allegations he was involved in the sale of arms from Bosnian Serbs to Iraq. The US accused the state-run Jugoimport company of shipping spare parts for MiG-21 fighter jets from Orao company in Republika Srpska to Baghdad. Belgrade also dismissed the head of Jugoimport, Jovan Cekovic, and ordered a full investigation. Further US investigations, as disclosed on 28 October, showed that Serb-dominated defense companies have been developing an Iraqi cruise missile for the past few years. Yugoslav scientists visited Iraq several times since early last year to finish work on the cruise missile contract, which was arranged by Jugoimport. Defense Minister Slobodan Bilic and army Chief of Staff Novica Simic of Republika Srpska resigned from their posts on 29 October after the government admitted that the state-owned Orao company had sold military equipment to Iraq in violation of the UN embargo. The Bosnian Serb Supreme Defense Council said the two men had not been directly involved in the sales, but had resigned to "improve the international position of the Republika Srpska and of Bosnia".

VIII. CONCLUSIONS
The combination of regional security fragility and regional stabilization in October in Southeastern Europe produced a tendency towards strengthening region-building. The wounds of the post-Yugoslav conflicts are slow in healing, but that there is progress cannot be denied in spite of the persistence of well-organized criminals and extreme nationalists. The fight against terrorism and the enlargements of NATO and EU to include Southeastern Europe have countered most of the destructive efforts in the region and have mobilized the democratic-minded people and their governments. The Balkan countries are still restless, but are also gradually assuming the features of a reliable partner in dealing with complex security-related issues.