Politics Update

It looks as if we are witnessing the beginning of the end of the current government as the political situation in Serbia becomes clearer.

The rough timescale of events will be as follows - the finalisation of the new Serbian constitution, a referendum on the constitution in October / November and finally elections in December / January.

President Tadic and PM Kostunica have agreed on this loose timescale and are also close to agreement on the form the new government might take. In plainspeak this means who gets what ministries. Some are speculating that Kostunica may actually remain Prime Minister and in return Tadic will be backed by Kostunica and his satellite parties in the Presidential elections. Talks are ongoing and who gets what will be influenced by the election result.

The Serbian Radical Party is also playing ball and is being consulted before the final text of the constitution is written up and brought before Parliament.

What does this mean in terms of Serbia's short to medium term future? Almost certainly another 'democratic' government which should be comfortably in place before Kosovo is proclaimed conditionally independent. This government will likely serve a full term.

In terms of party politics it signifies the return of the Democratic Party to government as the leading reformist party as they will receive the lions share of votes from the democratic block voters. However, it also means an almost amazing turn around in fortune for Kostunica and his DSS. It looked as if his favourite pet project, the constitution, was dead in the water but he may well toast success now. This, coupled with funds from the NIP, will allow him to build up some momentum before the election date and perhaps allow him to steal a few points away from rival parties. If his DSS manage 15 percent they will be delighted.

The Radicals have no interest in power at this point - harbouring no desire to be governing whilst Kosovo goes independent. They thus sacrifice their chances of governing for a further 4 years. Of course they reserve the right to take to the streets on Kosovo and to perhaps try to topple the government that way. Still, its interesting to speculate about how the Serbian Radical Party will look at the election after next. If the democratic block does throw its full weight behind Tadic at the Presidential elections the Radicals will likely face further electoral defeat.

Smaller parties, such as Cedomir Jovanovic's LDP may enter parliament, ironically also due to the constitution. LDP will bitterly campaign against the constitution due to the clauses naming Kosovo an integral part of Serbia.

But for once it looks like events are conspiring in Serbia to produce a more positive outcome.

PS Where Mladic fits into all this is anyones guess. Thinking off the top of my head it might be seen as potentially risky to deal with it now - meaning that the most likely (or optimally the best) time to locate and arrest will be in January.

tags: politics, elections, Serbia, constitution

Battle for third mobile operator begins / NIP

Somewhat sooner than expected, the Serbian government announced that the license for the third mobile phone operator, to compete against Telenor and state owned MTS, would be granted before the end of the year.

The news suggests that the Serbian government did a good job in selling Mobitel to Telenor since some observers claimed that part of that contract would be to give the winner at least 6 months of 'breathing space' before having to compete against a third rival.

As previously stated the starting price for the license will be 320 million Euros. Potential bidders include France Telecom, Oraskom (Egypt), Deutch Telekom (Germany), Telefonika (Spain), KPN Mobile (Holland) and Mobilkom. For now there is no word from mobile giant Vodaphone who have an agreement with Mobilkom not to compete on the same market.

The favourites must be Mobilkom who want to be present on the Serbian market as part of their wider regional strategy. But the same is true for Deutch Telekom (T-Mobile).

For now most analysts are keeping silent on how much they believe the government will bank but government sources suggest that any sum over 500 million Euros will be highly satisfactory.

And much of that total will be ploughed into the National Investment Plan which is a smart strategy for governing DSS since polls suggest that the Serbian voting public is rather keen on the NIP. Rather predictably the IMF have been sounding the alarm bells on the same issue. They claim that the money could be more wisely spent and are worried about the potential inflationary pressure on the economy.

It is crucial that funds from the NIP are wisely spent since there are only a few more large scale privatisations left to be carried out in Serbia - such as NIS (Oil Industry of Serbia). And one must be wary of the government tending to spend money on projects they believe will increase their popularity rather than benefit the country in the longer term.
However, many of the projects, particularly relating to infrastructure are necessary and long overdue. The current government may be fortunate to find itself in this position but if the money is well spent the current government will deserve to be remembered positively, on this issue at least.

Media Roundup - The Dreaded M(ladic) Word

The man who never seems far from the headlines - Ratko Mladic is again the subject of conjecture in the Serbian media.

The latest speculation seems to centre around an alleged Russian connection. Namely, during the Bosnian war Mladic appears to have bought weapons from the chief of Russian State Security Stjepasin. And yesterday it materialised that one of Mladic's right hand men, Marko Lugonja was arrested just minutes before his flight was due to take off - bound for Moscow. One version claims that Lugonja had already boarded the airplane but men in suits burst into the aircraft and then detained him. The other, preferred by Lugonja, is that he was stopped at passport control.
The operation was co-ordinated by the Special War Crimes Prosecutor Vukcevic in conjunction with the security agency BIA.

Either way the event was something of a fiasco since although Lugonja was meant to appear in court soonish, he still had the use of his passport and was technically was free to travel. Its not immediately clear why this occurred but with the Serbian record of letting suspects flee, hardly surprising.

Logonja now claims that the whole incident was set up with the intention of impressing the 'internationals' and Carla Del Ponte. As in many shady episodes in the Balkans there may be some truth in this - but of course this doesn't mean he didnt intend to flee.

Another Hague indictee Goran Hadzic is also (somewhat suspiciously) making the news. In what feels like a PR campaign by the Serbian government the potential arrest of Hadzic is being touted in the media as a possible offering to Del Ponte and the EU in return for the continuation of Serbian EU integration.

Sources quoted in the media say that if the EU refuses to continue the talks then the government will be forced to call a general election.

Are the Europeans impressed? Will Serbia go to the polls yet again this October?
Stay tuned.

Opinion Poll - and its potential impact

One should always take opinion polls with a pinch of salt but this one conducted in Serbia from the 21st - 24th July by Strategic Marketing (one of the most respected pollsters) has caused recent comment. Its part of the poll I mentioned below regarding Europe.

The usual 'how high can the Radicals go?' question reverted to the 'who is in the lead?' question which we haven't seen in Serbia for many months:

The Serbian Radical Party 36 percent
Democratic Party 31 percent
Democratic Party of Serbia 11 percent
Socialist Party of Serbia 5 percent

Parties G17, Nova Srbija, LDP (Cedo Jovanovic) follow on under the required census.

The poll is extensive and is part of the stats I gave below on the EU (hmm why are CESID and others only commenting now?) and provides interesting statistics on a number of other issues including the most pressing public concern (unemployment) and public optimism - people are predictably negative.

Conclusions? For the first time in many months, if elections were to be held tomorrow DS and DSS could form a government. That's a government without the need for hangers on, grand coalitions between parties etc. Both DS and DSS support is rising even if support for the Radical party is also in the ascendancy.

This throws a bit of a spanner in the works since senior members of the Kostunica government recently took the decision to continue with their current government until early next year. Not such an easy 'decision' to make when your coalition parties are threatening to steal the rug from under your feet. But Kostunica has a contingency plan involving bringing other parties into the government coalition to fill the gap.

The poll might put DSS in a slightly stronger negotiating position with these smaller parties - at least temporarily. After all Kostunica has less to lose than they do if he calls elections.

Serbian media roundup

This is the first in a regular series of fortnightly reports on a subject(s) in the Serbian media.

In conjunction with the OSCE Blic newspaper recently chose a female government - that is a government with every Minister represented by a woman. One woman was selected as Minister by readers every day out of a list of successful women.

Of the better known women Zorica Tomic (writer, lecturer) was chosen as Minister of Culture, Princess Jelisaveta Karadjordjevic was selected as Minister of the Diaspora, Milka Forcan (PR manager at Delta - Miskovic) as Trade and Tourism Minister. Ivana Dulic-Markovic (prominent because of the recent 'ustasa' jibe) was voted Vice Prime Minister and Ruzica Djindjic (wife of assassinated PM Djindjic, involved in a number of humanitarian and environmental organisations) chosen as Prime Minister.

Initially I was skeptical, although I support the rights of women, in my opinion there would be little difference in the world if women traded places with men in senior positions. That is because sex or gender is much less important than the culture of power and the system in which the human race currently finds itself. Thus, when you read the words of some editor or from some of the women involved that they are 'convinced that the world would be a better place' (if they were to run it) one feels a little dubious.

However, after consideration, I agree that this campaign of promoting the profile of professional women is beneficial to society. Equally there is something to be learnt from all of this in terms of future politics in Serbia. The women who were selected in the most senior roles are here to stay in Serbian politics / public life.
Ruzica Djindjic's vote was particularly impressive, 1689 votes, and the only candidate throughout the series that really made an impact on the public - she received thousands of votes and trounced her competitor for the PM spot, Vesna Pesic.

This confirms my opinion concerning Ruzica Djindjic - that if she wants to (and those who know her say that she will wait for her children to grow up before a final decision) high office is hers for the taking. Other opinion polls have confirmed this. Some months ago senior Radical Party officials decided on a policy of targeting her but when it became clear that she currently has no interest in office the attacks ceased. The implication is clear.

An advert published in Serbian newspapers

Interesting little tidbit. This week an advert appeared in the Serbian media asking candidates to apply for translation jobs. Languages that need translating include 'Montenegrin' and 'Bosniak'.

The advert itself was paid by a Croatian company that didn't feel the need to translate their job description into Serbian either which was a little odd considering the implication that they (Serbian, Croatian, Bosniak) are all different languages. The lucky candidate selected can count on earning about 5 Euros per translated page

Whilst the Serbian media has found the topic rather amusing - there are very few differences between Montenegrin (as its now called) and Serbian that isn't the point that concerns me.

What puzzles me now is this emergence from 'Bosnian' to 'Bosniak'. Not necessarily the insistence of a separate ethnic identity which used to be called Bosnian Muslum or Slav Muslum but now a 'new' language to boot. Evidence of further balkanisation? How long will it be before the Bosnian Serbs press for their own language? How long before the people of Porec claim they are speaking Istrian? What chances are there for Vojvodian or Hercegovian peoples be allowed to claim the right to their own language?

Or have I misread the advert and the idea behind it? Are they saying that only Bosniaks (Bosnian Muslums) need apply? Its hard to keep up with the idiocies of fragmentisation but I'm not the only one who is confused by all this.

How Much does Europe like Serbia?

Leaving the dry topics to one side the European commission conducts polls concerning EU member and non member states. One of them is to canvas opinion on how European citizens view other countries.

These are the results of the latest poll - whether EU citizens see potential Serbian EU membership as positive or negative:

Germany 37 percent for Serbian EU entry 55 percent against
France 50 percent for 41 against
Spain 50 percent for 18 against
Austria 30 percent for 65 against
Slovenia 66 percent for 29 against
Poland 60 percent for 22 against
Sweden 64 percent for 24 against
United Kingdom 41 percent for 37 against
Hungary 43 percent for 45 against
Greece 67 percent for 32 against
Slovakia 56 percent for 32 against

Looking at this from the point of view of traditional friendships there are few surprises here. The Germans and Austrians particularly oppose Serbian EU membership, the Greeks, and Scandinavian countries support Serbian membership strongly with most others broadly supportive. Another positive for Serbian EU membership is that the important players in the region like Poland and other EU countries such as Slovenia, Czech Republic and Slovakia also back Serbia.

These stats weren't from the original source which may be here:
http://ec.europa.eu/public_opinion/archives/ebs/ebs_255_en.pdf

Apologies, I tried to get the original stats but my computer hates pdf's just like me.

And how much does Serbia 'like' Europe? A survey was conducted from 21st July to 24th July on EU membership by Strategic Marketing.
The question was 'Do you support (Serbian) membership of the European Union?'
57 percent answered 'for' (yes)
27 percent 'dont have an opinion'
9 percent are 'against' (no)
7 percent answered 'not interested'.

Serbian government sells Mobi63

Telenor beats off Telecom Austria to become new owner of Mobi63. In a bidding process covered live by Radio Television Serbia the Norwegian company and Telecom Austrias traded bids but the Norwegian company came out on top.

The future of the company formerly known as Mobtel has been in the balance for some time. Firstly there was the dispute over the ownership structure that was being mulled over by European arbitrators. Then there was the alleged deal that former owner Bogoljub Karic made with Russian businessmen on selling his company BK Trade - which owned a reported 70 percent share of Mobtel. The Russian bid vanished and this quickly metamorphasised into the same deal but with Austrian 'freelancers' Martin Schlaff and company. Schlaff and his consortium specialise in the purchase of difficult companies (particularly in Eastern Europe) which they then sell on making a few million Euros profit into the bargain. The advantage in hiring somebody like Schlaff is that it prevents companies from getting their hands dirty or from getting their fingers burnt. Anybody interested in Schlaffs dubious past should check this:

http://online.wsj.com/public/article/SB115447779657224034-c41dBtbqmiHahGgVvf1Ziysq3OQ_20060808.html?mod=regionallinks

In the case of Mobtel Karic and Schlaff signed a secret agreement that (we presume) covered every eventuality or possibility. Nobody is certain how much Schlaff paid for BK Trade although 100 million is mentioned. In the end it turned out that Schlaff only had ownership of 20 percent of Mobtel (mobi63) shares. Alongside that the Serbian government promised Schalff that he would be given a fair chance to purchase the rest of Mobi63.

(The 20 percent share was the result of the decision of the Serbian government to finally pursue Karic for a number of infractions which Mobtels management committee had made. Those more sympathetic to Karic would say he was a victim of politicians who were afraid that he had grown too powerful. Both views have merit. )

In the end the sale of Mobi63 surprised most observers.
Firstly it was expected that Schlaff and Telecom Austria would see off the competition - some were concerned that the Serbian government had met with Schlaff, Austrian officials (Telecom Austria is partly owned by the Austrian government) and Telecom Austria representatives. This led to the suspicion that somehow the Serbian government would favour the Austrian bid. This belief proved false.
Secondly the sum of 1.53 billion was at the high end of the scale. Most predicted that the company would be sold in the range of 900 million to 1.2 billion Euros.
Thirdly it was clear that the Austrians deliberately tabled a low initial bid knowing that they could match any bid made and lose out because of their low initial bid. In practice this ensured that they would receive more for their 20 percent share of Mobi63 sold to them by Karic.

From a Serbian perspective the sale is good news since about 1.1 billion Euros will go to the Serbian government. (The remaining sum will go to Schlaff / Telecom Austria.)
This means more money will be earmarked for the projects of the national investment strategy.
Money that many say which belongs to the Serbian people but was stolen from them by the Milosevic era oligarchs.
The process itself was open, transparent and whilst it might not encourage new investment it shows that companies that want to invest in Serbia do not need to grease palms in order to receive fair treatment. (Even if corruption remains a problem in Serbia)

And what do Karic and Schlaff have to say about it? The latter claims he was 'conned' by the former. The former says that Mobi63 was worth 3 billion Euros. Does anybody truly believe either claim?

Of more concern is the potential case that Karic could have were a sympathetic government to come to power in Serbia. Some legal experts claim he has a case. On the other hand if Karic were to try to receive financial compensation at a later point it would likely go down very badly with Serbian voters. Karic would be more inclined to trade this potential legal route for dropping charges against him and his family for the various financial misproprieties they committed over the years.

One additional detail which makes the case more interesting - the introduction of a third mobile operator on the Serbian market. The Serbian government has confirmed that there will be a third operator but there is a little confusion concerning the time scale. Some observers thought that the Serbian government had promised that the winner of Mobi63 would be granted a year or so before the license for a third operator would be issued. This, it was thought, would bump the price up of Mobi63 a little more. However, government ministers are giving contradictory statements to the media on this.
Some say that those interested in the license can put in an application immediately and that within 6 months they will be competing for customers. Others say that part of the deal signed states that Mobi63 will have a year breathing space before a new competitor challenges.

Either way the minimum price for the license will be set at 320 million Euros. Telecom Austria has already stated its interest.