the Seam Starts to Rip…
Interview: Serbian Deputy Prime Minister Miroljub
In Serbia, the heightened debate over Kosovo is
laced with the fear that solutions giving the province
a special status and eventually leading to full
independence could serve as a model for a similar
scenario in Vojvodina, says Deputy Serbian Prime
Minister Miroljub Labus. “Everyone who is
focused on the Balkans in some way should be aware
of that. The government will face a dismal political
agenda in 2006.” Labus does not believe that
anyone will seriously try to replace the government
in office, because it is always more convenient
to criticise than to carry the burden of governance.
By: Tanja Jakobi
man has no idea how much a load of 100 kilos weighs
until he gets to carry it. Then he gets a second
load, then a third… one political problem
after another. And the day is just too short with
24 hours – only after the tape recorder was
switched off did Deputy PM Labus allow himself to
make a whole-hearted observation that, squeezed
in between negotiations with the IMF and the EU,
discussions and resolutions on Kosovo and a tug-of-war
in the Serbian Parliament, describes the spirit
of PM Kostunica’s Government better than any
formal answer to a reporter’s question ever
These political burdens keep Labus assured that,
contrary to general convictions, he actually wakes
up each morning as Deputy Prime Minister of a government
in full swing and not an outgoing Executive. “If
the Serbian Radical Party and the Democratic Party
really wanted to depose us, they wouldn’t
find it too difficult to find the three parliamentary
votes they need. But which of them would take over
the work load? It is always much easier to stay
on the sidelines and criticise.
“…the Government has entered its third
year in office with solid chances to endure the
complete four-year mandate. If for no other reason
than because 2006 looks dismal before it has even
arrived, plagued with arduous political trials and
uncertainty; and minor, uncertain victories.”
Why did we allow ourselves to count down the
days until the IMF’s ruling over whether the
three-year arrangement had a positive or negative
outcome, instead of securing a new arrangement?
We are not counting the days. We are concluding
a three-year arrangement… After this we will
have fully resolved the issue of foreign debt, which
will record a significant drop in relation to our
GDP. We want to maintain good relations with the
IMF in the future and we are currently negotiating
the type of arrangement we could make next. Since
we have borrowed 150 per cent of our quota from
the IMF, the rules are that there will have to be
a stricter monitoring procedure for our country.
The Government is now discussing what form of co-operation
with the IMF would suit us best. We think this is
important because we want to lend support to our
international credibility even at a time when we
do not have full macroeconomic stability with respect
to inflation and the balance of payments.
A month ago you had a successful closure with
the IMF yanked out of your hands by the vote on
Pension Law amendments?
The Parliament is a sovereign authority and although
the Government has a majority of seats, this does
not mean it can have its own way over each and every
Back in 2000, when the relationship with the
IMF was renewed and the one-year and three-year
arrangements were put on paper, proceedings seemed
to flow more smoothly. Now everything begins with
maybe: maybe we’ll start negotiations with
the IMF; maybe we’ll reach agreement, but
no one knows when. Why are things so sluggish now?
It’s quite natural actually. When we started
off with new arrangements nothing was regulated.
There was a blank sheet and, thus, progress was
fast in that phase. However, the law of diminishing
returns is present everywhere in nature. Each subsequent
phase is harder to finish and the time span required
for completion keeps widening.
As someone who figured as the leader of the
reform process, what is your take on the course
of transition in Serbia? Do you feel somewhat overwhelmed
by the whole endeavour? Haven’t all the strains
and obstacles sapped you dry?
Politicians here do not have to enjoy their success,
but they have to keep their gaze fixed on the next
hurdle. When we entered negotiations with the IMF
five years ago, the issue of whether inflation would
be nine per cent or 13 per cent wasn’t even
on the table. Now it is, because it is a deeper
issue of macroeconomic stability.
The previous government included some of the
best Serbian economists, while some of those who
have taken over their seats are barely competent
to work in their field of expertise. How would you
describe this change within the Government?
I wouldn’t like to go into details about
whether ministers are doing their jobs properly.
Part of our success is due to the fact that ministers
from G17 Plus are reform-oriented and do their job
well. Several other ministers are also doing a good
job and, hence, we have a critical mass for changes
that result in visible progress. Naturally, I would
like us to have this quality of work in some other
areas as well, above all in the judiciary, but this
seems to be a more difficult task than streamlining
What are the priorities in 2006? We have Kosovo,
the EU, and the IMF. Is there room for elections
on this agenda?
I don’t think there will be any elections,
but in saying this I have to stress that we are
talking about degrees of chance. 2006 will be a
year of great political challenges, but from the
perspective of EU integration it will be a year
of tangible results. From an economic perspective
it will be a good year as well, because the time
is ripe for all we have done to yield results. The
level of economic activity in the last quarter of
2005 gives weight to such forecasts.
Looking from the outside, it seems the Government
does not have a clear strategy for, and vision of,
Kosovo. If we look at negotiations with the EU,
all we can see in press reports is that various
representatives of the Government have been silencing
These are minor details. We have a platform and
a strategy for negotiations with the EU and the
only problem is posed by a dysfunctional state union…
As for Kosovo, it is true that we are behind schedule,
but we are dealing with a complicated matter. A
year ago we knew what we were not going to accept.
Now we are starting to shape the contours of what
we want. We have a clearly defined starting position,
so it remains to be seen how the other side will
react and how Marti Ahtisari will facilitate the
Nevertheless, DSS has returned to the “we
aren’t handing over Kosovo” rhetoric
after a long period of calm, when everyone is aware
that there will have to be serious and radical compromises.
From my point of view it is important to respect
two principles and find a balance between them.
The first is territorial integrity and sovereignty
and the second is human rights. There is a well-grounded
anxiety over territorial integrity and sovereignty.
I think it is no coincidence that issues of minority
rights in Vojvodina and special status for this
province have surfaced just ahead of negotiations
over Kosovo. Some people feel that pressure politics
are being applied here and that the practice of
raising issues of territoriality and special status
as an intermediary stage towards changing borders
could spread to Vojvodina if we succumb during negotiations
over Kosovo and Metohija. When the seam starts to
rip, there is no stopping it anymore.
People around us and in Europe have to understand
that these anxieties are quite plausible. Everyone
who takes part in policy making in the Balkans has
to know whether they are searching for a solution
with their course of action or if maybe their partial
interests are being satisfied at the expense of
Serbia’s reputation and territorial integrity.
I will state the opposite: this kind of behaviour
could provoke a reaction that will not be useful
Could this resemble a process similar to the
dissolution of the former Yugoslavia, only on a
smaller scale and without war?
The problems that flew out of the Pandora’s
Box that snapped open with the break-up of Yugoslavia
still loom large, and those who allowed the break-up
to happen the way it did cannot shift the burden
of responsibility onto us. There will not be war
or conflict, that is for sure, but we cannot rule
out a tightening of relations in the region. The
interests of Serbia have to be taken into account
in each of these matters, because there is simply
no stable solution otherwise.
Although other people acted as chief negotiators
during the break-up of the old country, chiefly
Milosevic, it seems that we still have a tendency
in Serbia to undermine our own credibility with
internal rows and either the lack of a clear vision
of what we want, or by failing to articulate this
vision before the international community. Why are
we making things difficult for ourselves yet again?
We still have unfinished business with problems
that came about with the break-up of the former
Yugoslavia. We are a country that has only recently
emerged from conflict; there is an overwhelming
unemployment rate, the country is in transition
and, on top of all that, it has to resolve some
basic issues of international status. You cannot
expect everyone to whistle the same tune in a situation
like this, because different layers of society are
hit in various ways by what is happening right now.
On the other hand, a number of political parties
that tried to settle the issue of Kosovo by applying
force still have significant electoral support.
These parties have also garnered significant support
because people have great difficulties making ends
meet and usually everyone starts accusing the government
when times are hard. This applies to all states
in transition, but what exacerbates the problem
here is an unresolved basic issue of status at a
juncture when the Government is putting effort into
a sensible solution through dialogue, but on the
other hand faces the prospect of being penalised
by voters for leading a responsible policy of economic
and political reforms. We then have to ask who will
resume these negotiations or lend support to their
What is your personal take on all that? It
seemed that you were more involved in all the important
debates under late PM Zoran Djindjic’s authority
and that you had more impact on political and economic
issues. As G17 Plus, you have now surfaced with
a somewhat different platform centred on Kosovo.
Is it because you do not feel fully comfortable
in this style of government?
We came out with this somewhat outstanding idea
after the election results in Kosovo that shocked
everyone, both here and abroad. We put forward a
proposal to co-operate with the world and to schedule
an international conference. At that time we had
no support either in or out of the country, since
the Serbian Government was not recognised as a legitimate
negotiator back then (he only recognised negotiators
were Kosovo Serbs).
Today the situation is different, because the
Serbian Government is also a valid negotiator. Opinions
have also changed here about how to solve the problem
of Kosovo within a wide-ranging definition of autonomy,
and different solutions are possible… In the
meantime, the Prime Minister and the President of
State have emerged with some solutions to which
we now lend our support. What we suggested was one
of several options that lie on the table and all
of them should remain open for the time being.
When is it realistic to expect a fresh one-year
arrangement with the IMF?
I think they have made clear that it is not sensible
to start negotiations before we know who the negotiators
are, in other words, before the referendum in Montenegro,
meaning that we cannot expect them to start before
You said that 2006 could be a year of privatisation.
How might this privatisation work in practice if
our credibility is dented by the absence of an arrangement
with the IMF and an unstable political situation
Our aim is to conclude the process of privatisation
by the end of 2006, but I cannot offer any guarantees,
because if there are no investors there is no privatisation.
The investor community, on the other hand, is aware
that we are keen to finish this process in as soon
as possible and, accordingly, keep lowering their
offers. The issues of Kosovo and the process of
privatisation are not directly interlinked, but
the course of negotiations over Kosovo gives a general
flavour to political stability in the country and
investors are very sensitive in that respect.
Another problem that arose during IMF negotiations
was that of the concession for the Horogos –
Pozega motorway. The IMF saw a high risk in this
project and said the feasibility study for this
concession was all wrong.
Of course there are risks, but ask the people from
the IMF how they would embark upon a risk-free project
to build a motorway. If the state borrows money
they say it overstretches the foreign debt, and
if it gives concessions there is a risk the budget
will be unable to support them. But you cannot build
a road without some risk. The IMF looks at these
matters merely by calculating the balance of payments,
while the Government has to include calculations
of the balance of payments, inflation and economic
growth. You can’t have the last of these three
without building an infrastructure to support it.
Does this mean you were unwilling to forego
this plan during negotiations with the IMF?
We can understand the IMF and their focus on balance
and inflation, but this kind of narrow policy is
detrimental to economic development and we are the
ones who have to find a sensible measure between
development and macroeconomic stability. This is
the central issue of negotiations at the moment.
Foreign diplomats would like to see written
consents by DSS and DS on the same piece of paper
for an agreement on Kosovo? This opens up the issue
of political consensus that seems beyond reach at
It goes without saying that the sooner we reach
a consensus, the greater our chances of gaining
a solution in accordance with our interests. But
the fact is that a structure for negotiations of
this kind is still in the making in Serbia.
When you compare the international reputations
of late Prime Minister Zoran Djindjic and current
Prime Minister Vojislav Kostunica, isn’t there
an obvious discrepancy?
I wouldn’t like to draw such comparisons.
In the first year of office there truly was a dilemma
over whether this Government was capable of leading
a pro-European and pro-reform policy. There is no
such dilemma anymore. You could criticise us for
being too slow with reforms, and we are unsatisfied
with their pace as well, but there is no questioning
our pro-European and reformist orientation.