New UN mission in Kosovo: reopening factories

Efforts to clean up polluters and attract investors face an uphill struggle.

The big Trepca lead smelter here in northern Kosovo lies empty and still on a late-summer morning.

The workers are gone, the furnaces are cold, and what was once not long ago a powerful engine of the Kosovo economy is now a sprawling complex of rusting steel, crumbling brick, and broken-down machinery.

The only souls stirring on a recent day are members of Kosovo's international police force, who stand at the gates holding automatic rifles and wearing white surgical masks.

"It's an unhealthy atmosphere here," says Murad Al-Abbadi, the Jordanian officer in charge. "It's dusty when the wind blows."

It was lead-tainted smoke from the smelter that prompted United Nations officials in Kosovo to shut it down last month. In an operation that gave new meaning to "hostile takeover," NATO-led peacekeeping troops slipped inside the gates early in the morning of Aug. 14 and seized control.

This dramatic action gave the UN control not only over an aging smelter, but over a conglomerate of more than 40 mines and related factories producing such goods as paint, crystal, and batteries. As recently as the 1980s, Trepca employed more than 20,000 workers. By wresting it away from Serb management, which had refused to cooperate with Western officials, the UN also won an important political victory. But now that it has Trepca, what will the UN do with it?

No one knows for sure. But it may become a case study in efforts to boost the economy. Over the coming months, experts will study the Trepca conglomerate, including the smelter at Zvecan, to determine which parts can still turn a profit and which must be left to the dustbin of history. Then, the UN says it will seek private investors willing to scrape away the rust and get the good parts running again.

Ethnic Albanian workers at the Shock Absorber Factory just outside the Kosovo capital, Pristina, have discovered just how tough this can be. Until 1989, when Serb authorities fired them, the factory employed 1,500 people and produced more than 3 million shock absorbers a year.

In July 1999, the Albanian workers began to return. The plant managers prepared an ambitious business plan, spiral bound and in seven colors. They contacted their old customers in Turkey and in Western Europe. They traveled to car fairs in Frankfurt and Paris.

More than a year later, they still haven't found the "strategic partner" they are looking for. "Sometimes I have the impression that the water is flowing downstream, and we are swimming up," says Besim Hasani, deputy manager for economic issues. "It's very difficult."

Since NATO-led forces occupied the province in June 1999, Kosovo has been afflicted not only with continuing ethnic violence, but by unemployment that some estimates place as high as 65 percent. Many officials say that putting people to work is a necessary step toward the peace that continues to elude the province.

"I think where you have economic activity, where people can see where they're going and where they have the hope of jobs, you have a much better chance of things getting stable than if people don't see any future," says Alan Pearson, head of economic development for the UN administration.

Kosovo was never blessed with great industrial development. Today, most experts agree that the future lies not in Kosovo's old factories but in new companies that are better suited to a modern market economy. The problem is that few investors want to risk their money in Kosovo. The province has no bankruptcy or contract laws. Plus, it is hard to say who actually owns most factories. Most larger businesses in the former Yugoslavia were publicly owned and run. The UN, reluctant to privatize factories in what technically remains a province of Serbia, has opted for a short-term solution: leases for periods of up to 15 years. The Sharr Cement Works in southern Kosovo is already working under Swiss management. Over the next six months, the UN plans to explore similar options with 30 of Kosovo's largest factories.

Officials are optimistic that parts of the Trepca mining company, including the Zvecan smelter, will prove attractive to investors. They have raised $16 million to study the complex and to begin cleanup operations. But no one knows yet if the Trepca mines still contain enough good ore to feed the smelter. It is also uncertain how many workers Trepca could employ.

Meanwhile, Serb workers trickle up to the main gate each day, asking about their old jobs. The UN pledged to hire 2,000 workers to clean up both the Zvecan smelter and a zinc smelter in a nearby Albanian area. But after that, it is making no promises.

"I hope that everything will be all right," says one worker, a former crane operator. "But we can only hope."

(c) Copyright 2000. The Christian Science Publishing Society

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