Speech before the Los Angeles World Affairs Council on March 21, 2001:

His Excellency Milan Panic
Former Prime Minister of Yugoslavia 
CEO of ICN Pharmaceuticals, Inc.


"Peace and Prosperity in the Balkans"

First, I’d like to thank the Council for inviting me to speak today. I have spoken here in the past, and you should be proud of the role you play in advancing understanding of foreign policy in our country and contributing to the debate that is so important in our democracy. Your speaker list is truly impressive, and I am proud to join that list once again.

When I first discussed this speech, I agreed to title it “Peace and Prosperity in the Balkans” because that must be our objective and I am by nature an incurable optimist. Some would argue that recent events in the Balkans could cure anybody of optimism. But I am not discouraged. Let me tell you why I believe that, despite the obvious problems, there are very good reasons to hope for peace and stability in the Balkans, and what I think we can do to help determine the course of events.

Following the recent electoral defeat of the Milosevic regime in Serbia, democracy now reigns in all of the countries of the former Yugoslavia. They have turned away from militant nationalism and are beginning to establish the economic ties that are essential as a basis for Balkan stability. The five nations that emerged from the wreckage of the former Yugoslavia now recognize that their future depends upon working together for the regional economic development needed to provide jobs and hope for their people. Stimulated by the support and policies of the Stability Pact for Southeastern Europe, which is funded by our country as well as the Europeans, the Balkan nations are eliminating barriers to the movement of goods and services and are signing free trade agreements with each other. So when it comes to regional economic cooperation and development, things are beginning to move in the right direction.

But make no mistake; dark clouds still hover over the area. While the ultranationalists who sought a Greater Serbia and a Greater Croatia have been effectively silenced, we are now confronted by yet another nationalist threat, for the proponents of a Greater Albania remain militantly active. As we read every day in the newspaper, there has been armed action by Albanian insurgents in the Presevo valley in southwestern Serbia, adjacent to Kosovo, and now even more serious action inside the Macedonian border with Kosovo.

The problem is not just the militants. Even the current moderate Albanian leadership in Kosovo has stated that there can be no future for Kosovo within the borders of Serbia. Although they reject violence as an instrument of policy and are critical of the insurgents, they openly espouse independence as the only solution for Kosovo. In private, some go further and acknowledge that their ultimate goal is unification of all Albanians in one state. This posture keeps the ethnic pot boiling below the surface in neighboring Macedonia, where Albanians make up one-third of the population, concentrated largely along the borders with Albania and Kosovo.

A partition of Kosovo, while difficult to map, might eventually be acceptable to Serbia and the Kosovo Albanians. The problem is that it would not end there. This solution would encourage independence-minded Albanians in Macedonia. This could be seriously destabilizing to that small nation, and as we know all too well, instability in one part of the Balkans can spread very easily.

Rather than go down that dangerous road, I believe we should address the issue of Kosovo in a way that allows time for economic development and strengthening of democracy in the region while minimizing ethnic conflict.

First, in the short term, NATO forces must take resolute steps to blunt the bold new Albanian insurgency that has spread into Macedonia. NATO has already negotiated an agreement with the new SerbianlYugoslav government for limited participation of Yugoslav forces in a key border area where Albanian insurgents have been active. That is an encouraging step.

Some, including our own Los Angeles Times editorial page, believe that this will result in greater ethnic tensions while undermining NATO’s credibility. I disagree. I believe NATO is showing that a new Yugoslavia, under democratic leadership that rejects ultra-nationalism, is prepared to protect all of its people without trampling on the rights of other nationalities.

I think it is also appropriate that NATO is taking steps to block the flow of support from Kosovo to insurgents in Macedonia.

We must demonstrate by word and deed that the United Nations mandate for Kosovo and the adjoining areas is to protect everyone’s fights evenhandedly. Albanian insurgents and their supporters in the broader Albanian community must be made to understand that they will not be permitted to spark another sustained ethnic conflict. We must make it perfectly clear that we will not permit the future of Kosovo to be decided by armed insurgency.

In the long term, the sensible way to give the region time to choose economic and political development over ethnic conflict would be to declare Kosovo a United Nations protectorate for the next five years. By placing Kosovo under its protective wing, the U.N. would stabilize the political atmosphere and push back for five years dreams of independence and a Greater Albania. The development of democratic public institutions and the rule of law could proceed in an orderly manner, and the hopes of ethnic Albanians, like those of Serbs, for economic development, peace, and stability would derive from cooperation with the United Nations, not from ethnic insurgency.

To be sure, this would require a continuing commitment by NATO, including the United States — and I stress that — including the United States, to provide the bulk of the peacekeeping force and logistical support. And the truth is that the thinking of some of our policy makers is headed in the opposite direction, toward a quick --mythical, in my view -- exit strategy.

But there are no quick and easy fixes in this troubled region. We have invested too many resources in peacemaking and peacekeeping in the Balkans to pull out before there is a reasonable chance for sustainable peace and stability.

Of course preventing violence is critical to the peace and security of the people who live in this troubled region. But if democracy is to survive in Yugoslavia and the other Balkan nations, those nations and the world must also turn their attention to the economy. In the long run, James Carville’s famous words, “It’s the economy, stupid,” apply to politics in the Balkans just as they apply here.

And although this active Albanian armed insurgency is limited to specific areas near Kosovo and inside Macedonia, it does serious harm to the atmosphere for investment in all parts of the former Yugoslavia. To counter this, we must maintain a vision of full political and economic integration into Europe for all of these countries. The major institutions that form the basis for Europe’s strength — especially the European Union -- must be open to all of the nations of the former Yugoslavia. It is critical to the future security of Europe. So it is in the interest of the entire continent to expedite economic integration. Creativity is needed to establish a fast-track process, with requirements reduced to the absolute essentials for membership in the European Union.

With regard to Serbia, the nation of my birth, we should recognize that its new leaders are faced with the extremely difficult task of establishing a society that upholds the democratic rule of law for the first time in more than half a century. As a measure of how well they are doing, we are watching closely to see whether Slobodan Milosevic is brought to justice.

Milosevic must and will face justice for his crimes. But I think we need to be careful about using this as the sole measure of their commitment to democracy. Judged by our standards, they may not always be moving as rapidly as we would like in taking legal action against Milosevic and his cronies or in cooperating with the Hague. But they are moving as rapidly as they believe they can to replace the layers of corrupt officials of Milosevic ‘s kleptocracy with judges and others of personal integrity. This takes time, and it doesn’t help to burden them with deadlines and economic ultimatums, which in effect undermine the development of a free market economy essential to support Serbia’s fledgling democracy.

They know what they have to do and are proceeding as best they believe they can within the constraints of a political system in complete transformation. We can help them best by showing a little more patience and understanding.

In summary, I remain optimistic about developments toward peace and prosperity in the Balkans. In some ways, the actions of the Albanian insurgents have been a wake-up call to the region and the world. They have sparked a round of necessary communication and negotiation among NATO, Serbian, Albanian, and Macedonian leaders. I am hopeful that this will bolster Europe’s determination to integrate the Balkan countries into its political and economic institutions as rapidly as possible. And I am hopeful that our government will understand that we must be as helpful as possible and stay the course, even if that means several more years. If our goal is sustainable peace and stability in the Balkans, withdrawing just when our presence may be needed most is not a viable option.

If we do the right thing, if Europe does the right thing, and if the new governments of Serbia and Yugoslavia do the right thing, we can indeed hope for peace and prosperity for millions of people to whom it has been denied for too long.