http://www.stratfor.com/CIS/specialreports/special26.htm

STRATFOR, Friday, March 17, 2000 0303 GMT, 000317

Kosovo: One Year Later

Summary

Nearly one year after NATO first intervened in Kosovo, it appears the
alliance has failed to fulfill its chief objectives, both in waging the
war and keeping the peace. Increasingly, Kosovo seems beyond the
alliance's control as crime, weapons and drug trafficking resurface.
Alliance forces are now on the defensive against former allies within
the ethnic Albanian community; the guerrillas of the Kosovo Liberation
Army (KLA) now appear to hold positions of considerable power. Nine
months after the war, the West faces a choice. It can increase its grip
on Kosovo, committing more troops and confronting the KLA, or the
alliance can resign itself to losing control of Kosovo.

Analysis

NATO's war against Yugoslavia set a precedent at considerable cost. It
was the first instance of unilateral NATO intervention in a sovereign
nation during the alliance's 50-year history. NATO sent more than 1,000
aircraft to fly more than 38,000 sorties, at an eventual estimated cost
of tens of billions of dollars. The alliance deployed 38,000
peacekeepers, drawn from 28 countries, with no foreseeable end to their
mission. Reconstruction has barely begun and is expected to cost another
$32 billion.

But one year later, the alliance's peacekeeping mission, known as KFOR,
is failing. Not only does ethnic violence persist, but the alliance
appears to be further losing control. The murder rate in the rural
breakaway province now equals that of the world's largest cities.
Sources on the ground report that weapons are increasingly in the hands
of former guerrillas. NATO troops have come under attack by the ethnic
Albanian majority as well as the Serb minority. The alliance is steadily
headed toward a daunting choice. It must increase its grip on Kosovo or
resign itself to providing a garrison force that safeguards a tumultuous
province, which is effectively in the hands of the KLA.

Kosovo's State of Violence

KFOR entered the province to fulfill three missions: to ensure safety,
enforce compliance with the June 1999 cease-fire agreements and
temporarily assist the United Nations with civilian functions, such as
policing and reconstruction. But Kosovo has steadily become an
upside-down world of reversed roles. The guerrillas were supposed to
disarm and disband but have in fact maintained a strong hold on power.
Increasingly, KFOR troops are defending themselves not just against
remaining pockets of Serbs, but apparently against their wartime allies
in the KLA.

It appears that elements of the guerrillas are orchestrating violence
that threatens international forces. Even Western military officials
have come grudgingly, though privately, to the conclusion that extremist
elements of the KLA are making a bid for outright independence. NATO
troops were stoned last October in the western city of Pec. The recent
violence in the northern city of Mitrovica included a grenade attack
that wounded 17 KFOR troops. In February, KFOR Cmdr. Gen. Klaus
Reinhardt said, "When NATO came into Kosovo we were only supposed to
fight the Yugoslav army if they came back uninvited. Now we're finding
we have to fight the Albanians."

Violent crime is falling but the largely rural province is far from
safe. In the southeast corner of Kosovo, the American sector, there were
615 incidents of hostile fire, 15 mortar attacks, 20 altercations with
unruly crowds, 129 grenade attacks and 58 landmine explosions - in the
first six months of peacekeeping, according to NATO figures. The murder
rate for the entire province has dropped from 127 murders per 100,000
people at the end of the war to 23 murders per 100,000. Still, the
murder rate of rural Kosovo now equals the murder rate of Los Angeles,
California - one of the world's largest and most densely populated
cities.

Under the June cease-fire agreement, the KLA was supposed to disband and
disarm, but there is evidence that former guerrillas now enjoy easy -
even sanctioned - access to weapons. Some 5,000 former KLA guerrillas
have joined the Kosovo Protection Corps (KPC), a sort of national guard
for emergency and disaster response. They are allowed to carry sidearms
with the proper permit cards. But the permit cards are being copied and
distributed to other former guerrillas, according to an international
police source.

The Power of the KLA and Drug Trafficking

In many ways, the state of affairs in Kosovo is the result of a lack of
government. The United Nations has never had a complete plan to set up a
government; nine months after peacekeeping began there is none. In this
vacuum, the KLA has flourished.

While the KLA was to have disbanded, two important wartime figures
remain at the core of the still existent KLA power structure. Hashim
Thaci, who led the KLA's political wing and became the chief contact for
the West, is now Kosovo's most important ethnic Albanian politician. The
commander of the KLA's military wing, Agim Cequ, commands 5,000 former
guerrillas who are now in the Kosovo Protection Corps.

The KLA is indebted to Balkan drug organizations that helped funnel both
cash and arms to the guerrillas before and after the conflict. Kosovo is
the heart of a heroin trafficking route that runs from Afghanistan
through Turkey and the Balkans and into Western Europe. It now appears
that the KLA must pay back the organized crime elements. This would in
turn create a surge in heroin trafficking in the coming months, just as
it did following the NATO occupation of Bosnia in the mid-1990s.

Two to six tons of heroin, worth 12 times its weight in gold, moves
through Turkey toward Eastern Europe each month. The route connecting
the Taliban-run opium fields of Afghanistan to Western Europe's heroin
market is worth an estimated $400 billion a year - and is dominated by
the Kosovar Albanians. This "Balkan Route" supplies 80 percent of
Europe's heroin.

For the KLA, the Balkan Route is not only a way to ship heroin to Europe
for a massive profit, but it also acted as a conduit for weapons
filtering into the war-torn Balkans. The smugglers either trade drugs
directly for weapons or buy weapons with drug earnings in Albania,
Bosnia, Croatia, Cyprus, Italy, Montenegro, Switzerland or Turkey. The
arsenal of weapons smuggled into Kosovo has included: anti-aircraft
missiles, assault rifles, sniper rifles, mortars, shotguns, grenade
launchers, anti-personnel mines and infrared night vision gear,
according to a NATO report cited in the Washington Times in June 1999.

There is already anecdotal evidence that the drug trade is flourishing
in Kosovo, in full view of international authorities. The bombed out,
unpaved streets of Kosovo are the new home to sleek European sports cars
with no license plates. There are 20 percent to 25 percent more cars in
Kosovo than there were before the war, according to an international
police official recently returned from several months in Kosovo. The
refugees claim Serbs took the plates, but the black Mercedes are signs
of a prospering drug trade.

Beyond Kosovo

Drug smuggling will make an impact beyond the Balkans and deep into the
rest of Europe. Ethnic Albanians are the predominant smugglers in the
Western European heroin market, according to Interpol data.

Some 500,000 Kosovar Albanians live in Western Europe. Those living off
the heroin trade rely on clan loyalties to tightly control their
business partners. They gain access to Western European cities by
exploiting their reputation as refugees. This gives them a distinct
advantage over the Turks or Italians.

Although Albanian speakers comprise about 1 percent of Europe's 510
million residents, they made up 14 percent of all Europeans arrested for
heroin smuggling in 1997, according to Interpol. The average quantity of
heroin confiscated from arrested smugglers was two grams; ethnic
Albanians arrested for the same crime carried an average of 120 grams,
the agency said.

The U.S. government has been - and likely continues to be - well aware
of the heroin trade coming through Kosovo, as well as the KLA
connection. Just two years before the war, the Clinton administration
wanted national security waivers for 14 countries - including Yugoslavia
- in order to send arms and stem drug trafficking. The U.S. Drug
Enforcement Agency reported in 1998 that ethnic Albanian organizations
in Kosovo are "second only to Turkish gangs as the predominant heroin
smugglers along the Balkan route."

Today, Kosovo poses for NATO an ironically similar problem to the one it
posed in 1999. Kosovo's problems - smuggling, crime and violence -
threaten to spill out into the Balkan region. Tensions between the Serbs
and ethnic Albanians challenge stability in Montenegro and Serbia, the
remaining Yugoslav republics. The alliance must not only contain
Kosovo's problems, but prevent renewed war between the KLA and Yugoslav forces in Serbia.

Montenegro threatens to become the next hot spot as a result of the
Kosovo war. The province's leadership has taken its cues from the
international community's defense of Kosovo. Montenegrin President Milo
Djukanovic has announced that the West is ready to offer help in the
event of a Serb attack. Officials from the U.N. and human rights groups
have made increasingly loud requests for Western attention to
Montenegro.

NATO's Next Move

NATO now faces a dilemma. It must take control of the situation in
Kosovo by increasing its troop presence and confronting its former
allies in the KLA. Or the alliance can accept a role as vassal to the
guerrillas, essentially safeguarding Kosovo from a Serbian invasion. The
guerrillas, in turn, would run Kosovo as they see fit.

Withdrawing altogether from Kosovo is out of the question; Yugoslav
forces would quickly pour into the province. The prospect of vastly
increasing forces is unpleasant. As it stands now NATO members are
reluctant to deploy even enough troops to meet the current mandate of
50,000 peacekeepers.

To maintain control, though, the alliance must do more than increase its
presence; it must reconsider its allies in Kosovo. There are signs that
the West may play a longtime moderate, Ibrahim Rugova, against Thaci.
During his recent trip to Kosovo, State Department spokesman James Rubin
met with Rugova, the first high-level public contact between U.S.
officials and Rugova since he was abandoned last year. The prospect is
stark. NATO would have to crush the KLA, risking more violence and a
public relations nightmare.

NATO's other option is probably even more unappealing: handing the KLA
the keys to Kosovo. In such a scenario, the alliance would give ethnic
Albanian political and civil leaders - with a few Serbs thrown in to
demonstrate multi-ethnic governance - political control. But in fact the
KLA would retain the upper hand. Alliance troops would remain to
safeguard whatever state the former guerrillas choose to build.


20 March 2000

Balkan Futures

Summary

Nearing the anniversary of the Kosovo war, it is time to consider
winners and losers. Things are not as clear as they were a year
ago. President Slobodan Milosevic has survived his defeat and the
territorial integrity of the rest of Belgrade's domain appears
intact. The Kosovo Liberation Army (KLA) is eager to establish an
Albanian state in Kosovo but is blocked by NATO. And the alliance -
unable to suppress the guerrillas, unable to withdraw and unwilling
to negotiate with Milosevic - is devoid of options. A year later,
Milosevic seems both secure and hopeful that events are moving his
way. In an odd parallel to Saddam Hussein's experience, being
defeated by the West may open doors rather than close them.

Analysis

It's been almost a year since the beginning of the Kosovo war and
it is time to take stock. In many ways, it is easier to understand
what has happened than what is going to happen, not only because
the future is inherently unknowable, but because the future of the
Balkans is particularly opaque. It is made opaque by three facts.
First, NATO has enabled the Kosovo Liberation Army (KLA) to come
close to its goal of creating an Albanian state in Kosovo. Second,
NATO has failed to break the Serbian nation and to deprive it of
the means to influence events in Kosovo. Third, NATO does not want
to see an Albanian state in Kosovo nor does it want to see Serbian
power re-emerge.

In short, the two national competitors, Serbs and Albanians, remain
in place while NATO stands opposed to both of their national
aspirations. To further complicate matters, since it lacks the
necessary military power NATO is neither in a position to impose
its will, should it actually redefine its policy, nor is NATO in a
position to withdraw. Thus, we are in a three-player game in Kosovo
in which none of the parties will or wishes to abandon the field
and none can prevail. NATO has maneuvered itself into a position
where it threatens the national aspirations of both Serbs and
Albanians simultaneously, yet lacks the force to govern directly.
This is a prescription for chaos.

To fully appreciate the danger of the situation, we need to
understand that both the Albanians and Serbs find themselves in
very similar strategic positions. Both sides have achieved the
underlying preconditions necessary to move from a defensive to
offensive position. Each side is probing the others' (and NATO's)
weaknesses. Thus, each side is daily becoming more aggressive.

A year ago, the Albanians as a whole and the KLA took advantage of
what Serbia was providing, an image of an ethnic population
undergoing massive violations of human rights. The goal of this
campaign was to trigger a NATO intervention against Yugoslavia. The
Albanians had a fairly sophisticated understanding of the
consequences of NATO intervention. NATO's actions would expel
Serbian armed forces from Kosovo, which in turn would force at
least a partial withdrawal of the Serbian population, who would
make one of two assumptions:

1. That NATO was in favor of a Kosovo cleansed of Serbs and that it
was, in effect, a full ally of Albanian national aspirations.
2. That NATO, whatever its intentions, was ineffective in defending
the Serbian population from KLA attacks.

The KLA took advantage of Serbian actions, Western perceptions and
political realities within NATO capitals. NATO intervention allowed
the KLA to lay the foundation for an effective strategy toward some
clear goals.

Let's consider the KLA's strategic goals:

1. Becoming the preeminent political force among Albanians in
Kosovo.
2. The creation of a KLA-dominated government in Kosovo.
3. The unification of Kosovo with Albania proper under a government
dominated by the KLA and its allies.
4. The extension of Albania to all areas populated by Albanians.
5. The creation of an Albanian entity that is secure, regionally
dominant and that controls the primary trade routes from Turkey to
central Europe.

The KLA achieved its first goal when the United States and NATO
were forced to rely on it to enable ground operations in Kosovo.
NATO depended on the KLA for intelligence, to pin Serb ground
forces down during the bombing operation and to enable NATO's
special forces to carry out operations in the region. This
dependency gave the KLA three advantages. First, as a primary
intelligence source for NATO, the KLA was able to shape NATO's
understanding of what was happening on the ground. This, in turn,
shaped NATO operations in favor of the KLA not only in relation to
the Serbs, but also in relation to other, non-KLA Albanian
political forces. Second, by supplying and supporting KLA forces
during the conflict, NATO strengthened the KLA in relation to other
Albanian factions, while providing the KLA with a political
imprimatur as NATO's anointed. Finally, in relying on the KLA for
civil administration after the war, NATO made the KLA the de facto
government of Kosovo.

Having achieved its first goal, the KLA is now engaged in pursuing
its second: the creation of a KLA-dominated government in Kosovo.
This has led to an interesting reversal. NATO, the KLA's enabler
in its first phase, is now the KLA's primary block in achieving its
second goal. NATO cannot tolerate the KLA achieving its second
strategic goal for domestic political and geopolitical reasons.
Domestically, an Albanian state in Kosovo, with the inevitable
ethnic cleansing of Serbs, would provide armed political opponents
of NATO governments. Some of these countries, like the United
States, are currently in the midst of elections that are devoid of
international content. The triumph of the KLA would give George
Bush a weapon that Clinton must deny him.

There is also a deeper geopolitical reason. The creation of an
Albanian Kosovo would inevitably lead to its integration with
Albania proper. It would create the demand for border
rectifications with countries like Macedonia that have Albanian
populations, making Albania a dominant regional power. Although
Albania is one of the most impoverished areas of Europe it must be
remembered that there is a massive throughput of narcotics that
could provide resources for improving Albanian military capability,
if not standards of living. This is not something that other
countries in the region want to see. In particular, Greece and
Italy, both NATO members with important national interests in the
Balkans, would be upset with this evolution. Therefore, NATO,
having helped the KLA achieve its first strategic goal, must now
act to block its second strategic goal.

Complicating the situation dramatically is the fact that the Serbs
themselves now find themselves in a much more favorable strategic
position than they were just a few months ago. Consider Milosevic's
strategic interests:

1. Stay in power in Belgrade.
2. Prevent the further disintegration of the Yugoslavian
Federation.
3. Reclaim lost territories and integrate areas that are
predominantly Serbian.
4. Make Serbia the preeminent power in the Balkans.

It seems clear, a year after the war began, that like Saddam
Hussein, Milosevic is not going to fall. The facile assumptions
made after the war that he could not survive his humiliation by
NATO have proven false. Milosevic was certainly despised by many
factions for leading his country into war and being outmaneuvered
by NATO, but he retained substantial support. NATO's persistent
anti-Serbian policy had persuaded many Serbs that NATO, for some
uncertain reason, meant to obliterate the Serbian nation. Milosevic
was seen as a champion of Serbia and as NATO's victim. He presented
himself as a man who had thwarted NATO's true ambitions by
confining Serbia's defeat to Kosovo.

At the same time, the democratic opposition that NATO had
fantasized about was neither as democratic as NATO believed, nor as
united. Certainly, it was not as powerful as NATO believed.
Whatever bitterness there was toward Milosevic's mishandling of the
war, the opposition was perceived as being opportunists, or worse,
as tools of NATO. His opponents were made to look like traitors.
Therefore, in spite of intense efforts by NATO to topple Milosevic
after the war, all that it achieved was to flush Milosevic's
opposition out into the open, and force it to display its
impotence. This substantially strengthened Milosevic's hand. As
with Saddam, the mere fact that Milosevic survived helped restore
his credibility.

Milosevic then was able to block the further disintegration of
Serbia by outmaneuvering Montenegrin separatists until even NATO no
longer had any confidence in them. Milosevic's ability to sustain
the presence of Federal forces in Montenegro was the first step.
When Montenegro's political evolution led to its remaining inside
the Yugoslav federation, the logic of disintegration was aborted.
Vague discussions of Vojvodina's seceding to Hungary, the entry of
NATO forces into Serbia proper and other territorial fantasies
petered out over the year. The breaking point came recently. When
the KLA tried to generate anti-Serb actions among Albanians still
living inside Serbia, NATO itself was forced to protect the Serb
frontier. During raids carried out last week, it actually struck at
KLA bases along the border. NATO is now protecting the territorial
integrity of the rest of Serbia. The main threat to Serbia's
territorial integrity, NATO's covert and overt operations, has
dissolved. What is left of Belgrade's domain will survive.

That leaves Milosevic with his third goal: reclaiming lost
territories, beginning with Kosovo. Milosevic now sees time on his
side. Milosevic never understood the alliance between NATO and the
KLA. He never understood that there was no deep, geopolitical
community of interest between the two, but that what bound them was
NATO's domestic political situation and the KLA's ambitions. He
did not expect NATO and the KLA to split because he never
understood how shallow the ties were. Milosevic is undoubtedly
delighted by his new understanding of the situation. As the KLA
pressed forward with its second strategic mission, it forced a
split with NATO that directly benefited Serbia.

NATO's entire mission is now based on a rapidly dissolving
foundation. Unless NATO can convince the KLA to abandon any further
strategic ambitions-which is unlikely-it is going to find itself
trapped between the absolutely unforgivable Milosevic and the
utterly ungrateful KLA. NATO cannot withdraw without being made to
look imbecilic and it can't stay without great danger.

>From where Milosevic sits, this is an ideal situation. If NATO
leaves, the Serbs still enjoy military superiority over the
Albanians and will be in a situation to intervene. On the other
hand, the longer NATO remains, the less sympathy in the West for
the Albanians. If NATO stays, it will inevitably become dependent,
at least covertly, on Serbs in Kosovo, and perhaps on the other
side of the border as well.

The KLA cannot hold back. They have their own intense credibility
problem. NATO is now clearly going to try to create a non-KLA
political alternative among the Albanians. More important, NATO
has a strategic card to play against the KLA. We give substantial
credence to reports that not only is KLA a critical part of the
global narcotics traffic system, but that it is using Kosovo as a
transshipment point. NATO does not have sufficient forces in
Kosovo to bring peace, but it has sufficient capability to
interrupt parts of the drug trade. If the KLA hangs back it risks
the emergence of new political forces under NATO sponsorship. If
it strikes at NATO, NATO can strike back at a fundamental interest
of the KLA. In either case, the KLA cannot pursue its other
strategic interests while NATO is still there.

The KLA always wanted NATO out, but expected it to destroy the Serb
Army for them. That hasn't happened and that has created a
tremendous dilemma for the KLA. It cannot tolerate NATO in Kosovo
and it is not yet in a position to defend against Serbia. It can no
longer expect NATO to finish off the Serbs and it can no longer
expect NATO to ignore KLA operations. The KLA has been trying to
get NATO to strike across the border, but instead NATO struck at
the KLA.

NATO is desperately signaling the KLA to rein itself in. But if
the KLA complies then its dream of a KLA-dominated Kosovo must be
abandoned and the narcotics trade that finances it will be
vulnerable to NATO pressure. It can't make the deal that NATO has
offered: temporary control over part of Kosovo at the discretion of
NATO. It just isn't enough.

The winner, at this rate, is going to be Milosevic. If NATO and
the KLA come to blows, then time is entirely on his side. Either
NATO will increase its presence in Kosovo in order to crush or cow
the KLA - unlikely - or NATO will have to open lines of
communication or coordination with the Serbs. Alternatively, NATO
can withdraw, in which case the correlation of forces will favor
the Serbs against the Albanians.

A year after the war began, Milosevic remains in power in Belgrade
and time appears to be on his side.

end