UNMIK FACILITATES OUTREACH TO NORTH KOSOVO SERBS

UNCLAS SECTION 01 OF 03 PRISTINA 000338

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SUBJECT: UNMIK FACILITATES OUTREACH TO NORTH KOSOVO SERBS

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1. (SBU) SUMMARY. On April 19 UNMIK hosted the first meeting
of the Mitrovica Focus Group to encourage engagement between
northern Kosovo Serb leaders and the international community.
The regional CCK representative, the mayors of the three
northern Serb-majority municipalities and the UNMIK advisory
board chairman described the difficulties faced in their
region, including lack of infrastructure and employment
opportunities, and pitched specific projects to potential
international donors. The European Commission (EC)
representative said the EC has already pledged 10.5 million
euros, and has more money potentially available for projects
that facilitate integration. END SUMMARY.

MITROVICA FOCUS GROUP TO ENGAGE NORTH KOSOVO SERB LEADERS
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2. (SBU) On April 19 Pol/Econ Chief, PolOff and PolFSN
attended the first meeting of the Mitrovica Focus Group (MFG)
at UNMIK regional headquarters in south Mitrovica. The
meeting was chaired by UNMIK regional representative (and
retired FSO) Jerry Gallucci. Gallucci said he has engaged
directly with Kosovo Serb leaders in the north (under
instruction from SRSG Jessen-Petersen),including Belgrade
negotiating team member and President of the Association of
Serb Municipalities Marko Jaksic and head of the Serb
National Council (SNV) Milan Ivanovic (both EO-listed).
Gallucci said his outreach objectives are to maintain peace
and calm in Mitrovica, engage in crisis management and ensure
that problems there do not spill over into the rest of
Kosovo.


3. (SBU) Gallucci said he believes the international
community (IC) should also engage more directly with northern
Serb leaders with a view to resolving some of the practical
problems they face. He suggested the international community
fund small, high impact infrastructure projects in the north.
Gallucci said in 2005 the SRSG provided 100,000 euro to each
of the three northern municipalities from the SRSG's
contingency funds and said he will ask for additional funding
this year.

FUNDING FOR PARALLEL INSTITUTIONS
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4. (SBU) When E/P Chief noted some of the project proposals
would fund Serbia-based (i.e. "parallel") institutions such
as "Elektrokosmet" facilities, Gallucci responded that grants
could be tailored to donor requirements. He noted UNMIK
recognizes the Kosovo Police Service (KPS) in the north
contains members who simultaneously work for the Serbian
Ministry of Interior (MUP); however, he said the KPS is the
most accepted UNMIK institution operating in the north.
(COMMENT. One of the major challenges of the final status
process is to adapt parallel institutions to whatever future
is worked out for Kosovo. There is general international
agreement that the Kosovo budget, as strictly a practical
matter, cannot afford to absorb the total cost of services
provided by the parallel system. The 48 electricity projects
put forward at the MFG meeting for funding in northern Kosovo
present an ironic example of a parallel institution that is
evidently indirectly looking for help in serving its
constituents. END COMMENT.)

"NORTHERN KOSOVO IS NOT PART OF KOSOVO"
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5. (SBU) Gallucci predicted that once final status is
determined later this year, the problem will be to keep the
north from slipping away. He said it is a "reality that
northern Kosovo is not part of Kosovo." He said the north is
not integrated into the rest of Kosovo, and there is no
longer any fixed NATO presence in the north. He added there
must be an IC presence in northern Kosovo after status is
determined, and said the MFG initiative will help develop

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relationships with leaders who are willing to cooperate.


6. (SBU) A European Commission (EC) representative attending
the meeting said "we cannot close our eyes to de facto
partition" and added the current situation will cause
enormous difficulties for UNMIK's successor, probably the EU.
Gallucci responded that the problem was created in 1999 when
NATO failed, in his view, to take control of the north; and
he said he lacks the wherewithal, money and personnel to
displace parallel institutions today. He said UNMIK's main
objective is to prevent further violence, and thereby prevent
further displacements of Kosovo Serbs.


7. (SBU) Gallucci said he has had some success in his
efforts to encourage the northern leaders to engage with
Kosovo institutions. For example, he is assisting the three
northern mayors to participate in the Kosovo Consolidated
Budget (KCB) process, and to go to Pristina for training on
the KCB. He has also organized three successful meetings of
the six northern mayors (three Serb and three Albanian) to
discuss technical issues related to regional water
management.

NORTHERN MAYORS DISCUSS INFRASTRUCTURE NEEDS
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8. (SBU) After meeting with the international
representatives, Gallucci invited in the Kosovo Serb leaders.
These included Momir Kasalovic, Mitrovica region head of the
Kosovo Coordination Center (CCK); Dragisa Milovic, mayor of
Zvecan; Slavisa Ristic, mayor of Zubin Potok; Velimir
Bojovic, mayor of Leposavic; and Srboljub Milenkovic, newly
elected chairman of the UNMIK north Mitrovica Advisory Board
(UAM). All of the mayors expressed gratitude for the
opportunity to discuss economic development, as opposed to
politics.


9. (SBU) The mayors all highlighted similar problems in
their jurisdictions, including high unemployment (especially
among youth),as well as poor road conditions, housing and
infrastructure. They mentioned possibilities for investment,
including livestock breeding, fruit farming and tourism;
saying these would create opportunities and enable returns.
The municipalities proposed specific projects, including
rehabilitation of roads, sewage systems, water supply,
electricity networks, schools and houses; and income
generation projects such as markets, milk factories, and
fresh fruit storage facilities.


10. (SBU) Milovic said that 3,000 Zvecan inhabitants lost
their jobs when the Trpca lead mines closed, and said their
greatest need is new jobs. He mentioned the lack of sports
facilities in the north, and linked that to increasing drug
use among youth.


11. (SBU) Ristic said development plans for Zubin Potok are
based on the municipality's natural resources, including
water, forests and tourism. He said specific problems
include school overcrowding, the need for a health care
facility and lack of housing for social welfare cases. He
blamed KFOR for the deteriorated road conditions.


12. (SBU) Bojovic said Leposavic has several small factories
which use raw materials brought in from Serbia and export the
finished products back to Serbia. He said UNMIK tariffs at
the administrative boundary line (ABL) on both imports and
exports raise the prices and make their goods uncompetitive.


13. (SBU) Milenkovic said the UAM budget for capital
investment in north Mitrovica for 2006 is only 10,000 euros.
He said the pre-war economy of Mitrovica was centered in the
south, and the economy in the north has been "dead" since

1999. He said north Mitrovica needs a middle school, green
market, trade center, sports hall, theater and more parking.

EC PLEDGES FUNDING

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14. (SBU) At the close of the meeting, the EC representative
said the EC has already pledged 10.5 million euros to fund
projects in north Mitrovica and Zvecan. He said additional
funding is available, but expressed concern that the projects
should facilitate further integration of northern Kosovo
municipalities into the rest of Kosovo.


15. (SBU) COMMENT. Kosovo's three northern municipalities,
de facto separated from Kosovo, are a potentially enormous
problem, and the MFG is one small but concrete step aimed at
improving relations with them. Serbs in the north need
positive incentives to engage with the international
community and with Pristina-based Kosovo institutions. The
willingness of the northern leaders to participate in the MFG
is a positive development, but is based on the belief that
participation will result in funding. USOP will continue to
support and monitor the development of the MFG. END COMMENT.


16. (U) Post clears this message in its entirety for
release to Special Envoy Ahtisaari.
GOLDBERG