Clean Up Macedonia

Wall Street Journal Europe, 12 March 2002

Today the World Bank and European Union are hosting a donors' conference here to finance the fledgling, and still fragile, peace effort in Macedonia. The target for the aid package is not small - a quarter of a billion dollars. For once, however, the real risk is not that donors will penny-pinch. Rather it's that they may be prepared to reward Macedonian cooperation by overlooking the country's endemic and deeply troubling corruption. If donors commit this sum - and I believe they should - without demanding a serious anticorruption effort, they will put at risk the investment they have made in peace.

While corruption plagues all transition countries, in Macedonia it threatens the viability of the state. Albanian minority participation in today's government rests on a simple principle: they get one third of the spoils already enjoyed by the Macedonian leadership. Both partners continue to flirt cynically with ethnic extremism, deepening communal divisions and corroding the rule of law and public trust in institutions as they connive at siphoning off national assets. Together, they have turned Macedonia into a fertile field for the violence that flared a year ago, nearly triggering a fourth Balkan war.

The cozy relationship between majority and minority leaders was shaken by the conflict, but has been restored since the international community brokered the Ohrid peace agreement. Macedonian media are replete with detailed, credible allegations (that diplomats privately corroborate) of corrupt practices affecting virtually every sector of the economy, with incalculable impact.

Here are some examples. A Greek concern bought Macedonia's oil refinery for what independent observers said was a fraction of its value, allegedly paying a "commission" to a senior official. Last year, a key minister with security responsibilities reportedly ran a kickback scheme worth millions for his family' benefit, soaking an equal amount out of his ministry's budget. Smuggling and customs rackets involving top officials have been reported in detail in the local press.

Ethnic Macedonian and Albanian parties reportedly divide the proceeds of cigarette smuggling (which ultimately costs EU taxpayers), while the Ministry of Economy hawks licenses to import staples like meat and sugar without paying duties. Last fall, the minister of interior dissolved his anticorruption unit.

Recently the government fired the head of Macedonia's development bank solely, diplomats say, because he was honest. After coming to office, the ruling party of Prime Minister Ljupco Georgievski openly acquired privatized firms - a practice later outlawed by the Constitutional Court. Now the government is rushing to privatize the electric power utility in a deal that could bring millions to insiders.

These cases, acknowledged or not, are just the most visible and widely discussed tip of a very large iceberg. Demoralized citizens see corruption as a way of life that the international community tolerates for the sake of political compliance. Foreign officials admit that conventional anticorruption measures taken so far have brought paltry results.

Nearly every international organization in Macedonia is involved in "institution-building," but corruption has made citizens cynical about these efforts. Nongovernmental groups like Transparency International show promise, but they depend on a critical mass of public support - something utterly absent.

The country cannot fix this problem alone. Only an outside catalyst - demonstrating international commitment - can ignite the belief that change is possible. A productive start in this respect would be for the donors and the government jointly to ask the European Commission to send an anticorruption adviser to Macedonia.

This adviser would harness the resources of international organizations engaged in the fight against corruption. Focusing not just on building new institutions, but on closely scrutinizing existing ones, he or she would activate moribund checks against corruption, and stimulate the efforts of government and civil society to develop and implement an anticorruption strategy. While the role I am envisaging is one of a partner rather than a prosecutor, international patience should have its limits: stonewalling by the authorities should incur the suspension of EU funding.

Macedonia's government would not necessarily resist. Alain LeRoy, the EU's effective special representative, has proved that both sides can accept international mediation. Prime Minister Georgievski is keen to keep international support in an election year, when he can hardly afford to look uncooperative against corruption. Last week, indeed, he told the International Crisis Group that accepting such an adviser would present "no problem."

Raising the profile and effectiveness of the fight against corruption could reorient politics away from a zero-sum tussle over resources and ethnic rights into a joint struggle against a common opponent. Macedonia's people, on both sides of the ethnic divide, deserve no less.

It's important that the $224 million funding target be met. Macedonia's leaders do deserve generous support to rebuild and to pay for the costly reforms agreed last August, and which are now well on their way to implementation. These reforms persuaded ethnic Albanian rebels to lay down arms, and a failure to meet the target would itself be dangerous, reinforcing the perception that "the West" is anti-Macedonian. But to approve a quarter of a billion dollars without demanding serious reform is to subsidize corruption - and jeopardize peace.