In Kosovo, It's 'Independence Eve'

Kosovo Risks Russia's Wrath As It Prepares for Historic Declaration of Independence

Ethnic Albanians walk on a bridge lined with Albanian flags, outside the village of Kacanik, in the south of the province of Kosovo, Serbia, Saturday, Feb. 16, 2008. Earlier Saturday, a day before the province is expected to declare independence, EU nations gave final approval to dispatch a 1,800-member policing and administration mission to Kosovo. (AP Photo/Dimitri Messinis)

Tiny Kosovo poor, mostly Muslim but feverishly pro-Western braced itself Saturday for a historic declaration of independence from Serbia, a decade after a war that killed 10,000 people and years of limbo under U.N. rule.

The province's bold bid for statehood, expected Sunday, and its quest for international recognition set up an ominous showdown with Serbia and Russia. Moscow contends the move will set a dangerous precedent for secessionist groups worldwide.

Revelers took to the streets in giddy anticipation. Prime Minister Hashim Thaci a former leader of the guerrilla Kosovo Liberation Army marked the eve of the new nation's birth by visiting a village where Serbian troops massacred ethnic Albanians in 1998.

"Tomorrow is a historic day in our effort to create a state," Thaci said in Prekaze, about 25 miles southeast of the capital, Pristina.

Thaci, a former leader of the now-disbanded Kosovo Liberation Army, was expected to call a special session of parliament Sunday afternoon to declare an independent Republic of Kosovo and unveil a new flag and national crest.

In a televised address later Saturday, Thaci said "everything is a done deal."

"We are getting our independence," he said. "The world's map is changing."

In the provincial capital Pristina, the icing was on celebratory cakes and bottles of "Independence" wine chilled as the new reality sank in.

"Independence is a dream for all the people of Kosovo, and I am very happy, like everybody," said Lumturije Bytyqi, 20.

But Kosovo's small Serb population greeted the secession as though it were an amputation. Many vowed never to accept the loss of a region they consider the heart of their ancestral homeland.

"I'm asking all the Serbs to reject the monster state of Kosovo, and to do everything to prevent its birth," said Marko Jaksic, a Kosovo Serb hard-line leader.

The dancing and drum-beating that pulsed through Pristina awash in red and black Albanian flags with the distinctive double-headed eagle contrasted sharply with the gloom gripping the ethnically divided northern town of Kosovska Mitrovica, a Serb stronghold and a flashpoint for violence.

Although it is formally part of Serbia, Kosovo has been administered by the U.N. since 1999, when NATO airstrikes ended the late Yugoslav leader Slobodan Milosevic's brutal crackdown on ethnic Albanian separatists.

Ninety percent of Kosovo's 2 million people are ethnic Albanian most moderate or non-practicing Muslims, the rest Roman Catholics and they see no reason to stay joined to the rest of Christian Orthodox Serbia.

With Russia, a staunch Serbian ally, determined to block the bid, Kosovo looked to the U.S. and key European powers for swift recognition as the continent's newest nation. That recognition was likely to come Monday at a meeting of EU foreign ministers in Brussels, Belgium.

The EU gave its final go-ahead Saturday to send an 1,800-member mission to replace the current U.N. administration. The mission is designed to help build a police, justice and customs system for Kosovo.

Thaci announced the creation of a new Cabinet ministry to focus on minority rights.

But the imminent independence of the territory, roughly the size of Connecticut, threatened to touch off a diplomatic crisis and possible unrest.

Russian President Vladimir Putin, arguing that independence without U.N. approval would set a dangerous precedent for "frozen conflicts" across the former Soviet Union and around the world, pressured the Security Council to intervene.

In the Serbian capital Belgrade, about 1,000 protesters waved Serbian flags and chanted "Kosovo is the heart of Serbia." Officials ruled out any military response, but warned that Serbia would downgrade relations with any foreign government that recognizes Kosovo's independence.

NATO, which still has 16,000 peacekeepers in Kosovo, boosted patrols in the tense north and in scattered isolated enclaves where most of the Serbs live in hopes of easing the chances of violence, and international police deployed Saturday to back up local forces.

Some Serbs have suffered reprisal attacks carried out by ethnic Albanians seeking to avenge the bloodshed of the 1998-99 war. There were concerns that edgy Serbs might pack up and leave, but the head of the influential Serbian Orthodox Church appealed to them Saturday to "stay in their homes and guard this holy Serbian land."

Many ethnic Albanian Kosovars, their long-awaited nationhood almost upon them, expressed disbelief that it would actually happen. For others, the joy was tempered by the what lies ahead: Building a multiethnic society and lifting themselves out of poverty and 50 percent unemployment.

But new posters implored people ethnic Albanians, at least to relax and enjoy the moment.

"Celebrate with dignity," read the posters, illustrated with bright red hearts.

Associated Press writers Dusan Stojanovic in Kosovska Mitrovica, Nebi Qena in Pristina and Slobodan Lekic in Belgrade contributed to this report.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Regulators now spooked by ghost stories

BEIJING (Reuters) - China has added ghosts, monsters and other things that go bump in the night to its list of banned video and audio content in an intensified crackdown ahead of the Beijing Olympics.

Producers have around three weeks to look through their tapes for "horror" and report it to authorities, the General Administration of Press and Publications said in a statement posted on the government Web site.

Offending content included "wronged spirits and violent ghosts, monsters, demons, and other inhuman portrayals, strange and supernatural storytelling for the sole purpose of seeking terror and horror," the administration said.

The new guidelines aim to "control and cleanse the negative effect these items have on society, and to prevent horror, violent, cruel publications from entering the market through official channels and to protect adolescents' psychological health."

The regulations suggest China, where graphic, pirated sex and horror movies are available on most street corners, is keen to step up its control of the cultural arena ahead of the Beijing Olympics in August, which are widely seen as a coming-out party for the rising political and economic power.

They come just weeks after Beijing clamped down on "vulgar" video and audio content, slapped restrictions on Internet sites and handed down a two-year film-making ban to the team behind the steamy "Lost in Beijing."

(Reporting by Beijing Newsroom; Editing by Nick Macfie and Alex Richardson)

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Insight: The next crisis will be over food

used to think that the fastest way to become worried about markets was to stare into the bowels of a monoline. No longer. A few days ago, I happened to hear Goldman Sachs discuss the state of the global financial system with European clients.

And what struck me most forcefully from this analysis – aside from the usual, horrific litany of bank woes – was just how much trouble is quietly brewing in corners of the commodities world.

Never mind that oil prices are high; that problem is already well known and gallons of ink have been spilt debating that, along with the pressures in metals and mineral spheres.

Instead, what is really catching the attention of Goldman Sachs now is the outlook for agricultural prices. Or as Jeff Currie, head of commodities research at the US bank, says with disarming cheer: “We think we could go into crisis mode in many commodities sectors in the next 12 to 18 months . . . and I would argue that agriculture is key here.”

Now, to some readers of the Financial Times, that observation might seem odd. After all, inhabitants of the western world typically spend far more time worrying about the price of petrol for their car, rather than the price of wheat or corn. And when western investors do think about “commodity shock”, their reference point typically tends to be the 1970s oil crisis.

However, as Mr Currie observes, this is a dangerously blinkered view. Back in the 1970s, famine touched a much bigger proportion of the world’s population than the energy crisis, he says. And even today, rising food prices pack a powerful political punch in the developing (or partly-developed) world, to a degree that is sometimes underappreciated by the pampered west.

Indeed, there is already ample evidence that political tensions are building: the World Food Programme, for example, now thinks a third of the world’s population lives in countries with food price controls or export bans.

However, Goldman Sachs thinks this is just part of a much bigger problem of capital and resource misallocation. After all, Mr Currie argues, if the world today was a rational economic place, then regions such as the Gulf which are food-constrained ought to be investing heavily in agriculture. And since the US is the world’s biggest agricultural supplier, this implies that the Saudi Arabians, say, should be snapping up farms in Wisconsin – as America secures oil in the most efficient manner by sending teams of Texans to Riyadh.

But in practice numerous investment controls prevent Saudi Arabians from buying Wisconsin farms and Americans owning Saudi oil wells. And these controls are not being dismantled now. On the contrary, mutual mistrust is now rising. Hence the fact that Gulf leaders are currently considering desalinating sea water to plant wheat in the desert – while the US and Europe are trying to turn corn into fuel.

Such exercises might make sense in domestic political terms; but they are apt to be fiendishly expensive. Thus the upshot of this misallocation, Mr Currie would argue, is even more inflation – even if the world does experience some form of growth slowdown.

Now, for any investor who is long on commodities right now (and I would guess that club includes Goldman Sachs), such trends might seem to smack of good news. For anybody who is dirt poor in the developing world, however, the picture is disastrous.

A WFP official, for example, recently showed me the red plastic cup that is used to dole out daily rations to starving Africans – and then explained, in graphically moving terms, that this vessel is typically now only being filled by two-thirds each day, because food prices are rising faster than the WFP budget.

But leaving aside this very real human tragedy, what should also be crystal clear for investors is that this is not a picture that points to 21st-century capital markets progress; nor is it likely to breed stability in the medium term. Anyone who thinks this decade’s problems start and end with credit, in other words, may yet receive a rude shock; sadly, we live in a world where soyabeans may yet pack as painful a punch as subprime.

Copyright The Financial Times Limited 2008

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