INTERNATIONAL PROBLEMS, 2000

Review of International Affairs

INTERNATIONAL PROBLEMS, NO. 1-2, 2000

Predrag BJELIĆ

INTERDEPENDENCE OF FOREIGN POLICY AND INTERNATIONAL TRADE (article in Serbian)

SUMMARY

Foreign policy is a strategy pursued by states in the field of international relations. One can notice the connection between foreign policy and international trade only if international relations are conceived in a broad way, including international economic relations, too. A direct connection between foreign policy and international trade is made through foreign trade policy. It is a part of foreign policy that defines international trade.

Most clearly can one notice the influence of foreign policy on international trade by observing foreign policy activities that have mostly to do with economy. Those activities include the following: customs, quantitative trade restrictions, foreign trade monopoly, exports and imports prohibition, penetration to a foreign market, modality of payment, economic assistance and capital flow management. The objective of such acting is to make the partner state change its behaviour in the field of international economic co-operation.

Except that they put international trade under the rules' customs can also serve as a measure of putting political pressure on the foreign trade partner. The more significant a country is as a foreign trade partner the more it exerts influence on its partner state. Quantitative trade restrictions are less subtle measures of political pressure on the partner state. Since this kind of measures is today prohibited by the World Trade Organisation they appear in the form of technical barriers to trade. The influence of the state on foreign trade is most prominent when there is a foreign trade monopoly. Foreign trade was totally dependent on foreign policy interests in the former socialist countries at the time when foreign trade state monopolies were present. A form of direct influence of the state or an institution on foreign trade is made by prohibition of exports to another country (embargo), imports (boycott), or prohibition of both exports and imports (economic blockade). The research has shown that unilateral sanctions that various countries have imposed against some other states during the century have in most of the cases failed to achieve their aims. More successful have been multilateral sanctions imposed by various international organisations. In some cases there is a wish to promote trade with some country by applying political measures. Then, the country resorts to use of export subsidies, dumping, exports promotion and financing. A loose interpretation of dumping makes possible to adopt various economic and political countermeasures against the importer state. Some of the foreign policy actions are manifested in the financial sphere of international trade and these actions are most applied today. Approval to make payment through clearing agreement can be taken as a political support on the part of the country that has authorised such modality of payment to its partner state. The influence of politics is especially strong in granting and distribution of all kinds of economic assistance. Economic assistance serves as a proper mechanism applied in rewarding or punishing a state for the foreign policy actions it has taken. When the political relations between two countries are strained, the first step one of them takes is to cancel all kinds of economic aid. The next step is to influence the capital flows. The state can influence the official capital flows directly. Its influence on the flows of private capital as the most significant in the international flows of capital today, can only be indirect, thus it can take various state measures in the financial sphere.

International trade also exerts impact on foreign trade. A considerable participation of a country in international trade also implies more developed foreign policy activity. The more a country is dependent on the world market the more its foreign policy is turned to the economic interests of the state. Also, significant commodity exporters must hold and maintain the reputation of the country in the international community that, in return, is one of the important non-price factors of the export competitiveness. With the aim of protecting their commercial interests some countries establish various political associations of producer countries in co-operation with other states as well as associations of exporters of some primary products. In that way developing countries have a better negotiating position at the world market. On the other hand, in pursuing their foreign policies developed countries whose transnational companies play a significant role in their exports must take care of the interests of those corporations. This pledging of domicile states for companies is known as strategic trade.

Taking into consideration what has been presented above one can conclude that foreign trade influences international trade, and vice versa, too, international trade exerts influence on foreign policy. Due to the changes that have occurred in the world order and creation of a new, global world economy as well as redistribution of power among states this mutual relationship will become more and more prominent. The foreign policy that is directed towards protection of economic interests of the state will become important even for great world states.

Radovan KOVAČEVIĆ

MANAGEMENT OF EXCHANGE RATE FLEXIBILITY (article in Serbian)

Summary

The current system produces excessive volatility and prolonged misalignments between major currencies, as the recent record of the yen-dollar exchange rate has amply illustrated. There are also reasons to fear high volatility and overshooting in the euro-dollar exchange rate. But developing countries have borne the brunt of the defects in the current system: inadequate policies have interacted with inefficient markets and produced the most serious financial debacle of the postwar period.

Three important messages emerge from our discussion. First, no system can substitute for economic policy credibility, in industrial and in developing countries alike. In the former, economic policy credibility is a prerequisite for any degree of exchange rate stability. In the developing countries, however, there is a potential dynamic interaction between the exchange rate regime and the gradual building of credibility, and some degree of nominal anchoring of the exchange rate, properly managed, can bring major benefits. Second, the efficiency of foreign exchange markets can certainly be improved. Even if economic policies are stable and credible, basic valuation principles are too often ignored, and no consistent attempt at "placing" the proper level of exchange rate is ever undertaken on the markets. This is why monetary authorities have an important role to play in providing markets with more incentives both to search for the level of long-term equilibrium exchange rates, and to analyze correctly the cyclical conditions that may justify a discrepancy between long-term equilibrium rates and current rates.

Third, whatever the efforts made to strengthen credibility and market efficiency, economic policy divergences are likely to play havoc with exchange rate stability. Any consideration of reform of the international monetary system sooner or later has to address the coordination problem. We argue that G-3 countries should adopt an enhanced surveillance mechanism, through which they would extensively monitor their own exchange rates. With respect to emerging markets, we have developed a proposal based on a system "adjustable reference parities".

It represents reasonable, concrete, and feasible steps. They do not constitute sweeping reform of the international monetary system, but they do offer the prospect of a much more stable, and therefore more prosperous and successful, world economy. In the wake of the repeated currency crises of the 1990s, which began in Europe and continued through Mexico to the dollar-yen and then into other parts of Asia and subsequently throughout the world, they represent minimum initial steps to reduce the risks of similar-and perhaps even more severe-disruptions in the future. We urge their adoption as soon as possible.

Gordana ILIĆ

STRENGTHENING OF THE ROLE OF THE EUROPEAN PARLIAMENT (article in Serbian)

SUMMARY

The article is analyzing the gradual strengthening of the position of the European Parliament (EP) within the institutional mechanism of the European Union (EU). The first part describes the position of the EP in the context of provisions of the constitutional treaties of the European Communities. Increased financial independence of the European Economic Community (EEC) was accompanied with increased budgetary powers of the EP. The Decision on the replacement of the member states’ contributions with the EEC’s own resources, in April 1970, amended the budgetary procedures and gave the EP increased budgetary powers. This is a significant institutional revision of the role of the EP. The Parliament was given the right to amend the budget drafts and to pass the budget. The second agreement on the budget (Brussels, 1975) has led to further increase in the budgetary powers of the EP. Thus, genuine opportunities were opened for EP’s influence upon the formulation and implementation of common policies of the EEC. In the EEC’s legislative procedure, the EP had only a consultative role. Gradually, the EP expanded its activity to include advisory opinion also with regard to acts that the constitutional treaties did not explicitly envisage. Thus, the legislative practice of the EEC strengthened the consultative function of the EP. Certain questions pertaining to the EEC foreign relations are also subject to the EP’s consultative function. The opinion of the EP is compulsory when it comes to the conclusion of association agreements. In 1973, when the procedure “Luns II” was introduced, the EP has been given the right to be informed in regard to negotiations aimed at concluding trade agreements. Generally speaking, the EP had insufficient control and a passive role in the process of concluding international agreements. According to the provisions of the constitutional treaties, the EP also had significant competencies to control the Commission. As regards the Council, the EP had only the right to put questions to the members of the Council.

The second part of the article deals with the position of the EP after concluding the Single European Act (SEA), in December 1985. The Act introduced a new procedure in passing Community legislation acts in an attempt to harmonize the standpoints of the Parliament and the Council. The consultative role of the EP has turned into a cooperative one. Generally speaking, the Council has the final decision in this process. The EP’s consultative activity is still present within the legislation procedure. The opinion of the EP is compulsory in regard to secondary legislation, which deals with the functioning of the Single market. As regards the procedures pertaining to signing of international agreements, provisions of the SEA expanded EP’s competencies to include its right to give consent. Thus, the EP has been given the right of veto with regard to admission of new states to membership and when it comes to concluding of association agreements. The SEA has legalized European political cooperation (EPC), which has functioned even before, only through non-institutional channels. The SEA provided for the inclusion of the EP into EPC. This meant further strengthening of EP‘s role within the institutional structure of the EEC.

The third part deals with the position of the EP as envisaged in the provisions of the Treaty on the EU (Maastricht, 1993). The legislative position of the EP has substantially been improved by introducing the procedure of co-decision. The Maastricht Treaty has also expanded the field in which the cooperation procedure between the EP and the Council is to be implemented. The procedure of giving EP’s consent has also gained in importance. Relevant Community legislation can be adopted only if explicitly approved by the Parliament. This is qualitative progress in the direction of strengthening EP competencies. The field of Common Foreign and Security Policy (CFSP) of the member states represents the second pillar of the EU. In this field of intergovernmental cooperation of the member states the EP has preserved its consultative role. Certain progress represents also EP’s mandate to discuss every year the achievements with regard to implementation of CFSP. A similar situation exists also with regard to the third pillar of EU cooperation (provisions on police and judicial cooperation in criminal matters), where the EP also has only a consultative function. The control functions of the EP represent a significant field among EP’s competencies, in accordance with the Maastricht Treaty. In this field the role of the EP is identical to the position of national parliaments in regard to the executive power in member states. This is where the level of EP’s democratization is best reflected. From the beginning of the European Communities the relations between the EP and the Council were very limited. The situation changed radically after cooperation procedures, co-deciding and getting EP’s consent were introduced. The relations between the EP and the Council are performed within the legislative dialogue. Very important is also the political dialogue between the Council and the EP. The basis of relations between the EP and the Commission is the Commission’s exclusive responsibility to the Parliament. EP is authorized to ask the Commission to elaborate proposals with regard to questions that, in the view of the EP, call for Community legislation in order to implement the EU Treaty. Up to the Maastricht Treaty only the Council had the mandate for this. The Maastricht Treaty gave the EP bigger rights within the procedure of appointing the Commission’s President. It is only after the influence of the EP in this process was established, that an institutional balance in the relations between the Commission and the EP was achieved.

The fourth section deals with the improvement of the position of the EP after the entry into force of the new Treaty on the EU (Amsterdam, May 1, 1999). EP is the biggest gainer of reforms introduced with the new Treaty, particularly with regard to further strengthening of the legislative and control competencies of the EP.

The concluding remarks emphasize that the strengthening of EP’s competencies illustrates the endeavours to remove the existing democratic deficit within the EU. The dynamic of the strengthening of EP’s position is an excellent indicator of the success achieved in the process of improving the democratic functioning of EU‘s institutional system. Member states of the EU continue to carefully measure the level of improvements of EP’s competencies. The process of institutional reforms of the Union has been continued by the entering into force of the revised (Amsterdam) Treaty on the EU. The role of the EP within the institutional structure of the Union has still not been finally determined. The political significance of the EP is present in the daily functioning of the EU.

Duško LOPANDIĆ

CENTRAL EUROPEAN INITIATIVE - TEN YEARS OF MULTILATERAL COOPERATION (article in Serbian)

SUMMARY

This article deals with the organization and activities of the Central European Initiative (former "Pentagonal/Hexagonal"). This is probably one of the most comprehensive and the most effective subregional cooperative frameworks, encompassing the region of Central and South Eastern Europe. The article is divided in five sections.

The first part of the article deals with the circumstances of foundation of the CEI, launched at the initiative of Italy. It was the first European cooperation forum that includes both countries for Western and Eastern Europe, including the members of the EU and neutral/non aligned countries.

The second part of the article concerns development and fields of cooperation of the CEI. The author divides the evolution of CEI in three periods: period of foundation and enlargement of CEI (1989-end of 1991), period of adaptation of CEI from six till sixteen member States (1992-1996); period of the consolidation and of the deepening of CEI cooperation, including the new financial resources (Trust Fund at the EBRD) and definition of three main strategic objectives (mutual cooperation, European integration, support to transition process).

The third part concerns presentation of organization, principles and functioning of CEI, while the fourth part is dealing with fields of activities of CEI. The author especially points out at the political, economic and technical achievements of the CEI until now. Political cooperation is not very different from similar activities of some other, more influential organizations, such as EU. While achievements in the political fields are not so impressive, the mere (non)participation in the forum is important for promotion of interests of its member countries. In this regard, the examples of former Yugoslav republic Croatia and Serbia/FRY are given. In the forth part, it is pointed out at the connection between the project ideas and initiatives and the methodology for their financing.

The last, fifth section of the article contains conclusion concerning advantages and limits of the CEI. Among advantages, it is pointed out that CEI has successfully encompassed a large number of European countries from different subregions (EU, Central Europe, Balkans, ex-USSR) thus overcoming, some new and artificial divisions in Europe. The particular advantage of CEI is its pragmatic approach and sufficient financial resources, based on the support of richer member States (Italy, Austria) and on the organic connection between CEI and EBRD (through CEI Secretariat at the EBRD). Some of CEI limits concern lack of coherence among member States and very different level of involvement in CEI activities; lack of coherence of a number of very dispersed programmes and projects; lack of larger budget support for projects; impossibility of better coordination of Initiative around some "core" projects, etc.

Ivica STOJANOVIĆ

OWNERSHIP TRANSFORMATION IN FR YUGOSLAVIA (article in Serbian)

SUMMARY

Substantial processes of ownership transformation started at the end of the eighties and beginning of the nineties in the former SFR Yugoslavia, when market reforms included also changes with regard to the economic system. However, due to events which occurred at the beginning of the nineties, the disintegration of SFRY, sanctions imposed upon FR Yugoslavia and the war environment, the process of ownership transformation has been significantly slowed down. It was understood that in conditions of economic blockade a continuation of ownership transformation on the basis of legal provisions from 1990 would cause more harm than benefit. New legal rules were passed; this did not prevent privatization, but did neither stimulate it.

The 1997 Act on ownership transformation in the Republic of Serbia established normative and legal foundations for a comprehensive approach to ownership transformation. The Act contains regulatory mechanisms which enable the state to control the dynamics of the implementation of ownership transformation. The principle that this should be done on a voluntary basis, particularly with regard to enterprises which are autonomously transformed, presents a regulator that is to the greatest extent slowing down the process of transformation. On the other hand, the principle of distribution of free shares and distribution of shares with a discount is a regulator that is accelerating ownership transformation. The strongest regulator for the state to control the dynamics of ownership transformation is the legal right to influence directly or indirectly decision-making with regard to transformation of more than 70% of the entire capital of Serbia’s economy - the capital that is in the public enterprises, enterprises with special programmes for transformation and in enterprises in which bankruptcy procedures should be initiated. The proper combination of regulators which slow down and those which accelerate transformation is necessary to secure the fulfillment of basic aims of transformation, the most optimal dynamics of transformation, with the least economic and social shocks, the new management structure in enterprises, the development of the capital market and a market-oriented restructuring of the economy.

Substantial transformation, as well as the fulfillment of the aims of transformation are yet to take place. Transformation is developing slowly, not only because of legal regulators which slow it down, but also because of internal and external political and economic tensions and pressures upon FR Yugoslavia. War, the state of war, deaths and tremendous damages caused by NATO aggression against FRY - all these have significantly slowed down the process of ownership transformation and the economic development in general. However, although conditions after the war are transformed and more difficult, it should be expected that the state will - in accordance with legal provisions - activate regulators which will speed up privatization. Without accomplishing basic aims of transformation, particularly the market-oriented restructuring of the economy and the development of the capital market, success in the reconstruction of the economy in the aftermath of war cannot be expected. It is of particular significance that the economy be not reconstructed through administrative measures, but in accordance with demands from the market. For this to happen, it is necessary to have an established development strategy and operational market institutions.

Radoje ZEČEVIĆ

THE INTERNATIONAL POSITION OF THE DANUBE AND THE IRON GATE (article in Serbian)

SUMMARY

The author analyses the international position and significance of the Danube, particularly of its Iron Gate (Djerdap) area. As a big international river, the Danube has certain specific features in regard to other international rivers. It flows through nine countries, and is navigable in 85% of its course. This is one of the biggest traffic routes for all the littoral countries and it is also one of the biggest European traffic routes. For all littoral countries, the Danube is of tremendous economic significance. In order to make full use of its waters, it is in the best interest of all Danubian countries to have common policies. There are two main forms in which the Danube is being exploited: by only using its waters (navigation, fishing, energy purposes), and by directly consuming them (irrigation, utilities, sanitary and other uses). The author emphasises that in the past the Danube was mostly used for navigation and fishing, whilst nowadays is increasing the exploitation of its waters for waterworks and production of electric energy. With regard to the level of exploitation of its waters for the industry, trade, fishing and other needs, Danube takes the sixth position in the world.

In regard to the navigation regime of the Danube, there are four periods. The first one is between 1616 and 1856. This is when during the struggle for Danube navigation rights between Austria and Turkey, and later also Russia, bilateral contracts were concluded. The second period is from 1856-1919, the third 1919-1948, and the fourth from 1948 till today. Of particular importance is the contemporary one, the fourth period, which began after the end of World War II and is lasting till today. During the Paris Peace Conference and the New York session of the Ministers of Foreign Affairs in 1946 two basic standpoints developed. The first, the Anglo-French-American one, implied a return to the regime of economic and political domination of western states over the Danube. The second was the position of the former Soviet Union and the countries of Eastern Europe, which wanted the Danubian states to govern Danubian navigation. The Convention on the navigation regime on the Danube, adopted in Belgrade in 1948, is based upon this second position. The Belgrade Convention has for the first time in Danube's history given the littoral states jurisdiction over the navigation regime and has marked the end of the domination of the great powers.

The Iron Gate has a specific position in regard to Danube navigation. Navigation in this sector was very difficult in the past and the Iron Gate was Danube's bottleneck. In order to regulate navigation, it was necessary to make a dam and a reservoir lake. SFR Yugoslavia and Romania signed in Belgrade in 1963 the Agreement on the Iron Gate Navigation and Power Project. The construction of the damn has completely solved the navigation problem and the utilization of over 80% of Danube's energy potential. The entire costs of the construction of the navigation and the hydro-electric supply system of the Iron Gate amounted to about 400 million USD. The entire damage caused by the construction of the damn and the creation of the reservoir lake is estimated at around 66,5 million USD. 25,000 vessels passed through the Iron Gate navigation and hydro-electric supply system. The hydro-electric power plant produced 150 billions of kilowatt-hours (the market price is around 6 billion USD). If the power produced in the Iron Gate hydro-electric power plant was exported, each year an additional hydro-electric power plant could be built. One thing is certainly sure - the Iron Gate hydro-electric power plant has up to now paid for itself at least 20 to 25 times.

The disintegration of SFRY, the introduction of sanctions against FR Yugoslavia and the blockade of the Danube forcefully prevented the implementation of international treaties in regard to the navigation regime on the Danube. When sanctions against FR Yugoslavia were lifted, navigation on the Danube was normalized. NATO aggression against FR Yugoslavia had far-reaching legal and economic consequences. Legally, it violated the existing international conventions and rules that directly regulate the Danubian navigation regime. Economically, it caused tremendous damages to Serbia, but also to other littoral states and countries which use the Danube as a navigation route. Regardless of the situation in which it found herself without her own guilt, FR Yugoslavia deems it necessary to contribute to the establishment of normal navigation along the Danube through cooperation with littoral states and in full compliance with the provisions of the Danubian Convention.

Analysis of historical developments in the Danubian region and of the relations among the great powers indicates that Serbia has always been in an unequal position when she could not decide on her own destiny. Making decisions in her name, the great powers have inflicted tremendous harm. Unfortunately, nowadays it is politics that will once again determine developments in the Danubian region in the forthcoming period.

 

INTERNATIONAL PROBLEMS, NO. 3, 2000

Ljubivoje AĆIMOVIĆ

OSCE AT THE BEGINNING OF 21 ST CENTURY - THE PLACE, ROLE AND REACH (article in Serbian)

SUMMARY

The Organization for Security and Co-operation in Europe (OSCE) was created on the foundations and as a follow-up of the Conference on Security and Co-operation in Europe (CSCE) that took place in Helsinki in 1975. However, one should keep in mind that, by its very nature, this is actually a new international institution. CSCE had been created during the cold war as an integral part and instrument of the détente process. With the end of the cold war CSCE lost its original historical role and purpose and instead of it - and on its foundations - OSCE was established. The latter one is essentially different from the Helsinki CSCE by its basic character, constitutional structure, subject matter and mode of acting. The basic current function and preoccupation of OSCE is to direct and manage the process of democratic transformation of the former socialist societies in Eastern and South-Eastern Europe as well as regional stabilization.

For analytical purposes the activity of OSCE/CSCE in the past decade can be divided into the following three groups: (1) its own institutional build-up, (2) normative and programmatic activity, and (3) operational and implementation activity.

In the field of institutional build-up the basic results were realized, above all, in the concluding documents of the CSCE summits that took place in Paris in 1990, Helsinki 1992 and Budapest 1994 (a decision was made there on the change its name into OSCE, or actually to transform it formally as well from a conference to an organization). Anyway, the institutional build-up (governing bodies, subsidiary bodies and organizational structure) has been a significant activity of CSCE/OSCE in the past period and for the time being it can be considered to be mostly completed.

In the field of normative and programmatic activity the basic decisions were made at the CSCE/OSCE summits, too, but they are also included in several other documents, such as, above all, four Vienna documents on confidence- and security buidling measures adopted in 1990, 1992, 1994 and 1999 as well as the final document of the second phase of the CSCE Conference on Human Dimension that took place in Copenhagen in 1990.

The OSCE operational and implementation activity has been dynamic and it involved a broad range of actions. The so-called field activities are of special importance within it. They have been numerous and varied, considering that, taken as a whole, the basic assignments of these missions have been as follows: first, assistance in resolving crises and conflicts in OSCE member states; second, assistance in building democratic institutions within the process of transition; third, complex implementation of some international documents (for example, the Dayton Agreement on Peace in Bosnia and Herzegovina); fourth, protection of human rights; fifth, co-operation with OSCE in general; and sixth, assistance in organising parliamentary elections in the OSCE member states and their supervision.

OSCE is not an institution where key international decisions are made, and, in comparison with CSCE, its political significance is comparatively smaller, but its practical applicability is much greater. Therefore, it is an important factor in international relations in the era after the cold war. Instrumental and operational aspect of OSCE is its dominant feature and it is likely to keep developing in that direction.

In any case, the role and further development of OSCE will primarily depend on developments in international relations, i.e. the international environment in which it is operating.

The Charter for European Security, a document adopted at the OSCE Istanbul summit in 1999, could be of importance for anticipating the role and activity of this institution in the forthcoming years. Not any significant innovation was included in the paper mentioned above, but the Charter confirmed the assumption that the current trend would be continued. In short, the basic innovations in the Charter are as follows: adoption of the platform for co-operative security; development of the OSCE role in peace-keeping operations; establishment of the REACT mechanism - this implies establishment of teams of experts for rendering rapid expert assistance particularly in the field activities of a large scope; enlargement and improvement of OSCE capacities to perform police activities with the objective to help ensure the rule of law; establishment of the Operation Centre with the aim of planning and performing field activities; promoting the consultation process within OSCE by the establishment of the Preparatory Committee under the OSCE Permanent Council.

As there is no ground to assume that some important changes will occur in international relations in this (Euro-Atlantic) region in the next period of about ten years, it could be expected that OSCE will mostly retain its current role and significance under the present conditions. It, actually, means that key decisions will still not be made by OSCE while it will keep on being involved in resolving conflicts and crises of lower intensity. It will certainly keep on performing its instrumental function in implementation of some external basic arrangements and decisions such as the Dayton Peace Agreement on Bosnia and Herzegovina and the Resolution 1244 on Kosovo adopted by the UN Security Council.

In the same way, geopolitical activities of OSCE will keep on being focused on the regions of the Balkans and the former Soviet Union in the fields of building of democratic institutions, protection of human rights and crises management. At the same time, this also implies considerable development of field activities. As an important component of its acting OSCE will keep on being engaged in the field activities.As an important component of its activites there will also remain those military aspects of security in Europe with the well-established system confidence- and security buidling measures as well as a gradual development of negotiations in the sphere of arms control and disarmament.

One should expect neither in the normative and programmatic field any major steps to be taken nor great innovations to be introduced in the institutional field. In both of these fields much has been achieved, and there would probably be no particular reason to take some new steps. All in all, one could expect that in the forthcoming years OSCE would mostly remain the same in all its substantial features.

Konstantin OBRADOVIĆ

RULES ON THE CONDUCT OF HOSTILITIES IN INTERNATIONAL ARMED CONFLICTS (article in Serbian)

SUMMARY

Considering the rules on the conduct of hostitilities in international armed conflicts that were defined by the Hague conventions, the 1977 Protocol I on international armed conflicts and some other international conventions, the author firstly points to some rules of general nature. General rules concern the ways or methods as well as means of combat. They are treated as governing rules and should serve as a model of behaviour for the warring parties in a situation when no specific rule can be applied. The author states that all restrictions imposed by the Hague law on the conduct of combats can be reduced to two basic principles of the standard law of war that are still valid today. First, there is the prohibition of means and ways of fight that with no distinction ("indiscriminately") affect both combatants and non-combatants, or actually destroy both military and civilian objects, or, yet, cause unnecessary suffering or even render death inevitable. Second, there is a strict obligation that the warring parties should constantly make a distinction between combatants and military objects, that might be exposed to military actions, and civilian population and non-military objects that, contrary to this, should be fully protected from the effects caused by taking military actions. The author says that the Protocol I only reaffirmed these and some other general rules making them more specific and adjusted to the contemporary conditions. The only new group of rules that were introduced were the ones concerning the environmental protection.

Contemporary law on international armed conflicts elaborates in detail these general rules giving more precise instructions to the warring parties. The purpose of this elaboration is to achieve the following two objectives: to protect from war destruction the civilian population and civilian objects as much as possible, and second, to reduce to a minimum the possibility of an ambiguous or erroneous interpretation of the rules on the conduct of hostilities. The second part of the paper deals with these specific issues: the concept of “attack” and measures of precaution in combats; additional rules on protection of civilian population, civilians and civilian objects, places and zones under a special protection (medical zones and places, safety places, neutralised zones, undefended places, demilitarised zones). The author devotes a special attention to the prohibition of “dishonourable” ways of fight: the prohibition of perfidy, the prohibition to abuse acknowledged marks, the prohibition to abuse national emblems, the prohibition to deprive a person of mercy, the obligation to protect an enemy disabled for further combat, the obligation to protect persons that were in the aircraft. The author analyses in detail these rules also pointing to the cases when they were violated as well as to the possibilities to prevent these violations and bring to justice the persons who have committed them.

Biljana VANKOVSKA

GLOBALIZATION AND FRAGMENTATION AS A DESTINY: A MACEDONIAN PERSPECTIVE (article in English)

ABSTRACT

Globalization, fragmentation and regionalization are terms that constitute the three poles of the analysis presented in this article. It creates a framework for the analysis from a point of view of a small Balkan state. The author does not operate with the stereotypes that present globalization as a benign and fragmentation as a malign process. This approach seems applicable exactly on the Balkan state of affairs that offers persuasive evidences that globalization and fragmentation have always been an age-old reality but have been perceived in a specific way. Therefore the author presents an inner view to both processes in their unity. The focal point is on the impact of these mutually related processes on security of Macedonia and the Balkan region.

Paul J. I. M. de WAART

NATO v. YUGOSLAVIA: TAKING INTERNATIONAL LAW INTO ITS OWN HANDS (article in English)

ABSTRACT

The author analyzes the NATO’s 1999-armed attack on Yugoslavia within the context of international law in general and human rights law in particular. He focuses his attention on the tension between sovereignty and human rights in the Alliance’s strategic concept, and discusses the dynamics of self-determination that results from the tension between the right of states to territorial integrity and the right of peoples to implement self-determination through secession. The concept of humanitarian catastrophe is defined by considering the limitation and derogation clauses in the International Bill of Human Rights. The author finally considers the extent to what the prohibition of the use of force as a peremptory norm might still permit the use of force for humanitarian purposes, i.e. humanitarian intervention.

Barbara DELCOURT

USE OF INTERNATIONAL LAW IN THE YUGOSLAV CRISES

TWO LAWS, TWO YARDSTICKS (article in English)

ABSTRACT

The place and role of international law in the Yugoslav crisis appear to be the result of a serious paradox. All political actors concerned have continuously invoked legal rules to legalize their positions, aspirations and actions. So, it could be expected that law formed part of a common language favouring negotiations and peaceful resolution of conflicts. However, referring to law has not prevented a dialogue of the deaf. By analyzing closely the statements of the relevant political players, the author demonstrates that referring to "international law" masked the conflicting concepts of the law invoked. Two major events served as a basis for this reasoning: the problem of recognition of the Yugoslav republics in 1991, and the political use of law in the Kosovo war and operation "Allied Force" against Yugoslavia in March-June 1999.

Domenico GALLO

A COLLATERAL ASPECT OF NATO AGGRESSION: EUROPEAN UNION SANCTIONS - The Parable of EU Sanctions: from Preventing War to Collective Punishment (article in English)

ABSTRACT

The author firstly deals with the political and legal aspects of the Common Foreign and Security Policy of the European Union as the background to the EU current policy towards the Yugoslav crisis. The paper presents series of restrictive measures the EU has applied against Yugoslavia from the very outset of conflicts resulting from the breakup of the former Yugoslavia up to the sanctions that where adopted when the crisis in Kosovo commenced. Analyzing these measures in the light of international law, the author particularly stresses all the aspects of illegitimacy of the EU sanctions. There is a common trait in all of the events that have taken and that is that power politics rebel against law. There is only one antidote to such politics: to continue the struggle in favour of law.

 

INTERNATIONAL PROBLEMS, NO. 4, 2000

Aleksandar FATIĆ

TRANSATLANTICISM AND DISTRIBUTION OF POWER (article in Serbian)

SUMMARY

The article discusses the European and USA foreign policies in the new structure of international relations by focusing on the concept of transatlanticism and the mutual dependencies between the USA and Europe in developing a sustainable security and development policy on the Old Continent. In this context, the article discusses the importance of large international organisations, the mutual relatedness of the EU and NATO, and the key management techniques for policy within the large organisations and for small countries that are waiting for full accession to these international fora.

I argue in the article that there are two main such policy management techniques for small countries in the new structure of international relations, namely bandwagoning, when smaller countries tow the line of the dominant military and political forces in the world theatre (such as Poland, the Czech Republic and Hungary did in relation to NATO until eventual accession to it), and alignment balancing, which implies a strategy whereby smaller and medium countries pursue independent foreign policies on the implicit understanding they they would act in an orchestrated manner, as an alliance, should one of them come under security threat. I also argue, in agreement with Margarita Balmaceda, that there is also an emergent mechanism for great power policy management within large international organisations, which is called "concert of power", whereby a few dominant powers within a large number of member countries make important decisions in a flexible institutional environment. An example of this mechanism is the Combined Joint Task Force within NATO, which allows major countries to staff the CJTF as appropriate to particular missions, where each participating country is allowed to opt out of any specific operation, but is not allowed to veto the conduct of the operation by the others. This is a mechanism which presents flexible coalitions with a window of opportunity to pursue aggresive foreign policies within the large international alliances as long as these policies do not directly threaten members of the alliances themselves.

The article concludes by discussing the USA pre- and post-Presidential election policies towards European security problems, along with briefly commenting on the likelihood of the same European policies being continued within the USA foreign policy camp regardless of the outcome of the Presidential election in November 2000.

During Clinton's administration, Ukraine, Belarus and Kayakhstan have agreed to place their nuclear capabilities, inherited from the Soviet era, under the control of the Russian Federation. In 1997, Clinton succeeded in persuading the Congress to finally ratifz the Chemical Weapons Convention, which the Bush administration had signed at the end of its tenure, and which was debated by Congress between 1993, when Clinton originally submitted it for ratification, and 1997, when it was ratified. The convention prohinits the development, production, acquisition, stockpiling, transfer and use of chemical weapons.

At the same time, Clinton's Administration has failed to persuade the Senate, which was dominated by the Democrats, to retify the Comprehensive Test Ban Treaty in October 1999, and Clinton has signed the National Missile Defense Act in 1999, which envisaged that the US would install a national missile defence system as soon as this became technologically practicable. These have been major failings in the effort to contribute to the creation of a safer international environment, and they have contributed to the US being perceived as an increasingly unilateralist power in international relations.

Not unrelatedly, the decision of the Administration to present the regime of Slobodan Milošević with a ready-made “Kosovo solution” in the form of an ultimatum at the Rambouillet negotiations precipitated the regime’s refusal to agree to the terms offered and led directly into the NATO bombing of FRY in 1999 without a Security Council authorisation, which flew in the face of a number of provisions of international law for which Clinton had once said that they would be before and above pure power politics during his presidency. The commencement of the bombing was followed by a hugely accelerated pace of the Serbian military activity in Kosovo and the mass expulsions of ethnic Albanians from the province. The campaign, marked by wrong judgments of how long FRY could hold under the bombs, tested the strength of NATO as an alliance, and when the peace agreement was finally signed Kosovo witnessed a reverse wave of ethnic cleansing, this time of the Serbs by the Albanians, and a rise in criminal activity which the UN Administration (UNMIC) has proven unable to keep in check.

Predrag SIMIĆ

DOES THE BALKANS EXIST?

VISIONS OF THE FUTURE OF SOUTHEASTERN EUROPE (article in Serbian)

SUMMARY

Ten years of war in ex-Yugoslavia brought back to use the terms “Balkans” and “balkanization” that by the end of the 19th and beginning of the 20th centuries in the West became synonymous for political violence, ethnic conflicts and fragmentation of states (kleinstatterei) that had marked the breakup of the Ottoman Empire and the so-called Eastern Crisis. At the time when the end of the bipolar division of Europe indicated the possibility of a new and peaceful order, wars for the Yugoslav legacy “brought wars back to Europe”, showing the inability of international organizations to ensure peace in the continent that was no longer threatened by conflicting interests of military and political alliances, but by crises and ethnic conflicts in the former socialist countries. The opportunity for stabilization of this region did not present itself until political changes occurred in Serbia, where the victory of the democratic opposition over Slobodan Milošević’s regime in September 2000 eradicated the last remnants of the Berlin Wall in Europe and, somewhat earlier, in Croatia where the victory of opposition also eliminated an anachronous nationalistic regime. Despite the fact that many crisis spots (Bosnia, Kosovo, etc.) are still active in the region, South East European countries for the first time in recent history have the opportunity to build stable mutual relations and long-term forms of regional integration as a part of the European and Euro-Atlantic integrations. The failure of the Rambouillet conference and NATO military intervention against Yugoslavia in 1999 had serious consequences not only for relations between the US and Russia but also for Transatlantic relations, confirming weaknesses of the Common Foreign and Defense Policy and marginal position of the Union in issues of the European security. Under the German Presidency, the Union responded to that challenge in June 1999 with the Stability Pact for Southeastern Europe and stabilization and association process. The Pact encompassed most former initiatives for regional cooperation as well as the policies of the European Union and the United States in the attempt to establish common policy towards South Eastern Europe.

Demetrius Andreas FLOUDAS and Luis Fernando ROJAS

SOME THOUGHTS ON NAFTA AND TRADE INTEGRATION IN THE AMERICAN CONTINENT (article in English)

ABSTRACT

The North American Free Trade Agreement (NAFTA) came into effect on 1 January 1994 with a primary function to create a free trade zone between the United States, Canada and Mexico, that would capitalise on the North American annual 6 trillion dollar market and its 350 million consumers. NAFTA already rivals the European Union as the world’s largest trade area and is set to become the eventual nucleus of a possible pan-American economic area. This article seeks to examine in brief a selected number of the basic elements of the NAFTA. It evaluates some of its key characteristics and provides a short outline of its historical background and economic nature. The second part of the article contains a summary outline of the Agreement’s more important provisions regarding market in order to describe the way that this specific issue has been tackled in North America. Finally, further focus is brought on the system of dispute resolution that the Agreement foresees.

Radovan KOVAČEVIĆ

TRANSITION COUNTRIES TRADE POLICIES - EXPERIENCES FROM THE 1990S (article in Serbian)

SUMMARY

From the earliest days of transition to market economy in Central and Eastern Europe and the former Soviet Union it was taken that trade liberalisation and trade re-orientation would and should form central components of economic policies of these countries, along with macroeconomic stabilisation, price liberalisation, privatisation and enterprise restructuring as well as institutional reforms. What was less clear was should there be pursued rapid trade liberalisation, whether imports or exports should be liberalised first, and what linkage might there be between the exchange rate, capital account transactions policy, and foreign direct investments. Further, economists were unsure what a new, equilibrium trade structure would look like in the transition economies, or how rapidly such a new structure might be approached, though there was an early analysis of this issue employing gravity models or models based on historical trade patterns. Also, various countries or groups of countries belonging to the transition economies formed different types of trade alliance with each other, with the ECU, etc.

Sudden liberalisation can impose a huge adverse shock on domestic enterprises, giving them no time to adjust to it before external competitive forces sweep them away. The most striking instance of this phenomenon was the case of East Germany, following the re-unification of the country in 1990, though the situation there was clearly exacerbated by the exchange rate that was politically motivated, but was at the same time economically disastrous at the time when the unification took place. Other countries also suffered from over-rapid liberalisation, which sometimes reversed for a time to give more time for domestic adjustment.

Successful trading in world markets requires substantial institutional support of the sort that was mostly lacking in adequate banking services able to deal in with convertible currencies, export credit guarantees, trade insurance, export promotion services to help overcome informational deficiencies to do with operating in foreign markets; efficient and honest custom services, etc. For some transition economies, especially those in Central Europe, bringing these services up to a reasonable standard was accomplished rather rapidly, but in many of the countries business-related services function very poorly and significantly impede the trade.

The key to a successful trade policy is to tailor reforms in such a way to fit the political and administrative potentials and institutional infrastructure of each country. However, when we have weak and underveloped countries, the only effective trade policy is the one that is administratively simple and relatively immune to political manipulation.

Ljubica M. ZJALIĆ

SCIENCE AND TECHNOLOGY BETWEEN CREATIVE USE AND ABUSE (article in Serbian)

SUMMARY

The author points to the fact that development of science and technology can be directed in two ways. It can be beneficial. Knowledge, scientific and technological discoveries manifested in new or improved products and processes, and directed towards explicitly defined targets and needs of the mankind, have been a significant development factor. They can make the human life easier and improving. Development of science and technology can create welfare, enable humanisation of work, improvement of the quality of life, and achievement of civilisation progress. These knowledge and discoveries, however, could be used unreasonably and for selfish purposes. New technologies can produce destructive effects. A progress made in development of science and technology can do harm to the human being and its surroundings and can generate means for destruction of the very life. The threatening risks of abuse of science are getting bigger and bigger while the consequences of irresponsible application of technology are becoming more and more dangerous. So, scientific and technological progress has two faces in our present times. It seems that the man knew how to make and apply the most powerful technological inventions, but has not been able to predict the effects they will produce. The events in the 20th century show that not in all occasions the man has been a sensible master of technology that is being created, thus deepening the gap between technology and humanity.

In searching to annul the negative impact of the application of science and technology it would be necessary to direct scientific and technological development. It is necessary to withstand straightforwardly to the abuse of science. Indeed, scientists who perform creative work have not a problem to think of abuse of their discoveries. It is, also, true that science and technology are not autonomous and some other factors have a crucial role in making decisions on the application of science and technology. Still, the academic circles all over the world expect that science would offer theoretical and practical assistance and support that would help people come to their senses and encourage them at the same time. Science should discover the oddity and evil in human mind in order to show that without science and technology the progress of the mankind would not have been made. Without science and technology we could have neither become what we are, nor we could long survive with it in the whirlpool of the technological nightmare we have been taken in. The solution to this problem would be to find a way to control the unrestrained power and subjectivity. It is also necessary to establish some kind of control over scientific research and technological development, since no one, including the greatest scientists of present times, knows where science will lead us to. The role of science and technology in the contemporary world can be significant and beneficial, but only if they are progressive and emancipating and by no means enslaving, concludes the author.

Aleksandra DJORDJEVIĆ

RULE OF LAW, JUSTICE AND PACIFICATION OF THE BALKANS

ABSTRACT

The issue of repatriation of refugees is widely seen as a basic issue of human rights, and thus also of justice more broadly conceived. The practicalities of repatriation demand the prior re-establishment of trust and a rule of law in the war-stricken lands. Such measures, among other preconditions, require the implementation of justice in a judicial sense, namely, trying of those who bear the individual responsibility for atrocities committed during the warfare. Leaving the issues of responsibility to linger would jeopardise the feasibility of the repatriation process itself. A number of various factors will influence the future of the Balkans, but all of them will be closely connected with the issues of justice and inter-ethnic reconciliation.

Tatjana JEVREMOVIĆ

ARBITRATION SETTLEMENT OF DISPUTES BETWEEN NON-GOVERNMENTAL ORGANISATIONS

SUMMARY

The author considers the role of arbitration in settlement of disputes between non-governmental organisations with particular reference to disputes with element of foreignness. Non-governmental organisations are active participants in social life, both in our country and in the world. Their activities proceed in various social fields and they are very significant in any society. A brisk activity of non-governmental organisations has particularly become noticeable in recent years and it is, therefore, understandable that it has brought about an increasing number of disputes in various legal relations. For these reasons, there is a proper need to study the ways of non-governmental dispute settlements. Mutual disputes between non-governmental organisations are very frequent and that could be harmful for committing further their activity and performing their function in the society. It is, therefore, necessary to predict possible ways for overcoming such situations.

Settlement of disputes between non-governmental organisations should be efficient and informal, implying more flexible ways that include arbitration as the most important one among them. The disputes that could be settled by arbitration are diverse and they extend from disputes within the non-governmental organisation to various ones between a non-governmental organisation and third parties, or actually mutual disputes between two or more non-governmental organisations. It is particularly the latter ones that could be significant for the work of the non-governmental sector and also encouraging for development of rules in this field. Arbitration in disputes with element of foreignness is of special significance, this particularly referring to those where a party in a dispute is a foreign person.

Arbitration in dispute settlements of non-governmental organisations makes positive effects on promotion of efficient and impartial trials, thus assuming a broad social role out of the non-governmental sector. One should particularly keep in mind the positive characteristics and proper effects of dispute settlement by arbitration. Apart from impartiality and efficiency, these are promotion of peaceful, out-of-court ways of dispute settlement, more active role of individuals who by their objectivity and professionalism exert influence on the society, flexibility of the offered solutions in dispute settlement and a possibility to resume co-operation between the parties in dispute, informality and one-level decision-making. A special contribution of arbitration is reflected in supplement of the meagre legislation in this field, this particularly referring to flexible forms that are employed to take arbitration decisions by applying the principle of equity. It is also reflected in the need to modernise the existing laws on the activity and functions of non-governmental organisations as well as in reaching the solutions in settlement of disputes that appear in their work. For all these reasons the author is of the opinion that arbitration is the best way to settle disputes with elements of foreignness between non-governmental organisations.


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