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Crime Holding Back Economic Growth in Balkans - 2002-09-21

In southeastern Europe, Western nations are hoping to speed economic growth by promoting trade within the region. But progress is slow and people wonder why assistance projects take so long to be completed.

The economy of Greece is bigger than the other Balkan economies combined. That includes Romania, Bulgaria, Albania and most parts of the former Yugoslavia.

The one business that flourishes in the Balkans is criminality. Whether drugs, prostitution, weapons or cigarettes, smuggling is a huge and profitable business.

Rory O'Sullivan heads the World Bank office in Belgrade. Earlier, he was in Bosnia-Herzegovina. Mr. O'Sullivan believes criminality is holding back development.

"The one area where there has been totally insufficient progress in all the countries is the rule of law. The reform of the courts and giving a sense of security to investors, so that, when they come into a country, they feel that their rights as investors, as businessmen who are prepared to work very hard to develop the country where they're investing their money, that their rights can be protected, and they can rely on the rule of law," Mr. O'Sullivan said.

Aid donors have been working hard to boost the salaries of judges and prosecutors, so that the legal system is less vulnerable to corruption.

Donors are equally frustrated with the corruption that has delayed progress in building basic infrastructure. Money allocated for road construction in some countries has simply disappeared. Elsewhere, construction moves at a snail's pace.

Greece, the regional power, wants to finish the highway running northward into Macedonia and Serbia. Greece is offering to pay for the construction of 156 kilometers of highway in southern Serbia, finishing up the huge freeway project that has lain dormant for 20 years. When completed, the highway will link Greece with Austria and Hungary. Michel Spinellis is the Greek ambassador in Belgrade.

"It is important for Greek exports. It's important because it is the highway that connects the countries in the region, and this piece is really the only part of this highway that is not finished," Mr. Spinellis said.

That unfinished piece extends from Leskovacs to Vranje, in an area of southern Serbia that has seen ethnic unrest.

Rory O'Sullivan believes it is critical that the European Union produce some tangible economic results in the Balkans.

"Every single country in the region has a desire to move closer to Europe and closer to European standards of management and human rights and everything it means to be a member of the European Union," he said.

Some development projects, however, are unlikely to be completed anytime soon. These include the ambitious plan to build a road from the port of Durres in Albania to Skopje, Macedonia, and on to Sofia, Bulgaria. That project would cost over $2 billion dollars. Similarly in doubt, say some experts, is the plan to build a new bridge over the Danube River from Calafat, Romania to Vidin, Bulgaria.