No sooner had the IMF welcomed Kosovo as its newest member on May 8, than Serbia announced that the fledgling state would have to assume the servicing of more than $1 billion in foreign debt.
The demand – likely to be shunned by Kosovo – would cover its share in Serbia’s debt to the Paris and London Club, said deputy prime minister Mladjan Dinkic.
But Serbian officials deny the suggestion that if Kosovo takes over its debt, it would mean Serbia’s acknowledgement of its sovereignty.
The suggestion’s far from trivial: Serbia is locked in a legal effort to invalidate Kosovo’s declaration of independence last year, in a case currently pending before the International Court of Justice (ICJ). “This case is of paramount importance, not only for Serbia but for international law and order, because the ICJ will essentially have to consider whether an illegal and ethnically motivated act of secession is acceptable,” says a Serbian official at the Ministry for Kosovo and Metohia. “Therefore, the opinion ICJ gives will set a precedent for any future attempt for secession.”
Kosovo’s ambassador to the UK, Muhamet Hamiti, argues that “on the political side, Kosovo’s stature as an international actor will be enhanced with the IMF membership.”
But Serbian authorities, perhaps predictably, maintain that Kosovo’s IMF membership is of limited significance: “This will not have any impact on the other aspects of Serbian efforts to preserve Kosovo within Serbia,” an official at Serbia’s Ministry for Kosovo and Metohia told Emerging Markets.
“This membership is not an affirmation of a country’s sovereignty, but shows the relation of leading economic countries towards Kosovo. Serbia will continue to fight for the preservation of its sovereignty and territorial integrity with all diplomatic and legal means.”
Membership benefits
Kosovo will become the Fund’s 186th member, with an initial quota of SDR 59 million. The requirement for membership was a simple majority vote, but 96 IMF members plumped in Kosovo’s favour, with 10 against and 32 recorded abstentions. “An exceedingly good result,” Hamiti says.
The ambassador says the vote is significant because it will grant the government access to international funds for the first time. “We are striving to rebuild Kosovo after a long period of disinvestment (because of the Serbian occupation) and the devastation of the 1998–99 war. We will be able to access international finances in a way that we have been unable to do for lack of status in the past. Kosovo will be able to benefit from IMF membership just like any other country.”
The move also opens the way for membership of the World Bank for which IMF membership is a prerequisite. The 185 members of the World Bank are identical to those of the IMF, but Kosovo will be the only member of the IMF that is not also a member of the United Nations.
Serbian diplomacy is mainly interested in preventing Kosovo from becoming a member of international bodies that imply sovereignty of their members. “The IMF is not that kind of organization,” an official at the Serbian Kosovo ministry says.
But the diplomat suggests Serbia’s continued attempts to deny its independence are wrongheaded: “Kosovo has been free for almost a decade now. Kosovo has been independent for 15 months now,“ he says. “Serbia needs to extract itself from the hole of denial it has dug itself in for so long.”
“Kosovo and Serbia, as independent and sovereign nations, should aspire to Euro-Atlantic integrations, and leave the tragic legacy of the past behind.”
Kosovo will continue to lobby for inclusion into other international bodies, says Hamiti: “We are committed to becoming a full member of the international community, integrating into the EU and Nato, and last but not least, membership in the UN. There are challenges ahead, but also a lot of opportunities for our new nation.”
The road ahead
But Tomas Valasek, director of foreign policy and defence at the Centre for European Reform, predicts difficulties ahead for Kosovo. For one, there are some international organizations which Kosovo “will not join in the foreseeable future” for the simple reason that unanimity is required for membership.
“If either Russia or Serbia or any of the other countries that are against its independence – including five members of the European Union, Spain, Romania, Slovakia, Greece and Cyprus – if any of those have a say, they will block it.”
EU membership is an even more remote possibility. Valasek says that Kosovo will have to overcome “three massive hurdles” aside from the opposition of five current members. He cites resistance within the EU to further enlargement and the great reluctance, following the EU’s experience with Cyprus, to admit members who are engaged in a dispute in the way Serbia and Kosovo are.
Valasek argues that Kosovo’s membership in the IMF is just “one move in what is likely to be a very long chess game in which Serbia, Russia and other opponents will try to thwart Kosovo’s inclusion in international institutions” while Kosovo with its allies “will try and join as many as it can”.
“But this is not a game which is going to end any time soon,” says Valasek. “The EU is about as complicated as it gets in terms of accession, and the IMF inclusion is going to have very little impact on Kosovo’s ability to join the EU.”