Business Brews Challenges for U.N. in Kosovo

PEC, Yugoslavia — When marauding Serbian forces pulled out of this devastated city at war’s end in June, they took key parts of their beloved Pecko brewery with them:

The already bottled beer. The empty brown bottles waiting to be filled with beer. More than 40 delivery trucks that distributed the beer.

But they left the beer-making equipment.

A few days later, Rexhe Krasniqi, 45, Pecko’s production director until a province-wide purge of Albanians from the public work force in 1990, walked into the empty brewery with other former workers to look around.

Yes, they agreed. They could make it work again.

And they have, filling Kosovo’s cafes with Birre e Pejes Extra, a light ale bearing what Krasniqi describes as a temporary “wartime” red-and-black label that pronounces the beer a product of Kosova, the Albanian word for the separatist Serbian province.

It’s a mark of the ironies of peacetime Kosovo, where alcohol-shunning Islam is the dominant religion, that one of the first medium-sized businesses back in operation was a brewery.

Yet the reopened brewery, which can produce 60 million bottles a year, also points up one of the main difficulties that U.N. administrators face in establishing themselves as the caretakers of what, from a legal standpoint, they don’t own.

Under the Yugoslav economic system, businesses generally operated in three ways: small private enterprises; large state-run companies; and mid-sized firms like Pecko, “socially owned” by the workers themselves, with profits going to the central government.

U.N. officials in Pristina knew that the Pecko brewery had reopened, with 450 Albanian employees, each of whom earn about $120 a week. The U.N. officials didn’t know that the profits, which brewery officials declined to specify, were going to Kosovo’s unrecognized provisional government.

“That’s clearly a problem for us,” said Rutger Wessels, a Dutch economist and deputy director in the U.N. office charged with restarting Kosovo’s economy. “We are aware that this is happening to some extent, but we haven’t had much standing to argue against it because we don’t have an alternative in place.”

Wessels, who said he doesn’t believe any business in Kosovo is making much money, added that U.N. officials are less concerned with who owns the properties and profits than with getting businesses up and running safely.

Right now, no one even knows how many of the businesses have restarted.

Safet Merovci, 38, deputy finance minister in the provisional government, said he can’t estimate how much money his department oversees.

Merovci said government expenditures include small grants to help restart state-owned businesses, including about $11,000 to the Novo Brdo coal mine. An additional $55,000 was recently distributed to about 1,200 families of dead Kosovo Liberation Army fighters, he said.

Provisional government officials see themselves as the only mechanism for restarting former state-owned businesses, he said, citing U.N. officials’ slow progress in creating their own civilian bureaucracy.

“The provisional government is trying to maintain the socially owned property,” Merovci said. “If it’s possible for the workers to come back . . . then they will come back.”

They already have come back to the Rinia Cinema, a two-screen movie house in downtown Pristina, the provincial capital, that was showing the film “The Negotiator” as NATO bombs began falling March 24.

One of the screens was ruined during the war, but the other is ready to go. But the workers committee that revived the theater can’t find a distributor to send films, so the theater remains dark.

The committee has, however, given a two-year lease to Muhamet Abdullahu, 34, and a partner to reopen a disco on the first floor. Abdullahu said he made repairs and had begun installing lights and a sound system when someone from the provisional government showed up.

“The guy came with a document and said this building belonged to [the provisional government], and they said I had to leave,” Abdullahu said.

Abdullahu and the committee took the issue to U.N. officials, who posted signs claiming the theater in their own name.

“Now we are waiting to see what the U.N. will decide,” Abdullahu said.

But he’s optimistic. “They gave me the keys,” he said.