Danube trade blocked by bridges

Eastern European countries suffering huge losses appeal for funds to

The three bridges that spanned the Danube River in this northern Serbian city are little more than monuments to the punishing 11-week air campaign that NATO led against Yugoslavia this spring.

Crumpled and collapsed from direct hits by NATO bombs, the now defunct bridges hulk helplessly in the water, cutting off the two sides of the city and blocking river trade on southeastern Europe's most important waterway, which stretches more than 1,700 miles from Germany through Austria and the Balkans to the Black Sea.

As a result, Hungarian and Slovak barges are stuck in Ukrainian and Romanian ports, while Bulgarian ships idle at Budapest docks.

But it will take more than cranes and bulldozers to clear the logjam at Novi Sad. It will take a major political breakthrough.

The bankrupt Yugoslav government insists that since NATO caused the mess, it must help finance the cleanup and reconstruction of Novi Sad's bridges. As long as Yugoslav President Slobodan Milosevic remains in power, the West will neither commit aid to rebuilding the bridges at Novi Sad nor include Yugoslavia in its "Balkan Stability Pact" for the region.

For neighboring countries, the wait is bringing dire economic consequences. "No regional development is possible without Yugoslavia," says a Bulgarian diplomat based in Belgrade. "I'm not optimistic about the regime here. But Yugoslavia has to be a member of the Stability Pact and the process of European integration."

Last week, the transportation ministers of Bulgaria, Romania, and Ukraine appealed to the European Union (EU) to fund the removal of river debris. The Budapest-based Danube Commission estimates that repairs could cost as much as $92 million and take as long as four years.

For the poorer countries along the lower Danube, the river is the cheapest transportation route to the markets of Western Europe. With the Danube blocked at Novi Sad, their fragile economies are suffering huge losses. Romania claims losses of $90 million, while Ukraine has lost $70 million, and Bulgaria $100 million. An estimated 3,000 Romanian workers have been laid off, and Bulgaria's state shipping company has had to fire 500 employees.

"Danube transportation accounts for one of the most important sources of economic growth," says Aleksandar Kovacevic, an independent economic analyst in Belgrade. "Gross national product in Serbia cannot grow if transportation on the Danube is not increasing."

The same correlation between river trade and economic growth exists in Bulgaria, Romania, and Ukraine, says Mr. Kovacevic.

A bypass canal around Novi Sad exists, but Yugoslavia says it is for domestic use only. It has permitted Russian and Ukrainian barges passage, because those countries opposed NATO airstrikes. But Romania, along with Bulgaria and new NATO member Hungary, granted NATO use of their airspace. Romanian shippers have retaliated by prohibiting Yugoslav barges from traveling through the Danube-Black Sea channel.

Belgrade analyst Kovacevic, who has worked intensively on navigation problems on the Danube, says for Western Europe - especially Germany - the blockage of the river is actually a boon. For one, activity on the Rhine River and at Atlantic ports increases. And the competitiveness of central European industry, traditionally dependent on raw materials transported up the Danube, decreases.

"The real problem of the Stability Pact is that it doesn't have technical provisions," adds Kovacevic. Navigation on the river is still governed by the antiquated Danube Convention, largely dictated by the Soviet Union in the aftermath of World War II. "If you miss this chance to set up regulations on the Danube, you won't have regional stability," he says.

This is not the first time that turmoil in the Balkans has caused economic hardship for the struggling economies of the lower Danube.

When sanctions were imposed on Belgrade in 1992 over its support for Bosnia's Serbs, vital land and water routes through Yugoslavia were strictly controlled, leading to a steep drop in trade. The embargo also spawned a wide network of organized crime in the region - perhaps the legacy of the Balkan wars that will last the longest.

"It's no secret that even during the embargo, fuel and other goods went from Bulgaria and Romania to Yugoslavia," says the Bulgarian diplomat. "The embargo was a catalyst for the appearance of organized crime in Bulgaria."

While the West has pledged aid to the ailing southeast European economies, many in the region remain skeptical about what help will actually arrive.

There is a lingering bitterness in Romania and Bulgaria that losses sustained from the Yugoslav embargo were never compensated fully. And while Western-oriented governments supported the NATO airstrikes, both are showing signs of frustration at the slow pace of investments and of integration into European structures.

Last week, Bulgarian Prime Minister Ivan Kostov said at a meeting with his Macedonian counterpart that "skepticism of the Bulgarian government over the pact's actual implementation is growing," and that "if there are no developments soon, skepticism will change into disappointment."

(c) Copyright 1999. The Christian Science Publishing Society