Southern Serbia’s Albanian-majority Presevo Valley is a still incomplete Balkan success story. Since international and Serbian government diplomacy resolved an ethnic Albanian insurgency in 2001, donors and Belgrade have invested significant resources to undo a legacy of human rights violations and improve the economy. Tensions are much decreased, major human rights violations have ended, the army and police are more sensitive to Albanian concerns and there is progress, though hesitant, in other areas, such as a multi-ethnic police force, gradual integration of the judiciary, and Albanian language textbooks. Ethnic Albanians appear increasingly intent on developing their own political identity inside Serbia and finding a way to cohabit with Serbs, something that should be encouraged and supported. Nevertheless, the Kosovo status process threatens to disrupt the Presevo Valley’s calm.

The negotiations in Vienna have prompted ethnic Albanian politicians in the Presevo Valley to call for the same autonomy, decentralisation and minority rights for Albanians in Serbia as Belgrade seeks for Serbs in Kosovo. They complain that at the same time as the Serbian government is demanding more decentralisation inside Kosovo, it is moving toward greater centralisation at home. They are encouraged in this by some Pristina politicians, who seek to build defences against Belgrade’s efforts to partition Kosovo. But such linkage, which the international community and Serbian authorities want to avoid, could open a Pandora’s Box with wider regional consequences.

As ethnic tensions have decreased, both Serbs and Albanians point to the disastrous economy as their primary concern. There is 70 per cent unemployment in the Presevo Valley and no real perspectives for the rapidly growing population. Without new investment and revitalisation of existing enterprises, the region will remain fragile, regardless of Kosovo’s ultimate disposition. Current well-intentioned development policies are insufficient, and EU visa policies block the release of pent-up demographic pressures. In the medium to long term, the economic situation is likely to be resolved only through large-scale out-migration from the three main municipalities in southern Serbia, hopefully in the context of the overall development of Serbia, Kosovo and Macedonia, as well as a liberalised travel and work regime with the EU.

For now, however, a number of steps would help to consolidate the recent stabilisation:

• The international community, and Kosovo politicians should continue to make it clear that Kosovo will not be partitioned, and the Presevo Valley will remain within Serbia, and the Serbian government needs to abandon any thought of partitioning Kosovo.
   
• The Serbian government institution charged with overseeing southern Serbia, the Coordination Body for Southern Serbia, has ceased to function, leaving no framework for resolving the region’s many pressing problems precisely when tensions can be expected to rise due to the Kosovo status process. It should be revitalised as a priority, with Albanians renewing their participation, Belgrade giving it real authority and resources, and the international community pro-actively assisting.
   
• The balance of policing responsibilities should be shifted to the multi-ethnic force from the paramilitary, nationalist Gendarmerie, which is still in charge of much local security and continues to engage in ethnic provocations.

Belgrade/Pristina/Brussels, 27 June 2006