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"Deals made with the central government may not fully
apply to the ethnic Albanian zones. This means double
the dealmaking and, possibly, double the corruption
and kickbacks."
Gligor Tashkovich, executive vice president of AMBO
LLC, which is seeking to build the trans-Balkan oil
pipeline, says he has met with "both sides" in
Macedonia and is confident of the prospects for the
$1.1 billion project.
AMBO's president, Ted Ferguson, was formerly an
executive for a subsidiary of Halliburton Co., which
was led until last year by Vice President Dick Cheney.



Macedonia Fighting Hurts Investment 
By Brian Murphy
Associated Press Writer
Sunday, Sept. 9, 2001; 1:20 p.m. EDT

SKOPJE, Macedonia �� They're only dots on a map. 

But for backers of a proposed pan-Balkan oil pipeline,
the sketched out route represents something huge and
historic: a chance to bring major foreign investment
to one of Europe's most economically stagnant regions.


The trouble is the pipeline plans � and other projects
spanning the southern Balkans � pass through the heart
of tormented Macedonia. 

Macedonia was once regarded as the stable centerpiece
for dreams of a modern communications, transportation
and energy corridor stretching from Bulgaria's Black
Sea coast to Albanian ports on the Adriatic. 

Now it's the weak link. And few investors seem willing
to assume the risks until a solid truce is reached
between Macedonians and ethnic Albanians seeking
greater minority rights. 

"My phone hasn't rang for months with anyone
interested in a project in Macedonia," said Ned Cabot,
the regional director for the U.S. Trade and
Development Agency, which helps American companies
seeking overseas deals. 

Not too long ago, it was quite different. In 1995 � as
war roared in other parts of former Yugoslavia � the
United States and other nations excitedly promoted the
so-called Corridor 8. 

Its backers envisioned transport links that would
speed goods and fuel from the Black Sea region and
central Asia to Albania, just across from Italy and
the rest of wealthy western Europe. 

A few stretches of Corridor 8 road and rail have been
completed, but it still takes at least 30 hours by
truck to make the 450-mile drive from the Black Sea to
the Adriatic. Rail connections are hopelessly
indirect. Plans for fiber optics and pipelines are
gathering dust. 

"Everything is basically on hold now," said Cabot. 

It's something Macedonia cannot afford. It emerged
from the break-up of Yugoslavia as the poorest new
nation � landlocked and dependent on neighbors for
trade. Its economic footing has continually been
undercut � first by a 1991-95 economic embargo by
neighboring Greece, then by international sanctions
and NATO warfare against Yugoslavia, a key trading
partner. 

Unemployment now approaches 40 percent. Per capita
income stands at $3,800 a year � double Albania's but
slightly lower than in Bulgaria. 

The economic worry is so acute that Macedonia
alienated giant China by forging diplomatic relations
with Taiwan in 1999 in exchange for aid pledges of up
to $130 million. Macedonia reversed the decision in
June, leaving the Vatican as Taiwan's sole diplomatic
foothold in Europe. 

Last week, Prime Minister Ljubco Georgievski warned
parliament that rejection of a peace agreement
designed to end six months of ethnic conflict in
Macedonia could completely choke off Western capital. 

After the accord cleared its first test in parliament,
the European Union immediately rewarded Macedonia with
a $65 million reconstruction package. The United
States, too, has held out the promise of more cash as
the prize for stability. In 1999, Macedonia received
$1.27 million in U.S. funds to improve its creaky
railways as part of the Corridor 8 strategy. 

But government largesse is easier than sealing deals
with nervous private firms. 

Proposals to privatize the Skopje airport operations
and parts of the electricity sector interested U.S.
firms, but plans are now on hold, Western officials
said. In the EU, some food and retail companies have
entered the small Macedonian market. 

But the big deals have been limited. 

In 1999, Greece's state-run Hellenic Petroleum began
efforts to buy a majority stake in Macedonia's oil
refinery OKTA. Last December, a consortium headed by
Hungarian telecommunications firm Matav bought 51
percent of Macedonia's mobile telephone network. 

Now, the prospect of greater ethnic Albanian political
autonomy could add another wrinkle. 

"Deals made with the central government may not fully
apply to the ethnic Albanian zones. This means double
the dealmaking and, possibly, double the corruption
and kickbacks," said James Ker-Lindsay, a regional
analyst at Syn SA, an Athens, Greece-based company
that advises corporate clients on investment risks. 

Still, there are those already looking past the
turmoil. 

Gligor Tashkovich, executive vice president of AMBO
LLC, which is seeking to build the trans-Balkan oil
pipeline, said he has met with "both sides" in
Macedonia and is confident of the prospects for the
$1.1 billion project. 

AMBO's president, Ted Furguson, was formerly an
executive for a subsidiary of Halliburton Co., which
was led until last year by Vice President Dick Cheney.


"Oil companies work in far more unstable areas of the
world than Macedonia," said Tashkovich. "You think of
Angola. You think of Indonesia. You think of Chechnya.
What's going on in Macedonia is nothing compared with
what these places have experienced." 



   

   


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