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Oil Market

U.S. Opts Out of Yugoslavian Oil Embargo

Keynsian Economics: First we sell 'em oil. Then we bomb the oil tanks.
The oil companies and the bomb
manufacturers make more money this way. The taxpayers? Who cares? The
sheep will pay.

THE European Union yesterday banned oil sales to Yugoslavia, but in a
development that will be regarded as scandalous in European capitals,
America confirmed that it had no plans to follow suit.
This means that while it is now illegal for any EU country to export oil
to Slobodan Milosevic, it remains perfectly legal for American companies
to continue to fuel the Serb war machine.

On April 10, two weeks into the conflict, the American firm Texaco
shipped some 65,000 barrels of oil products into Bar, the Montenegrin
port. The company said it was assured that the products were for use in
Montenegro but the port now serves as Yugoslavia's only supply route for
fuel. Other routes, including a pipeline from Hungary, or the land
routes from Croatia and Bulgaria have effectively been cut off.

The disclosure that American firms have been selling oil to Yugoslavia
while America pilots have been risking their lives to bomb refineries
and storage facilities is likely to undercut American efforts to
moralise to the rest of the world. Texaco has now publicly stated that
it will no longer sell oil to Yugoslavia. But hundreds of other
companies have yet to do the same.

A US State Department official confirmed there were no plans to
introduce the same sort of legislation that EU foreign ministers
yesterday adopted in Luxembourg, which renders it a crime to sell oil to
Yugoslavia. The embargo will be implemented on Friday.

Nato's communiqué on Kosovo, published at the weekend, stops short of
calling on all Nato members to adopt legal instruments to halt the flow
of oil. What Nato is committed to do, however, is to interrupt the
supply of oil, wherever it comes from, by means of a "visit and search"
regime that will board and inspect ships heading for Bar.

Since international law says ships can only be halted in pursuit of a
United Nations sanctions resolution, it is extremely uncertain what will
happen if a Russian, or indeed an American, oil tanker declines to be
searched. Russia has refused to join an oil embargo so the potential for
conflict is high. If Russian ships were challenged on the high seas, it
might decide to give them military escorts.

Further economic restrictions were also placed on Yugoslavia and it
emerged that the European Commission would halt a promised package of
economic assistance for Montenegro - lest it fell into "the wrong
hands".



The London Telegraph, April 27, 1999


Der Fuhrer Invades Yugoslavia

Milosevic Stronger Than Ever

Anti-Milosevic Sentiment Turns Anti-NATO

BELGRADE - NATO warplanes reduced his home to a pile of rubble, his
television stations off the air and destroyed the headquarters of his
ruling Socialist Party. But President Slobodan Milosevic carries on with
what, to outside appearances at least, is his regular routine. He
presides over cabinet meetings, meets with foreign dignitaries and
issues orders for reconstructing his devastated country.
When NATO began its air campaign against Serb-led Yugoslavia a month
ago, alliance officials expressed the hope that it would cause serious
political strains within the Milosevic regime, perhaps even provoke a
revolt by his senior military commanders. So far, these hopes have not
been realized.

If anything, the man whom President Bill Clinton calls ''Europe's last
dictator'' is more solidly entrenched in power now than he was when the
bombs first began to rain down on his country, according to Yugoslav
political analysts.

Associates depict Mr. Milosevic as a man of strong nerves, angry but
unfazed by the bombing of his residence and determined to resist NATO
''aggression'' to the end, even if the alliance attempts to occupy
Kosovo with a ground offensive. ''Imagine your reaction if a criminal
came and destroyed your home,'' said Foreign Minister Zivadin Jovanovic.
All the same, he added, Mr. Milosevic ''is conducting his business as
president of the republic and commander in chief absolutely normally.''

Asked how Mr. Milosevic reacted to the missile attack on his official
residence in the exclusive Dedinje section of Belgrade, Mr. Jovanovic
quoted him as saying, ''It's terrible, but perhaps less terrible'' than
if NATO had attacked a populated civilian area.

Former associates say the Yugoslav president seems to thrive in
situations in which he has his back against the wall. ''He is stimulated
by crises,'' said an official who has worked closely with him. ''When
everything is normal, he can't come up with a strategy. He needs
conflict. NATO played right into his hands.''

Given the secrecy that surrounds the inner workings of the Yugoslav
regime, and particularly Mr. Milosevic's own activities, it is virtually
impossible to get independent insights into the Yugoslav leader's
present state of mind.

But the general impression of cool calculation mingled with indignant
self-righteousness is consistent with his behavior during earlier
political crises, including three dramatic months in early 1997 when
popular demonstrations over electoral fraud seemed to have a good chance
of toppling him from power.

Mr. Milosevic rode out that crisis in the same way that he is riding out
the present war with the U.S.-led alliance: through a mixture of
stubbornness, patience and cosmetic concessions.

Many political analysts in Serbia, including Zoran Djindjic, leader of
the opposition Democratic Party, say that the present crisis has
strengthened Mr. Milosevic. The NATO attacks have sparked a
nationalistic upsurge that has seriously undermined Mr. Milosevic's
opposition, because it now seems unpatriotic to be pro-Western.

The buttressing of Mr. Milosevic's political position has not
necessarily made him more popular among ordinary Serbs. Many Serbs,
particularly in big cities like Belgrade, continue to have little
affection for a man they associate with a decade of war and a
 catastrophic decline in their standard of living. The present mood is
not pro-Milosevic but anti-NATO.

''For most Serbs, Milosevic does not matter any more,'' said a former
associate. ''This is not about him. This is about the country.''

One of the very few political leaders here who has openly espoused
political compromise with the West is Deputy Prime Minister Vuk
Draskovic, the leader of a moderate party who joined the government this
year.

In a television appearance Sunday night, he urged the Belgrade
government to accept a compromise on Kosovo that he predicted would be
reached with Russian and UN mediation, and he called on state leaders to
''stop lying to the people and finally tell them the truth.''

As a statesman, Mr. Milosevic has presided over disastrous setbacks for
Yugoslavia and Serbia. During his 10 years in power, the country has
lost traditional Serb-occupied lands in Croatia and Bosnia. The economy
was a shambles even before NATO missiles began destroying the country's
biggest industrial plants, bridges and power grids.

As a political tactician determined to hang on to power, however, Mr.
Milosevic has few equals. In the opening phase of the present crisis,
his grasp of military strategy and war aims seems to have been superior
to that of his NATO enemies. While Mr. Milosevic apparently had a good
idea of the damage that NATO was prepared to inflict on his country -
and made the brutal calculation that the pain was bearable - NATO was
unprepared for the all-out Serb offensive in Kosovo and the forced
exodus of many of its ethnic Albanian inhabitants.

Even if NATO succeeds in wresting control over Kosovo from Belgrade
through a protracted air campaign or a ground offensive, most Serbian
observers believe Mr. Milosevic will find ways of turning the situation
to his advantage.

''This will probably end with a Western victory,'' said Aleksa Djilas, a
political analyst who is the son of the former Yugoslav dissident
Milovan Djilas. But, he said, ''it will be a Pyrrhic victory'' if the
aim is to get rid of Mr. Milosevic or to ensure lasting political
stability in the Balkans.

Like many other Serbian intellectuals who have opposed Mr. Milosevic,
Mr. Djilas believes that Western governments made a mistake in squeezing
the Yugoslav leader into a corner. ''They left no room for diplomacy,''
Mr. Djilas said. ''They came to the conclusion that nobody here supports
Milosevic so they could simply bully him.''

International Herald Tribune, April 27, 1999


Der Fuhrer Invades Yugoslavia

Flirting With KLA Terrorists

"First, money to the drug dealers. Later, more money to the drug
warriors. Taxpayers are suckers, heh, heh."


Support is building to arm the KLA to fight against the Serbs in Kosovo,
though evidence suggests it is a drug-smuggling, leftist terrorist group
with plans of conquest.

Sanctions failed. Diplomacy failed. Even massive air attacks by
nuclear-capable strategic bombers failed. As the Clinton
administration's drive to force Yugoslavia to grant autonomy to Kosovar
Albanians crumbled amid the bombed-out hulks of government buildings,
bridges and factories, Washington seemed primed to try yet another
weapon: waging a ground war by arming what a former U.S. special envoy
to Kosovo called a "terrorist group." It's an option that, if
implemented, will further complicate Operation Allied Force, will risk
throwing a monkey wrench into U.S. counterterrorism and counternarcotics
policy and could further complicate relations with NATO allies.

With dashed hopes for the Yugoslavian regime's quick surrender, the
administration and Congress are considering an initiative to build up a
small guerrilla force, the Kosovo Liberation Army, or KLA, into an
effective fighting machine. As Secretary of State Madeleine Albright
openly flirts with the KLA, other officials say the United States wants
closer relations with the group. Some Capitol Hill staff following
Kosovo are asking if, despite NATO's open nonsupport, the United States
already may be providing covert assistance to the KLA.

Bipartisan initiatives in the House and Senate, meanwhile, openly would
fund the arming and training of the KLA into a full-scale irregular
army. Arming the KLA is attracting an unlikely coalition of Democratic
and Republican lawmakers with ethnic Albanian constituencies;
politicians squeamish about using U.S. and NATO ground forces but
wanting some sort of on-the-ground military presence against Yugoslavian
forces in Kosovo; a smattering of conservative armchair insurgency
"experts" who invoke the Reagan Doctrine of supporting anticommunist
resistance movements; and Marxist radicals who find the KLA's ideology
compatible with their own.

Among the most prominent politicians favoring this scheme are polar
opposites, Republican presidential candidate Steve Forbes and House
Minority Whip David Bonior of Michigan. While Forbes was hastening the
collapse of the Soviet empire in the 1980s as head of the board
supervising Radio Free Europe/Radio Liberty in the effort to undermine
communist rule, critics say Bonior was so friendly to the comrades that
he became a cheerleader for the Marxist-Leninist Sandinista regime in
Nicaragua and a leading foe of democratic resistance there.

On April 14, six congressmen led by Rep. Eliot Engel, a New York
Democrat, introduced the Kosova Self-Defense Act to allocate $25 million
to train and arm the KLA. (The name of the Yugoslavian province itself
is in dispute. Kosovo is the Serbian-language name, while Albanians use
the term Kosova.) "The KLA is on the ground in Kosova now and, with
proper weapons, could defend innocent Kosovars against Serb predation,"
the hawkish Engel reasons. "When Serb forces do leave, the KLA can serve
as a peacekeeping and police force until a government is organized. This
would mean fewer NATO troops, including U.S. forces, would be needed in
the area." Sponsors include Republican Mark Sanford of South Carolina
and William Goodling of Pennsylvania, as well as Bonior. Sens. Joseph
Lieberman, a Connecticut Democrat, and Mitch McConnell, a Kentucky
Republican, have prepared similar legislation, now under State
Department review.

Veteran Reagan Doctrine proponents who have studied the KLA think the
proposal is a dangerous idea. "Some politicians have apparently confused
the KLA with the Nicaraguan Contras or the Afghan mujahideen of the
1980s," says Michael Radu of the Foreign Policy Research Institute in
Philadelphia. In a memo circulating on Capitol Hill, Radu argues that
arming the KLA "would display both American ignorance of the true nature
of the KLA and despair at the failure of the NATO air strikes against
Yugoslavia."

Not only does the KLA stake territorial claims on other countries,
including NATO ally Greece, but Insight's sources say it has roots in
the Sigurimi secret police of Albania's late Stalinist dictator Enver
Hoxha, who had designs on a Greater Albania carved from Greece and
countries that made up Yugoslavia. "Some of its founders and leading
cadres were associated with the Yugoslavian Communist secret police or
even . . . Sigurimi," according to Radu. Even more disturbing are
reports that the KLA has received military support from Iran and from
fugitive Saudi terrorist financier Osama bin Laden, who is wanted for a
spate of mass killings, including the 1998 bombings of the U.S.
embassies in Kenya and Tanzania. President Clinton ordered
cruise-missile attacks on alleged bin Laden targets in Sudan and
Afghanistan.

Last month, the Times of London reported that the KLA is involved in the
heroin trade and that Germany, Sweden and Switzerland, in conjunction
with the European police authority Europol, are probing "growing
evidence that drug money is funding the KLA's leap from obscurity to
power." Italian and Czech authorities also report KLA connections to
weapons and narcotics trafficking. If proved, allegations of terrorism
and drug smuggling would blow up in the face of Washington as it armed
and equipped the KLA and would drive a stake through U.S. antiterrorism
and antinarcotics policy.

As it is, say Insight sources who specialize in this region, Washington
has undermined its own goal of supporting democracy there. U.S.
diplomacy has subverted more moderate, Western-oriented Kosovar Albanian
groups. The U.S. government "has seemingly undermined the anti-Marxist
faction" in Kosovo, says Daniel McAdams, a Budapest-based human-rights
worker and Phillips Foundation Balkan analyst who has visited Albania 15
times and is writing a study of the Albanian secret police. "The KLA has
politically ascended at the expense of the democratically elected
[Kosovar Albanian leader Ibrahim] Rugova and with the full support of
the U.S.," McAdams tells Insight. "This shift in the power axis is most
significant when considering events which were to take place subse
quently, as the KLA had shown no hesitation to dispose of those Kosovar
Albanians politically opposed to its hybrid ideology of Maoism, Swiss
banks, Chinese guns and heroin."

"This month the KLA decided on its own government, overthrowing Rugova
after boycotting last year's election" that made Rugova the first-ever
democratically elected Kosovar Albanian leader, according to McAdams.
After Belgrade's crackdown, Rugova appointed an exile government in
Germany. But the KLA clamored for a more "broad-based" government on
KLA-controlled territory inside Kosovo.

The $25 million in the House legislation to back irregular forces,
according to a news release from Engel, "would be made available only
for grants to the interim government of Kosova and be used for training
and support for established self-defense forces -- the KLA." That would
effectively bar funds from going to any non-Marxist Kosovar resistance
forces. Right now, no such force exists; the KLA has made sure it would
have no competition.

"When the Kosovo Democratic League of Ibrahim Rugova," according to
Radu, "tried to establish its own armed branch, the armed forces of the
Kosovo Republic, with bases in Albania, the KLA promptly killed its
leader." The KLA also murdered other moderate Kosovar Albanian leaders
allied with Rugova. The goal, Radu says, is "to eliminate competitors
from power."

The KLA alleges that Rugova is a sellout to Belgrade. That line is
consistent with what other extremist movements, from the Palestine
Liberation Organization and the Irish Republican Army to the
Sandinistas, have done to discredit rival leaders who don't share their
ideology or brand of violent revolution. Human-rights worker McAdams
believes that Rugova, a key to any peaceful settlement, initially fled
to Belgrade to hide from KLA assassins. No one outside the region knows
for sure; Rugova is not free to leave Yugoslavian custody or communicate
freely with the outside world.

For the moment, Clinton administration officials only speak openly of
training KLA leaders to help them transition from an insurgency to a
political entity or standing constabulary force. "We want to develop a
good relationship as they transform themselves into a politically
oriented organization," says State Department spokesman James Foley. "We
want to develop closer and better ties with this organization." The
models, in the administration's view, are the Provisional Irish
Republican Army and the Palestine Liberation Organization, or PLO. That
line may be bending. On April 16, NATO spokesman Jamie Shea acknowledged
that NATO air attacks were making the KLA "more effective" and seemed to
hold out the possibility of coordination in the future.

KLA supporters brush off the terrorist label as Serbian propaganda. But
before its military action against Belgrade's forces, the Clinton
administration used the same language, citing the KLA's strategy of
murdering people to provoke a Serbian crackdown that the KLA would use
as a pretext to wage more violence. In early 1998, State Department
officials belittled the KLA's name, known in Albanian as the UCK, and
repeatedly condemned what they called "terrorist action by the so-called
Kosovar Liberation Army." Ambassador Robert Gelbard, then a top
policymaker on the Balkans and the administration's special envoy to
Kosovo, told reporters in February 1998 that the State Department
deplored violence "by terrorist groups in Kosovo and particularly the
UCK -- the Kosovar Liberation Army. This is, without any question, a
terrorist group."

The views of Gelbard, who is one of the government's top experts on
terrorism and international organized crime, should have carried a lot
of weight. Later, however, Gelbard retreated in Clintonian fashion,
telling a House panel that the KLA was not "classified legally by the
U.S. government as a terrorist organization."

Support for the KLA has become a political issue in states which have
sizable Albanian-American constituencies, including New York,
Connecticut and Massachusetts, and that might account for the parsing of
terrorist definitions in Washington. Engel, who sponsored the bill to
aid the KLA, is a seasoned veteran of ethnic politics. He boasts on his
Website that he is a leader of the Congressional Ad Hoc Committee on
Irish Affairs, was "the prime sponsor of the [nonbinding] congressional
resolution recognizing Jerusalem as the undivided capital of Israel" and
was author of "the bill designating October as Italian-American Cultural
and Heritage Month." As author of the KLA-support bill, Engel is wearing
his hat as a leader of the Congressional Albanian Issues Task Force.

Is arming the KLA just another throwaway campaign issue? Engel, whose
district in the Bronx is one of the most ethnically diverse in the
country, was a member of the House International Relations Committee and
warned early of an impending Yugoslavian crackdown on Kosovar Albanians.
However, the Almanac of American Politics observed in 1996 that he used
his committee seat not to further the na-tion's interest but instead
"signed on to the various foreign-policy causes of his district's
European ethnics." He promoted foreign-policy initiatives "almost as a
type of constituent service."

Other politicians also are likely to milk the KLA issue for electoral
gain. First lady Hillary Rodham Clinton, for instance, has just
discovered Kosovo as she mulls a run for the Senate from New York.
Though she has not yet declared support for the KLA, she already
champions Yasser Arafat's PLO and Palestinian statehood. On a visit to
New York on April 18, she declared her intention to visit Kosovo as
early as possible. "I've expressed my very strong interest in going,"
she told refugee-relief groups, "and as soon as I'm given the green
light to go, I intend to go."

Support for the KLA by mainstream politicians is only weeks old, say
staffers on the Hill, and follows on the heels of hard-core
sandal-wearing groupies of Central American Marxists whose heroes
petered out with the Cold War. "Not since the Nicaraguan Sandinistas
embodied anti-American Marxist chic have the 'Sandalistas' of North
America had such excitement for a guerrilla group as the KLA," says
professor Mark Almond of Oxford University. A revolutionary-warfare
expert, Almond last year chronicled KLA agitprop from San Francisco to
Switzerland and reported on an Internet-based solidarity network that
includes Fidel Castro-backed Latin American guerrilla movements. That
network has disappeared from Internet as the KLA has gone more
mainstream.

Almond tells Insight, "It is odd how links and sites which existed in
1997 have been purged." He says, "Already similar myths are being
created to explain their struggle as the ones which made the Viet Cong
so cozy in the 1960s to readers of the New York Review of Books and
draft dodgers distant from the action," according to Almond. "Anyone who
points out the KLA's shadowy past and links to Marxist-Leninist groups
is usually told (via Internet abuse) that the KLA is based on local clan
structures among the Albanian peasantry." KLA supporters in the United
States aren't too anxious to shatter the images.

While acknowledging that the KLA has its share of unsavory figures,
Joseph O'Brien of Engel's district office in the Bronx shrugs, "It's a
work in progress." Asked about reports of heroin smuggling, ties to the
communist secret police and connections with Middle Eastern terrorists,
O'Brien can only say, "It's tough to tell where it's all coming from."

Insight Magazine, May 17, 1999
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris

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