The West's propensity to throw money at international problems is never the most effective method of conflict resolution. The fact is, nationalism and hate are often too strong for economic rationality to overcome. It's time for the West to take a look at the Balkans as a whole and not shun its duty as a de facto colonial power. It's time to redraw the map of the Balkans daringly and substantially along ethnic lines so that the peoples of the region can work in harmony across borders, rather than engage in ethnic conflicts within them.

The current victory of capitalism led Westerners of all colours and stripes to believe in solving problems by throwing money at them. Prosperity, international trade, foreign investment, globalisation and joint ventures are the new magic formulas. Mathematically put, this superstition is often presented thus: the propensity to fight decreases in direct proportion to the amount of economic common interests of the potential rivals. Hence, instead of tackling core issues, the West tries to drown them in a green deluge of US dollars. Where the West should have tackled a corrupt and autocratic mentality (Russia), it commits funds through the IMF instead. Where it should have applied itself to interethnic tensions and rivalries (the politically correct phrase denoting racism), it rebuilds infrastructure.

A mini-EU

If the "throw money at the problem" theorem were correct - and it never has been, not once in human history - the Yugoslav wars of secession and succession would have never erupted. Former Yugoslavia was economically independent and prosperous. It constituted an effective and dynamic free trade zone between its six constituent republics. Resources were allocated within it with reasonable efficiency. Macedonia produced raw materials. Slovenia processed them. Croatia consumed them, added some industrial products of its own and all of them traded with Serbia, the seat of the administration. Yugoslavia was rather self-sufficient and conducted much of its value-added and trading activities in-house. The gap between its GDP and GNP only a decade ago, reflects what used to be this rather efficient and lucrative market, a mini-EU in the Balkans.

The envy of all other socialist countries, Yugoslavia was already mooted to become member of the EU (then, the EEC) when the thought of the Czech Republic as a member would have elicited condescending smiles. Heavy industry, light manufacturing, construction and engineering all flourished. Yugoslavia's exports boomed. It had a proto-capitalistic system of ownership and a Japanese-style system of management. It introduced the IMF and its reforms in 1980, when Tito was still alive and years before any other socialist country. The reforms of Ante Markovic (the 1989-91 federal prime minister) are still a model of "free enterprise with a socialist bent". On purely economic grounds, the Yugoslav wars were and are a colossal insanity.

The new Yugoslavia endured economic devastation to fight a losing war aimed at securing the interests and safety of Serb minorities in the newly formed Republics of former Yugoslavia (NOT to establish a "Greater Serbia" as Western propaganda has it). Macedonia withstood a multiple embargo by its neighbours, Greece and Bulgaria, because it wouldn't change its name or the historical status of its language. The economic price that Macedonia was forced to pay was mind boggling (the affair with Greece is dormant now but far from over) - and it was nothing compared to the Serb tally. The Jews in Israel, by contrast, were busy signing economic agreements with Germans less than six years after the Holocaust. A different order of priorities, surely.

Old colonial habits die hard

Having lived in the Balkans and worked there for almost a decade, I am forced to conclude that economic arguments are absolutely meaningless when they clash with the proud and romantic nationalism the likes of Serb nationalism. If offered in isolation, economic incentives will do nothing to reduce future conflicts or contain them. Marshal plans, future EU membership (or EU association), IMF soft loans and World Bank effective grants will all fail to preclude future armed conflicts as they have always failed in the past.

Take Bosnia-Herzegovina. By now, the West - through the various organs of its global financial architecture - has committed well over five billion USD to this godforsaken piece of land. This is almost three times the official GDP of this country. It would be the equivalent of 20 trillion US dollars invested in the USA over four years time. All this was meant to cement the cohesiveness of this artificial concoction of a state and to secure its future as a political (read: economic) unit. It failed miserably.

The Republika Srpska is nowhere nearer to integrating with its Muslim and Croat neighbour. The common currency has done nothing to foster a common identity. And the place represents an abysmal reversion to old colonial habits, with a governor to regulate the unruly and unyielding natives, by the application of force if need be.

Indeed, the ethnic wars of the modern era are a direct result of said colonial period. Borders, drawn at random and with a minimal and arbitrary knowledge of the terrain and its inhabitants, led to a hundred years of correctional warfare by the victims of this patronising ignorance.

The rule of thumb is simple: people cannot live together. Humans are misanthropes, they love to hate the different, the other. Therefore, it is best to encourage the formation of ethnically homogenous political units, where ethnic affiliation counts; of ideologically homogenous political units, where ideology matters; and of racially homogenous political bodies, where race equals identity. A simple rule derived from the 5000 years of trials and errors called "human history".

Ethnic homogeneity

The USSR disintegrated peacefully because it disintegrated into ethnically homogenous entities (or entities with clear ethnic identities and majorities). In the process Russia gave up oil reserves, mineral riches, space launching sites, strategic locations and much of its nuclear and conventional weaponry. Despite all these incredible sacrifices, it was a generally peaceful process.

The Czechs separated from the Slovaks in a bloodless break-up of their common state because the two resulting entities were ethnically homogenous. Well, almost - considering the persecution of the Roma in both countries and the significant Hungarian minority in Slovakia .

Slovenia and Macedonia seceded from the Yugoslav Federation without as much as a shot (except for the first few days of Slovenia's independence when confusion ruled supreme) - because there were very few Serbs in either. Slovenia and Macedonia are ethnically homogeneous (Macedonia has a sizeable Albanian minority, though). Hence their status as islands of peace and tranquillity in an impossible region. The war with Croatia and more so in Bosnia was a direct result of ethnic heterogeneity.

The not-so-implicit deal from the West in the case of the USSR and the Czech Republic was simple to grasp and very effective: "You will peacefully break up into ethnically homogeneous units, and we will support you financially and initiate you into our economic superstructures". It worked. It still is working.

But this was not the deal offered to the former Yugoslav republics. To them the West's message was: "You will peacefully break up into ethnically HETEROGENEOUS units, and we will support you financially, subject to painful and sustained reforms."

It is time to recognise the folly and the fallacy of this last message. Yugoslavia in particular and the Balkans in general must be "re-designed" into ethnically homogeneous political units. If this necessitates the re-drawing of now dangerously obsolete borders - let it be so. It would make a lot more sense to dismantle Bosnia and unite the Republika Srpska with Yugoslavia (Serbia) and the Croat bit with Croatia. The Muslims can have their political unit, if they wish. Parts of Kosovo must go to Albania.

The borders have to be redrawn. The result should be a series of ethnically homogeneous states - viable, cohesive, peaceful and able to concentrate on economic warfare rather than on the economics of war.

A new Bismarck

To achieve this goal, colonialism must be revived. Operation Allied Force is a colonial war without the mercantilist emphasis of days gone by. It is a coalition of rich countries, led by a superpower, attacking and subduing a regional bully. As in the good old days, borders are effectively redrawn (Kosovo's "extensive self-government"), new political entities formed, alliances with one group of natives against another abound, military hardware coupled with economic prowess are pitted against local aspirations which do not conform with a moralistic "global view" of the world.

The absurdity is that, because colonialism is not politically correct and is condemned by all with great vehemence, the colonial powers of today are castrated. These eunuchs of geopolitics do not dare to carry their military and economic clout to its logical and beneficial conclusion. In other words: they do not dare to DICTATE a solution and impose it rather than engage in endless consultations with local parties and amongst themselves.

We need a new Berlin Congress. We need a new Bismarck.

Bismarck once said that the whole of the Balkans is not worth the bones of one Pomeranian grenadier - but this did not prevent the newly born (and recently victorious) Germany from engaging in the redesign of South Europe. Unfortunately, the Berlin Congress was a shoddy job, more influenced by the narrow self-interests of the participants than by any grand vision or integrity of intentions. To the reshapers of Europe of that time, it was more important to adversely affect the interests of Russia and Turkey than to create a long lasting peace and the conditions for prosperity. This strategy was bound to fail, it did and it still does.

This is the second chance for the region (not counting Communism). This is the time to redefine South Europe and the Balkans. This is the time to draw logical borders which reflect not whims and eccentricities, paranoias and ignorance, condescension and malice - but demography and history, national aspirations and disparate cultures and narratives. Let each ethnic group live within safe and internationally guaranteed borders. Let them work in harmony across borders, rather than engage in conflicts within them. Let the Albanian lands go to Albania, the Serb lands to the Serbs - as the Czech lands are to the Czechs and Russian lands are to the Russians. Only then will peace prevail in the Balkans as it does in the centuries-old battlefields of Western Europe today.

Dr Sam Vaknin, 31 May 1999